The laws made by the legislature lay down a separate procedure for civil and criminal complaints. The remedy in case of breach of contract is usually a civil remedy that is taken to civil courts for recovery of compensation from the opposite party. If the plaintiff or the aggrieved party is not satisfied with the outcome of the proceeding or is not interested in the civil suit, he can move to the magistrate with a criminal complaint against the other party.
The magistrate has the right to examine the complainant under the oath as per section 200 of Criminal Procedure Code, 1973 and upon satisfaction, if he feels there is a case, he moves forward with the case or he may dismiss the complaint under Section 203 of Crpc.
The Supreme Court in the case of Debendra Nath Bhattacharya v. The State of West Bengal and another examined the scope of section 203 and held that if scrutiny of complaint shows that the essential ingredients of offence alleged are absent or that the dispute is only civil, then it will constitute sufficient ground to dismiss the complaint under Section 203 of CrPC.
In the case of Hriday Ranjan Prasad Verma & Ors. v. State of Bihar & Anr, Apex court held that mere breach of a contract cannot be a ground for criminal prosecution as the fraudulent or dishonest intention has to be shown right at the beginning of the transaction to culminate the offence of Cheating. ‘Intention’ is an essential ingredient that has to be established for proving the criminal offence.
It will be on the opinion of the judge and the fact of the cases whether a civil and criminal complaint will be entertained by the court.