Gujarat High Court
Parva Kumar Ravibhai Machhar vs State Of Gujarat on 24 June, 2025
NEUTRAL CITATION
R/SCR.A/1615/2015 ORDER DATED: 24/06/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CRIMINAL APPLICATION (QUASHING) NO. 1615 of 2015
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PARVA KUMAR RAVIBHAI MACHHAR & ORS.
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR CHETAN K PANDYA(1973) for the Applicant(s) No. 1,2,3
MR HRIDAY BUCH(2372) for the Respondent(s) No. 2
MR. TIRTHRAJ PANDYA, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE J. C. DOSHI
Date : 24/06/2025
ORAL ORDER
1. By way of this application under Section 482 of the Code of Criminal Procedure, 1973 (for short, "the Code"), petitioners seek quashing of the FIR being I-C.R. No.153 of 2011 registered with Himatnagar Town Police Station, Himatnagar, as well as Criminal Case No.3217 of 2011 pending before the Hon'ble Court of the Chief Judicial Magistrate, along with all consequential proceedings arising therefrom.
2. In support of the prayer for quashing of the FIR, which has culminated in the filing of a charge sheet, learned advocate Mr. Chetan K. Pandya appearing for the petitioners has placed reliance on the judgment of the Hon'ble Supreme Court in Rikhab Birani v. State of Uttar Pradesh, SLP (Criminal) No. 8592 of 2024. He submitted that a purely civil/commercial transaction has been unnecessarily given the colour of criminality, despite the lapse of four years since the alleged transaction.
Page 1 of 5 Uploaded by MANISH MISHRA(HC01776) on Thu Jun 26 2025 Downloaded on : Thu Jun 26 23:28:07 IST 2025NEUTRAL CITATION R/SCR.A/1615/2015 ORDER DATED: 24/06/2025 undefined 2.1. It is submitted that the goods in question were purchased from the complainant for the purpose of export to the United States. However, the goods were found to be sub-standard by the U.S. Food and Drug Administration (FDA). The petitioners, who are arrayed as accused, made attempts to rectify the goods to meet required standards, but ultimately failed to do so in the U.S. market.
2.2. Learned advocate Mr. Pandya further submitted that the petitioners had preferred an application for discharge before the learned Trial Court after the filing of the charge sheet. Though the said application was rejected by the learned Trial Court, the petitioners preferred a revision application before the learned Sessions Court, wherein the petition partly succeeded. The learned Sessions Court discharged accused Nos.2 and 3 on the ground that they had resigned from the company prior to the alleged transaction.
2.3. However, according to the submission of Mr. Pandya, the learned Sessions Court failed to appreciate that there was no dishonest intention or mens rea on part of the petitioners to commit the offence of criminal breach of trust or cheating. It is further submitted that even otherwise, the offences under Sections 406 and 420 IPC cannot stand together in the facts of the case, as the basic ingredients for either offence are not satisfied.
2.4. Upon such submissions, learned advocate Mr. Chetan K. Pandya, appearing for the petitioners, prayed that the present petition be allowed.
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3. Learned advocate Mr. Jeet Patel, appearing on behalf of learned advocate Mr. Hriday Buch for respondent No.2, opposed the petition. He submitted that there was never any contractual agreement between the parties indicating that the goods purchased by the petitioners were intended for export to the United States or that such export was subject to FDA approval. Therefore, the petitioners cannot take the defence that the goods were sub- standard to avoid their liability to pay the outstanding dues.
3.1. Learned advocate Mr. Patel further submitted that the petitioners were well aware from the inception that the goods were not being purchased for export purposes, and the present attempt to seek discharge is an afterthought. Hence, he prayed for dismissal of the petition.
4. Learned APP for the respondent-State, having regard to the facts and circumstances of the case, submitted that appropriate orders may be passed as deemed.
5. Having heard the learned advocates for both sides and upon perusal of the material on record, it is to be noted that the present petition is essentially filed under Article 227 of the Constitution of India, challenging the concurrent findings recorded by the Courts below. The learned Trial Court, at the first instance, declined to discharge all the accused. However, in revision, the learned Sessions Court was pleased to discharge accused Nos. 2 and 3 on the ground that they had resigned from the directorship of the company prior to the transaction in question.
5.1. A bare reading of the FIR indicates that the matter arises out Page 3 of 5 Uploaded by MANISH MISHRA(HC01776) on Thu Jun 26 2025 Downloaded on : Thu Jun 26 23:28:07 IST 2025 NEUTRAL CITATION R/SCR.A/1615/2015 ORDER DATED: 24/06/2025 undefined of a commercial transaction between two parties--one being the seller and the other the purchaser--which ultimately did not fructify as intended. According to the FIR, the purchaser failed to make payment for certain goods purchased from the complainant. Notably, the FIR came to be lodged after a delay of nearly four years from the date of the alleged transaction.
5.2. Learned advocate Mr. Chetan Pandya, appearing for the petitioners, submitted that the dispute is purely civil in nature and has been wrongly given the colour of criminality. He relied upon the judgment of the Hon'ble Supreme Court in Rikhab Birani v. State of Uttar Pradesh (supra), wherein the Court elaborately discussed the distinction between civil breaches, contractual disputes, and criminal liability--particularly under Section 406 of the Indian Penal Code--by referring to a catena of earlier decisions.
5.3. This Court finds merit in the submissions advanced by learned advocate Mr. Pandya. The Hon'ble Apex Court in Rikhab Birani (supra) has categorically held that mere non-payment of dues or breach of contractual terms, absent any fraudulent or dishonest intent at the inception, would not attract penal provisions under Sections 406 or 420 of the IPC.
5.4. Furthermore, in Ashok Kumar Jain v. State of Gujarat, SLP (Criminal) No. 1850 of 2020, the Hon'ble Supreme Court once again reaffirmed the settled position of law, reiterating the distinction between civil liability arising from breach of contract and criminal prosecution based on dishonest or fraudulent intention.
5.5. This Court, without entering into the merits of the case, is of Page 4 of 5 Uploaded by MANISH MISHRA(HC01776) on Thu Jun 26 2025 Downloaded on : Thu Jun 26 23:28:07 IST 2025 NEUTRAL CITATION R/SCR.A/1615/2015 ORDER DATED: 24/06/2025 undefined the opinion that the learned Appellate Court ought to have considered all relevant material aspects in light of the aforesaid decisions, as well as the provisions of Sections 406 and 420 of the Indian Penal Code, before forming an opinion as to whether the remaining accused deserved to be discharged.
5.6. In view of the above, the present petition succeeds to the extent that the impugned judgment and order passed by the learned Sessions Court in Criminal Revision Application No. 7 of 2014, insofar as it declines to discharge accused Nos. 1, 4, and 5, is hereby quashed and set aside. The revision application stands restored to its original file for fresh consideration and hearing in accordance with law.
(J. C. DOSHI,J) MANISH MISHRA Page 5 of 5 Uploaded by MANISH MISHRA(HC01776) on Thu Jun 26 2025 Downloaded on : Thu Jun 26 23:28:07 IST 2025