Gujarat High Court
Alpeshkumar Kirtibhai Raval vs State Of Gujarat on 3 November, 2025
NEUTRAL CITATION
R/CR.MA/16911/2017 ORDER DATED: 03/11/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE
FIR/ORDER) NO. 16911 of 2017
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ALPESHKUMAR KIRTIBHAI RAVAL
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR TEJAS M BAROT(2964) for the Applicant(s) No. 1
MR. KANVA ANTANI, APP for the Respondent(s) No. 1
RULE SERVED for the Respondent(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE J. C. DOSHI
Date : 03/11/2025
ORAL ORDER
1. In paragraph 18 of the present petition, the petitioner has prayed for the following reliefs:-
"A) Hon'ble Court be pleased to issue an appropriate order or direction quashing impugned FIR being I-CR No.124 of 2017 registered with Mehsana "B" Division Police Station qua the present Petitioner;
B) Pending admission, hearing and final disposal of the present petition, Hon'ble Court be pleased to stay further proceedings of impugned FIR being I-CR No.124 of 2017 registered with Mehsana "B" Division Police Station qua the present Petitioner and be further pleased to restrain I.O., Mehsana "B" Division Police Station from acting in furteance of the said impugned FIR being I-CR No.124 of 2017 registered with Mehsana "B" Division Police Station or taking any coercive measures against the Petitioner;"
2. Brief facts of the case are as under:-
2.1. Shorn of non-essential details, the relevant factual matrix of the lis in hand is adumbrated thus: The Petitioner, at the relevant time, was serving as the Location Manager at Mehsana Branch of Hinduja Leyland Finance Ltd. The Respondent No.2 had approached Page 1 of 11 Uploaded by MANISH MISHRA(HC01776) on Thu Nov 06 2025 Downloaded on : Thu Nov 06 23:02:53 IST 2025 NEUTRAL CITATION R/CR.MA/16911/2017 ORDER DATED: 03/11/2025 undefined the said branch seeking financial assistance for purchase of an Ashok Leyland truck costing Rs.22,54,286/-, for which a loan of Rs.19,70,000/- was sanctioned. Upon default in payment of EMIs, the vehicle came to be repossessed by the Company on 05.01.2016 through Gokul Motors Pvt. Ltd. Subsequently, on 21.01.2016, the Respondent No.2 cleared part dues of Rs.3,14,200/- towards outstanding EMIs, whereafter the Petitioner sought approval from the State Head for release of the repossessed vehicle, which was accordingly handed over to the Respondent No.2's driver, Hitendrakumar Raval, after due verification and issuance of a release order.
2.2. It is the Petitioner's case that despite the release of the vehicle, the Respondent No.2 continued to default in repayment and issued two cheques which were dishonoured for the reason "drawer's signature differ." Consequently, statutory notices under Section 138 of the Negotiable Instruments Act were issued, and criminal complaints came to be filed by the Company before the learned Metropolitan Magistrate, Ahmedabad. The Respondent No.2, while seeking to drop the said proceedings under Section 258 CrPC, made inconsistent averments acknowledging repossession of the vehicle on 05.01.2016. The said applications were rejected by the learned Magistrate vide order dated 15.02.2017.
2.3. The Petitioner further asserts that the Respondent No.2 had illegally sold the financed vehicle to a third party without the Company's consent, which subsequently came to be used for transporting contraband liquor, as revealed from a notice received from Barava Police Station, Haryana. To save his own skin and to harass the Petitioner, the Respondent No.2 lodged the impugned FIR Page 2 of 11 Uploaded by MANISH MISHRA(HC01776) on Thu Nov 06 2025 Downloaded on : Thu Nov 06 23:02:53 IST 2025 NEUTRAL CITATION R/CR.MA/16911/2017 ORDER DATED: 03/11/2025 undefined being I-CR No.124 of 2017 registered with Mehsana "B" Division Police Station for the offences punishable under Sections 406, 420 and 114 IPC, making false and concocted allegations of cheating and breach of trust. Hence, the present petition.
3.1. Learned advocate Ms. Rhea Chokshi appearing for the Petitioner submitted that the impugned FIR being I-CR No.124 of 2017 registered with Mehsana "B" Division Police Station for the offences punishable under Sections 406, 420 and 114 of the IPC is ex-facie false, frivolous, and a sheer abuse of the process of law. It is contended that the Petitioner, at the relevant time, was merely discharging his official duties as Location Manager of Hinduja Leyland Finance Ltd., and had no personal role, much less any dishonest intention, in the transaction in question. The allegations made in the FIR are wholly civil and contractual in nature, arising from a loan-cum-finance agreement between the Company and the Respondent No.2, and do not disclose any ingredient of the offences alleged.
3.2. Learned advocate would urge that the essential elements of "criminal breach of trust" under Section 406 IPC or "cheating" under Section 420 IPC are utterly absent in the present case. The entire process of repossession and subsequent release of the vehicle was carried out strictly in accordance with company policy and after obtaining due approval from the higher authorities. The vehicle was released only upon payment of outstanding EMIs and after proper verification, and the receipt of such payment was duly issued by another official of the Company. Ergo, the Petitioner cannot, by any stretch of imagination, be attributed with mens rea or a fraudulent intention requisite to constitute an offence under the aforesaid Page 3 of 11 Uploaded by MANISH MISHRA(HC01776) on Thu Nov 06 2025 Downloaded on : Thu Nov 06 23:02:53 IST 2025 NEUTRAL CITATION R/CR.MA/16911/2017 ORDER DATED: 03/11/2025 undefined provisions.
3.3. It is further submitted that the Respondent No.2, after illegally selling the financed vehicle without the Company's consent and in violation of the loan agreement, appears to have lodged the impugned FIR only as a counterblast to the proceedings initiated against him under Section 138 of the Negotiable Instruments Act for dishonour of cheques issued by him. The FIR, filed more than a year after the transaction, is manifestly motivated, belated, and mala fide, intended solely to harass and pressurize the Petitioner. The factual matrix, as delineated in the record, is utterly devoid of any indica of a dishonest or fraudulent intent on the part of the Petitioner.
3.4. Learned advocate further relied upon the judgment of the Hon'ble Apex Court in Delhi Race Club (1940) Ltd. v/s. State of Uttar Pradesh [2024 INSC 626] and thus prayed to allow the present petition.
4. Per contra, learned Additional Public Prosecutor appearing for the State has strongly opposed the present petition, contending that the FIR discloses commission of cognizable offences under Sections 406, 420 and 114 IPC and, therefore, calls for a thorough investigation. It is submitted that the allegations in the FIR, if taken at their face value, prima facie reveal that the Petitioner, in conspiracy with co-accused Hitendrakumar Raval, caused wrongful loss to the complainant by releasing the repossessed vehicle without the complainant's knowledge and by facilitating its subsequent disposal, thereby attracting the ingredients of criminal breach of trust and cheating.
Page 4 of 11 Uploaded by MANISH MISHRA(HC01776) on Thu Nov 06 2025 Downloaded on : Thu Nov 06 23:02:53 IST 2025NEUTRAL CITATION R/CR.MA/16911/2017 ORDER DATED: 03/11/2025 undefined 4.2. Learned APP would urge that at the stage of investigation, the High Court ought not to undertake meticulous examination of the evidence or enter into disputed questions of fact. Whether the Petitioner acted in good faith or exceeded his official authority are matters which require evidentiary evaluation and cannot be adjudicated in proceedings under Section 482 CrPC. The investigation is at a nascent stage, and the police must be permitted to probe the veracity of the allegations to unearth the true nature of the transaction.
4.3. Upon above submissions, learned APP prayed to dismiss the present petition.
5. Though duly served, none has chosen to appear and contest the petition on behalf of respondent No.2.
6. I have heard the learned advocates appearing for the respective parties and have perused the material available on record with due circumspection.
7. The undisputed factual substratum emerging from the record reveals that the petitioner was serving as an officer of the finance company at the relevant point of time. The complainant had approached the said company seeking financial assistance for the purchase of a truck, for which a loan of Rs.19,70,000/- was sanctioned after the complainant made a down payment of Rs.4,50,000/-.
7.1. It further transpires that, towards repayment of the said loan, the complainant had handed over ten blank cheques to the Page 5 of 11 Uploaded by MANISH MISHRA(HC01776) on Thu Nov 06 2025 Downloaded on : Thu Nov 06 23:02:53 IST 2025 NEUTRAL CITATION R/CR.MA/16911/2017 ORDER DATED: 03/11/2025 undefined financier. A hypothecation agreement was duly executed inter se the parties pursuant to the loan application submitted by the complainant (refer pages 25-30), wherein all terms and conditions were unequivocally assented to by both sides.
7.2. It stands admitted that the complainant subsequently defaulted in payment of the equated monthly installments, thereby compelling the petitioner, acting in his official capacity, to repossess the vehicle in accordance with the contractual stipulations. The record further evinces that the complainant, upon payment of a part of the outstanding amount, regained custody of the truck and thereafter executed a Power of Attorney (refer page 48), transferring possession thereof to a third party. The cycle of default, however, recurred, leading to the initiation of proceedings under Section 138 of the Negotiable Instruments Act against the complainant (refer page 50).
7.3. These undisputed and documentary facts unmistakably demonstrate that the petitioner merely exercised the authority vested in him under the terms of the hypothecation agreement. The factual matrix, as delineated hereinabove, ex facie does not disclose the essential ingredients constituting the offences under Sections 406 or 420 of the Indian Penal Code.
7.4. For the sake of completeness, it would be apposite to advert to Sections 405 and 415 of the Indian Penal Code, the penal consequences of which are embodied in Sections 406 and 420 respectively. The provisions read thus:--
"405. Criminal breach of trust.--Page 6 of 11 Uploaded by MANISH MISHRA(HC01776) on Thu Nov 06 2025 Downloaded on : Thu Nov 06 23:02:53 IST 2025
NEUTRAL CITATION R/CR.MA/16911/2017 ORDER DATED: 03/11/2025 undefined Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits "criminal breach of trust".
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415. Cheating.--
Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to "cheat."
7.5. The Hon'ble Supreme Court, in the case of Delhi Race Club (supra), has elucidated the true purport and legal contour of the offences contemplated under Sections 406 and 420 of the Indian Penal Code, which are reproduced and expounded hereinbelow:--
"406. Punishment for criminal breach of trust.-- Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.
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420. Cheating and dishonestly inducing delivery of property.--
Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, Page 7 of 11 Uploaded by MANISH MISHRA(HC01776) on Thu Nov 06 2025 Downloaded on : Thu Nov 06 23:02:53 IST 2025 NEUTRAL CITATION R/CR.MA/16911/2017 ORDER DATED: 03/11/2025 undefined alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine."
7.6. The Hon'ble Supreme Court, in Delhi Race Club (supra) , has inter alia discussed the distinction between Sections 406 and 420 of the Indian Penal Code, and has further observed that:-
"36. What can be discerned from the above is that the offences of criminal breach of trust (Section 406 IPC) and cheating (Section 420 IPC) have specific ingredients.
In order to constitute a criminal breach of trust (Section 406 IPC): -
1) There must be entrustment with person for property or dominion over the property, and
2) The person entrusted: -
a) dishonestly misappropriated or converted property to his own use, or
b) dishonestly used or disposed of the property or willfully suffers any other person so to do in violation of:
i. any direction of law prescribing the method in which the trust is discharged; or ii. legal contract touching the discharge of trust (see: S.W.P. Palanitkar (supra).
Similarly, in respect of an offence under Section 420 IPC, the essential ingredients are: -
1) deception of any person, either by making a false or misleading representation or by other action or by omission;
2) fraudulently or dishonestly inducing any person to deliver any property, or
3) the consent that any persons shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit (see: Harmanpreet Singh Ahluwalia v. State of Punjab, (2009) 7 SCC 712 : (2009) Cr.L.J. 3462 (SC)) Page 8 of 11 Uploaded by MANISH MISHRA(HC01776) on Thu Nov 06 2025 Downloaded on : Thu Nov 06 23:02:53 IST 2025 NEUTRAL CITATION R/CR.MA/16911/2017 ORDER DATED: 03/11/2025 undefined
37. Further, in both the aforesaid sections, mens rea i.e. intention to defraud or the dishonest intention must be present, and in the case of cheating it must be there from the very beginning or inception.
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43. There is a distinction between criminal breach of trust and cheating. For cheating, criminal intention is necessary at the time of making a false or misleading representation i.e. since inception. In criminal breach of trust, mere proof of entrustment is sufficient. Thus, in case of criminal breach of trust, the offender is lawfully entrusted with the property, and he dishonestly misappropriated the same. Whereas, in case of cheating, the offender fraudulently or dishonestly induces a person by deceiving him to deliver any property. In such a situation, both the offences cannot co-exist simultaneously."
7.7. The punishment for the offences of criminal breach of trust and cheating is prescribed under Sections 406 and 420 of the Indian Penal Code, respectively. The gravamen of the offence under Section 405 IPC lies in entrustment or dominion over property, followed by dishonest misappropriation or conversion thereof to one's own use, or dishonest disposal of such property in violation of any legal direction or contract governing the discharge of such trust. Ergo, only where such dishonest intention coexists with the act of misappropriation or conversion can it be said that the offence of criminal breach of trust stands consummated.
7.8. In the case at hand, the hypothecation agreement itself unequivocally demonstrates that the petitioner, being the financier, retained ownership and dominion over the vehicle in question until the entire loan amount stood duly liquidated. The complainant, having defaulted in repayment, could not, ex facie, claim proprietary Page 9 of 11 Uploaded by MANISH MISHRA(HC01776) on Thu Nov 06 2025 Downloaded on : Thu Nov 06 23:02:53 IST 2025 NEUTRAL CITATION R/CR.MA/16911/2017 ORDER DATED: 03/11/2025 undefined rights over the hypothecated asset. The petitioner's act of repossessing the vehicle, in exercise of the contractual authority vested under the hypothecation agreement, cannot, by any stretch of legal imagination, be construed as constituting the offences punishable under Sections 406 or 420 of the IPC. The filing of the FIR, therefore, appears to be a manifest abuse of the process of law.
8. This Court may gainfully refer to the following observations of this Court in the case of State of Haryana v. Bhajan Lal [1992 Suppl (1) SCC 335], and the law laid down therein has been consistently followed. In para 102, the Hon'ble Apex Court held as under :-
"102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.
(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.
(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a Page 10 of 11 Uploaded by MANISH MISHRA(HC01776) on Thu Nov 06 2025 Downloaded on : Thu Nov 06 23:02:53 IST 2025 NEUTRAL CITATION R/CR.MA/16911/2017 ORDER DATED: 03/11/2025 undefined cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.
(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.
(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a noncognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.
(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.
(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge."
9. In wake of above reasons, the petition deserves consideration and accordingly, it is ALLOWED. The impugned FIR registered as I-C.R.No.124 of 2017 registered with Mehsana "B" Division Police Station and further proceedings arising thereof are hereby quashed and set aside qua the petitioner herein. Rule is made absolute. Direct service is permitted.
(J. C. DOSHI,J) MANISH MISHRA Page 11 of 11 Uploaded by MANISH MISHRA(HC01776) on Thu Nov 06 2025 Downloaded on : Thu Nov 06 23:02:53 IST 2025