Bombay High Court
Vijay L Ghate And Anr vs State Of Maharashtra And Anr on 5 August, 2025
Author: A. S. Gadkari
Bench: A. S. Gadkari
2025:BHC-AS:33275-DB
KVM WP 2424-23.doc
Digitally signed
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
KANCHAN by KANCHAN
VINOD
VINOD MAYEKAR
MAYEKAR Date: 2025.08.05 CRIMINAL APPELLATE JURISDICTION
14:57:57 +0530
CRIMINAL WRIT PETITION NO. 2424 OF 2023
1. Shri Vijay L Ghate, )
Age Adult, Occ. Business, )
Flat No.404, Silver Leaf-2, )
Model Colony, Shivaji Nagar, )
Pune 400 0016. )
2. Shri Mandar S. Sawant )
Age Adult, Occ. Business, )
A/3903 Alpine Tower, )
Thakur Village, Opp. Thakur )
College, Kandivali East, )
Mumbai 400 101. ) ..Petitioners
(Org. Accused Nos.4 and 5)
Vs.
1. The State Of Maharashtra )
Through Nayanagar Police Station, )
C. R. No. 303 of 2022. )
2. Shri Mahesh Ramesh Madan )
Age : 54, Occ.: Business, )
B/13, Karishma CHS Ltd., )
Opposite to Padmavati Garden Hall, )
New Link Road, Borivali West )
Mumbai 400 091. ) ...Respondents
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KVM WP 2424-23.doc
Mr. Pratik S. Sabrad a/w. Mr. Suresh M. Sabrad, Mr. Amey Sawant, Ms.
Neha Parte, Ms. Gracy Saldana for Petitioners.
Smt. Prajakta P. Shinde, for the Respondent-State.
Mr. Parag Mishra for Respondent No.2.
______________________________
CORAM : A. S. GADKARI AND
RAJESH S. PATIL, JJ.
RESERVED ON : 12th June 2025
PRONOUNCED ON : 5th August 2025
JUDGMENT ( Per : Rajesh S. Patil, J.) :
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1) The Petitioners (original Accused Nos.4 and 5) have filed this
Petition under Article 226 of the Constitution of India read with Section 482
of the Code of Criminal Procedure, to quash and set aside the Chargesheet
No.14502 of 2022 qua the Petitioners, pending on the file of learned
Judicial Magistrate First Class (Court No.8), Thane, arising out of C.R. No.
303 of 2022, registered with Naya Nagar Police Station, Mira-Bhayandar
Vasai-Virar, dated 10th May 2022, for the offences punishable under Section
420, 407 read with 34 of the Indian Penal Code.
2) In the First Information Report (FIR) it is alleged by the
Respondent No.2, Complainant that, he along with the accused persons
were partners of a firm known as 'Sameer Wines'. The said firm was
carrying on the business of a wine shop based on a license which was in the
name of Accused Nos. 1, 2 and 3. It is further alleged that, all the accused
persons have cheated the Respondent No.2 and so also there is a breach of
KVM WP 2424-23.doc
trust by accused persons as they transferred the funds of the Partnership
Firm to a separate bank account opened by them, excluding the
complainant. So also, they prevented the complainant from entering into
the premises in which the partnership business was carried out. Hence, they
have cheated the complainant and therefore, the FIR was lodged against
the accused persons.
3) It is submitted by the Petitioners who have been arraigned as
accused Nos. 4 and 5 in the FIR and subsequently in the charge-sheet that,
on the face of the records and evidence which have been produced by the
prosecution, no case is made out against present Petitioners. It is submitted
that, whatever amounts that have been transferred from the old bank
account to the new bank account were used only for the purpose of making
payments of the dues from whom stocks were purchased and in fact,
payment of much more amounts have been made then that was transferred
from the old bank account. The dispute raised by the Respondent No.2, is of
purely civil nature. The said fact is admitted by the Respondent No.2, as he
had on 11th November 2021, filed an Arbitration Suit under Section 9 of
Arbitration and Conciliation Act, 1996, before the Civil Judge Senior
Division, Thane. Much later, on 10 th May 2022, present FIR has been lodged
by the Respondent No.2, alleging therein that the offence was committed
on 31st March 2021. In Section 9 Suit the reliefs as prayed by the
Respondent No.2 were not granted and hence, with ulterior motive present
KVM WP 2424-23.doc
FIR has been lodged. The Arbitration Proceedings are pending before
learned Arbitrator. The dispute is purely a civil dispute between the
partners of a Partnership Firm, hence, present FIR and the charge-sheet
filed should be quashed and set aside.
4) Learned APP and learned Advocate appearing for Respondent
No.2 opposed present Petition. It is submitted that, it is a clear case of
cheating committed by partners against one partner of the firm. The funds
of the partnership Firm were transferred in the individual accounts of the
accused persons and so also, the Respondent No.2 was not allowed to enter
inside the premises where the partnership Firm's business was carried on.
Hence, FIR is lodged and further charge-sheet is filed and at this stage the
charge-sheet can't be quashed.
5) We have heard learned Advocate for the respective parties and
considered the documents on record including the FIR and charge-sheet.
6) It is the case of the Respondent No.2, that in the year 2005, he,
along with one Mr. Jagdish Shetty had taken the Shop No. 4 at Borivali to
conduct the business of Wine Shop from Accused No. 1 to 3 ("the Patil
brother's"). Subsequently, the said Mr. Jagdish Shetty retired from the
partnership and the complainant, inducted his daughter in the said
partnership business on 10th May 2011. In the year 2012, a new Partnership
Deed was executed wherein the Respondent No.2 along with the Petitioner's
herein and Mr. Vaibhav Patil were inducted as partners. The business of
KVM WP 2424-23.doc
wine shop, which was conducted at Shop No. 4, at Borivali, was shifted to
Mira Road, Thane. In the Partnership Deed there was a specific clause that
the bank accounts of the partnership Firm would be operated by any two
partners. Clause 8 of Partnership Deed reads as under:
"8. The Bank Account or Accounts of the partnership business may
be opened in the name of the firm and mentioning name of all the
partners. However it should be operated and signed by at least two
partners in following fashion i.e. by Partner 1 or partner 2 & partner 3
or Partner 4."
7) Therefore, as per Clause 8, one of the Complainant or Accused
No. 1, was permitted to sign cheques on behalf of the partnership Firm.
Thus it was agreed by partners that, all the partners need not sign the
cheques on behalf of the partnership firm and either of the Petitioners were
permitted to sign on behalf of the firm.
8) When dispute arose between partners, the Respondent No.2
had invoked the Arbitration Clause under Section 9 of the Arbitration &
Conciliation Act, by filing a suit on 11 th November 2021, seeking reliefs of
restraining the Respondents therein from depositing sale proceeds of the
firm in the bank account of M/s. Sameer Winess, and to allow the
Respondent No.2 herein to enter into the shop where the partnership
business was conducted. Based on undertaking given by the Advocate of
Respondents therein (accused herein), the relief of not to transfer sale
proceeds of M/s. Sameer Wines into the bank account of M/s. Sameer
KVM WP 2424-23.doc
Winess, was granted on 6th May 2022. All the reliefs as prayed in the
Section 9, suit were not granted. Thereafter, on 10 th May 2022, the present
FIR was lodged, for an alleged incident occurred in 31st March 2021.
9) Thereafter, the Respondent No.2 on 11 th December 2023,
preferred an application for appointment of Arbitrator, under Section 11 of
the Arbitration and Conciliation Act, before the learned Single Judge of this
Court. By an Order dated 24 th February 2025, the Section 11 Application
was allowed and an Arbitrator was appointed to resolve the dispute and
differences arising out of Partnership Deed.
10) It is also pertinent to note that, the Respondent No.2 has not
disclosed in the FIR about the initiation of Arbitration Proceedings and the
Order passed therein by the Civil Judge Senior Division, Thane, in Section 9
Application filed by him. This has much bearing on the FIR since without
disclosing all the facts, the FIR has been lodged before the Police by the
Respondent No.2. This according to us is also one more reason why the FIR
and the charge-sheet filed thereof needs to be quashed and set aside.
11) The Respondent No.2 himself invoked the Arbitration
proceedings and after a considerable time lodged this FIR. In our view this
actually amounts to a businessman, converting a purely civil dispute into a
criminal case. Solely because civil law remedies are time-consuming and
also because in a criminal prosecution there is a likelihood of quick
settlement as criminal prosecution amounts to applying pressure on the
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accused.
11.1) Supreme Court in the case of Mitesh Kumar Shah vs. State of
Karnataka reported in (2022) 14 SCC 572 , while dealing with the aspect of
civil dispute being converted into criminal cases, considered the cases of (i)
M/s. Indian Oil Corporation vs. M/s. NEPC Indian Ltd & Ors. reported in
(2006) 6 SCC 736, (ii) G. Sagar Suri & Anr. vs. State of Uttar Pradesh &
Ors. reported in (2000) 2 SCC 636 and the case of (iii) Randheer Singh vs.
State of Uttar Pradesh & Ors. decided in Criminal Appeal No. 932 of 2021
on 02.09.2021, and in para 44, held that a civil dispute should not be
converted into a Criminal Case. This will amount to an abuse of process of
law. The said para 44 reads as under:
"44. Moreover, this Court has at innumerable instances
expressed its disapproval for imparting criminal color to a civil
dispute, made merely to take advantage of a relatively quick
relief granted in a criminal case in contrast to a civil dispute.
Such an exercise is nothing but an abuse of the process of law
which must be discouraged in its entirety."
12) Similarly recently in the case of, Naresh Kumar & Anr. vs. State
of Karnataka reported in 2024 SCC OnLine SC 268, the Hon'ble Supreme
Court has held that, criminal proceeding cannot be used as a weapon of
harassment in a dispute, which is essentially of a civil nature. Para No. 9 of
the said judgment reads as under:
KVM WP 2424-23.doc
"9. In the case at hand, the dispute between the parties was
not only essentially of a civil nature but in this case the
dispute itself stood settled later as we have already discussed
above. We see no criminal element here and consequently the
case here is nothing but an abuse of the process. We therefore
allow the appeal and set aside the order of the High Court
dated 02.12.2020. The criminal proceedings arising out of
FIR No. 113 of 2017 will hereby stand quashed."
13) In the present proceedings the dispute between the parties
arise out of a contract, i.e. a Partnership Deed. The Respondent No.2
himself has invoked the Arbitration clause since according to him, there was
dispute between him and the partners. In fact, the Accused No. 2 & 3 are
not even partners in the said partnership firm. After filing the Section 9
Application under the Arbitration Act, the Respondent No.2 chose to file the
present crime. All the prayers made in the Section 9 Applications were not
granted by the Civil Court. The only question then remains to be answered
is whether ingredients of offences under Section 420, 406 read with 34 of
IPC are prima-facie made out. Going by the fact as narrated in the FIR and
more importantly, the suppression of the fact about Arbitration proceedings
in the FIR, in our view, the FIR and the Charge-sheet does not prima-facie
disclose the commission of an offence under Sections 420, 406 read with 34
of IPC, by the present petitioners. The allegation against the petitioner are
insignificant on the basis of which no prudent person could reach to a
conclusion that there is sufficient ground to proceed against the Petitioners
KVM WP 2424-23.doc
(Accused No. 4 & 5). We find there are no merits in the FIR lodged as
against the Petitioners and the charge-sheet filed thereof, so far as the
Petitioners (Accused No. 4 & 5) are concerned for the offence punishable
under Sections 420, 406 read with 34 of IPC.
14) Hence, the present Writ Petition is allowed in terms of prayer
clause (a).
15) Our findings noted above are pertaining to the present criminal
case, qua the Petitioners only and we have not dealt with the merits of the
civil dispute interse between the parties. The Arbitration Proceedings filed
by the Respondent no.2 be decided without being influenced by the findings
recorded by us in the present Judgment.
(RAJESH S. PATIL, J.) (A.S. GADKARI, J.)
