[Cites 26, Cited by 0]
Bombay High Court
Bipin Hiralal Shah vs The State Of Maharashtra Through ... on 8 December, 2025
Author: Manish Pitale
Bench: Manish Pitale
2025:BHC-AS:54066-DB
17_WP_1646_11.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
WRIT PETITION NO. 1646 OF 2011
Bipin Hiralal Shah ... Petitioner
vs.
State of Maharashtra,
Through Versova Police Station and another ... Respondents
Mr. Anand Mishra a/w. Adv. A. Shrivastava, Mr. Abdullah Shaikh, Mr. Amit
Dubey and Ms. Priti Rao, i/b. Mr. Ashok M. Saraogi for petitioner.
Dr. Dhanalakshmi S. Krishnaiyer, APP for respondent No.1-State.
Mr. Bharat Manghani, i/b. Ms. Drushti Gala for respondent No.2-original
complainant.
CORAM : MANISH PITALE &
MANJUSHA DESHPANDE, JJ
DATE : 08th DECEMBER, 2025
P.C. :
. Heard learned counsel for the petitioner, the learned APP for
respondent No.1-State and the learned counsel appearing for
respondent No.2 (original complainant), concerning this petition
seeking quashing of Criminal Case No.758/PW/2011, pending before
Andheri Railway Mobile Court.
2. Before referring to the rival submissions, it would be
appropriate to refer to the chronology of events, as discernible from
the documents and material on record.
3. M/s. Hansa Pictures, of whom the petitioner is one of the
partners, entered into a Memorandum of Understanding dated
14.06.2006 (the said MOU) with M/s. Saraswati Films, of which
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respondent No.2 is the proprietor, in the context of rights pertaining
to the film Krrish (the said film), particularly the Tamil dubbed
version of the same for distribution, exhibition and exploiting of
rights. The said MOU recorded that an amount of ₹ 27 lakhs was
paid by the said M/s. Hansa Pictures to M/s. Saraswati Films for
acquiring such rights, which were to be exercised as per clauses of
the said MOU. Clause 11 of the said MOU specifically provided that
in the event any dispute arose out of the terms of the said MOU, the
same would be referred to sole arbitration of the South Indian Film
Chamber of Commerce, Chennai. It is to be noted that the said MOU
was executed at Chennai on 14.06.2006.
4. It appears that disputes arose between the parties, as a
consequence of which, in October 2006, the respondent No.2 filed a
suit bearing O.S. No.7974 of 2006 before the City Civil Court at
Chennai, for a declaration that the said MOU stood terminated from
30.09.2006, with consequential relief of injunction restraining the
said M/s. Hansa Pictures, of which the petitioner is a partner, from
exhibiting the Tamil dubbed version of the said film in the entire
State of Tamil Nadu and further direction to M/s. Hansa Pictures to
submit statement of accounts and upon scrutiny of the same, for a
decree for payment of such amount. A further relief of mandatory
injunction for returning all prints and publicity material pertaining to
the said film, was sought in the aforesaid suit.
5. The petitioner filed an application under Section 8 of he
Arbitration and Conciliation Act, 1996 (Arbitration Act), relying
upon the aforesaid clause 11 of the said MOU, to pray for stay of the
aforesaid suit filed by respondent No.2 and for referring the parties
to arbitration. By an order dated 26.04.2007, the City Civil Court at
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Chennai allowed the application filed by the petitioner and
consequently, directed the parties to be referred to arbitration. It is
an admitted position that no further steps were taken by respondent
No.2 to air his grievances through arbitration or otherwise.
6. Subsequently, in July 2008, respondent No.2 filed Case
No.137/MISC/2008 before the Metropolitan Magistrate, Railway
Mobile Court, Andheri under Section 156(3) of Code of Criminal
Procedure, 1973 (Cr.P.C.), seeking a direction to the police officials of
Versova Police Station, Andheri, Mumbai, to register an FIR against
the petitioner for offences under Sections 406, 409 and 420 of the
Indian Penal Code, 1860 (IPC) and to carry out investigation in that
regard.
7. On 16.10.2008, the said Magistrate, by a cryptic order, allowed
the complaint and directed the said police station to carry out
investigation. It is in pursuance of the said order that criminal
proceedings were undertaken, leading to the said criminal case, of
which the petitioner is seeking quashing in the present petition.
8. In this petition, on 02.07.2012, notice was issued indicating
that the petition would be heard finally at admission stage.
Subsequently, on 12.03.2013, this Court granted Rule upon recording
that prima facie, the dispute appeared to be of civil nature, arising
out of the said MOU and also, recorded that there was an issue
regarding the Magistrate at Bombay having jurisdiction. While
granting Rule, this Court also granted interim relief in terms of
prayer clause (d), as a consequence of which further proceedings in
the criminal case were stayed.
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9. The petition was taken up for hearing and the learned counsel
for the parties were heard at length.
10. Mr. Mishra, learned counsel appearing for the petitioner,
submitted that in the present case, there are various grounds on
which, the petition deserves to be allowed.
11. Firstly, it was submitted that a dispute purely of
civil/commercial nature was sought to be given the colour of
criminality by respondent No.2, and that the said respondent had
initially resorted to civil remedy, by filing the aforesaid suit before
the City Civil Court at Chennai. But, after the said Court allowed the
application of the petitioner, filed under Section 8 of the Arbitration
Act, and relegated the parties to arbitration, instead of taking further
logical steps in that regard, the said respondent belatedly filed the
complaint before the aforesaid Magistrate, invoking jurisdiction
under Section 156(3) of Cr.P.C. It was submitted that such conduct
on the part of the said respondent, ought to be deprecated and the
present petition deserves to be allowed.
12. Secondly, it was submitted that even if the contents of the
complaint filed before the Magistrate, are to be perused, the
ingredients of the alleged offences under Sections 406, 409 and 420
of the IPC, are not made out and therefore, on the face of it, the
criminal proceedings are unsustainable and that they deserve to be
quashed. In support of the aforesaid contention, the learned counsel
for the petitioner relied upon the judgments of the Supreme Court in
the case of Anukul Singh vs. State of Uttar Pradesh and another
(judgment and order dated 24.09.2025 passed in Criminal Appeal
No.4250 of 2025), as also Naresh Kumar and another vs. The State
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of Karnataka and another [judgment and order dated 12.03.2024
passed in Criminal Appeal arising out of SLP (Crl.) No.1570 of 2021]
and Shailesh Kumar Singh alias Shailesh R. Singh vs. State of Uttar
Pradesh and others (2025 SCC OnLine SC 1462).
13. Thirdly, it was submitted that in the present case, even
according to respondent No.2, the entire cause of action, if at all, had
arisen at Chennai and that the Magistrate at Andheri had absolutely
no jurisdiction to even entertain the complaint filed by the said
respondent. It was submitted that even if the statements made in the
complaint, were to be taken at their face value, it was clear that the
Magistrate could not have entertained the said complaint.
14. Fourthly, it was submitted that in the present case, the
mandate of law, as recognized by the Supreme Court in the case of
Priyanka Srivastava and another vs. State of Uttar Pradesh and
others [(2015) 6 SCC 287], was not followed. The complaint does
not divulge as to whether respondent No.2 had made prior
applications under Sections 154(1) an 154(3) of the Cr.P.C., before
resorting to filing application under Section 156(3) of Cr.P.C. before
the Magistrate. The order of Magistrate does not record any such
effort made on behalf of the said respondent, thereby indicating that
the order passed by the Magistrate, which ultimately led to the
criminal proceedings being initiated against the petitioner, was
wholly unsustainable. On this ground also, it was submitted that the
petition deserves to be allowed in the interest of justice.
15. On the other hand, Dr. Krishnaiyer, the learned APP
vehemently submitted that this is not a fit case for exercising power
under writ jurisdiction or inherent power of this Court to interdict
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criminal proceedings at this stage itself. It was submitted that the
complaint read as it is, on the face of it, makes out a case
demonstrating ingredients of alleged offences and that therefore, the
petition ought to be dismissed.
16. It was submitted that the definition of criminal breach of trust,
under Section 405 of the IPC, makes it amply clear that the
allegations made against the petitioner make out ingredients of the
alleged offences and therefore, no indulgence needs to be shown to
the petitioner. It was further submitted that on the same set of facts,
civil and criminal proceedings can be initiated as recognized by the
Supreme Court in various judgments, including in the case of S. N.
Vijayalakshmi and others vs. State of Karnatak and another (2025 SC
1575). It was submitted that so long as the complaint prima facie
discloses the element of criminality, the same cannot be quashed.
17. Reliance was also placed on the judgment of the Supreme
Court in the case of B. N. John vs. State of U.P. and another
[judgment and order dated 02.01.2025 passed in Criminal Appeal
arising out of SLP (Crl.) No. 2184 of 2024], to contend that the facts
of the present case, do not fall within any of the 7 categories stated
by the Supreme Court in the case of State of Haryana and others vs.
Bhajan Lal and others [1992 Supp (1) SCC 335], and that the
Supreme Court, in the case of CBI vs. Tapan Kumar Singh [(2003) 6
SCC 175], had emphasized on the aspect that the information given
by the complainant/first informant, must disclose commission of
cognizable offence and since the complaint in the present case, does
show the ingredients of the alleged offences, the petition deserves to
be dismissed.
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18. Apart from this, reference was made to a report submitted by
the Senior Police Inspector of Versova Police Station to the concerned
Magistrate, copy of which is tendered across the bar. It was
submitted that the said report refers to a cheque given by the
petitioner at Mumbai and the discussion regarding the said MOU also
having taken place at Mumbai, to indicate the aspect of jurisdiction.
Reference was made to Section 178 of the Cr.P.C., to claim that so
long as the part of the cause of action arose at Mumbai, the
petitioner could not claim lack of territorial jurisdiction of the
Magistrate.
19. Mr. Manghani, the learned counsel appearing for respondent
No.2 supported the submissions made by the learned APP. In the
context of territorial jurisdiction, apart from relying upon the report
referred to by the learned APP, reference was made to a letter
allegedly written on 15.06.2006 by respondent No.2 to the
petitioner, asking him to prepare a demand draft for an amount of
₹ 27 lakhs payable at Mumbai. Copy of the said letter was tendered
across the bar.
20. Apart from this, the learned counsel for respondent No.2 relied
upon judgments of the Supreme Court in the case of Rajesh Bajaj vs.
State NCT of Delhi and others [(1999) 3 SCC 259] and Trisuns
Chemical Industry vs. Rajesh Agarwal and others [(1999) Supp. 2
SCR 686], as also Digambar Pathak vs. State of Uttar Pradesh and
others [judgment and order dated 15.07.2025 passed in Criminal
Appeal arising out of SLP (Crl.) No. 7341 of 2025] and Somjeet
Mallick vs. State of Jharkhand and others [judgment and order dated
14.10.2024 passed in Criminal Appeal arising out of SLP (Crl.)
No.6583 of 2024]. By relying upon the said judgments, it was
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submitted that the contention pertaining to territorial jurisdiction
was wholly unsustainable because the Supreme Court in the case of
Trisuns Chemical Industry vs. Rajesh Agarwal and others (supra), has
specifically held that the territorial jurisdiction was more concerned
with the trial of the case rather than cognizance being taken by the
Magistrate. It was submitted that by the aforesaid judgments, the
Supreme Court has repeatedly held that so long as the ingredients of
the alleged offences are made out, merely because the dispute is of
civil or contractual nature, the same would not mean that criminal
proceedings cannot be maintained under any circumstances. It was
submitted that therefore, in the facts of the present case, even if
respondent No.2 had resorted to civil remedy, which terminated in a
particular manner, it cannot be said that the criminal case could not
be instituted against the petitioner, so long as the ingredients of the
offences were made out. On this basis, it was submitted that the
petition ought to be dismissed.
21. We have considered the rival submissions. The grounds raised
on behalf of the petitioner and responded to by the learned APP for
the State as well as the learned counsel for respondent No.2, give
rise to various questions. But, the aspect that goes to the very root of
the matter is, as to whether the contents of the complaint prima facie
make out the ingredients of the alleged offences. Nonetheless, the
other aspects that arise for consideration, also need to be considered
and therefore, before going to the root of the matter, this Court is
inclined to examine the other aspects of the matter.
22. The petitioner claims that the present case essentially involves
a civil/contractual dispute between the parties to which, the
respondent No.2 is deliberately seeking to give the colour of
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criminality. In this context, much emphasis has been placed on the
proceedings before the City Civil Court at Chennai and the manner in
which the proceedings terminated.
23. A perusal of the documents on record shows that the said MOU
was indeed executed at Chennai. It pertained to mutual obligations
of the parties, in the context of rights given to the petitioner to
distribute, exhibit and exploit the said film, particularly the dubbed
version thereof. The relevant clause of the said MOU refers to an
advance amount of ₹ 27 lakhs paid by the petitioner to respondent
No.2. There is no dispute about the said amount having exchanged
hands.
24. A perusal of the complaint concerning the suit filed by
respondent No.2 before the City Civil Court at Chennai, shows that
the crux of the dispute raised by the said respondent, concerned
alleged breach of certain clauses of the said MOU, failure on the part
of the petitioner to render proper accounts and the perceived loss
suffered by the said respondent, due to the alleged acts of the
petitioner. The prayer clause makes it clear that according to the said
respondent, the said MOU stood terminated on 30.09.2006, leading
to a situation where the said respondent was claiming consequential
injunctions against the petitioner and also, a direction to furnish true
and correct statement of accounts, so that a decree for monetary
relief could be passed in favour of the said respondent.
25. This Court is of the opinion that the contents of the plaint and
the nature of the prayer clause, makes it amply clear that the said
respondent was aggrieved by the perceived monetary loss and that a
decree in that regard could follow only upon the statement of
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accounts being rendered by the petitioner and City Civil Court
coming to the conclusion that there was indeed substance in the
allegations made by respondent No.2.
26. It is a matter of record that the City Civil Court at Chennai
allowed the application filed on behalf of the petitioner, effectively
terminating the suit and referring the parties to arbitration. It is also
an admitted position on facts that thereafter, respondent No.2 chose
not to take any further steps to seek redressal of its grievances stated
in the aforementioned plaint. No arbitration proceeding was initiated
and no further proceedings were undertaken on the civil side for
seeking relief with regard to the alleged monetary loss suffered by
the said respondent.
27. The City Civil Court at Chennai allowed the application of the
petitioner, filed under Section 8 of the Arbitration Act, by order dated
26.04.2007. More than an year later i.e. in July 2008, respondent
No.2 initiated the aforesaid criminal case against the petitioner, by
filing the application under Section 156(3) of Cr. P.C. The contents of
the complaint do show that the grievances sought to be raised
therein, were nothing but a reflection of the contents of the plaint
concerning the suit filed before the City Civil Court at Chennai. As to
whether the contents of the complaint prima facie constitute the
ingredients of the alleged offences will be dealt with hereinafter. But,
a perusal of the complaint does make out a case in favour of the
petitioner, to claim that the colour of criminality was being sought to
be given by the said respondent to a dispute, which essentially had
its roots in a civil/commercial/contractual dispute.
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28. The Supreme Court, in the case of Anukul Singh vs. State of
Uttar Pradesh and another (supra) referred to its earlier judgment in
the case of Indian Oil Corporation vs. M/s. NEPC India Ltd. [(2006)
6 SCC 738], to take note of the growing tendency in business circles
to convert purely civil disputes into criminal cases. The Supreme
Court did recognize the fact that a given set of facts may give rise to
purely a civil wrong; or purely a criminal offence; or a civil wrong as
also a criminal offence. But, it was recorded that while a criminal
case cannot be quashed merely because it relates to commercial
transaction, considering the aforesaid growing tendency of giving the
colour of criminality to purely civil disputes, the Courts should be
alive to the situation, while considering the prayers for quashing of
criminal cases arising out of contractual disputes between the
parties.
29. In the said judgment, reference was also made to the
illustrative categories, recorded in the judgment of the Supreme
Court in the case of State of Haryana and others vs. Bhajan Lal and
others (supra). The petitioner claims that the present case is covered
under categories 1 and 7 of the said illustrations. This Court will
consider the said submissions, while considering as to whether prima
facie case is made out for alleged ingredients of the offences.
30. But, in the light of the admitted position on facts and having
perused the plaint in the suit filed before the City Civil Court at
Chennai and also, the contents of the complaint filed before the
Magistrate at Andheri, we find that this is indeed a case, where a
dispute essentially of civil/contractual/commercial nature, is sought
to be given the colour of criminality on the part of respondent No.2.
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31. This brings us to the next ground of challenge raised on behalf
of the petitioner pertaining to the territorial jurisdiction of the
Magistrate at Andheri, Mumbai. We find that the admitted facts on
record indicate that the said MOU was executed at Chennai. The
grievance of respondent No.2 pertained to the alleged distribution
and exhibition of the said film in breach of the terms of the said
MOU, outside the State of Tamil Nadu and even a Telugu version in
the State of Karnataka. There is no reference to any such
distribution/exhibition within the jurisdiction of Versova Police
Station or the Magistrate at Andheri. A perusal of the complaint filed
under Section 156(3) of the Cr.P.C. shows that no reference is made
to any event or occasion that occurred within the jurisdiction of the
said Magistrate at Andheri, Mumbai. Thus, a reading of the
complaint itself shows that there was no reason why the Magistrate
at Andheri could have entertained the complaint under Section
156(3) of the Cr.P.C.
32. At this stage, we find that the learned counsel for the
petitioner is justified in objecting to copy of the letter dated
15.06.2006, being furnished across the bar by the learned counsel for
respondent No.2, purporting to be a letter sent by respondent No.2
to the petitioner, which indicated that the demand draft for the
agreed amount was payable at Mumbai. Similarly, reliance placed by
the learned APP on the report submitted by the Senior Police
Inspector from Versova Police Station to the Magistrate at Andheri,
can be of no avail, as it simply records that discussion appears to
have been taken place between the parties at Mumbai and cheque
was given at Mumbai.
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33. What is important in such situation is as to what are the
allegations levelled by respondent No.2 (complainant) before the
Magistrate, pursuant to which the FIR had been registered and the
criminal case has proceeded. The contents of the complaint and the
allegations made therein, make no reference to any cause of action at
Mumbai. In such a situation, Section 178 of Cr.P.C. cannot come to
aid of respondent No.2 and therefore, on this count also, the
petitioner has made out a case in his favour. But, we do find some
substance in the contention raised by the learned APP that if that be
so, at worst, the case could be transferred to the jurisdictional
Magistate. But, the petitioner cannot be left scot-free. In the context
of the findings rendered in favour of the petitioner on other issues,
the aforesaid contention raised by the learned APP pales into
insignificance.
34. The petitioner has also harped on the fact that the Magistrate
erred in passing the order, leading to registering of the FIR, without
ascertaining as to whether the respondent had satisfied the
requirements under Section 154(1) and 154(3) of the Cr.P.C. There is
no statement made in the complaint filed by the respondent No.2, as
to whether and in what manner efforts were made before the
concerned police station or higher police officials for registration of
FIR prior to filing of complaint under Section 156(3) of the Cr.P.C.
35. The order dated 16.10.2008 passed by the Magistrate, is a
cryptic order, which indicates no reasoning or application of mind,
prior to issuing direction for investigation and eventual registration
of FIR against the petitioner. The judgment of the Supreme Court in
the case of Priyanka Srivastava and another vs. State of Uttar
Pradesh and others (supra), lays down that the Magistrate, in such
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cases, is required to give some reasoning, divulging application of
mind, while issuing such direction regarding initiation of
investigation. The said order of the Magistrate falls woefully short of
meeting the standards laid down by the Supreme Court, thereby
indicating that the said aspect of the matter inures to the benefit of
the petitioner.
36. We are conscious of the fact that the Supreme Court, in the
subsequent judgment in the case of Kanishk Sinha and another vs.
State of West Bengal (2025 SCC OnLine SC 443), held that the
direction given in the case of Priyanka Srivastava and another vs.
State of Uttar Pradesh and others (supra), of filing affidavit in
support of the complaint under Section 156(3) of Cr.P.C., would
apply prospectively. But, that in itself cannot assist the respondent
No.2, for the reason that in the present case, the respondent No.2
failed to state in the complaint as to what efforts were made to
approach the concerned police station or senior Police Officers before
filing the said complaint directly before the Magistrate and that too,
more than one year after the order passed by the City Civil Court at
Chennai.
37. This brings us to the heart of the matter, which is as to
whether the complaint of respondent No.2, accepting the contents as
it is on face value, make out the ingredients of the alleged offences
against the petitioner.
38. Having perused the contents of the complaint, we find that
throughout the complaint, the focus of respondent No.2 is on the
alleged breach of contractual terms by the petitioner, in the context
of the said MOU. There is a reference to termination of contract due
to the alleged breaches on the part of the petitioner and the
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grievance of the said respondent is throughout concerning breach of
contract and consequential alleged monetary loss. We find that the
contents of the complaint prima facie do not make out the
ingredients of the offence of criminal breach of trust, as defined
under Section 405 of IPC. A perusal of the definition shows that the
respondent No.2 was required to state in the complaint as to how the
property made over or entrusted to the petitioner, had been misused,
leading to breach of trust reposed by respondent No.2 in the
petitioner. We find that this is a case of pure contractual dispute,
wherein one party is dissatisfied by the manner in which the rival
party has breached the terms of contract. Undoubtedly, the same set
of facts can indeed give rise to civil and criminal cases. But, as
cautioned by the Supreme Court, the complaint must at least prima
facie show the ingredients of the alleged offences. We are not
satisfied that the ingredients of the offence are made out.
39. As regards the offence of cheating, there is substance in the
contention raised on behalf of the petitioner that for alleging
cheating, there has to be an allegation that from the very beginning,
the accused person had the intention of luring or cheating the
aggrieved person. There is no such allegation in the complaint filed
by respondent No.2. It is also to be noted that the Supreme Court has
repeatedly held that the offence of criminal breach of trust on the
one hand and cheating on the other, cannot go together. This has
been reiterated in various judgments, including judgment of the
Supreme Court in the case of Delhi Race Club (1940) Limited vs.
State of Uttar Pradesh [(2024) 10 SCC 690] and Shailesh Kumar
Singh alias Shailesh R. Singh vs. State of Uttar Pradesh and others
(supra). We find that this aspect also inures to the benefit of the
petitioner.
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40. In view of the above, we find that the petitioner has made out
a strong case in his favour, to demonstrate that the dispute between
the parties, in the present case, was a purely
civil/contractual/commercial dispute and that the respondent No.2
sought to give it the colour of criminality. The respondent No.2
having initiated proceedings on the civil side, which terminated in
the parties being referred to arbitration, failed to initiate any further
proceedings on the civil side. We are clear that merely because there
is an arbitration clause in the said MOU or that civil proceedings
were initiated by respondent No.2, cannot and is not a ground for
this Court to hold in favour of the petitioner. But, the petitioner has
succeeded on the touchstone of demonstrating that even if the
contents of the complaint are accepted as it is, the ingredients of the
alleged offences are not made out.
41. In view of the above, the petition is allowed in terms of prayer
clause (b). Accordingly, Criminal Case No.758/PW/2011 pending
before Andheri Railway Mobile Court, is quashed. Pending interim
applications, if any, also stand disposed of.
(MANJUSHA DESHPANDE, J.) (MANISH PITALE, J.)
Priya Kambli
PRIYA KAMBLI
KAMBLI Date:
2025.12.10
17:09:07 +0530
