Bombay High Court
Prajakta Mahendra Agrawal And Another vs The State Of Maharashtra And Another on 20 September, 2025
2025:BHC-AUG:25472-DB
13.Cri.Appln.-1438-2022.odt
0IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
Criminal Application No. 1438 Of 2022
1. Prajakta Mahendra Agrawal
Age 35 years, Occ.: Household,
R/o. Rajendra Prasad Road, Jalna.
2. Giridharilal Shivdas Agrawal
Age 70 years, Occ.: Business,
R/o. Rajendra Prasad Road, Jalna. .. Applicants
Versus
1. The State of Maharashtra
Through Police Inspector,
Sadar Bazar Police Station,
Jalna.
2. Jawahar s/o. Shankarlal Dembda
Age 46 years, Occ.: Business,
R/o. Vasundhara Nagar, Jalna. .. Respondents
*****
* Advocate for the Applicants :
Mr. Vishal A. Bagdiya
* APP for the Respondent No.1/State :
Mr. S. R. Wakale
* Advocate for the Respondent No.2 :
Mr. Aditya N. Sikchi
*****
CORAM : SANDIPKUMAR C. MORE AND
MEHROZ K. PATHAN JJ.
RESERVED ON : 8th SEPTEMBER 2025
PRONOUNCED ON : 20th SEPTEMBER 2025
[1]
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J U D G M E N T (Per Mehroz K. Pathan, J.) :
1. The Applicants have filed the present application for
quashing of the First Information Report registered as Crime
No.051/2022 at S.B. Police Station, Jalna for the offences
punishable under Sections 420, 406 and 34 of the Indian Penal
Code.
2. During the pendency of the present application, the
Respondent/Sadar Bazar Police Station, where the crime was
registered, has filed the charge-sheet before the learned
jurisdictional Court i.e. Judicial Magistrate First Class, Jalna. The
Applicants - Prajakta and Girdharilal have thus amended the
application for quashing and now sought quashment of the entire
charge-sheet and the proceeding bearing RCC No.1058/2022
pending before the Judicial Magistrate First Class, Jalna.
3. The brief facts in a nutshell are as under :
. That the complainant - Jawahar Dembda has filed a
complaint before the police station, thereby stating that he was a
resident of Jalna and friend of the Accused No.1/Mahendra
Girdharilal Agrawal. The complainant used to visit the house of
Mahendra Girdharilal Agrawal and therefore knew his father -
Girdharilal Agrawal and Mahendra's wife - Prajakta Mahendra
Agrawal. The Agrawal family had a business of Mahendra Tyres.
4. It is alleged by the complainant that in the year 2019, the
accused/Girdharilal and Prajakta alongwith Mahendra had asked
the complainant to join them into a new business venture as a
13.Cri.Appln.-1438-2022.odt
partner. The accused persons had assured that the business of
real estate, is going to flourish in the future, and time and again
induced the complainant to invest into the real estate project,
despite of the initial reluctance of the complainant. On the day of
Vijayadashami in the year 2019, there was a meeting with all the
accused persons with the complainant and it was decided that
they would purchase the land and after demarcating plots, the
same would be sold to the public in general and whatever profits
that would be coming out of such project, would be equally
shared by all the four persons. It was further decided that if any
of the partners wants to induct some new partners, it would be
from their personal share and not the share of other partners.
That the complainant has thus deposited an amount of Rs.25
Lacs alongwith the other partners to raise a capital to purchase
the land after about eight to ten days of the meeting in the year
2019.
5. The three accused persons have allegedly assured the
complainant that a land admeasuring area 10 acre would be
purchased in the city of Jalna and that further plot would be
demarcated and sold and it was assured that the registry of the
said plot would be executed till Diwali 2019. However the registry
of the said plot was not executed even after Diwali 2019 and as
such the complainant inquired about the same from the accused
persons. The accused persons replied that though the amount of
consideration was paid to the land owner, however the land
owner is demanding more amount of consideration as the land
rates have increased due to passage of time. It was then stated
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by the accused persons that additional amount of Rs.25 Lacs
would be required to be deposited by all the partners.
6. The complainant was not ready to deposit such additional
amount of Rs.25 Lacs and asked the accused persons to return
back his initial amount of Rs.25 Lacs. However the accused
persons have informed the complainant that if he does not
deposit 25 Lacs rupees more, then the other partners would be
inducted by them as huge profits are going to be earned by
purchase of such land by the partners. It was also informed that
they would be returning the complainant 25 Lacs rupees only
after the profits are gained out of the project. The complainant
was therefore allegedly induced by the accused persons to
additionally deposit an amount of Rs.25 Lacs. However this time
the complainant got an agreement prepared on a stamp paper of
Rs.100 thereby mentioning about the payment of Rs.25 Lacs in
addition to the earlier amount of Rs.25 Lacs paid to the accused
for purchasing of the land which was signed by accused
No.1/Mahendra Girdharilal Agrawal. The accused persons have
assured in the agreement that the registry/sale deed of the plot
intended to be purchased would be executed by March, 2020.
7. It is stated that in the FIR that as Corona had spread its
wings in the month of March 2020 and there was a lock-down,
the registry could not be executed. The complainant had
thereafter time and again requested the accused persons for
execution of the sale deed. However it was informed that
accused no. 1/Mahendra Girdharilal Agrawal had died due to
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corona on 11.07.2020. After the mourning period was over, the
complainant had visited the house of Mahendra, requesting for
execution of sale deed to the Applicants - Girdharilal (father) and
Prajakta (wife). However they refused to execute any such
agreement or payback the amount deposited by the complainant.
The complainant further alleges in the FIR that as the wife of the
complainant is suffering from cancer, he was required to spend
an amount of Rs.70 to 80 Lacs for her medical treatment and as
such when he had approached the accused Girdharilal (father)
and Prajakta (wife of the deceased Mahendra), the accused
persons informed that the land owner has taken the money and
is not returning back, however they did not disclose the name of
the land owner. The complainant suspected the conduct of the
accused no.2- Girdharilal (father) and Prajakta (wife of the
deceased Mahendra), and realized that such act on the part of
the complainant amounts to cheating the complainant of his hard
earned money of Rs.50 Lacs and criminal breach of trust as the
Applicants have not purchased the land in the city of Jalna nor
returned back the amount to the complainant. The complainant
thus prayed for appropriate action against the accused persons.
8. The Applicants Prajakta and Girdharilal (wife and father of
Mahendra) have approached this Hon'ble Court, seeking
quashment of the said FIR and the charge-sheet on the ground
that this is the fit case, wherein the civil dispute has been given
a colour of the criminal offence. The Counsel for the Applicants
would submit that the agreement executed on a stamp paper
dated 08.01.2020 which is mentioned in the FIR, is executed by
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Mahendra Girdharilal Agrawal who has already expired on
11.07.2020. The said agreement nowhere bears the signature of
the Applicants - Girdharilal (father) and Prajakta (wife of
deceased Mahendra). The main thrust of the arguments of the
Applicants is that prior to the said agreement dated 08.01.2020,
also there is no agreement on record to show that the Applicants
were the partners in any such firm, wherein the amount was
allegedly deposited by the Applicants. The agreement dated
08.01.2020, cannot be used by the Complainant to lodge the
criminal prosecution against the present Applicants who are the
father and wife of the deceased Mahendra.
9. The learned Counsel for the Applicants would further submit
that the cheque bearing no. 904816 drawn on State Bank of
India mentioned in the agreement dated 08.01.2020, was never
deposited by the complainant, for withdrawing amount of Rs.50
Lacs and the letter dated 17.02.2022 issued by the Bank in fact
shows that the cheque bearing no.904816 issued by Mahendra
was not presented by the complainant for encashment. The
Counsel for the Applicants would also submit that there is
nothing on record to show that such huge amount was there with
the complainant to be paid in cash. The Income Tax Returns are
not filed by the complainant to show that any such real
transaction had ever taken place in such huge amount. It is
further submitted that the agreement as well as FIR nowhere
mention the details of the land which was decided to be
purchased allegedly by the deceased Mahendra or the accused
Applicants in partnership with the complainant.
13.Cri.Appln.-1438-2022.odt
10. The another limb of argument on behalf of the Counsel for
the Applicants Mr. Bagdiya, is that the complainant has already
filed a suit for recovery against the Applicants before the learned
Civil Court. A copy of the civil suit is tendered at the bar, which
shows that a civil suit bearing Special Civil Suit No.324/2023 is
filed by the complainant - Jawahar Dembda against the
Defendants - Prajakta and Girdharilal. That even in the said civil
suit, there is a specific mention about the cheque no. 904816
issued at the State Bank of India branch Jalna, wherein the
deceased Mahendra Agrawal alone had promised to pay back the
amount of Rs.50 Lacs to the complainant, if the same is not
utilized for purchasing of the land. It is thus submitted that apart
from the bare allegations in the FIR, there is nothing on record to
show that the Applicants were a party to any such agreement or
subsequent additional agreement dated 08.01.2020. The Counsel
for the Applicants vehemently submitted that in the absence of
any intention on the part of the Applicants to cheat or defraud
the complainant, the First Information Report and the
consequent filing of the charge-sheet is nothing but an abuse of
process of law which is one of the grounds for interference of this
Court to exercise inherent powers under Section 482 of the Code
of Criminal Procedure.
11. The learned Counsel for the Applicants has relied upon the
recent judgment delivered by the Hon'ble Supreme Court
reported in (2024) 10 SCC 690 in the matter of Delhi Race Club
(1940) Limited and Others Vs. State of Uttar Pradesh and
Another, to buttress his submission that if the complainant
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claims that the offence of criminal breach of trust as defined
under Section 405, punishable under Section 406, is committed
by the accused, then in the same breath it cannot be said that
the accused had also committed the offence of cheating as
defined and explained in Section 415 IPC, which is punishable
under Section 420 IPC, wherein the Hon'ble Supreme Court has
held as under :
"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."
12. The Hon'ble Supreme Court in the aforesaid judgment has
also made observation as under :
"55. It is high time that the police officers across the country are imparted proper
training in law so as to understand the fine distinction between the offence of
cheating viz-a-viz criminal breach of trust. Both offences are independent and distinct.
The two offences cannot coexist simultaneously in the same set of facts. They are
antithetical to each other. The two provisions of the IPC (now BNS, 2023) are not
twins that they cannot survive without each other.."
13. The learned Counsel for the Applicants Mr. Bagdiya has
further relied on the judgment of the Hon'ble Supreme Court in
the case of Rama Devi Vs. State of Bihar and Ors., reported in
2011 Cri. L.J. 652, wherein it is held that absence of any
intention on the part of the accused to cheat or defraud
complainant, the complainant at best can claim damages.
14. The learned Counsel Mr. Bagdiya has further relied on the
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judgment of the Hon'ble Supreme Court in the case of Anand
Kumar Mohatta and Anr. Vs. State (Govt. of NCT of Delhi),
Department of Home and Anr., reported in 2019(11) SCC 706,
wherein it is held that "Essence of offence of criminal breach of
trust lies in the use of property entrusted to person by that
person in violation of any direction of law or any legal contract
which he has made during discharge of such trust." Amount not
paid is a dispute civil in nature and does not constitute criminal
breach of trust.
15. The learned Counsel Mr. Bagdiya has further relied on the
judgment of the Hon'ble Supreme Court in the case of Sardar Ali
Khan Vs. State of Uttar Pradesh through Principal Secretary
Home Department, reported in AIR 2020 SCC 626, wherein an
identical First Information Report under Sections 419, 420, 467,
468, 471 was quashed and set aside, holding that the record
shows that dispute was mainly civil in nature for which civil suit
is already pending.
16. The final judgment relied upon by the learned Counsel for
the Applicants Mr. Bagdiya is in the case of Prof. R.K.
Vijayasarathy & Anr. Vs. Sudha Seetharam & Anr., reported in
2019(16) SCC 739, wherein the Hon'ble Supreme Court has laid
down as under :
"23. The jurisdiction under Section 482 of the Code of Criminal Procedure has to
be exercised with care. In the exercise of its jurisdiction, a High Court can examine
whether a matter which is essentially of a civil nature has been given a cloak of a
criminal offence. Where the ingredients required to constitute a criminal offence are
not made out from a bare reading of the complaint, the continuation of the criminal
proceeding will constitute an abuse of the process of the Court."
13.Cri.Appln.-1438-2022.odt
17. Per contra, the learned Counsel for Respondent No.2 Mr.
Sikchi has supported the First Information Report and the filing
of the charge-sheet. It is stated that there are two witnesses of
the agreement dated 08.01.2020 who have categorically made a
statement about the execution of the agreement, wherein it was
admitted that an amount of Rs.25 Lacs is being paid by the
complainant, in addition to the earlier amount of Rs.25 Lacs
deposited by the complainant as his share for purchasing the
land in Jalna city. The witnesses- Kishor Bharuka and Sunil
Agrawal, clearly state about the role of the present Applicants, in
inducing the complainant to deliver the amount. Mr. Sikchi has
further argued that there is a variance in the date of knowledge
mentioned by the accused persons Girdharilal as well as
Prajakta. The date of knowledge of such agreement is stated as
21.02.2022, the date of knowledge is stated by Prajakta as
07.02.2022. The Applicants being wife and the father of the
deceased Mahendra, cannot claim ignorance particularly when
the witnesses- Kishor Bharuka and Sunil Agrawal specifically
asserted their involvement and presence at the time of initial
payment of Rs.25 Lacs and also at the time of execution of
agreement dated 08.01.2020.
18. Mr. Sikchi has further argued that the statement of Mr. Dilip
Bhandarge at page 116 of the paper book, would show that he
had sold the 100 rupees stamp paper to Mahendra Agrawal and
the memorandum of agreement was written in his presence and
that the deceased Mahendra Girdharilal Agrawal and Jawar
Dembda had put his signature on the said bond in his presence.
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The witness Dilip Bhandarge further states about the presence of
the two other witnesses namely Kishor Bharuka and Sunil
Agrawal at the time of the execution of the said document before
the notary public Mr. Dilip Bhandarge. Mr. Sikchi has further
relied upon the notary register at page 117 to show the entries
of the register taken by the notary public which shows the
presence of Mahendra Agrawal and the complainant Jawahar
Dembda.
19. The learned Counsel Mr. Sikchi for Respondent No.2 has
vehemently argued that the Applicants being the father and the
wife of the deceased Mahendra, was having knowledge right from
the inception about the investment of Rs. 25 Lacs initially in the
year 2019 by the complainant. The complainant was induced in
fact not only by Mahendra Agrawal, but also by Girdhari (father)
and Prajakta (wife of the deceased Mahendra) to invest in the
business, for purchasing of the land and doing the business of
real estate. The initial reluctance was persuaded by Girdhari,
Prajakta and Mahendra together and as such they cannot feign
ignorance about the transaction. Thus Mr. Sikchi has prayed for
dismissal and rejecting the application for quashing. According to
his submission the prima facie material is sufficient enough to
establish a cognizable offence committed by the Applicants. The
evidence collected by the prosecution also supports the
allegations and as such no case is made out for interference of
this Hon'ble Court in exercise of powers under Section 482
Cr.P.C.
13.Cri.Appln.-1438-2022.odt
20. Mr. Sikchi learned Counsel for Respondent No.2 has relied
upon the judgment of the Hon'ble Supreme Court delivered in
Kathyayini Vs. Sidharth P.S. Reddy and Ors., reported in 2025
INSC 818, wherein the Supreme Court has laid down in
Paragraph Nos. 19 and 20 as under :
"19. We now come to the issue of bar against prosecution during the pendency of
a civil suit. We hereby hold that no such bar exists against prosecution if the of-
fences punishable under criminal law are made out against the parties to the civil
suit. Learned senior counsel Dr. Menaka Guruswamy has rightly placed the relevant
judicial precedents to support the above submission. In the case of K. Jagadish V.
Udaya Kumar G.S. and another3, this Court has reviewed its precedents which clarify
the position. The relevant paragraph from the above judgment is extracted below:
"8. It is thus well settled that in certain cases the very same set of facts
may give rise to remedies in civil as well as in criminal proceedings and
even if a civil remedy is availed by a party, he is not precluded from
setting in motion the proceedings in criminal law."
20. In Pratibha Rani Vs. Suraj Kumar and another, this Court summed up the distinc-
tion between the two remedies as under :
"21. ... There are a large number of cases where criminal law and civil law can run
side by side. The two remedies are not mutually exclusive but clearly coextensive and
essentially differ in their content and consequence. The object of the criminal law is
to punish an offender who commits an offence against a person, property or the
State for which the accused, on proof of the offence, is deprived of his liberty and
in some cases even his life. This does not, however, affect the civil remedies at all
for suing the wrongdoer in cases like arson, accidents, etc. It is an anathema to sup-
pose that when a civil remedy is available, a criminal prosecution is completely
barred. The two types of actions are quite different in content, scope and import. It
is not at all intelligible to us to take the stand that if the husband dishonestly misap-
propriates the stridhan property of his wife, though kept in his custody, that would
bar prosecution under Section 406 IPC or render the ingredients of Section 405 IPC
nugatory or abortive. To say that because the stridhan of a married woman is kept
in the custody of her husband, no action against him can be taken as no offence is
committed is to override and distort the real intent of the law."
21. Learned Counsel Mr. Sikchi has further relied upon the
recent judgment of the Supreme Court in Punit Beriwala Vs. The
State of NCT of Delhi and Ors., 2025 INSC 582, wherein it is held
in paragraph no.28 which reads as under :
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"28. It is trite law that mere institution of civil proceedings is not a ground for
quashing the FIR or to hold that the dispute is merely a civil dispute. This Court in
various judgments, has held that simply because there is a remedy provided for
breach of contract, that does not by itself clothe the Court to conclude that civil
remedy is the only remedy, and the initiation of criminal proceedings, in any manner,
will be an abuse of the process of the court. This Court is of the view that because
the offence was committed during a commercial transaction, it would not be
sufficient to hold that the complaint did not warrant a further investigation and if
necessary, a trial."
. Learned Counsel Mr. Sikchi has further relied upon the
paragraph no.32 of the judgment in Punit Beriwala (supra),
which reads as under :
"32. This Court is of the view that the learned Single Judge misdirected himself
by concluding that the only allegation against Vikramjit Singh and Maheep Singh
(Respondent Nos. 2 and 3) is that they were witnesses to the Receipt-cum-Agreement
to Sell dated 12th April 2004, whereas, the gravamen of the allegation was that
Vikramjit Singh and Maheep Singh (Respondent Nos. 2 and 3) were equally guilty of
misrepresentation as, despite their knowledge to the contrary (as they were all closely
related as well as members of the said HUF and Vikramjit Singh was actual Karta),
they allowed Bhai Manjit Singh who was not competent to execute the Receipt-cum-
Agreement to Sell on behalf of Bhai Manjit Singh HUF to represent himself as the
Karta and execute the same. Consequently, the underlying act of misrepresentation by
Bhai Manjit Singh, Vikramjit Singh and Maheep Singh (all three) is the offence by
which the Appellant is aggrieved, and not the mere act of signing the receipt as
witnesses. However, the learned Single Judge has neither dealt with nor examined the
said aspect in the impugned judgment."
. Learned Counsel Mr. Sikchi has lastly relied upon the
paragraph no.33.15 quoted from the judgment reported in
Neeharika Infrastructure Vs. State of Maharashtra, (2021) 19
SCC 401 which states that the Court is not required to consider
on merits whether or not the merits of the allegations make out
a cognizable offence and has to only consider whether the
allegations in the FIR disclose commission of a cognizable offence
or not.
22. It is therefore strenuously argued by the learned Counsel
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for Respondent No.2 that the precedents noted by the Hon'ble
Supreme Court in its earlier judgments make it crystal clear that
the mere pendency of a civil proceeding on the same subject
matter involving the same parties is no justification to quash the
criminal proceeding, if a prima facie case exists against the
accused. It is his further submission that a prima facie case
exists against Respondents in the present case and as such the
Applicants should be put to a criminal trial to ensure justice to
the complainant.
23. The learned APP Mr. Wakale appearing for the State has
also supported the arguments of Mr. Sikchi for the Complainant
and has specifically stated that no case is made out for
interference as the prosecution has found sufficient evidence so
as to file charge-sheet against the present Applicants for
cheating and criminal breach of trust. He, therefore, prays for
rejecting the present application.
24. We have heard Mr. Vishal Bagdiya for the Applicants, Mr.
Aditya Sikchi for Respondent No.2 and Mr. Wakale, APP for the
State.
25. After having considered the submissions made by the
parties, it is found that the complainant has allegedly entered
into an oral agreement with the deceased person Mahendra,
Prajakta, Girdharilal in the year 2019 for investing into the real
estate. It has also emerged from the record that the agreement
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dated 08.01.2020 was entered into between the complainant and
the deceased Mahendra. The agreement further states about the
cheque of Rs. 50 Lacs signed by Mr. Mahendra (deceased),
handed over as a security deposit to the complainant. Counsel
for the Applicants has also produced on record a copy of the suit
for recovery filed by the complainant for the recovery of the
amount of Rs. 50 Lacs paid by the complainant which is
registered as Special Civil Suit No.324/2023 pending before the
Civil Judge Senior Division, Jalna which is also admitted by the
respondent/complainant.
26. It is also pertinent to note that Mr. Mahendra Agrawal had
also handed over a cheque of Rs.50 Lacs to the complainant as a
security, in case the amount is not paid back or the sale deed is
not executed for the land intended to be purchased. Thus the
intention to cheat is missing at the inception on the part of Mr.
Mahendra Agrawal. The Applicants as it is, were never signatories
to such agreement and thus the mens rea of cheating the
complainant, also cannot be attributed to the present Applicants.
27. Insofar as the allegation of criminal breach of trust is
concerned, it is almost a settled law that every act of breach of
trust may not result in a penal offence of criminal breach of trust,
unless there is evidence of manipulating act of fraudulent
misappropriation. An act of breach of trust involves a civil wrong
in respect of which the person may seek his remedy for damages
in civil Courts, but any breach of trust with the mens rea gives
rise to a criminal prosecution as well.
13.Cri.Appln.-1438-2022.odt
28. In the present case, the mens rea for criminal breach of
trust on the part of the Applicants is missing inasmuch as there
is no written agreement between the Applicants and the
complainant. All that the complainant relies upon is an
agreement dated 08.01.2020 entered into between the
complainant and the deceased Mahendra Agrawal. The mens rea
on the part of the Applicants is therefore, absent and as such the
offence of criminal breach of trust punishable under Section 406
of Indian Penal Code, is thus not made out as against the present
Applicants.
29. The perusal of the charge-sheet filed by the prosecution,
only contains a statement of the complainant, witnesses and
notary and the other relevant documents pertaining to the
transaction between the complainant and the deceased
Mahendra Agrawal. Perusal of the agreement dated 08.01.2020
merely shows that there was an earlier agreement between the
complainant and Mahendra (deceased), Girdharilal, Prajakta.
However the agreement does not bear the signatures of the
Applicants as a party to such agreement or as witness or
consentors to the said agreement dated 08.01.2020, wherein an
additional amount of Rs.25 Lacs was handed over by the
Applicants to the deceased Mahendra. There is no allegations in
the FIR that the Applicants had a dishonest or fraudulent
intention at the time of receiving the initial amount of Rs.25 Lacs
from the complainant or the additional amount of Rs.25 Lacs as
stated in the agreement dated 08.01.2020.
13.Cri.Appln.-1438-2022.odt
30. The Hon'ble Supreme Court in the judgment reported in
Hari Prasad Chamaria Vs. Bishun Kumar Surekha, (1973) 2 SCC
823 has observed as under :
"4. We have heard Mr. Maheshwari on behalf fo the appellant and are of the
opinion that no case has been made out against the respondents under Section 420
of the Penal Code, 1860. For the purpose of the present appeal, we would assume
that the various allegations of fact which have been made in the complaint by the
appellant are correct. Even after making that allowance, we find that the complaint
does not disclose the commission of any offence on the part of the respondents
under Section 420 of the Penal Code, 1860. There is nothing in the complaint to
show that the respondent had dishonest or fraudulent intention at the time the
appellant parted with Rs. 35,000/-. There is also nothing to indicate that the
respondents induced the appellant to pay them Rs.35,000/- by deceiving him. It is
further not the case of the appellant that a representation was made by the
respondents to him at or before the time he paid the money to them and that at the
time the representation was made, the respondents knew the same to be false. The
fact that the respondents subsequently did not abide by their commitment that they
would show the appellant to be the proprietor of Drang Transport Corporation and
would also render accounts to him in the month of December might create civil
liability of them, but this fact would not be sufficient to fasten criminal liability on
the respondents for the offence of cheating. "
. From the perusal of the above judgment, it would be clear
that the case of cheating and dishonest intention starts with the
very inception of the transaction. But in the case of criminal
breach of trust, a person receiving the movable property, though
receives initially as legal, however illegally retains it or converts
it to his own use against the terms of the contract.
31. The law pertaining to the applications under Section 482 of
Cr.P.C. for quashing of FIR, is laid down in the seven exceptions
carved out by the Hon'ble Supreme Court in the landmark
judgment reported in the case of State of Haryana Vs. Bhajan
Lal, AIR 1992 SC 604, wherein the Hon'ble Supreme Court has
laid down as under :
13.Cri.Appln.-1438-2022.odt
"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 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 F.I.R. do not disclose a cognizable offence, justifying an investi-
gation 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 non-cognizable 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
institu- tion 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."
32. After going through the entire record including the First
Information Report and the charge-sheet filed by the
13.Cri.Appln.-1438-2022.odt
prosecution, we are of the considered opinion that the present
case clearly falls under clauses first and third exception carved
out by the Hon'ble Apex Court in paragraph no.102 of the Apex
Court judgment of Bhajan Lal cited supra. The Hon'ble Supreme
Court in its judgment in the case of State of Karnataka Vs. L.
Muniswamy and Ors. reported in (1977) 2 SCC 699, was pleased
to hold that the High Courts are entitled to quash a proceeding if
it comes to the conclusion that allowing the proceeding to
continue would be an abuse of the process of the Court or that
the ends of justice would require that the proceeding ought to be
quashed. The saving of the High Court's inherent powers under
Section 482, both in civil and criminal matters, is designed to
achieve a salutary public purpose which is that a court
proceeding ought not to be permitted to degenerate into weapon
of harassment or persecution. In a criminal case, the veiled
object behind a lame prosecution, the very nature of the material
on which the structure of the prosecution rests and the like
would justify the High Court in quashing the proceeding in the
interest of justice.
33. The facts of the present case clearly shows that the
dispute which is mainly civil in nature is tried to be turned into a
criminal prosecution only with the sole intention of recovering the
amount which may not be permitted in view of the judgment of
the Hon'ble Supreme Court in Vijayasarathy's case cited supra.
In the present case, there is no such allegation that the
Applicants or the deceased Mahendra had an intention of
cheating or dishonest intention at the very inception of the
13.Cri.Appln.-1438-2022.odt
transaction. As could be reflected from the FIR, the entire
allegations are that the intention of all the partners were to enter
into some land transactions and to earn profits. Thus the
dishonest intention from the very inception, is missing. Neither
there is any allegation about dishonest misappropriation or
disposal of that property. The only allegation is that the
complainant is cheated and that the amount is not paid back to
the complainant. The Hon'ble Supreme Court in the judgment
reported in 2006 (6) SCC 736, M/S Indian Oil Corporation vs
M/S Nepc India Ltd. and Ors., was pleased to observe as
follows :
"13. Any effort to settle civil disputes and claims, which do not involve any
criminal offence, by applying pressure though criminal prosecution should be depre-
cated and discouraged....."
34. The complainant has also failed to deposit the cheque to
withdraw the amount of Rs. 50 Lacs as the deceased Mahendra
has given the said cheque by way of security in case of non-
payment of the amount. The complainant has filed a civil suit
even though subsequently for recovery of the amount. In our
considered view, the ingredients required to constitute a criminal
offence of cheating and criminal breach of trust, are not made
out from a bare reading of the complaint or the charge-sheet,
much less against the Applicants.
35. At this stage, we are only concerned with the question
whether the averments in the complaint/FIR and the charge-
sheet taken at their face value make out the ingredients of
13.Cri.Appln.-1438-2022.odt
criminal offence. In the present case, looking at the allegations in
the complaint on the face of it, we find that no allegations are
made attracting the ingredients of Section 405 IPC. Likewise,
moreover, there are no allegations as to the dishonest intention
of the appellants at the inception in order to have wrongful gain
to themselves or causing wrongful loss to the complainant.
Excepting the bald allegations that the appellants did not make
payment to the complainant. There is no iota of allegation as to
the dishonest intention in misappropriating the property. Even if
all the allegations in the complaint taken at the face value are
true, in our view, the basic essential ingredients of dishonest
misappropriation and cheating are missing. The criminal
proceedings are not a shortcut for other remedies.
36. The judgment relied upon by Mr. Sikchi for Respondent
No.2 i.e. Kathyayini Vs. Sidharth P.S. Reddy and Ors. (supra),
lays down a proposition that in certain cases the very same set
of facts may give rise to remedies in civil as well as criminal
proceedings and even if a civil remedy is availed by a party, he is
not precluded from setting in motion the proceeding in criminal
law. There is no doubt that the very same fact may give rise to
remedies in civil as well as criminal proceedings, however in the
present case, it is seen that the dishonest intention at the very
inception is missing and equally missing, is the allegation of
criminal misappropriation of the entrusted property. Hence the
judgment relied upon by Mr. Sikchi, the learned Counsel for
Respondent No.2, is not applicable in the facts of the present
case.
13.Cri.Appln.-1438-2022.odt
37. The another judgment relied upon by Mr. Sikchi, the
learned learned Counsel for Respondent No.2 i.e. Punit Beriwala
Vs. The State of NCT of Delhi and Ors. (supra) is again on the
same lines that civil proceeding is not a ground for quashing of
the FIR or to hold that the dispute is merely a civil dispute. The
other paragraphs relied upon by Respondent No.2, is paragraph
no.32 of the said judgment, wherein the Court has recorded a
finding of the fact that the Respondents/accused persons who
were witnesses to the receipt-cum-agreement to sell and were
equally guilty of misrepresentation.
. However in the present case, the agreement dated
08.01.2020 does not even bear the signatures of the Applicants
as either witnesses, or consentors to the agreement which was
executed only between the deceased Mahendra and the
complainant. The judgment relied upon by Respondent No.2 i.e.
Punit Beriwala cited supra, is therefore distinguishable on the
facts of the present case. The filing of the civil suit is only an
additional reason apart from the basic allegation of intention of
cheating from inception and dishonest intention of
misappropriation which is missing in the complaint.
38. The Hon'ble Supreme Court in the judgment of Delhi Race
Club (1940) Limited (supra) was pleased to hold as under:
"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
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offences cannot co-exist simultaneously."
"55. It is high time that the police officers across the country are imparted proper
training in law so as to understand the fine distinction between the offence of
cheating viz-a-viz criminal breach of trust. Both offences are independent and distinct.
The two offences cannot coexist simultaneously in the same set of facts. They are
antithetical to each other. The two provisions of the IPC (now BNS, 2023) are not
twins that they cannot survive without each other.. "
. The Hon'ble Supreme Court in the judgment in the case of
Rikhab Birani Vs. State of Uttar Pradesh reported in 2025 INSC
512 was also pleased to impose a cost of Rs.50,000/- upon the
State of Uttar Pradesh, thereby observing as under :
"We are also constrained to impose costs of Rs.50,000/- on the State of Pradesh as
in spite of repeated judgments/orders of this Court, we are being flooded with cases
of civil wrongs being made the subject matter of criminal proceedings by filing
charge-sheets etc. where a civil grievance was attempted to be prosecuted as a
criminal case, thereby causing harassment to the litigants. Since no case of criminal
breach of trust or dishonest intention of inducement is made out and the essential
ingredients of sections 405/420 IPC are missing, the prosecution of the appellants
under section 406/120B IPC, is liable to be quashed and set aside."
39. The continuation of the criminal proceeding would thus,
constitute abuse of process of the Court. The grievance of the
complainant which is essentially of a civil nature has been given
a cloak of a criminal offence. In our view, therefore, the First
Information Report and the consequent charge-sheet is thus,
liable to be quashed and set aside. Hence, the following order :
ORDER
(i) The Criminal Application is allowed.
(ii) The First Information Report bearing Crime No.051/2022
registered at S.B. Police Station, Jalna for the offences
punishable under Sections 420, 406 and 34 of the Indian Penal
Code, is hereby quashed and set aside.
13.Cri.Appln.-1438-2022.odt
(iii) The charge-sheet filed by the Respondent No.1 and the
further proceeding bearing RCC No.1058/2022 pending before
the Judicial Magistrate First Class, Jalna, are also quashed and
set aside.
(iv) There shall be no order as to cost.
MEHROZ K. PATHAN SANDIPKUMAR C. MORE
JUDGE JUDGE
Najeeb..
