Chattisgarh High Court
Dr. K. V. K. Rao vs State Of Chhattisgarh on 8 May, 2025
Author: Ramesh Sinha
Bench: Ramesh Sinha
1
2025:CGHC:21273-DB
AFR
HIGH COURT OF CHHATTISGARH AT BILASPUR
CrMP No. 402 of 2022
Dr. K.V.K. Rao S/o Late K. Venkaiah Aged About 61 Years presently R/o
Plot No. 100, High Court Colony, Street No. 5, Vanasthalipuram, Hayath
Nagar, PS Vanasthalipuram, Tehsil and District Ranga Reddi, Telangana
State 500070
... Petitioner
versus
1 - State of Chhattisgarh Through Superintendent of Police Raipur,
District Raipur Chhattisgarh.
2 - Station House Officer P. S. Pandit Deen Dayal Upadhyay Nagar, (D D
Nagar), District Raipur Chhattisgarh.
3 - Anil Kumar Goyal S/o Satyanarayan Goyal, Aged About 55 Years R/o
76, Daldal Seoni, Mowa, Ram Manohar Lohiya Nagar, Near R.C.M.
Godown, Pandari, Raipur, Chhattisgarh. 492001
... Respondents
For Petitioner : Mr. Amit Buxy, Advocate
For Respondents Mr. Shaleen Singh Baghel, Dy. Govt. Advocate
No.1 & 2/State :
For Respondent : Mr. Navin Shukla, Advocate
No.3
VASANT KUMAR
KUMAR 2025.05.13
16:44:13
+0530
Hon'ble Shri Ramesh Sinha, Chief Justice
Hon'ble Shri Arvind Kumar Verma, Judge
Order on Board
Per Ramesh Sinha, Chief Justice
08/05/2025
1. Heard Mr. Amit Buxy, learned counsel for the petitioner. Also
heard Mr. Shaleen Singh Baghel, Dy. Govt. Advocate for the State
and Mr. Navin Shukla, learned counsel appearing for respondent
No.3 .
2. The present petition has been filed by the petitioner with the
following relief(s):
"(i) That, this Hon'ble Court may kindly be pleased
to call for the entire records for its kind perusal.
(ii) That, this Hon'ble Court may kindly be pleased to
quash FIR no. 0187/2019 dated 30/05/2019
registered at PS Deendayal Nagar (DD Nagar),
Raipur and all the consequential proceedings against
the petitioner.
(iii) Any other relief, as this Hon'ble Court may deem
fit and proper may also be granted."
3. Brief facts of the case are that a written complaint was filed by Anil
Kumar Goyal- respondent No.3, before the respondent no. 2, in
which it was stated that his firm M/s. R.K. Engineering had entered
into an agreement with the petitioner, proprietor of M/s. Kedhari
Traders for selling and purchasing of scrap material of power plant
equipment on "as is where is basis" on 14/08/2018. The complaint
stated that the petitioner in lieu of the said agreement took an
amount of INR 7.5 crores and has only allowed the complainant to
lift material worth an amount of 1.89 crores, thereafter, the
petitioner has suddenly stopped providing the material, the
complainant also alleged that the petitioner demanded for more
money and upon asking for refund the petitioner denied of the
same, thereby committing an offence under Sections 406 and 420
IPC.
4. A contractual agreement was entered into between the Firms of the
present petitioner and the complainant on 14/08/2018 for selling
and purchasing of Power Plant Equipment. In furtherance thereof,
the complainant made defaulted payments violating the terms of
payment of the agreement as per clause 6.
5. The acts of omission and commission leading to the breach of
contract on the part of the purchaser. As the purchaser (complainant
along with his two other partners) was obligated to make the
payment of Rs. 10 crores by 15.09.2018 and another Rs.5 crores by
15.10.2018, as per the agreed payment schedules and could pay
only Rs.7.5 crores, resulting in default of two subsequent
installments. As time bound scheduled payment being the essence
of the sale cum purchase agreement, the purchaser has committed
default in payment.
6. The total value of the agreement amounted INR 30 Crores and the
payment was to be made by the complainant to the petitioner in a
scheduled manner as per Clause 6 of the agreement Le. Payment
Terms. That from the first instance the complainant and its firm
made multiple defaults in payment of amount as agreed between
the parties in the agreement. An amount of 7.5 crores was paid in
installments however in default against the agreed terms. The
petitioner allowed the complainant to lift the property as per the
agreed terms of the contract and thereafter upon further default
made by the complainant, a notice to terminate the agreement was
sent by the present petitioner on 27/10/2018 as per clause 11(b) of
the Agreement. That the notice of termination was acknowledged
by the firm and partners of the complainant and there were various
correspondences between the two parties in dispute.
7. Complainant defaulted in adhering to the payment schedule and
other conditions which ultimately led to the termination of the
Agreement and a notice of termination was sent on 27/10/2018 in
terms of Clause 3(e) which also provided for forfeiture of the
amount, and other relevant terms and conditions of the agreement
and subsequently a Termination notice dated 20/11/2018.
8. It is also pertinent to mention here that even after the agreement
was terminated on 20/11/2018, the complainant and his partner
namely Mr. Sabhir Aga continued to lift the material from the site
without authorization and therefore, a complaint was filed under
Section 378 of IPC against one of the partners namely Mr. Sabhir
Aga, of the firm of the complainant on 05/12/2018 by the firm of
the petitioner i.e. Kedhari Traders at Verna Police Station, Verna,
Goa.
9. Pursuant to filing of the written complaint, a Legal Notice dated
11/02/2019 was sent to the petitioner by the counsel of the
complainant. Raising questions and dispute on the agreement
entered into between the parties and illegal termination of the
contract thereby claiming compensation. However, no legal action
to challenge the validity of termination has been initiated till date
as per clause 15 and 16 of the Agreement.
10. The petitioner on 01/03/2019, through his representative legal
counsel, replied to the Legal Notice dated 11/02/2019 stating in
detail that the said termination of agreement was proper and legal
as the complainant and its firm have defaulted the terms and
conditions of the agreement as per clause 6 and in default thereof,
the agreement has rightly been terminated as per clause 11. The
reply to the Legal notice also specifically stated that no case of 406
and 420 IPC is made out as the said dispute is purely a contractual
dispute and of civil nature.
11. The complainant has also alleged in his complaint that the GST has
not been paid by the petitioner, however the details of GST were
not provided by the firm of the complainant even after repeated
requests and thereafter the payment of GST has also been made by
the present petitioner and the allegations of non-payment of GST is
false.
12. Since the registration of FIR on 30/05/2019, no action or enquiry
has been conducted by the respondent authorities and it is after a
period of two and a half years that on 28/01/2022 the petitioner has
been served with a notice u/s 41 of Cr.P.C to which the Petitioner
has replied in detail and the fact that the dispute is purely a civil
dispute is also in the knowledge of the respondent authorities.
Registration of the offence is a gross misuse of process of law and
deserves to be quashed for the ends of justice. Hence, the present
petition.
13. Learned counsel for the petitioner would submit that the FIR does
not disclose any cognizable offence against the petitioner as
everything was done by the petitioner strictly in accordance with
the agreed terms and conditions of the agreement dated 14.08.2019
between them. The FIR has been mechanically registered as a tool
to falsely implicate the petitioner for pressurizing him to refund the
amount which the complaint is not entitled to get back as per the
terms of the Agreement. The complaint does not disclose any
dishonesty, misrepresentation and breach of trust made by the
petitioner inducing the complainant to deliver any property. No act
of the petitioner has caused any wrongful loss to the complainant
and therefore no offence u/s 406 and 420 of the IPC is made out.
He would further submit that the allegation of Sections 406 and
420 IPC against the present petitioner is false and made-up in order
not to avail the civil remedies envisaged in the dispute settlement
clause of the agreement and to take undue advantage of the
Criminal Law. In fact there has been default on the part of
complainant in complying with the terms and conditions of the
agreement and making timely payments as per the schedule of
payment mentioned in clause 6 of the agreement. The respondent
no. 2 has registered the FIR without ascertaining correct and true
facts in the matter and has proceeded without application of mind.
As per the terms of the agreement, in case of any dispute arising
out of the agreement, the exclusive jurisdiction of the Court is in
Hyderabad, India as per clause 16 of the agreement and Goa in case
of Arbitration as per clause 15 of the agreement. Therefore, the
registration and further investigation of this FIR by DD Nagar PS,
Raipur, Chhattisgarh is itself not maintainable. The petitioner has
not committed any offence and has been falsely implicated just to
settle scores and pressurize the petitioner to abandon the
proceedings initiated by him against the complainant. He would
also submit that as in the agreement dated 14.08.2019 between the
petitioner and the complainant have specific clauses for dispute
resolution, the complainant is legally bound to exercise that rights.
But without exercising that right, the complaint lodged this FIR
with malafide intension to make the alleged civil dispute as
criminal offence which is a misuse of law of the land for which the
complaint should be punished as per law and the FIR may be
quashed.
14. Learned State counsel would submit that once a complaint is
received by the police and prima facie cognizable offence is made
out, the police is bound to register the FIR and proceed in
accordance with law. As such, the police has registered the FIR,
investigated the matter.
15. In spite of the time being granted to the private respondent No.3 to
file the return, the same has not been filed.
16.We have heard learned counsel for the parties and perused the
material available on record including the impugned FIR.
17. The legal position on the issue of quashing of criminal proceedings
is well-settled that the jurisdiction to quash a complaint, FIR or a
charge-sheet should be exercised sparingly and only in exceptional
cases and Courts should not ordinarily interfere with the
investigations of cognizable offences. However, where the
allegations made in the FIR or the complaint even if 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, the
FIR or the charge-sheet may be quashed in exercise of powers
under Article 226 or inherent powers under Section 482 of the
Cr.P.C.
18. In a recent judgment passed in the case of Rikhab Birani &
Another Vs. State of Uttar Pradesh & Another reported in 2025
SCC Online SC 823, the Hon'ble Supreme Court has reiterated the
ratio laid down in the case of Sharif Ahmed and Another Vs. State
of Uttar Pradesh and Another reported in 2024 SCC Online SC
726, and has held thus in Para Nos.21 to 26 are as under :
"21. Lastly, we would refer to another detailed judgment of
this Court in Sharif Ahmed and Another Vs. State of Uttar
Pradesh and Another reported in 2024 SCC Online SC
726, which draws out the ingredients required to establish an
offence under Sections 406, 415, 420, 503 and 506 of the
IPC in the following terms:
"36. An offence under Section 406 of the IPC requires
entrustment, which carries the implication that a person
handing over any property or on whose behalf the property
is handed over, continues to be the owner of the said
property. Further, the person handing over the property
must have confidence in the person taking the property to
create a fiduciary relationship between them. A normal
transaction of sale or exchange of money/consideration
does not amount to entrustment. Clearly, the charge/offence
of Section 406 IPC is not even remotely made out.
37. The chargesheet states that the offence under Section
420 is not made out. The offence of cheating under Section
415 of the IPC requires dishonest inducement, delivering of
a property as a result of the inducement, and damage or
harm to the person so induced. The offence of cheating is
established when the dishonest intention exists at the time
when the contract or agreement is entered, for the essential
ingredient of the offence of cheating consists of fraudulent
or dishonest inducement of a person by deceiving him to
deliver any property, to do or omit to do anything which he
would not do or omit if he had not been deceived. As per
the investigating officer, no fraudulent and dishonest
inducement is made out or established at the time when the
agreement was entered.
38. An offence of criminal intimidation arises when the
accused intendeds to cause alarm to the victim, though it
does not matter whether the victim is alarmed or not. The
intention of the accused to cause alarm must be established
by bringing evidence on record. The word 'intimidate'
means to make timid or fearful, especially : to compel or
deter by or as if by threats. The threat communicated or
uttered by the person named in the chargesheet as an
accused, should be uttered and communicated by the said
person to threaten the victim for the purpose of influencing
her mind. The word 'threat' refers to the intent to inflict
punishment, loss or pain on the other. Injury involves doing
an illegal act.
39. This Court in Malik Taneja v. State of Karnataka, had
referred to Section 506 which prescribes punishment for the
offence of 'criminal intimidation' as defined in Section 503
of the IPC, to observe that the offence under Section 503
requires that there must be an act of threating another
person with causing an injury to his person, reputation or
property, or to the person or reputation of any one in whom
that person is interested. This threat must be with the intent
to cause alarm to the person threatened or to do any act
which he is not legally bound to do, or omit to do an act
which he is entitled to do. Mere expression of any words
without any intent to cause alarm would not be sufficient to
bring home an offence under Section 506 of the IPC. The
material and evidence must be placed on record to show
that the threat was made with an intent to cause alarm to the
complainant, or to cause them to do, or omit to do an act.
Considering the statutory mandate, offence under Section
506 is not shown even if we accept the allegation as
correct."
22. Significantly, this Court in Sharif Ahmed (supra)
cautioned courts to check such attempts of making out a
criminal case on the basis of vague and ex facie false
assertions.
23. Further, Sharif Ahmed (supra) exposits the legal position
relating to the ingredients and contents of a chargesheet,
drawing upon several earlier judgments of this Court which
elucidate the contents of a police report under Section 173(2)
of the Cr.P.C. It also clarifies the course of action to be
adopted by the Magistrate when the chargesheet is found to
be incomplete or vague in content. In this context, reference
may be made to Sections 190 and 204 of the Cr.P.C., as well
as Sections 211 to 213 and 218 of the Cr.P.C., which
collectively govern the framing and contents of a charge.
Some of the portions of this judgment are reproduced below:
"13. The question of the required details being complete must be
understood in a way which gives effect to the true intent of the
chargesheet under Section 173(2) of the Code. The requirement of
"further evidence" or a "supplementary chargesheet" as referred to
under Section 173(8) of the Code, is to make additions to a
complete chargesheet,8 and not to make up or reparate for a
chargesheet which does not fulfil requirements of Section 173(2) of
the Code. The chargesheet is complete when it refers to material
and evidence sufficient to take cognizance and for the trial. The
nature and standard of evidence to be elucidated in a chargesheet
should prima facie show that an offence is established if the
material and evidence is proven. The chargesheet is complete where
a case is not exclusively dependent on further evidence. The trial
can proceed on the basis of evidence and material placed on record
with the chargesheet. This standard is not overly technical or fool-
proof, but a pragmatic balance to protect the innocent from
harassment due to delay as well as prolonged incarceration, and yet
not curtail the right of the prosecution to forward further evidence
in support of the charges.
XX XX XX
16. This Court in Bhushan Kumar V. State (NCT of Delhi) while
referring to Sections 190 and 204 of the Code has observed that the
expression "cognisance" in Section 190 merely means "becoming
aware of", and when used with reference to a court or a judge it
connotes "to take notice of judicially". It indicates the juncture at
which the court or Magistrate takes judicial notice of the offence
with a view to initiate proceedings in respect of such an offence.
This is different from initiation of proceedings. Rather, it is a
condition precedent to the initiation of proceedings by a Magistrate
or judge. At this stage, the Magistrate has to keep in mind the
averments in the complaint or the police report, and has to evaluate
whether there is sufficient ground for initiation of proceedings. This
is not the same as the consideration of sufficient grounds for
conviction, as whether evidence is sufficient for supporting the
conviction or not, can be determined only at the stage of trial, and
not at the stage of cognisance. This aspect is important and will be
subsequently referred to when we examine the decision of this
Court in K. Veeraswami v. Union of India, and the observations
therein which have been referred to on several occasions in other
judgments.
17. Section 204 of the Code does not mandate the Magistrate to
explicitly state the reasons for issue of summons and this is not a
prerequisite for deciding the validity of the summons. Nevertheless,
the requirement of the Code is that the summons is issued when it
appears to the Magistrate that there is sufficient ground for
proceeding against the accused. Summons is issued to the person
against whom the legal proceedings have commenced. Wilful
disobedience is liable to be punished under Section 174 of the Penal
Code, 1860. As a sequitur, keeping in mind both the language of
Section 204 of the Code and the penal consequences, the Magistrate
is mandated to form an opinion as to whether there exists sufficient
ground for summons to be issued. While deciding whether
summons is to be issued to a person, the Magistrate can take into
consideration any prima facie improbabilities arising in the case.
The parameters on which a summoning order can be interfered with
are well settled by the decision of this court in Bhushan Kumar
(supra). The Magistrate in terms of Section 204 of the Code is
required to exercise his judicial discretion with a degree of caution,
even when he is not required to record reasons, on whether there is
sufficient ground for proceeding. Proceedings initiated by a
criminal court are generally not interfered with by High Courts,
unless necessary to secure the ends of justice.
XX XX XX
19. Sections 211 to 213 and Section 2018 of the Code deal with the
contents of the charge. The object and purpose of these provisions
is to bring the nature of allegations against the accused to his
notice. These allegations have to be proved and established by
leading evidence. The accused should not be taken by surprise or be
unbeknownst so as to cause prejudice to him. The provisions of the
Code also prescribe how to interpret the words used in the charge in
terms of Section 214 of the Code, the effect of defects in the charge
in terms of Section 215 of the Code, the power of the court to alter
the charge and recall of the witnesses when a charge is altered in
terms of Sections 216 and 217 of the Code.
20. There is an inherent connect between the chargesheet submitted
under Section 173(2) of the Code, cognisance which is taken under
Section 190 of the Code, issue of process and summoning of the
accused under Section 204 of the Code, and thereupon issue of
notice under Section 251 of the Code, or the charge in terms of
Chapter XVII of the Code. The details set out in the chargesheet
have a substantial impact on the efficacy of procedure at the
subsequent stages. The chargesheet is integral to the process of
taking cognisance, the issue of notice and framing of charge, being
the only investigative document and evidence available to the court
till that stage. Substantiated reasons and grounds for an offence
being made in the chargesheet are a key resource for a Magistrate to
evaluate whether there are sufficient grounds for taking cognisance,
initiating proceedings, and then issuing notice, framing charges etc.
XX XX XX
26. The object and purpose of the police investigation is manyfold.
It includes the need to ensure transparent and free investigation to
ascertain the facts, examine whether or not an offence is committed,
identify the offender if an offence is committed, and to lay before
the court the evidence which has been collected, the truth and
correctness of which is thereupon decided by the court.
27. In H.N. Rishbud and Inder Singh v. State of Delhi, this Court
notes that the process of investigation generally consists of : 1)
proceeding to the concerned spot, 2) ascertainment of facts and
circumstances, 3) discovery and arrest, 4) collection of evidence
which includes examination of various persons, search of places
and seizure of things, and 5) formation of an opinion on whether an
offence is made out, and filing the chargesheet accordingly. The
formation of opinion is therefore the culmination of several stages
that an investigation goes through. This Court in its decision in
Abhinandan Jha v. Dinesh Mishra states that the submission of the
chargesheet or the final report is dependent on the nature of opinion
formed, which is the final step in the investigation.
28. The final report has to be prepared with these aspects in mind
and should show with sufficient particularity and clarity, the
contravention of the law which is alleged. When the report
complies with the said requirements, the court concerned should
apply its mind whether or not to take cognisance and also proceed
by issuing summons to the accused. While doing so, the court will
take into account the statement of witnesses recorded under Section
161 of the Code and the documents placed on record by the
investigating officer.
29. In case of any doubts or ambiguity arising in ascertaining the
facts and evidence, the Magistrate can, before taking cognisance,
call upon the investigating officer to clarify and give better
particulars, order further investigation, or even record statements in
terms of Section 202 of the Code.
XX XX XX"
24. The chargesheet in the present case is bereft of particulars
and details required and mandated in terms of Section 173(2)
of the Cr.P.C. It merely reproduces the contents of the FIR
which makes reference to the payments made as well as the
allegation that in the revenue records, the godown in
question was recorded in the name of Rakesh Birani, the son
of the appellant, Rikhab Birani. It is noted that the appellant,
Rikhab Birani, informed the complainant that Rakesh Birani
had expired. The complainant had then requested refund of
money, etc. However, the FIR does not state the material and
evidence available and collected during the course of the
investigation to establish the offences under Sections 420,
406, 354, 504 and 506 of the IPC. Clearly, the ingredients of
the aforesaid are not established and made out.
25. In view of the aforesaid discussion, we set aside the
impugned judgment/order and allow the present appeal
quashing the FIR and the resultant proceedings, including the
chargesheet.
26. We clarify that the present appeal only deals with the
question of criminal offence. We have not commented or
made any observations on the civil rights of complainant-
respondent No.2.
19. In the well notable judgment reported in AIR 1992 SC 605 State
of Haryana and others Vs. Ch. Bhajan Lal, the Apex Court held
that those guidelines should be exercised sparingly and that too in
the rarest of rare cases. Guidelines are as follows:
"(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 to 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 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
156(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 every
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."
20. In case of Rupan Deol Bajaj v. K.P.S. Gill; reported in (1995)
SCC (Cri) 1059, Rajesh Bajaj v. State of NCT of Delhi; reported
in (1999) 3 SCC 259 and Medchl Chemicals & Pharma (P)
Ltd.v. Biological E Ltd. & Ors; reported in 2000 SCC (Cri) 615,
the Apex Court clearly held that if a prima facie case is made out
disclosing the ingredients of the offence, Court should not quash
the complaint. However, it was held that if the allegations do not
constitute any offence as alleged and appear to be patently absurd
and improbable, Court should not hesitate to quash the complaint.
The note of caution was reiterated that while considering such
petitions the Courts should be very circumspect, conscious and
careful. Thus, there is no controversy about the legal proposition
that in case a prima facie case is made out, the FIR or the
proceedings in consequence thereof cannot be quashed.
21. Very recently in Neharika Infrastructure Pvt. Ltd. Vs. State of
Maharashtra and others : 2021 SCC OnLine SC 315, the Apex
Court has observed that the power of quashing should be exercised
sparingly with circumspection in the rarest of rare cases. While
examining an F.I.R./complaint, quashing of which is sought, the
Court cannot inquire about the reliability, genuineness, or
otherwise of the allegations made in the F.I.R./complaint. The
power under Section 482 Cr.P.C. is very wide, but conferment of
wide power requires the Court to be cautious. The Apex Court has
emphasized that though the Court has the power to quash the F.I.R.
in suitable cases, the Court, when it exercises power under Section
482 Cr.P.C., only has to consider whether or not the allegations of
F.I.R. disclose the commission of a cognizable offence and is not
required to consider the case on merit.
22.Therefore, it is very well settled that criminal proceedings
maliciously instituted with ulterior motives can be quashed by this
Court while exercising the power under Section 482 Cr.P.C.
23. In the present case, it appears that the dispute is commercial in
nature leading to claims from either side and thus, from the overall
scrutiny of the FIR it is clear that it is purely a dispute of civil
nature between the complainant and the petitioner herein and there
is a comprehensive remedy of arbitration clause available under the
Regulations. Hon'ble Supreme Court dealing with the issue in
Vinod Natesan v. State of Kerala, (2019) 2 SCC 401 has
observed that there was no criminality on part of the accused and a
civil dispute is tried to be converted into a criminal dispute. Thus to
continue the criminal proceedings against the accused would be an
abuse of the process of law. Relevant Para of the said judgment is
quoted as below:
"10.Having heard the appellant as party in person and the
learned advocates appearing on behalf of the original accused as
well as the State of Kerala and considering the judgment¹ and
order passed by the High Court, we are of the opinion that the
learned High Court has not committed any error in quashing the
criminal proceedings initiated by the complainant. Even
considering the allegations and averments made in the FIR and
the case behalf of the appellant, it cannot be said that the
ingredients of Sections 406 and 420 are at all satisfied. The
dispute between the parties at the most can be said to be the civil
dispute and it is tried to be converted into a criminal dispute.
Therefore, we are also of the opinion that continuing the
criminal proceedings against the accused will be an abuse of
process of law and, therefore, the High Court has rightly quashed
the criminal proceedings. Merely because the original accused
might not have paid the amount due and payable under the
agreement or might not have paid the amount in lieu of month's
notice before terminating the agreement by itself cannot be said
to be a cheating and/or having committed offence under Sections
406 and 420 IPC as alleged. We are in complete agreement with
the view taken by the High Court."
24. Recently, in Sachin Garg v. State of U.P., 2024 SCC OnLine SC
82 the Apex Court reiterated its view that a commercial dispute,
which ought to have been resolved through the forum of Civil
Court has been given criminal colour by lifting from the penal code
certain words or phrases and implanting them in a criminal
complaint. Relevant para of the said judgment is quoted as below:-
"20. While it is true that at the stage of issuing summons a
magistrate only needs to be satisfied with a prima facie
case for taking cognizance, the duty of the magistrate is
also to be satisfied whether there is sufficient ground for
proceeding, as has been held in the case of Jagdish Ram
(supra). The same proposition of law has been laid down
in the case of Pepsi Foods Ltd. v. Special Judicial
Magistrate[(1998) 5 SCC 749]. The learned Magistrate's
order issuing summons records the background of the case
in rather longish detail but reflects his satisfaction in a
cryptic manner. At the stage of issue of summons,detailed
reasoning as to why a Magistrate is issuing summons,
however, is not necessary. But in this case, we are satisfied
that the allegations made by the complainant do not give
rise to the offences for which the appellant has been
summoned for trial. A commercial dispute, which ought to
have been resolved through the forum of Civil Court has
been given criminal colour by lifting from the penal code
certain words or phrases and implanting them in a
criminal complaint. The learned Magistrate here failed to
apply his mind in issuing summons and the High Court
also failed to exercise its jurisdiction under Section 482 of
the 1973 Code to prevent abuse of the power of the
Criminal Court.
21. It is true that the appellant could seek discharge in
course of the proceeding itself before the concerned Court,
but here we find that nocase at all has been made out that
would justify invoking the machinery of the Criminal
Courts. The dispute, per se, is commercial in nature
having no element of criminality."
25. Accordingly, the instant petition is allowed. The impugned First
Information Report No.0187/2019 registered at Police Station
Deendalayl Nagar, District Raipur, CG for the offence punishable
under Sections 420 and 406 of IPC against the petitioner and entire
criminal proceedings pursuant to impugned FIR are hereby
quashed.
Sd/- Sd/-
(Arvind Kumar Verma) (Ramesh Sinha)
Judge Chief Justice
Vasant
Head Note
"When there is a comprehensive remedy of arbitration clause under
the Regulations, a case which is of civil dispute cannot be converted into
a criminal dispute, it would be an abuse of the process of law."
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