Gujarat High Court
Ashit R Shah vs State Of Gujarat on 29 July, 2025
NEUTRAL CITATION
R/CR.MA/298/2014 ORDER DATED: 29/07/2025
undefined
.
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE
FIR/ORDER) NO. 298 of 2014
==========================================================
ASHIT R SHAH
Versus
STATE OF GUJARAT & ANR.
==========================================================
Appearance:
MR K I KAZI(5030) for the Applicant(s) No. 1
MS TEJAL A VASHI(2704) for the Respondent(s) No. 2
MR. TIRTHRAJ PANDYA, APP for the Respondent(s) No. 1
==========================================================
CORAM:HONOURABLE MR. JUSTICE J. C. DOSHI
Date : 29/07/2025
ORAL ORDER
1. The present application is filed under Section 482 of the Code
of Criminal Procedure, 1973, seeking to quash and set aside the First
Information Report (FIR) being C.R. No.I-303 of 2013 registered
with Gandhinagar Police Station, along with all consequential
proceedings arising therefrom.
2. Learned Advocate Mr. K.I. Kazi appears for the petitioner and,
after inviting attention to the averments made in the FIR, submits
that the present FIR is nothing but a counterblast to the proceedings
initiated by Sharekhan Commodities Pvt. Ltd. and others. It is
submitted that even if the allegations in the FIR are taken at their
face value, they do not disclose the commission of any cognizable
offence under Sections 420, 460, 506(2), 120B, 452, 499, and 114 of
the Indian Penal Code.
2.1. It is further submitted that the gravamen of the allegations is
that the petitioner, Mr. Ashit R. Shah, was serving as the Manager of
NEUTRAL CITATION
R/CR.MA/298/2014 ORDER DATED: 29/07/2025
undefined
Sharekhan Commodities Pvt. Ltd., a company engaged in the
business of trading in equities, derivatives, and currency derivatives
segments since 2011. It is submitted that various commodities,
including gold, crude oil, and lead, were traded at the instance of the
complainant, and significant monetary transactions were involved.
However, the complainant failed to square off the open positions in
accordance with the trading rules of Sharekhan Commodities Pvt.
Ltd.
2.2. It is further submitted that the complainant was a customer of
Sharekhan Commodities Pvt. Ltd. and had issued two cheques
towards the outstanding dues, which were dishonoured upon
presentation. Consequently, criminal proceedings under Section 138
of the Negotiable Instruments Act were initiated against the
complainant before the learned 61st Metropolitan Magistrate,
Bombay.
2.3. Moreover, arbitration proceedings were also initiated before
the Arbitral Tribunal, Bombay, for recovery of the outstanding
amount. By award dated 24.12.2013, the learned Arbitral Tribunal
allowed the claim of Sharekhan Commodities Pvt. Ltd. and directed
the complainant to pay an amount of ₹19,39,572.44 along with
interest at the rate of 12% per annum.
2.4. It is therefore submitted that in order to evade compliance with
the arbitral award and to exert undue pressure upon the petitioner,
the complainant has resorted to filing the impugned FIR with
malicious intent. The present criminal proceedings are manifestly
vexatious and constitute an abuse of the process of law.
Accordingly, it is prayed that this Court may be pleased to quash the
NEUTRAL CITATION
R/CR.MA/298/2014 ORDER DATED: 29/07/2025
undefined
impugned FIR in the interest of justice.
3. Learned advocate Ms. Tejal Vashi, appearing for the
respondent No.2 - original complainant, submitted that no
instructions were ever issued to Sharekhan Commodities Pvt. Ltd. to
square off the forward sell position. However, the petitioner, on his
own volition, squared off the said position, thereby causing
substantial financial loss to the complainant. It is further submitted
that the FIR specifically narrates an incident dated 29.08.2013,
wherein, while the first informant was watching television at his
residence, the petitioner, along with his associate Mr. Manish Shah,
allegedly visited the complainant's premises and issued threats,
questioning why the payment of the cheque issued in favour of
Sharekhan Commodities Pvt. Ltd. had been stopped.
3.1. Based on these submissions, learned advocate for respondent
No.2 has prayed for dismissal of the present petition.
4. Learned APP, adopting the arguments advanced by the learned
advocate for respondent No.2, has also opposed the petition and
prayed that the same may not be entertained by this Court.
5. I have heard the learned advocates for the respective parties
and perused the material on record. The undisputed facts emerging
from the record reveal that the petitioner was serving as the Manager
of Sharekhan Commodities Pvt. Ltd., Gandhinagar Branch, and that
the first informant-complainant was associated with the said branch
in the capacity of a client. It is also not in dispute that the
complainant has been actively engaged in the trading of equities,
derivatives, and currency derivatives segments since August 2011.
NEUTRAL CITATION
R/CR.MA/298/2014 ORDER DATED: 29/07/2025
undefined
The trading account of the first informant maintained with
Sharekhan Commodities Pvt. Ltd. bears Account No. 1436223.
5.2. The gravamen of the FIR is that the complainant had allegedly
instructed the petitioner to square off the forward position in gold
trading; however, the said position was kept pending. Significantly,
an agreement was executed between the complainant and Sharekhan
Commodities Pvt. Ltd., wherein Clause 10 extracted in Annexure-B
provides as under:"
"If the Client defaults in paying the daily margin, the member
shall be entitled to liquidate /close out all or any of the Client's
positions, without prejudice to the Member's right to refer the
matter to arbitration. Any and all losses and financial charges
on account of such liquidation /closing out shall be charged to
and borne by the Client. The Member is permitted in its sole
and absolute discretion to impose additional margin even
though not imposed by the Exchanges, the Clearing
Corporation/ Clearing House) and the Client shall be obliged
to fulfill such additional margin requirements."
5.3. It is evident that beyond a particular time frame, the petitioner
was not permitted to continue holding the forward position and was
required to square off the same. It remains undisputed that the two
cheques issued by the complainant were dishonoured upon
presentation. Consequently, Sharekhan Commodities Pvt. Ltd.
instituted proceedings under Section 138 of the Negotiable
Instruments Act before the learned Metropolitan Magistrate,
Bombay, in relation to the dishonour of the said cheques. Notably,
the criminal complaint under Section 138 was filed much prior to the
lodging of the impugned FIR.
NEUTRAL CITATION
R/CR.MA/298/2014 ORDER DATED: 29/07/2025
undefined
5.4. The present FIR thus appears to have been lodged with an
oblique motive to pressurize Sharekhan Commodities Pvt. Ltd. into
compromising or withdrawing the proceedings initiated against the
complainant. The FIR appears to be nothing but a counterblast to the
earlier criminal complaint lodged under Section 138 of the NI Act.
5.5. In Iqbal v. State of U.P., (2023) 8 SCC 734, the Hon'ble
Supreme Court pertinently observed that the High Court ought to
exercise its inherent powers under Section 482 of the Cr.P.C., or its
extraordinary jurisdiction under Article 227 of the Constitution of
India, to quash criminal proceedings if they are palpably frivolous or
instituted with a mala fide or ulterior intent. The relevant paragraph
reads as under:-
"At the same time, we also take notice of the fact that the
investigation has been completed and the charge sheet is
ready to be filed. Although the allegations levelled in the
FIR do not inspire any confidence, particularly in the
absence of any specific date, time, etc. of the alleged
offences, we are of the view that the appellants should
prefer a discharge application before the trial court under
Section 227 of the Code of Criminal Procedure (CrPC).
We 2025:HHC:13252 say so because even according to the
State, the investigation is over and the charge sheet is ready
to be filed before the competent court. In such
circumstances, the trial court should be allowed to look
into the materials which the investigating officer might
have collected forming part of the charge sheet. If any such
discharge application is filed, the trial court shall look into
the materials and take a call whether any discharge case is
made out or not."
5.6. Reference may also be made to the decision of the Hon'ble
Supreme Court in the case of Vineet Kumar and Others v. State of
NEUTRAL CITATION
R/CR.MA/298/2014 ORDER DATED: 29/07/2025
undefined
Uttar Pradesh and Another, reported in (2017) 13 SCC 369,
wherein, in the peculiar facts of the case, the Apex Court was
pleased to hold as under:-
"22. Before we enter into the facts of the present case it is
necessary to consider the ambit and scope of jurisdiction
under Section 482 CrPC vested in the High Court. Section
482 CrPC saves the inherent power of the High Court to
make such orders as may be necessary to give effect to any
order under this Code, or to prevent abuse of the process of
any court or otherwise to secure the ends of justice.
23. This Court time and again has examined the scope of
jurisdiction of the High Court under Section 482 CrPC and
laid down several principles which govern the exercise of
jurisdiction of the High Court under Section 482 CrPC. A
three-Judge Bench of this Court in State of Karnataka v. L.
Muniswamy® held that the High Court is 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 require that the
proceeding ought to be quashed. In para 7 of the judgment,
the following has been stated:
"7. ... In the exercise of this wholesome power, the High
Court is 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 require that the proceeding ought to be quashelf. The
saving of the High Court's inherent powers, 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 a 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. The ends of justice are higher than the
ends of mere law though justice has got to be administered
NEUTRAL CITATION
R/CR.MA/298/2014 ORDER DATED: 29/07/2025
undefined
according to laws made by the legislature. The compelling
necessity for making these observations is that without a
proper realisation of the object and purpose of the provision
which seeks to save the inherent powers of the High Court to
do justice, between the State and its subjects, it would be
impossible to appreciate the width and contours of that
salient jurisdiction."
5.7. In the case of Ashok Kumar Gupta v. State of U.P. and
Another, reported in (2017) 11 SCC 239, the Hon'ble Supreme
Court was pleased to observe and hold as under:-
"3. The case of the respondent complainant is that the
appellant along with Arun Kumar, Accused 2 was supplying
books to the complainant. The complainant did not make the
payment for the books on the ground that the books were not
of proper standard. However, the appellant took away blank
Cheque No. 115668 drawn on Canara Bank, Main Branch,
Hathras from the cheque book kept in the drawer of the table
of the complainant and falsely entered the amount of
Rs.97,552.
4. The appellant sought quashing of the said complaint on
the ground that the criminal complaint was a counterblast to
the notice of dishonour of cheque upon which a summoning
order had been passed and proceedings under Section 138 of
the Negotiable Instruments Act, 1881 were initiated by the
appellant. The appellant relied on notice of dishonour, a
copy of Criminal Complaint No. 135 of 2010 filed on 16-10
-2010 and order of the Court dated 4-11-2010. Reliance has
been placed on the judgments of this Court in Eicher Tractor
Ltd. v. Harihar Singh, Mahindra and Mahindra Financial
Services Ltd. v. Rajiv Dubey? apart from Zandu
Pharmaceutical Works Ltd. v. Mohd. Sharaful Haque*.
5. It is is submitted that while it is true that in quashing
proceedings, the Court could not go into disputed version,
but in the present case, the proceedings are clear abuse of
process of law"
NEUTRAL CITATION
R/CR.MA/298/2014 ORDER DATED: 29/07/2025
undefined
5.8. In the present case, another striking aspect is that the
arbitration proceedings initiated before the learned Arbitral Tribunal
culminated in favour of the petitioner, whereby the Tribunal directed
the first informant-complainant to pay a sum of ₹19,39,572.44
along with interest at the rate of 12% per annum.
5.9. In light of the aforesaid circumstances, the impugned FIR
appears to be nothing but a malicious and vexatious prosecution,
initiated with the sole intent to harass the petitioner. The criminal
proceedings instituted by the first informant are evidently a
counterblast to the proceedings initiated under Section 138 of the
Negotiable Instruments Act, 1881, and have been resorted to with an
oblique motive to evade the consequences thereof.
6. Accordingly, the present petition is ALLOWED. The
impugned FIR being C.R. No.I-303 of 2013 registered with
Gandhinagar Police Station, and all consequent proceedings are
hereby quashed and set aside. Rule is made absolute. Direct service
is permitted.
(J. C. DOSHI,J)
MANISH MISHRA
