Petitioners vs State Of Uttarakhand And Another
2025 Latest Caselaw 4446 UK

Uttarakhand High Court

Petitioners vs State Of Uttarakhand And Another on 19 September, 2025

                             Judgment reserved on: 12.09.2025
                           Judgment delivered on: 19.09.2025


 HIGH COURT OF UTTARAKHAND AT NAINITAL

      Criminal Misc. Appli. (C-482) No. 772 of 2017


M/s OCL Iron & Steel Ltd. & others
                                                        -------Petitioners

                                  Versus

State of Uttarakhand and another
                                                 -----------Respondents
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Presence:-
Mr. S.K.Jain, learned Senior Counsel, assisted by Mr. Siddharth
Jain, learned counsel for the petitioners.
Mr. Deepak Bisht, learned Deputy Advocate General, for the
State/respondent no.1.
Mr. D.C.S.Rawat, learned counsel for the respondent no. 2.
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Hon'ble Mr. Subhash Upadhyay, J.

The present Criminal Misc. Application under Section C-482 of the Code of Criminal Procedure, 1973, has been filed by the petitioners with the prayer to quash the summoning order dated 22.02.2017, passed in the Criminal Complaint No. 07 of 2017, Sushil Kumar Sharma vs. M/s OCL, Iron @ Steel Ltd. & others, under Section 420 IPC, passed by the Additional Chief Judicial Magistrate, Kashipur, District Udham Singh Nagar.

2. The facts, as stated in the Criminal Misc. Application are that M/s OCL Iron & Steel Limited is a registered company, duly registered under the Companies Act, and is in manufacturing of Sponge Iron

and Iron Steel having its registered office at Village Lamloi, PS Garvana Rajgangpur, District Sundhar Garh, Odihsa. On 08.08.2016, the respondent no.2 placed certain orders to purchase total 2475 MT of Sponge Iron through purchase order no. 87 for 1860 MT and order No. 89 for 615 MT. Vide amended order dated 22.08.2016, quantity of 1860 MT of Sponge Iron Lumps and Fines was to be supplied and in pursuance to the purchase order no. 87 dated 08.08.2016 as amended on 22.08.2016, the applicant supplied to the respondent 1529.56 MT Sponge Iron between the period 22.08.2016 to 05.11.2016; that due to some unavoidable circumstance, the applicant could not supply the remaining 331.84 Iron Lumps; that the respondent company requested to supply the remaining quantity and the applicant assured to supply the same; that the applicant company supplied the rest of 331.84 MT Sponge Iron Lumps between 10.04.2017 to 22.05.2017.

3. Learned counsel for the applicant submits that the respondent no.2, however, had filed a Criminal Complaint Case 07 of 2017, under Section 406, 504, 506, 420,120B and 405 IPC, on 03.01.2017 and the summoning order was issued on 22.02.2017, under Section 420 IPC, which order has been impugned in the present Criminal Misc. Application.

4. Learned counsel for the applicant contends that the criminal proceedings initiated against the applicant is an abuse of the process of law as the entire dispute between the parties was of civil nature for non- supply of goods within time specified and cause of any

alleged financial loss to the respondent no.2 cannot be said to have any ingredient of Section 420 IPC, as there is a difference between the breach of contract and cheating and every breach of contract would not give rise to an offence of cheating and only in those cases breach of contracts would amount to cheating, where there was any deception played at the very inception. He referred the complaint made by the respondent no.2 and contends that the said complaint does not disclose the basic essential ingredients of dishonest misappropriation and cheating and reading of the complaint does not disclose a case of dishonest intention of inducement and, as such, the summoning order issued against the applicants under Section 420 IPC was illegal. He further submits that the learned Magistrate prior to the issuance of summons, has to apply its mind and is also to be satisfied whether, there is sufficient grounds for proceeding against the applicants. He further submits that the present case of delay in supply of goods and of any alleged financial loss would at the most could have fallen under the category of commercial disputes, which ought to have been resolved through Civil Court, but the same has been given criminal colour and the learned Magistrate ought to have considered the said aspect of the matter before issuance of summons to the applicants.

5. Per contra, learned counsel for the respondent no.2 submits that the applicants were required to supply the goods through railway network but the said goods were supplied through trucks and, as such, the applicants had committed the offence of breach of trust due, to which, the respondent-company had to suffer

huge monetary loss. Moreover, due to delay caused, the respondent company had to arrange the said material from other sources and that also caused monetary loss to the respondent company. He further contends that the remaining quantity of goods were supplied only after the complaint was lodged and the present C-482 Petition is not maintainable as the applicants had an alternative remedy to file Criminal Revision before the learned Sessions Judge.

6. In reply, learned Senior Counsel for the applicants submits that in view of the law laid down by the Hon'ble Apex Court in the case of Prabhu Chawla vs. State of Rajasthan, AIR 2016 SC 4245, the present C-482 Petition is maintainable. The Hon'ble Apex Court in para 6 of the said judgment has held as hereunder:

"In our considered view any attempt to explain the law further as regards the issue relating to inherent power of High Court under Section 482 Cr.P.C. is unwarranted. We would simply reiterate that Section 482 begins with a non-obstante clause to state:

"Nothing in this Code shall be deemed to limit or affect the inherent powers 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." A fortiori, there can be no total ban on the exercise of such wholesome jurisdiction where, in the words of Krishna Iyer, J. "abuse of the process of the Court or other extraordinary situation excites the court's jurisdiction. The limitation is self- restraint, nothing more." We venture to add a further reason in support. Since Section 397 Cr.P.C. is attracted against all orders other than interlocutory, a contrary view would limit the availability of inherent powers under Section 482 Cr.P.C. only to petty interlocutory orders! A situation wholly unwarranted and undesirable."

7. The learned Senior Counsel for the applicants in support of his contention; that in case of dispute of Civil nature, the Criminal proceedings could not be initiated as the same amounts to an abuse of process of law; has placed reliance on the following Judgments:

(1) Sachin Garg vs. State of U.P. and another, 2024 SCC OnLine SC 82 (2) Vijay Kumar Ghai and others vs. State of West Bengal and others, (2022) 7 Supreme Court Cases

124.

(3) Chandran Ratnaswami vs. K.C.Palanisamy and others, (2013) 6 Supreme Court Cases740

8. After hearing learned counsel for the parties, this Court is of the view that the Criminal proceedings initiated against the applicants is nothing but an abuse of process of law.

9. On perusal of the complaint and the summoning order it would reveal that the entire dispute between the parties was with regard to the delay in supply of goods resulting in alleged financial loss to the respondent no.2 and the same was purely a commercial dispute. The allegations made in the complaint by the respondent no.2 does not give rise to an offence, for which, the applicants have been summoned for trial. The criminal proceedings are not a shortcut for the other available civil remedy.

10. The Hon'ble Apex Court in the case of Pepsi Food Ltd. and another vs. Special Judicial Magistrate and others, reported in (1998) 5 SCC 749, has held in para 28 of the judgment as hereunder:-

"Summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. it is not that the complainant has to bring only two witnesses to support his allegations in the complaint to have the criminal law set into motion. The order of the magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in bringing charge home to the accused. It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. Magistrate has to carefully scrutinise the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused."

11. The Hon'ble Apex Court in the case of Chandran Ratnaswami vs. K.C.Palanisamy and others (supra) in para 39 and 47 has held as hereunder:

"39. This Court in State of Karnataka vs. L. Muniswamy and Others, (1977) 2 SCC 699 observed that the wholesome power under Section 482 Cr.P.C. entitles the High Court to quash a proceeding when 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. The High Courts have been invested with

inherent powers, both in civil and criminal matters, to achieve a salutary public purpose. A court proceeding ought not to be permitted to degenerate into a weapon of harassment or persecution. The Court observed in this case that ends of justice are higher than the ends of mere law though justice must be administered according to laws made by the legislature. It was held in this case:

(SCC P.703, para 7)

"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 quashed. 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 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."

This case has been followed in a large number of subsequent cases of this Court and other courts.

47. In the case of Uma Shankar Gopalika vs. State of Bihar and Another, (2005) 10 SCC 336, this Court has held as under:( SCC Pages 338-39, paras 6-7)

"6. Now the question to be examined by us is as to whether on the facts disclosed in the petition of complaint any criminal offence whatsoever is made out much less offences under Sections 420/120-B IPC. The only allegation in the complaint petition against the accused persons is that they assured the complainant that when they receive the insurance claim amounting to Rs 4,20,000, they would pay a sum of Rs 2,60,000 to the complainant out of that but the same has never been paid. Apart from that there is no other allegation in the petition of complaint. It was pointed out on behalf of the complainant that the accused fraudulently persuaded the complainant to agree so that the accused persons may take steps for moving the Consumer Forum in relation to the claim of Rs 4,20,000. It is well settled that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. In the present case it has nowhere been stated that at the very inception there was any intention on behalf of the accused persons to cheat which is a condition precedent for an offence under Section 420 IPC.

7. In our view petition of complaint does not disclose any criminal offence at all much less any offence either under Section 420 or Section 120-B IPC and the

present case is a case of purely civil dispute between the parties for which remedy lies before a civil court by filing a properly constituted suit. In our opinion, in view of these facts allowing the police investigation to continue would amount to an abuse of the process of court and to prevent the same it was just and expedient for the High Court to quash the same by exercising the powers under Section 482 CrPC which it has erroneously refused."

12. In view of the observations made in the preceding paragraphs, the C-482 Petition is allowed. Accordingly, the summoning order dated 22.02.2017, passed in the Criminal Complaint No. 07 of 2017, Sushil Kumar Sharma vs. M/s OCL, Iron @ Steel Ltd. & others, under Section 420 IPC and the entire proceedings pending before the Additional Chief Judicial Magistrate, Kashipur, District Udham Singh Nagar, are hereby quashed.

(SUBHASH UPADHYAY, J.)

Dated: 19.09.2025 Kaushal