Gujarat High Court
Umesh Rameshbhai Bhatia vs State Of Gujarat on 16 January, 2025
NEUTRAL CITATION
R/CR.MA/829/2025 ORDER DATED: 16/01/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC. APPLICATION (FOR QUASHING & SET ASIDE
FIR/ORDER) NO. 829 of 2025
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UMESH RAMESHBHAI BHATIA
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR. RADHESH Y VYAS(7060) for the Applicant(s) No. 1
MR.YOGESH M VYAS(7258) for the Applicant(s) No. 1
MS. CHETNA M. SHAH, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT
Date : 16/01/2025
ORAL ORDER
1. The present application is filed for seeking the
following reliefs:
“A. This application may be admitted and allowed.
B. YOUR LORDSHIPS may be pleased to quash and set-
aside the FIR NO. 11210047230253/2023, registered by
Udhna Police station, Surat City, Dist. Surat, for the
offences punishable u/s. 406, 408, 409, 120B 34, 504, 506(2)
of Indian Penal Code (Annexure-A) and and all further
proceedings i.e charge sheet (Annexure-B)and Criminal case
no. 69942 of 2023 pending before Ld.10th Addl.Sr.CivilPage 1 of 33
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Judge and A.C.J.M, surat (Annexure-C) in the interest of
justice.
C. Pending hearing and final disposal of the application,
YOUR LORDSHIPS may be pleased to stay the further
proceedings arising from FIR NO. 11210047230253/2023,
registered by Udhna Police station, Surat City, Dist. Surat,
for the offences punishable u/s. 406,408, 409, 120B 34, 504,
506(2) of Indian Penal Code 1860(Annexure-A) i.e Criminal
case no. 69942 of 2023 pending before Ld.10th Addl.Sr.Civil
Judge and A.C.J.M, in the interest of justice.
D. YOUR LORDSHIPS may be pleased to grant such other
and further reliefs as may be deemed, fit, just and proper
in the interest of justice.”
2. Brief facts as per the case of the applicant in this
application are as such that the present applicant was
doing business on behalf of the firm and has entered
into commercial activities with different business entities,
whereby textile goods was supplied to them by proper
bill but these business entities after purchasing the
goods and receiving, have not paid the amount
outstanding to the firm belonging to the complainant and
in furtherance of common intention these business
entities and present applicant have committed ‘criminal
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breach of trust. Thereafter, it is stated that the above-
referred FIR was investigated and the inquiry officer has
filed a final report, being charge sheet no. 151/2023 on
27/07/2023 and Criminal case no. 69942 of 2023 is
registered. Furthermore, it is case of the present
applicant that the allegation made by the complainant is
false and frivolous rather it is an attempt to convert
civil dispute into criminal by clever drafting. It is further
stated that by misusing the police machinery of the state
present complaint is filed with ulterior motive to extort
the money, tarnish the image of the applicant in the
society and as a short cut to the civil proceedings to
recover outstanding amount due to commercial sale
transaction. Furthermore, it is case of the present
applicant that it is stated that as an arm-twisting
technique to settle private dispute of complaint with the
present applicant, the police has also joined the hands
with the complainant. During the course of the
investigation, the I.O. has exercised the power to seize or
Freeze/prohibit the operation of bank accounts belonging
to the present applicant and his family members i.e wife,
son and mother (They are not named as Accused in FIR/
Charge sheet). Because of such technique, the applicant
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and entire family is at the verge of vegrancy. The
condition of applicant is so precarious that whole family
is surviving at the mercy of relatives and friends. The
mother of the applicant is battling with cancer and there
is no money for medicine either. Furthermore, it is case
of the present applicant that on bare reading of FIR and
investigation papers does not discloses the offence as
alleged and continuation of proceedings against present
applicant is abuse of process of law. Hence, this
applicant has been preferred.
3. Heard Mr. Radhesh Vyas, learned advocate for the
applicant, Mr. Nasir Saiyed, learned advocate for the
respondent No.2 – complainant and Ms. Chetna M. Shah,
learned APP for the respondent – State.
4.1 Mr. Radhesh Vyas, learned advocate for the
applicant has submitted that the present applicant is
wrongly implicated in the alleged offence as at the best,
the dispute, which is alleged by the FIR, can be
considered as a civil dispute, which the complainant has
tried to convert into criminal dispute by cleverly drafting
the complaint as some and substance of the entire
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complaint is that the present applicant was doing
business on behalf of the firm and has entered into
commercial activities with the different business entities
whereby textile goods were supplied to them by proper
bill but these business entities after purchasing the
goods and receiving the goods, have not paid the amount
outstanding to the firm belonging to the complainant and
in furtherance of common intention, these business
entities and present applicant have committed ‘criminal
breach of trust’. Furthermore, he has submitted that
continuation of the proceedings pursuant to the present
FIR would amount to misuse of the police machinery,
which is filed with ulterior motive to extort money.
Furthermore, he has submitted that applicant has been
falsely roped in the alleged offence as there is an
ongoing dispute with his employer as a part of an arm
twisting technique. Thus, alleged complaint has been
filed.
4.2 Furthermore, he has submitted that the applicant
was working in the firm in the capacity of marketing
head and role of the applicant being marketing head was
to do marketing in the field by showing samples and
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accepting the orders on behalf of the firm only. It is
also submitted that even if it is considered that whole
FIR is truth then also dispute can be considered as a
non-payment of money of commercial transaction and the
complainant has availed shortcut for recovery of
outstanding dues from the commercial transaction by
making the present applicant ‘scapegoat’. Furthermore, he
has relied upon the decision of this Court in the case of
Arvindbhai Maganlal Master vs. State of Gujarat
reported in 2015 (1) GLH 149, and has submitted that
clever drafting of complaint to recover outstanding dues
will not help to convert the complaint from actual civil
dispute to criminal dispute. Furthermore, he has
submitted that certain complaints are also filed under
the Negotiable Instruments Act against the other accused
persons by the present applicant and, therefore, the
present applicant is falsely roped into the present FIR
by the complainant. Lastly, he has submitted that
considering the judgment of the Hon’ble Apex Court in
the cases of (i) Delhi Race Club (1940) Ltd. and Ors. vs.
State of Uttar Pradesh and Anr. reported in Criminal
Appeal No.3114 of 2024, (ii) Robert John D’Souza and
Others vs. Stephen Vs. Gomes and Another reported in
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(2015) 9 SCC 96, and (iii) N. Raghvender vs. State of
Andhar Pradesh, CBI, reported in Criminal Appeal No.5
of 2010, and has submitted that present complaint is
nothing but an abuse of process of law and therefore,
the same is required to be quashed and set aside.
5. Per contra, Ms. Chetna M. Shah, learned APP for
the respondent – State has strongly opposed the
submissions made at the bar. He has tendered a report
received from the concerned police station and has
further submitted that pursuant to the FIR, charge-sheet
is also filled and now the trial is also commenced and
the same is at the stage for the process to the accused
th
and next date is 28 March, 2025. She has further
submitted that on bare reading of the FIR, the role of
the applicant is clearly stated in detail as the present
applicant – Umesh Rameshbhai Bhatia is handling the
trading business of wepfab firm and during the period of
2022 till 31st December, 2022, the present applicant –
Umesh Rameshbhai Bhatia as well as co-accused –
Harishkumar @ Haris Master, Vedprakash as well as
Ramesh Narsaiya have created various firms with the
help of near relatives in the name of Shreeji Fashion,
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Shri Kali Mahalaxmi Enterprise, Satguru Synthetics,
Ganpati Fabrics, Radhe Fashion, Tushar Silk Mills, Mohi
Silk, and JMD Enterprise, and also executed the rent
agreement of such firms and the account of such firms
are opened in HDFC Bank, Vesu Branch and in collusion
of each other, cheques were executed from the proprietor
of such firms and such cheques were kept in the custody
of the present applicant and thereafter, further
transaction from some dummy firms are also entered and
total goods of Rs.15,64,52,095/- are sent to the different
dummy firms from the wepfab firm and thereafter,
amount of Rs.15,64,52,095/- outstanding of wepfab firm
was not recovered by the present applicant – Umesh
Rameshbhai Bhatia by breaching the trust put by the
wepfab firm and thereafter, when the complainant has
asked for the same, he has threatened and, therefore,
the complaint is filed for criminal breach of trust as well
as cheating. After investigation, the charge sheet is filed
against the present applicant and other co-accused and
the matter is now at the stage of further process and
accordingly, now matter is proceeded further and is at
the stage of issuance of process and, therefore, she has
submitted that prima face, cases is made out and no
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interference of this Court is required to be called for at
this stage.
6. Mr. Nasir Saiyed, learned advocate for the
respondent No.2 – complainant has submitted that he
will file his Vakalatnama as he has instructions to
appear on behalf of the complainant. He has supported
submissions made the bar by the learned APP and has
submitted that the complainant is cheated by the present
applicant and other persons by way of conspiracy and,
therefore, all the ingredients of the sections alleged in
the FIR are satisfied and, therefore, after proper
investigation, police has also filed charge-sheet against
the present applicant and other accused persons and,
therefore, when the prima facie case is made out and
the trial is about to commenced, no interference of this
Court is required to be called for by this Court. He has
relied upon the judgment of the Hon’ble Apex Court in
the case of Neeharika Infrastructure Pvt. Ltd. versus
State of Maharashtra and Others reported in 2021 SCC
OnLine SC 315, and more particularly para 80 is
relevant, and has submitted that the present application
is required to be dismissed.
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7.1 It have considered the rival submissions made at
the bar. It is fruitful to refer the provisions of Sections
406, 408, 409, 120B 34, 504, 506(2) of Indian Penal
Code, as under:
“Section 406 in The Indian Penal Code, 1860:
406. Punishment for criminal breach of trust.–
Whoever commits criminal breach of trust shall be punished
with imprisonment of either description for a term which
may extend to three years, or with fine, or with both.
Section 408 in The Indian Penal Code, 1860:
408. Criminal breach of trust by clerk or servant.–
Whoever, being a clerk or servant or employed as a clerk
or servant, and being in any manner entrusted in such
capacity with property, or with any dominion over property,
commits criminal breach of trust in respect of that property,
shall be punished with imprisonment of either description
for a term which may extend to seven years, and shall also
be liable to fine.
Section 409 in The Indian Penal Code, 1860:
409. Criminal breach of trust by public servant, or by
banker, merchant or agent.–
Whoever, being in any manner entrusted with property, or
with any dominion over property in his capacity of a public
servant or in the way of his business as a banker, mer-
chant, factor, broker, attorney or agent, commits criminal
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breach of trust in respect of that property, shall be
punished with imprisonment for life, or with imprisonment
of either description for a term which may extend to ten
years, and shall also be liable to fine.
Section 120B in The Indian Penal Code, 1860:
120B. Punishment of criminal conspiracy.–
(1) Whoever is a party to a criminal conspiracy to commit
an offence punishable with death, imprisonment for life or
rigorous imprisonment for a term of two years or upwards,
shall, where no express provision is made in this Code for
the punishment of such a conspiracy, be punished in the
same manner as if he had abetted such offence.
(2) Whoever is a party to a criminal conspiracy other than
a criminal conspiracy to commit an offence punishable as
aforesaid shall be punished with imprisonment of either
description for a term not exceeding six months, or with
fine or with both.
Section 34 in The Indian Penal Code, 1860:
34. Acts done by several persons in furtherance of common
intention.–
When a criminal act is done by several persons in
furtherance of the common intention of all, each of such
persons is liable for that act in the same manner as if it
were done by him alone.
Section 504 in The Indian Penal Code, 1860:
504. Intentional insult with intent to provoke breach of the
peace.–
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Whoever intentionally insults, and thereby gives provocation
to any person, intending or knowing it to be likely that
such provocation will cause him to break the public peace,
or to commit any other offence, shall be punished with
imprisonment of either description for a term which may
extend to two years, or with fine, or with both.
Section 506 in The Indian Penal Code, 1860:-
506. Punishment for criminal intimidation.–
Whoever commits, the offence of criminal intimidation shall
be punished with imprison-ment of either description for a
term which may extend to two years, or with fine, or with
both;
If threat be to cause death or grievous hurt, etc.– And if
the threat be to cause death or grievous hurt, or to cause
the destruction of any property by fire, or to cause an
offence punishable with death or imprisonment for life, or
with imprisonment for a term which may extend to seven
years, or to impute, unchastity to a woman, shall be
punished with imprisonment of either description for a term
which may extend to seven years, or with fine, or with
both.”
7.2 On bare reading of the FIR, it transpires that there
is transaction done through the present applicant, who is
handling business of wepfab firm and in
collusion/connivance of the other persons, some other
firms are also created and then, in turn, the transaction
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were made with some dummy firms and, therefore, good
of huge amount are sold to such dummy firms through
the help of one person, which is co-accused Rajendra @
Guddubhai Ramkishor Mishra, who works of agent of
grey cloth business. It also transpires that thereafter, the
charge-sheet is filed after full-fledged investigation,
whereby many statements were recorded and from the
tenor of the statements, on perusal for the sanctification
of the Court, it is found that the applicant has also
annexed some statements and documents with the
present application and the Court has cursorily perused
the said documents. On perusal of such documents also,
it transpires that there is serious allegation against the
present applicant, which prima facie constitute offence of
criminal breach of trust. It also transpires that offence of
cheating is also made out from the bare reading of the
FIR. It is pertinent to note that provisions of Section
120B of the Indian Penal Code, which is criminal
conspiracy is also invoked in the FIR and considering
the role of the various accused petitioners, and
considering the modus operandi of opening the accounts,
I am of the view that prime facie, case is made out
against all the accused and investigating officer after
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thorough investigation has filed the charge-sheet against
all the accused and some of the persons are also shown
as witnesses in the charge-sheet and, therefore, I am of
the view that arguments which are advanced by learned
advocate for the applicant, though it sounds very
attractive but in the facts and circumstances of the
present case, yet are not helpful to the facts of the
present case.
7.3.1 It is fruitful to refer the judgment of the
Hon’ble Apex Court in the case of Delhi Race Club
(1940) Ltd. and Ors. (supra), more particularly,
paragraph Nos.25, 33 and 36 are relevant, as under:
“25. What can be discerned from the above is that the
offences of criminal breach of trust (Section 406 IPC) and
cheating (Section 420 IPC) have specific ingredients.
In order to constitute a criminal breach of trust (Section
406 IPC): –
1) There must be entrustment with person for property or
dominion over the property, and
2) The person entrusted: –
a) dishonestly misappropriated or converted property
to his own use, orPage 14 of 33
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b) dishonestly used or disposed of the property or
willfully suffers any other person so to do in violation
of:
i. any direction of law prescribing the method
in which the trust is discharged; or
ii. legal contract touching the discharge of trust
(see: S.W.P. Palanitkar (supra).
Similarly, in respect of an offence under Section 420 IPC,
the essential ingredients are: –
1) deception of any person, either by making a false or
misleading representation or by other action or by omission;
2) fraudulently or dishonestly inducing any person to deliver
any property, or
3) the consent that any persons shall retain any property
and finally intentionally inducing that person to do or omit
to do anything which he would not do or omit (see:
Harmanpreet Singh Ahluwalia v. State of Punjab, (2009) 7
SCC 712 : (2009) Cr.L.J. 3462 (SC)).
33. It has been held in State of Gujarat v. Jaswantlal
Nathalal reported in (1968) 2 SCR 408, “The term
“entrusted” found in Section 405 IPC governs not only the
words “with the property” immediately following it but also
the words “or with any dominion over the property”
occurring thereafter–see Velji Raghvaji Patel v. State of
Maharashtra [(1965) 2 SCR 429]. Before there can be any
entrustment there must be a trust meaning thereby an
obligation annexed to the ownership of property and aPage 15 of 33
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confidence reposed in and accepted by the owner or declared
and accepted by him for the benefit of another or of
another and the owner. But that does not mean that such
an entrustment need conform to all the technicalities of the
law of trust — see Jaswantrai Manilal Akhaney v. State of
Bombay [1956 SCR 483]. The expression “entrustment”
carries with it the implication that the person handing over
any property or on whose behalf that property is handed
over to another, continues to be its owner. Further the
person handing over the property must have confidence in
the person taking the property so as to create a fiduciary
relationship between them. A mere transaction of sale
cannot amount to an “entrustment””.
36. From the aforesaid, there is no manner of any doubt
whatsoever that in case of sale of goods, the property
passes to the purchaser from the seller when the goods are
delivered. Once the property in the goods passes to the
purchaser, it cannot be said that the purchaser was
entrusted with the property of the seller. Without
entrustment of property, there cannot be any criminal
breach of trust. Thus, prosecution of cases on charge of
criminal breach of trust, for failure to pay the consideration
amount in case of sale of goods is flawed to the core.
There can be civil remedy for the non-payment of the
consideration amount, but no criminal case will be
maintainable for it. [See : Lalit Chaturvedi and Others v.
State of Uttar Pradesh and Another : 2024 SCC OnLine SC
171 & Mideast Integrated Steels Ltd. (MESCO Steel Ltd.)
and Others v. State of Jharkhand and Another : 2023 SCC
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OnLine Jhar 301].”
7.3.2 It is also fruitful to refer the judgment of the
Hon’ble Apex Court in the case of Robert John D’Souza
and Others (supra), more particularly, paragraph Nos.7 to
16 are relevant, as under:
“7. Arguments were advanced by learned counsel for the
parties on the above lines pleaded before us. Having
considered the submissions of the learned counsel for the
parties what is apparent in the present case is that the
complainant is not the member of Mukka Welfare Society.
It is also not disputed that the sale deeds in question were
executed way back in the year 1996 and the complainant,
who is not even member of the Society, raises the issue
that the sale deeds were executed for the benefit of the
Directors of the Society, after a long gap of more than
twelve years. Sale deeds in question are registered, and not
declared null and void by any court of law. It is also
relevant to mention here that admittedly earlier a complaint
was made by the complainant to the Deputy Commissioner
in the year 2009, which was got investigated by the police
and the result of the investigation was that no offence was
found committed by the appellants on the ground that the
dispute is of civil in nature.
8. In view of the above facts, apparent on the record,
we are of the view that the High Court and the courtsPage 17 of 33
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below have committed grave error of law in ignoring the
same. Needless to say that to constitute an offence
punishable under Section 406 IPC, the essential ingredient
is the “entrustment” of the property. The complaint filed by
the complainant nowhere discloses that the land in question
purchased in the year 1978 was entrusted to the Society for
the benefit of others. It is only after entrustment is shown,
it can be said that there was criminal breach of trust.
9. In Ram Narayan Popli v. Central Bureau of
Investigation[1], this Court, per majority, has explained
“entrustment” in paragraph 363 as under: –
“The term “entrustment” is not necessarily a term of law. It
may have different implications in different contexts. In its
most general signification all it imports is the handing over
possession for some purpose which may not imply the
conferring of any proprietary right at all.”
10. In State of Gujarat v. Jaswantlal Nathalal[2], this
Court in paragraph 8 has observed that a mere transaction
of sale cannot amount to an entrustment.
11. At this stage we also think it proper to observe that
in the present case, even if the allegations made in the
complaint are taken to be true, the ingredients of the
offence punishable under Section 409 IPC for which
appellants are summoned, are also not made out. To
constitute an offence punishable under Section 409 IPC,
apart from entrustment, it is also essential requirement that
it should be shown that the accused has acted in the
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capacity of a public servant, banker, merchant, factor,
broker, attorney or agent. It is nowhere shown in the
complaint that the appellants have acted in any of the
above capacities.
12. As far as offence of cheating is concerned, the same
is defined in Section 415 IPC, for which the punishment is
provided under Section 420 IPC.
Section 415 reads as under:-
“415. Cheating. – Whoever, by deceiving any person,
fraudulently or dishonestly induces the person so
deceived to deliver any property to any person, or to
consent that any person shall retain any property, or
intentionally induces the person so deceived to do or
omit to do anything which he would not do or omit
if he were not so deceived, and which act or omission
causes or is likely to cause damage or harm to that
person in body, mind, reputation or property, is said
to “cheat”.
Explanation. – A dishonest concealment of facts is a
deception within the meaning of this
section.Illustrations ……………”
From the above language of the Section, one of the
essential ingredients for the offence of cheating is deception,
but in the present case, from the contents of the complaint
it nowhere reflects that the complainant was deceived or he
or anyone else was induced to deliver the property by
deception. What was done, was so reflected in the
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resolutions, and sale deeds.
13. In Mathavrao Jiwajirao Scindia and others v.
Sambhajirao Chandrojirao Angre and others[3], a three-
Judge Bench of this Court has laid down the law as to
quashment of proceedings under Section 482 CrPC as
follows:-
“7. The legal position is well settled that when a
prosecution at the initial stage is asked to be
quashed, the test to be applied by the court is as to
whether the uncontroverted allegations as made prima
facie establish the offence. It is also for the court to
take into consideration any special features which
appear in a particular case to consider whether it is
expedient and in the interest of justice to permit a
prosecution to continue. This is so on the basis that
the court cannot be utilised for any oblique purpose
and where in the opinion of the court chances of an
ultimate conviction is bleak and, therefore, no useful
purpose is likely to be served by allowing a criminal
prosecution to continue, the court may while taking
into consideration the special facts of a case also
quash the proceeding even though it may be at a
preliminary stage.”
14. In Suresh v. Mahadevappa Shivappa Danannava and
another[4], criminal prosecution was quashed by the Court
in respect offence of cheating noticing that the complaint
was filed after a lapse of ten years.
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15. In Inder Mohan Goswami and another v. State of
Uttaranchal and others[5], this Court in paragraphs 25 and
46 has observed as under: –
“25. Reference to the following cases would reveal
that the courts have consistently taken the view that
they must use this extraordinary power to prevent
injustice and secure the ends of justice. The English
courts have also used inherent power to achieve the
same objective. It is generally agreed that the Crown
Court has inherent power to protect its process from
abuse. In Connelly v. DPP (1964 AC 1254) Lord
Devlin stated that where particular criminal
proceedings constitute an abuse of process, the court
is empowered to refuse to allow the indictment to
proceed to trial. Lord Salmon in DPP v. Humphrys
(1977 AC 1) stressed the importance of the inherent
power when he observed that it is only if the
prosecution amounts to an abuse of the process of the
court and is oppressive and vexatious that the judge
has the power to intervene. He further mentioned
that the court’s power to prevent such abuse is of
great constitutional importance and should be
jealously preserved.
xxx xxx xxx
46. The court must ensure that criminal prosecution
is not used as an instrument of harassment or for
seeking private vendetta or with an ulterior motive to
pressurise the accused. On analysis of the
aforementioned cases, we are of the opinion that it is
neither possible nor desirable to lay down anPage 21 of 33
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inflexible rule that would govern the exercise of
inherent jurisdiction. Inherent jurisdiction of the High
Courts under Section 482 CrPC though wide has to
be exercised sparingly, carefully and with caution and
only when it is justified by the tests specifically laid
down in the statute itself and in the aforementioned
cases. In view of the settled legal position, the
impugned judgment cannot be sustained.”
16. In view of the above discussion and facts and
circumstances of the case, we are of the view that none of
the offences for which the appellants are summoned, is
made out from the complaint and material on record. We
further find that it is nothing but abuse of process of law
on the part of the complainant to implicate the appellants
in a criminal case after a period of twelve years of
execution of registered sale deeds in question, who is
neither party to the sale deeds nor a member of the
Society. Therefore, we allow the appeal and set aside the
orders passed by the High Court and that of the courts
below. Accordingly, the order passed by the Magistrate
summoning the appellants in the criminal complaint filed by
respondent No. 1, in respect of offences punishable under
Sections 406, 409 and 420 IPC, also stands quashed.”
7.3.3 It is also fruitful to refer the judgment of the
Hon’ble Apex Court in the case of N. Raghvender
(supra), more particularly, paragraph Nos.41 and 42 are
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relevant, as under:
“41. Section 409 IPC pertains to criminal breach of trust by
a public servant or a banker, in respect of the property
entrusted to him. The onus is on the prosecution to prove
that the accused, a public servant or a banker was
entrusted with the property which he is duly bound to
account for and that he has committed criminal breach of
trust. (See: Sadupati Nageswara Rao v. State of Andhra
Pradesh9).
42. The entrustment of public property and dishonest
misappropriation or use thereof in the manner illustrated
under Section 405 are a sine qua non for making an
offence punishable under Section 409 IPC. The expression
‘criminal breach of trust’ is defined under Section 405 IPC
which provides, inter alia, that whoever being in any
manner entrusted with property or with any dominion over
a property, dishonestly misappropriates or converts to his
own use that property, or dishonestly uses or disposes of
that property contrary to law, or in violation of any law
prescribing the mode in which such trust is to be
discharged, or contravenes any legal contract, express or
implied, etc. shall be held to have committed criminal
breach of trust. Hence, to attract Section 405 IPC, the
following ingredients must be satisfied:
(i) Entrusting any person with property or with any
dominion over property;
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(ii) That person has dishonestly mis-appropriated or
converted that property to his own use;
(iii) Or that person dishonestly using or disposing of that
property or wilfully suffering any other person so to do in
violation of any direction of law or a legal contract.”
7.4 Furthermore, in light of the above decisions, there
is no quarrel about the proposition of law laid down by
the Hon’ble Apex Court in the aforesaid judgment, but
considering the facts of the present case, it specifically
comes out evenafter investigation that prima facie,
offence is made out and the charge-sheet is required to
be filed as the present applicant being an authorized
person to look after the business of wepfab firm has
misused his position by allegedly colluding with the other
firms by creating such firm and thereafter, entering into
transaction of some other dummy firms and accordingly,
goods of more than Rs.15 crores were sold and the
amount is not repaid. It cannot be said that merely the
present application is having only civil colour as dispute
is essentially about non-payment of the amount from the
commercial transaction.
7.5 Furthermore, looking to the conduct of the parties,
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it is also emerging from the record that bogus firms are
created in collusion/connivance with the respective
proprietors by the present applicant and considering the
role of the present applicant to sell the goods to the
dummy firms, it clearly indicates that the involvement of
the applicant in alleged offence is prima facie
established.
7.6 At this stage, it would be fruitful to refer to the
recent decision of the Hon’ble Apex Court in the case of
Somjeet Mallick versus State of Jharkhand and others
reported in (2024) 10 SCC 527, more particularly Paras :
15, 17and 18 thereof, which read as under :
” 15. Before we proceed to test the
correctness of the impugned order, we must
bear in mind that at the stage of deciding
whether a criminal proceeding or FIR, as the
case may be, is to be quashed at the
threshold or not, the allegations in the FIR
or the police report or the complaint,
including the materials collected during
investigation or inquiry, as the case may be,
are to be taken at their face value so as to
determine whether a prima facie case forPage 25 of 33
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investigation or proceeding against the
accused, as the case may be, is made out.
The correctness of the allegations is not to
be tested at this stage.
17. It is trite law that FIR is not an
encyclopaedia of all imputations. Therefore, to
test whether an FIR discloses commission of
a cognizable offence what is to be looked at
is not any omission in the accusations but
the gravamen of the accusations contained
therein to find out whether, prima facie,
some cognizable offence has been committed
or not. At this stage, the Court is not
required to ascertain as to which specific
offence has been committed.
18. It is only after investigation, at the
time of framing charge, when materials
collected during investigation are before the
Court, the Court has to draw an opinion as
to for commission of which offence the
accused should be tried. Prior to that, if
satisfied, the Court may even discharge the
accused. Thus, when the FIR alleges a
dishonest conduct on the part of the accused
which, if supported by materials, wouldPage 26 of 33
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disclose commission of a cognizable offence,
investigation should not be thwarted by
quashing the FIR.”
In light of the above decision, the Hon’ble Apex
Court has stated that the mere fact that a dispute is of
a civil nature is not sufficient to establish criminal
liability. In cases like the present one, which involve
elements of criminality and possess a criminal texture, it
is essential to consider the matter in its entirety.
Furthermore, considering that charge-sheet has been filed
following the FIR, in this respect, it is pertinent to refer
to the judgment of the Hon’ble Apex Court in the case
of Neeharika Infrastructure Pvt. Ltd. (supra). Specifically,
paragraph 80 of the judgment is relevant and is as
follows:
“80. In view of the above and for the reasons stated
above, our final conclusions on the principal/core
issue, whether the High Court would be justified in
passing an interim order of stay of investigation and/
or “no coercive steps to be adopted”, during the
pendency of the quashing petition under Section 482
Cr.P.C and/or under Article 226 of the Constitution of
India and in what circumstances and whether thePage 27 of 33
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High Court would be justified in passing the order of
not to arrest the accused or “no coercive steps to be
adopted” during the investigation or till the final
report/chargesheet is filed under Section 173 Cr.P.C.,
while dismissing/disposing of/not entertaining/not
quashing the criminal proceedings/complaint/FIR in
exercise of powers under Section 482 Cr.P.C. and/or
under Article 226 of the Constitution of India, our
final conclusions are as under:
i) Police has the statutory right and duty under the
relevant provisions of the Code of Criminal Procedure
contained in Chapter XIV of the Code to investigate
into a cognizable offence;
ii) Courts would not thwart any investigation into the
cognizable offences;
iii) It is only in cases where no cognizable offence or
offence of any kind is disclosed in the first
information report that the Court will not permit an
investigation to go on;
iv) The power of quashing should be exercised
sparingly with circumspection, as it has been
observed, in the ‘rarest of rare cases (not to be
confused with the formation in the context of deathPage 28 of 33
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penalty).
v) While examining an FIR/complaint, quashing of
which is sought, the court cannot embark upon an
enquiry as to the reliability or genuineness or
otherwise of the allegations made in the
FIR/complaint;
vi) Criminal proceedings ought not to be scuttled at
the initial stage;
vii) Quashing of a complaint/FIR should be an
exception rather than an ordinary rule;
viii) Ordinarily, the courts are barred from usurping
the jurisdiction of the police, since the two organs of
the State operate in two specific spheres of activities
and one ought not to tread over the other sphere;
ix) The functions of the judiciary and the police are
complementary, not overlapping;
x) Save in exceptional cases where non-interference
would result in miscarriage of justice, the Court and
the judicial process should not interfere at the stage
of investigation of offences;
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xi) Extraordinary and inherent powers of the Court
do not confer an arbitrary jurisdiction on the Court
to act according to its whims or caprice;
xii) The first information report is not an
encyclopaedia which must disclose all facts and
details relating to the offence reported. Therefore,
when the investigation by the police is in progress,
the court should not go into the merits of the
allegations in the FIR. Police must be permitted to
complete the investigation. It would be premature to
pronounce the conclusion based on hazy facts that the
complaint/FIR does not deserve to be investigated or
that it amounts to abuse of process of law. After
investigation, if the investigating officer finds that
there is no substance in the application made by the
complainant, the investigating officer may file an
appropriate report/summary before the learned
Magistrate which may be considered by the learned
Magistrate in accordance with the known procedure;
xiii) The power under Section 482 Cr.P.C. is very
wide, but conferment of wide power requires the
court to be more cautious. It casts an onerous and
more diligent duty on the court;
xiv) However, at the same time, the court, if it
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thinks fit, regard being had to the parameters of
quashing and the self-restraint imposed by law, more
particularly the parameters laid down by this Court
in the cases of R.P. Kapur (supra) and Bhajan Lal
(supra), has the jurisdiction to quash the
FIR/complaint;
xv) When a prayer for quashing the FIR is made by
the alleged accused and the court when it exercises
the power under Section 482 Cr.P.C., only has to
consider whether the allegations in the FIR disclose
commission of a cognizable offence or not. The court
is not required to consider on merits whether or not
the merits of the allegations make out a cognizable
offence and the court has to permit the investigating
agency/police to investigate the allegations in the FIR;
xvi) The aforesaid parameters would be applicable
and/or the aforesaid aspects are required to be
considered by the High Court while passing an
interim order in a quashing petition in exercise of
powers under Section 482 Cr.P.C. and/or under Article
226 of the Constitution of India. However, an interim
order of stay of investigation during the pendency of
the quashing petition can be passed with
circumspection. Such an interim order should not
require to be passed routinely, casually and/or
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mechanically. Normally, when the investigation is in
progress and the facts are hazy and the entire
evidence/material is not before the High Court, the
High Court should restrain itself from passing the
interim order of not to arrest or “no coercive steps to
be adopted” and the accused should be relegated to
apply for anticipatory bail under Section 438 Cr.P.C.
before the competent court. The High Court shall not
and as such is not justified in passing the order of
not to arrest and/or “no coercive steps” either during
the investigation or till the investigation is completed
and/or till the final report/chargesheet is filed under
Section 173 Cr.P.C., while dismissing/disposing of the
quashing petition under Section 482 Cr.P.C. and/or
under Article 226 of the Constitution of India. xvii)
Even in a case where the High Court is prima facie
of the opinion that an exceptional case is made out
for grant of interim stay of further investigation,
after considering the broad parameters while
exercising the powers under Section 482 Cr.P.C.
and/or under Article 226 of the Constitution of India
referred to hereinabove, the High Court has to give
brief reasons why such an interim order is warranted
and/or is required to be passed so that it can
demonstrate the application of mind by the Court and
the higher forum can consider what was weighed
with the High Court while passing such an interim
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order.
xviii) Whenever an interim order is passed by the
High Court of “no coercive steps to be adopted”
within the aforesaid parameters, the High Court must
clarify what does it mean by “no coercive steps to be
adopted” as the term “no coercive steps to be
adopted” can be said to be too vague and/or broad
which can be misunderstood and/or misapplied.”
7.7 In light of the overall facts and circumstances of
the case, I am of the opinion that no ground is made
for the interference of this Court. On the contrary,
allowing such an application by quashing the proceedings
against the present applicant would amount to premium
treatment to dishonesty, which is prima facie evident
from the applicant’s conduct, based on the allegations
and the materials available on record. Therefore, I found
that this is not a fit case where this Court should
exercise its discretion in favour of the present applicant
as the present application is found meritless and is
required to be dismissed and is dismissed, accordingly
with no order as to costs.
(SANDEEP N. BHATT,J)
DIWAKAR SHUKLA
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