Gujarat High Court
Dharmishthaben Hareshbhai Pandya vs State Of Gujarat on 8 January, 2025
NEUTRAL CITATION
R/CR.MA/9164/2017 JUDGMENT DATED: 08/01/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC. APPLICATION NO. 9164 of 2017
(FOR QUASHING & SET ASIDE FIR/ORDER)
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE DIVYESH A. JOSHI : Sd/-
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Approved for Reporting Yes No
- √
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DHARMISHTHABEN HARESHBHAI PANDYA
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR MAULIN G PANDYA(3999) for the Applicant(s) No. 1
MR TUSHAR M GOKANI(5472) for the Applicant(s) No. 1
MR RAVI MANDALIYA for MR PRATIK B BAROT(3711) for the
Respondent(s) No. 2
MR SOAHAM JOSHI APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE DIVYESH A. JOSHI
Date : 08/01/2025
ORAL JUDGMENT
1. By filing instant application under section 482 of
the Code of Criminal Procedure, 1973 (hereinafter
referred to as “CrPC” for short), the applicant –
original accused no.2 seeks quashment of the
impugned FIR being C.R. No.I-21/2017 registered
with Rajkot Taluka Police Station, Rajkot for the
offences punishable under Sections 406, 420, 507
and 114 of the Indian Penal Code, 1860
(hereinafter referred to as “IPC” for short).
2. The allegations in the impugned FIR in nutshell
are as under,
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The accused have, in connivance with each
other, have purchased tar weighing 3,50,684 Kgs.
worth of Rs.80,48,201/- from the Company of the
respondent no.2 herein and out of which,
Rs.25,00,000/- was paid to him by depositing it in
the account and, thereafter, the assurance was
given to make the payment of remaining amount of
Rs.55,48,201/-, however, the said amount was not
paid and on the contrary, threats were
administered and thereby the accused have
committed alleged offences.
3. Heard learned advocate Mr. Maulin Pandya for the
applicant, learned APP Mr. Soaham Joshi for the
respondent – State and learned advocate, Mr. Ravi
Mandaliya for learned advocate, Mr. Pratik Barot
for the respondent no.2.
4. Learned advocate, Mr. Pandya submitted that bare
perusal of the allegations leveled in the impugned
FIR clearly goes on to show that entire
allegations and accusation are leveled against the
original accused no.1, who is husband of the
present applicant but except that, no any other
transaction took place between the complainant and
the present applicant. Learned advocate has
referred to the allegations leveled in the
impugned FIR, more particularly, at the bottom of
the FIR and submitted that the respondent no.2
herein has made bald assertion that the applicant
is one of the partners of the partnership firm and
since very beginning, she is aware about the said
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business transaction between the parties and
except that, no any specific instance has been
mentioned in entire body of the FIR. He further
submitted that if the recital of the FIR are to be
seen, in that event, it would be found out that
there was simple business transaction took place
between two traders and due to non-payment of the
outstanding amount, the impugned FIR has been
lodged. He, however, submitted that by filing
impugned FIR, civil dispute has been converted
into criminal one. He further submitted that bare
perusal of the allegations clearly goes on to show
that basic, essential and requisite ingredients to
constitute the charge under Sections 405 of the
IPC are missing and vague and general allegations
arel eveled in the impugned FIR. He further
submitted that in fact, the applicant is not
directly or indirectly connected with the
commission of crime and despite that, he is
wrongly arraigned as accused in the aforesaid
commission of crime.
5. Learned advocate has placed reliance upon
following decisions,
(1) the judgment of the Hon’ble Supreme Court in
case of Delhi Race Club (1940) Ltd. & Ors.
Vs. State of Uttar Pradesh & Anr.,, reported
in (2024) 10 SCC 690;
(2) the judgment of the Hon’ble Supreme Court in
case of Sunil Bharti Mittal Vs. CBI, reported
in (2015) 4 SCC 609;
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(3) the judgment of the Hon’ble Supreme Court in
case of Hotline Teletubes and Components Ltd.
Vs. State of Bihar, reported in (2005) 10 SCC
261;
(4) the judgment of this Hon’ble Court in case of
Jayrajsinh Madhubha Gadhvi Vs. State of
Gujarat, reported in 2024 (1) GLR 786;
6. Referring to the aforesaid decisions, learned
advocate submitted that the case of the applicant
is squarely covered by those decisions, therefore,
discretion may be exercised in favour of the
applicant. At this stage, learned advocate
submitted that considering the principle of law
laid down by the Hon’ble Apex Court in case of
State of Haryana Vs. Bhajan Lal, reported in AIR
1992 SC 604 as well as in case of R.P. Kapur Vs.
State of Punjab, reported in AIR 1960 SC 866 :
1960 Cri LJ 1239, the prosecution launched against
the applicant is required to be quashed and set
aside.
7. Learned APP Mr. Soaham has objected present
application with vehemence and submitted that it
was a pre-planned conspiracy hatched by the
accused in connivance with each other, wherein
involvement of the applicant is found out. Learned
APP submitted that the accused have committed
criminal breach of trust with the respondent no.2
herein by giving false promises of repayment of
the amount but they have not cleared the
outstanding dues. It is, therefore, urged that the
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present application may be rejected.
8. Learned advocate, Mr. Mandaliya appearing for the
respondent no.2 has also opposed the present
application and submitted that in the business
transaction, the applicant being a partner of the
partnership firm has played equal role and right
from the beginning, she was aware about the
transaction took place between the parties,
therefore, she is arraigned as accused in the
aforesaid offence and at the time of registration
of the impugned FIR, specific allegations are
leveled against her, which constitute the
commission of crime and thus, basic, essential and
requisite ingredients of the alleged offences are
satisfied. It is, therefore, urged that no
discretion may be exercised in favour of the
applicant and the present application may be
rejected.
9. I have given my thoughtful consideration to the
submissions advanced by the learned advocates for
the respective parties. After hearing the learned
advocates for the respective parties and perusing
the contents of the FIR, this Court is of the
considered opinion that the complainant has tried
to misuse the machinery of criminal law. For
ascertaining whether any offence as alleged in the
FIR is established or not, this Court has very
minutely gone through the allegations and the
documents as pointed out by the respective
parties.
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10. Before evaluating the contentions advanced on
behalf of the parties, it will be useful to
briefly notice the scope and ambit of the inherent
powers of the High Court under Section 482 of the
IPC. The section itself envisages three
circumstances, under which, the inherent
jurisdiction may be exercised, namely, (i) to give
effect to an order under the Code; (ii) to prevent
an abuse of the process of court; and to otherwise
secure the ends of justice. Nevertheless, it is
neither possible nor discernible to lay down any
inflexible rule which govern the exercise of
inherent jurisdiction of the court. Undoubtedly,
the power possessed by the High Court under the
said provision is very wide, but is not unlimited.
Therefore, it has to be exercised sparingly,
carefully and cautiously, ex debito justitiae to
do real and substantial justice for which alone
the court exits. It needs little emphasis that the
inherent jurisdiction does not confer any
arbitrary power on the High Court to act according
to whim or caprice. The power exists to prevent
abuse of authority and not to produce any justice.
11. In the case of R.P. Kumar (supra), the Supreme
Court had summarized some of the categories of
cases where the inherent power under Section 482
of the Code could be exercised by the High Court
to quash criminal proceedings against the accused.
These are; (i) where it manifestly appear that
there is a legal bar against the institution or
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continuance of the proceedings e.g. want of
sanction; (ii) where allegations in the first
information report or complaint taken at its face
value and accepted in their entirety do not
constitute the offence alleged; (iii) where the
allegations constitute an offence, but there is no
legal evidence adduced or the evidence adduced
clearly or manifestly fails to prove the charge.
12. In the case of G. Sagar vs. State of U.P.,
reported in (2000) 2 SCC 636, the Supreme Court
had opined as follows;
“Jurisdiction under Section 482 of the Code has
to be exercised with a great care. In exercise
of its jurisdiction High Court is not to
examine the matter superficially. It is to be
seen if a matter, which is essentially of civil
nature, has been given a cloak of criminal
offence. Criminal proceedings are not a short
cut of other remedies available in law. Before
issuing process a criminal court has to
exercise a great deal of caution. For the
accused it is a serious matter. This Court has
laid certain principles on the basis of which
High Court is to exercise its jurisdiction
under Section 482 of the Code, Jurisdiction
under this Section has to be exercised to
prevent abuse of the process of any court or
otherwise to secure the ends of justice.”
13. A bare perusal of the contents of the FIR, it is
found out that there was transaction between the
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respondent no.2 herein and the original accused
no.1, who is husband of the applicant to the tune
of Rs.80,48,201/-, out of which admittedly as per
the say of the respondent no.2 himself,
Rs.25,00,000/- have already been paid by the
accused no.1 through RTGS and the dispute is with
regard to remaining amount of Rs.55,48,201/- and
as the said amount was not paid by the accused
no.1, the impugned FIR has been lodged against the
accused no.1 and his wife i.e. the applicant
herein, who is partner of the partnership firm.
However it is found out from bare perusal of the
contents of the FIR that except in last paragraph
of the impugned FIR, not a single allegation is
leveled against the applicant herein nor any
instance is mentioned in the entire body of the
FIR. Thus from this fact itself, it is clear that
the basic, essential and requisite ingredients for
the alleged offences are missing.
14. 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, or
b) dishonestly used or disposed of the
property or willfully suffers any otherPage 8 of 25
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person so to do in violation
i) any direction of law prescribing the
method in which the trust is discharged
and
ii) of legal contract touching the discharge
of trust (see: S.W.P. Palanitkar v.
State of Bihar, (2002)1 SCC 241) : (AIR
2001 SC 2960).
15. 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:
Harmanpeet Singh Ahluwalia v. State of
Punjab, (2009)7 SCC 712 : (2009) Cr.L.J. 3462
(SC))
16. Further, in both sections, mens rea i.e. intention
to defraud or the dishonest intention must be
present from the very beginning or inception,
without which, either of these sections cannot be
invoked.
17. In my view, the plain reading of the contents of
the impugned FIR fails to spell out any of the
aforesaid ingredients noted above. I may only say,Page 9 of 25
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with a view to clear a serious misconception of
law in the mind of the police as well as the
courts below, that if it is a case of the
complainant that offence of criminal breach of
trust as defined under Section 405 of IPC,
punishable under Section 406 of IPC, is committed
by the accused, in that event, it could not be
said that the accused has also committed the
offence of cheating as defined and explained in
Section 415 of the IPC, punishable under Section
420 of the IPC.
18. Every act of breach of trust may not be resulted
in a penal offence of criminal breach of trust
unless there is evidence of manipulating act of
fraudulent misappropriation. An act of breach of
trust involves a civil wrong in respect of which
the person may seek his remedy for damages in
civil courts but, any breach of trust with a mens
rea, gives rise to a criminal prosecution as well.
It has been held in Hart Prasad Chamaria Vs. B.K.
Surekha & Ors., reported in (1973) 2 SCC 823 as
under:
We have heard Mr. Maheshwari on behalf of
the appellant and are of the opinion that
no case has been made out against the
respondents under Section 420 Indian Penal
Code. For the purpose of the present
appeal, we would assume that the various
allegations of fact which have been made in
the complaint by the appellant are correct.
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Even after making that allowance, we find
that the complaint does riot disclose the
commission of any offence on the part of
the respondents under Section 420 Indian
Penal Code. There is nothing in the
complaint to show that the respondents had
dishonest or fraudulent intention at the
time the appellant parted with Rs. 35.000/-
There is also nothing to indicate that the
respondents induced the appellant to pay
them Rs. 35.000/- by deceiving him. It is
further not the case of the appellant that
a representation was made, the respondents
knew the same to be false. The fact that
the respondents subsequently did not abide
by their commitment that they would show
the appellant to be the proprietor of Drang
Transport Corporation and would also render
accounts to him in the month of December
might create civil liability on the
respondents for the offence of cheating.
19. To put it in other words, the case of cheating and
dishonest intention starts with the very inception
of the transaction. But in the case of criminal
breach of trust, a person who comes into
possession of the movable property and receives it
legally, but illegally retains it or converts it
to his/her own use against the terms of the
contract, then the question is as to whether the
retention is with dishonest intention or not,
whether the retention involves criminal breach of
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trust or only a civil liability would depend upon
the facts of each case.
20. At this juncture, I may quote with profit the
observations made by the Hon’ble Supreme Court in
case of Delhi Race Club (1940) Ltd. (supra), upon
which reliance has been placed by learned advocate
for the applicant, wherein the Hon’ble Supreme
Court has the difference between criminal breach
and trust and cheating as also aspect of civil
dispute, which was considered in criminal colour.
Relevant observations made by the Hon’ble Supreme
Court in Paragraph Nos.24 to 39 as under,
24. This Court in its decision in S.W. Palanitkar
& Ors. v. State of Bihar & Anr. reported in
(2002) 1 SCC 241 expounded the difference in
the ingredients required for constituting an
of offence of criminal breach of trust
(Section 406 IPC) viz-a-viz the offence of
cheating (Section 420). The relevant
observations read as under: –
“9. The ingredients in order to constitute a
criminal breach of trust are: (i) entrusting
a person with property or with any dominion
over property, (ii) that person entrusted (a)
dishonestly misappropriating or converting
that property to his own use; or (b)
dishonestly using or disposing of that
property or wilfully suffering any other
person so to do in violation (i) of any
direction of law prescribing the mode in
which such trust is to be discharged, (ii) ofPage 12 of 25
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any legal contract made, touching the
discharge of such trust.
10. The ingredients of an offence of cheating
are: (i) there should be fraudulent or
dishonest inducement of a person by deceiving
him, (ii)(a) the person so deceived should be
induced to deliver any property to any
person, or to consent that any person shall
retain any property; or (b) the person so
deceived should be intentionally induced to
do or omit to do anything which he would not
do or omit if he were not so deceived; and
(iii) in cases covered by (ii)(b), the act of
omission should be one which causes or is
likely to cause damage or harm to the person
induced in body, mind, reputation or
property. ”
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, or
b) ishonestly used or disposed of the
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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;
orii. 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)
26. Further, in both the aforesaid sections, mens
rea i.e. intention to defraud or the
dishonest intention must be present, and in
the case of cheating it must be there from
the very beginning or inception.
27. In our view, the plain reading of the
complaint fails to spell out any of the
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aforesaid ingredients noted above. We may
only say, with a view to clear a serious
misconception of law in the mind of the
police as well as the courts below, that if
it is a case of the complainant that offence
of criminal breach of trust as defined under
Section 405 of IPC, punishable under Section
406 of IPC, is committed by the accused, then
in the same breath it cannot be said that the
accused has also committed the offence of
cheating as defined and explained in Section
415 of the IPC, punishable under Section 420
of the IPC.
28. Every act of breach of trust may not result
in a penal offence of criminal breach of
trust unless there is evidence of
manipulating act of fraudulent
misappropriation. An act of breach of trust
involves a civil wrong in respect of which
the person may seek his remedy for damages in
civil courts but, any breach of trust with a
mens rea, gives rise to a criminal
prosecution as well. It has been held in Hari
Prasad Chamaria v. Bishun Kumar Surekha &
Ors., reported in (1973) 2 SCC 823 as under:
“4. We have heard Mr. Maheshwari on behalf of
the appellant and are of the opinion
that no case has been made out against
the respondents under Section 420 Penal
Code, 1860. For the purpose of the
present appeal, we would assume that thePage 15 of 25
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various allegations of fact which have
been made in the complaint by the
appellant are correct. Even after making
that allowance, we find that the
complaint does not disclose the
commission of any offence on the part of
the respondents under Section 420 Penal
Code, 1860. There is nothing in the
complaint to show that the respondents
had dishonest or fraudulent intention at
the time the appellant parted with Rs.
35.000/- There is also nothing to
indicate that the respondents induced
the appellant to pay them Rs. 35,000/-
by deceiving him. It is further not the
case of the appellant that a
representation was made, the respondents
knew the same to be false. The fact that
the respondents subsequently did not
abide by their commitment that they
would show the appellant to be the
proprietor of Drang Transport
Corporation and would also render
accounts to him in the month of December
might create civil liability on the
respondents for the offence of
cheating.”
29. To put it in other words, the case of
cheating and dishonest intention starts with
the very inception of the transaction. But in
the case of criminal breach of trust, a
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person who comes into possession of the
movable property and receives it legally, but
illegally retains it or converts it to his
own use against the terms of the contract,
then the question is, in a case like this,
whether the retention is with dishonest
intention or not, whether the retention
involves criminal breach of trust or only a
civil liability would depend upon the facts
of each case.
30. The distinction between mere breach of
contract and the offence of criminal breach
of trust and cheating is a fine one. In case
of cheating, the intention of the accused at
the time of inducement should be looked into
which may be judged by a subsequent conduct,
but for this, the subsequent conduct is not
the sole test. Mere breach of contract cannot
give rise to a criminal prosecution for
cheating unless fraudulent or dishonest
intention is shown right from the beginning
of the transaction i.e. the time when the
offence is said to have been committed.
Therefore, it is this intention, which is the
gist of the offence. Whereas, for the
criminal breach of trust, the property must
have been entrusted to the accused or he must
have dominion over it. The property in
respect of which the offence of breach of
trust has been committed must be either the
property of some person other than the
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accused or the beneficial interest in or
ownership of it must be of some other person.
The accused must hold that property on trust
of such other person. Although the offence,
i.e. the offence of breach of trust and
cheating involve dishonest intention, yet
they are mutually exclusive and different in
basic concept. There is a distinction between
criminal breach of trust and cheating. For
cheating, criminal intention is necessary at
the time of making a false or misleading
representation i.e., since inception. In
criminal breach of trust, mere proof of
entrustment is sufficient. Thus, in case of
criminal breach of trust, the offender is
lawfully entrusted with the property, and he
dishonestly misappropriated the same.
Whereas, in case of cheating, the offender
fraudulently or dishonestly induces a person
by deceiving him to deliver any property. In
such a situation, both the offences cannot
co-exist simultaneously.
31. At the most, the court of the Additional
Chief Judicial Magistrate could have issued
process for the offence punishable under
Section 420 of the IPC i.e. cheating but in
any circumstances no case of criminal breach
of trust is made out. The reason being that
indisputably there is no entrustment of any
property in the case at hand. It is not even
the case of the complainant that any property
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was lawfully entrusted to the appellants and
that the same has been dishonestly
misappropriated. The case of the complainant
is plain and simple. He says that the price
of the goods sold by him has not been paid.
Once there is a sale, Section 406 of the IPC
goes out of picture. According to the
complainant, the invoices raised by him were
not cleared. No case worth the name of
cheating is also made out.
32. Even if the Magistrate would have issued
process for the offence punishable under
Section 420 of the IPC, i.e., cheating the
same would have been liable to be quashed and
set aside, as none of the ingredients to
constitute the offence of cheating are
disclosed from the materials on record.
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 a confidence
reposed in and accepted by the owner or
declared and accepted by him for the benefit
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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””.
34. Similarly, in Central Bureau of
Investigation, SPE, SIU(X), New Delhi v.
Duncans Agro Industries Ltd., Calcutta
reported in (1996) 5 SCC 591, this Court held
that the expression “entrusted with property”
used in Section 405 of the IPC connotes that
the property in respect of which criminal
breach of trust can be committed must
necessarily be the property of some person
other than the accused or that the beneficial
interest in or ownership thereof must be in
the other person and the offender must hold
such property in trust for such other person
or for his benefit. The relevant observations
read as under: –
“27. In the instant case, a serious dispute
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has been raised by the learned counsel
appearing for the respective parties as
to whether on the face of the
allegations, an offence of criminal
breach of trust is constituted or not.
In our view, the expression “entrusted
with property” or “with any dominion
over property” has been used in a wide
sense in Section 405 IPC. Such
expression includes all cases in which
goods are entrusted, that is,
voluntarily handed over for a specific
purpose and dishonestly disposed of in
violation of law or in violation of
contract. The expression entrusted
appearing in Section 405 IPC is not
necessarily a term of law. It has wide
and different implications in different
contexts. It is, however, necessary that
the ownership or beneficial interest in
the ownership of the property entrusted
in respect of which offence is alleged
to have been committed must be in some
person other than the accused and the
latter must hold it on account of some
person or in some way for his benefit.
The expression tuts in Section 405 IPC
is a comprehensive expression and has
been used to denote various kinds of
relationships like the relationship of
trustee and beneficiary, bailor and
bailee, master and servant, pledger andPage 21 of 25
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pledgee. When some goods are
hypothecated by a person to another
person, the ownership of the goods still
remains with the person who has
hypothecated such goods. The property in
respect of which criminal breach of
trust can be committed must necessarily
be the property of some person other
than the accused or the beneficial
interest in or ownership of it must be
in the other person and the offender
must hold such property in trust for
such other person or for his benefit. In
a case of pledge, the pledged article
belongs to some other person but the
same is kept in trust by the pledgee.
[…]” (Emphasis supplied)
35. The aforesaid exposition of law makes it
clear that there should be some entrustment
of property to the accused wherein the
ownership is not transferred to the accused.
In case of sale of movable property, although
the payment may be deferred yet the property
in the goods passes on delivery as per
Sections 20 and 24 respectively of the Sale
of Goods Act, 1930.
“20. Specific goods in a deliverable state.-
Where there is an unconditional contract
for the sale of specific goods in a
deliverable state, the property in the
goods passes to the buyer when thePage 22 of 25
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contract is made and it is immaterial
whether the time of payment of the price
or the time of delivery of goods, or
both, is postponed.
xxx xxx xxx
24. Goods sent on approval or “on sale or
return”. – When goods are delivered to
the buyer on approval or “on sale or
return” or other similar terms, the
property therein passes to the buyer –
(a) when he signifies his approval or
acceptance to the seller or does any
other act adopting the transaction;
(b) if he does not signify his approval or
acceptance to the seller but retains the
goods without giving notice of
rejection, then, if a time has been
fixed for the return of the goods on the
expiration of such time, and, if no time
has been fixed, on the expiration of a
reasonable time.”
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
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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 OnLine Jhar 301]
37. The case at hand falls in category No. 1 as
laid in Smt. Nagawwa (supra) referred to in
para 7 of this judgment.
38. If it is the case of the complainant that a
particular amount is due and payable to him
then he should have filed a civil suit for
recovery of the amount against the appellants
herein. But he could not have gone to the
court of Additional Chief Judicial Magistrate
by filing a complaint of cheating and
criminal breach of trust.
39. It appears that till this date, the
complainant has not filed any civil suit for
recovery of the amount which according to him
is due and payable to him by the appellants.
He seems to have prima facie lost the period
of limitation for filing such a civil suit.”
21. Thus in view of the above facts coupled with the
broad guidelines issued by the Hon’ble Supreme
Court in the aforesaid decision, I am of the
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opinion that the chances of an ultimate conviction
of the applicant on the basis of the facts of the
present case are bleak and therefore continuation
of criminal prosecution against the applicant is
nothing but sheer misuse of process of the Court.
Therefore, the present application deserves to be
allowed.
22. In the result, the application succeeds and is
hereby allowed. Accordingly, the impugned First
Information Report being C.R. No.I-21/2017
registered with Rajkot Taluka Police Station,
Rajkot and all other consequential proceedings
arising out of said FIR are hereby quashed and set
aside qua the applicant. Rule is made absolute.
Direct service is permitted.
Sd/-
(DIVYESH A. JOSHI, J.)
Gautam
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