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Supreme Court of India
Rikhab Birani vs The State Of Uttar Pradesh on 16 April, 2025
Author: Sanjay Kumar
Bench: Sanjay Kumar
REPORTABLE
IN THE SUPREME COURT OF INDIA
2025 INSC 512
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. OF 2025
(arising out of SLP(Crl.) No.8592 of 2024)
RIKHAB BIRANI & ANR. ..... APPELLANT(S)
VERSUS
STATE OF UTTAR PRADESH & ANR. ..... RESPONDENT(S)
O R D E R
Leave granted.
The appellants, Rikhab Birani and Sadhna Birani, had entered
into an oral agreement to sell Roti Godown No. 28/27, Birhana Road,
Kanpur, Uttar Pradesh, to respondent No.2, Shilpi Gupta, for a
consideration of ₹1,35,00,000/- (Rupees one crore thirty five lakhs
only) in June, 2020.
Respondent No.2, Shilpi Gupta, and her husband claimed that
they had paid an amount of ₹19,00,000/- (Rupees nineteen lakhs only)
towards part-sale consideration between June and September, 2020.
It is the case of the appellants, Rikhab Birani and Sadhna
Birani, that respondent No.2, Shilpi Gupta, had to pay 25 per cent
of the total sale consideration amount as advance on or before
15.09.2020. However, she was unable to pay the same. In fact, a
cheque of ₹10,00,000/- (Rupees ten lakhs only) given by respondent
Signature Not Verified
No.2, Shilpi Gupta, bounced due to insufficient funds. The
Digitally signed by
Deepak Guglani
Date: 2025.04.19
16:20:09 IST
Reason:
appellants, Rikhab Birani and Sadhna Birani, relied upon some
1
WhatsApp messages and other communications inter se them and
respondent No.2, Shilpi Gupta, and her husband, whereby the latter
was asked to pay the unpaid amount and complete the sale transaction
by execution of a registered document. This was not done.
After about one year, on 03.09.2021, the appellants, Rikhab
Birani and Sadhna Birani, sold the aforesaid property by way of
registered sale deed dated 03.09.2021 at the lower price of
₹90,00,000/- (Rupees ninety lakhs only) statedly due to changed
circumstances.
It is the case of the appellants, Rikhab Birani and Sadhna
Birani, that they had suffered losses of ₹45,00,000/- (Rupees forty
five lakhs only) on account of the failure of respondent No. 2,
Shilpi Gupta, and her husband, in paying the sale consideration amount
and abiding by the oral agreement; hence, they are not liable to
refund or pay any amount to respondent No.2, Shilpi Gupta.
It is the accepted position that neither the appellants, Rikhab
Birani and Sadhna Birani, nor respondent No. 2, Shilpi Gupta,
initiated any civil proceedings. On the other hand, respondent No.2,
Shilpi Gupta, approached the Court of the Metropolitan Magistrate,
Kanpur Nagar, for registration of a First Information Report1 by
taking recourse to the provisions of Section 156(3) of the Code of
Criminal Procedure, 1973.2 However, by the detailed and reasoned order
dated 26.04.2022, the Metropolitan Magistrate, Kanpur Nagar,
dismissed the application3 under Section 156(3) of the Cr.P.C.,
1 For short, “FIR”.
2 For short, “Cr.P.C.”.
3 Misc. Case No. 4732/2021.
2
holding that this is a civil matter and no criminal offence is made
out.
Respondent No.2, Shilpi Gupta, thereupon filed another criminal
complaint4 on 14.06.2022 before the Court of the Metropolitan
Magistrate, Kanpur Nagar. The Metropolitan Magistrate had, thereupon,
called the Station House Officer of the Police Station – Harbans
Mohal, District – Kanpur Nagar, Uttar Pradesh, to submit a report
under Section 202 of the Cr.P.C. After receiving the report, the
Metropolitan Magistrate, Kanpur Nagar, vide judgment dated
14.07.2023, dismissed the criminal complaint, holding that the matter
is of civil nature.
Notwithstanding the two orders passed by the Metropolitan
Magistrate, referred to above, respondent No.2, Shilpi Gupta,
directly approached the Police Station – Harbans Mohal, District –
Kanpur Nagar, Uttar Pradesh, and registered FIR No. 78/2023 dated
22.07.2023 for the offence(s) punishable under Sections 420, 406,
354, 504 and 506 of the Indian Penal Code, 1860.5
Aggrieved thereby and apprehending their arrest, the
appellants, Rikhab Birani and Sadhna Birani, filed an application
for grant of anticipatory bail, which was granted to them till the
filing of the chargesheet.
The investigating officer, on 12.09.2023, filed a chargesheet
in the aforesaid FIR No.78/2023. We shall subsequently refer to the
contents of the chargesheet.
On the aforesaid chargesheet being filed, the Metropolitan
4 Complaint Case No. 90180/2022.
5 For short, “IPC”.
3
Magistrate, Kanpur Nagar, notwithstanding the two earlier orders,
passed on the same allegations, dismissing the criminal complaints
of respondent No.2, Shilpi Gupta, passed order dated 17.01.2024
taking cognizance and summoning the appellants, Rikhab Birani and
Sadhna Birani.
Thereupon, the appellants, Rikhab Birani and Sadhna Birani,
preferred a petition under Section 482 of the Cr.P.C. before the High
Court,6 which was dismissed by the High Court, vide the impugned
order dated 09.05.2024, notwithstanding the aforesaid facts, stating
that at that stage, only a prima facie case was to be seen in the
light of the law laid down by this Court.
We are constrained to pass this detailed speaking order, as it
is noticed that, notwithstanding the law clearly laid down by this
Court on the difference between a breach of contract and the criminal
offence of cheating, we are continuously flooded with cases where
the police register an FIR, conduct investigation and even file
chargesheet(s) in undeserving cases.
During the last couple of months, a number of judgments/orders
have been pronounced by this Court, especially in cases arising from
the State of Uttar Pradesh, deprecating the stance of the police as
well as the courts in failing to distinguish between a civil wrong
in the form of a breach of contract, non-payment of money or disregard
to and violation of contractual terms; and a criminal offence under
Sections 420 and 406 of the IPC, the ingredients of which are quite
different and requires mens rea at the time when the contract is
6 A482 No. 7415/2024.
4
entered into itself to not abide by the terms thereof.
In Lalit Chaturvedi and Others v. State of Uttar Pradesh and
Another,7 this Court quoted an earlier decision in Mohammed Ibrahim
and Others v. State of Bihar and Another,8 wherein, referring to
Section 420 of the IPC, it was observed that the offence under the
said Section requires the following ingredients to be satisfied:
“18. Let us now examine whether the ingredients of
an offence of cheating are made out. The essential
ingredients of the offence of “cheating” are as
follows:
(i) deception of a person either by making a false
or misleading representation or by dishonest
concealment or by any other act or omission;
(ii) fraudulent or dishonest inducement of that
person to either deliver any property or to consent
to the retention thereof by any person or to
intentionally induce that person so deceived to do
or omit to do anything which he would not do or
omit if he were not so deceived; and
(iii) such act or omission causing or is likely to
cause damage or harm to that person in body, mind,
reputation or property.”Reference was also made to the decision in V.Y. Jose and Another
v. State of Gujarat and Another9 and it was observed:
“7. Similar elucidation by this Court in “V.Y.
Jose v. State of Gujarat”, explicitly states that
a contractual dispute or breach of contract per
se should not lead to initiation of a criminal
proceeding. The ingredient of ‘cheating’, as
defined under Section 415 of the IPC, is existence
of a fraudulent or dishonest intention of making
initial promise or representation thereof, from the
very beginning of the formation of contract.
Further, in the absence of the averments made in
the complaint petition wherefrom the ingredients of
the offence can be found out, the High Court should7 2024 SCC Online SC 171.
8 (2009) 8 SCC 751.
9 (2009) 3 SCC 78.
5
not hesitate to exercise its jurisdiction under
Section 482 of the Cr.P.C. Section 482 of
the Cr.P.C. saves the inherent power of the High
Court, as it serves a salutary purpose viz. a
person should not undergo harassment of litigation
for a number of years, when no criminal offence is
made out. It is one thing to say that a case has
been made out for trial and criminal proceedings
should not be quashed, but another thing to say
that a person must undergo a criminal trial despite
the fact that no offence has been made out in the
complaint. This Court in V.Y. Jose (supra) placed
reliance on several earlier decisions in “Hira Lal
Hari Lal Bhagwati v. CBI”, “Indian Oil
Corporation v. NEPC India Ltd.”, “Vir Prakash
Sharma v. Anil Kumar Agarwal” and “All Cargo Movers
(I) (P) Ltd. v. Dhanesh Badarmal Jain”.”
This Court, in Delhi Race Club (1940) Limited and Others v.
State of Uttar Pradesh and Another,10 highlighted the fine distinction
between the offences of criminal breach of trust and cheating,
observing that the two are antithetical in nature and cannot coexist
simultaneously. Police officers and courts must carefully apply their
minds to determine whether the allegations genuinely constitute the
specific offence alleged.
In Kunti and Another v. State of Uttar Pradesh and Another,11
this Court referred to Sarabjit Kaur v. State of Punjab and Another12
wherein it was observed that a breach of contract does not give rise
to criminal prosecution for cheating unless fraudulent or dishonest
intention is shown right at the beginning of the transaction. Merely
on the allegation of failure to keep a promise will not be enough to
initiate criminal proceedings. Thus, the dishonest intention on the
part of the party who is alleged to have committed the offence of
10 (2024) 10 SCC 690.
11 (2023) 6 SCC 109.
12 (2023) 5 SCC 360.
6
cheating should be established at the time of entering into the
transaction with the complainant, otherwise the offence of cheating
is not established or made out.
It is the duty and obligation of the court to exercise a great
deal of caution in issuing process, particularly when the matter is
essentially of civil nature.13 The prevalent impression that civil
remedies, being time-consuming, do not adequately protect the
interests of creditors or lenders should be discouraged and rejected
as criminal procedure cannot be used to apply pressure.14 Failure to
do so results in the breakdown of the rule of law and amounts to
misuse and abuse of the legal process.
In yet another case, again arising from criminal proceedings
initiated in the State of Uttar Pradesh,15 this Court was constrained
to note recurring cases being encountered wherein parties repeatedly
attempted to invoke the jurisdiction of criminal courts by filing
vexatious complaints, camouflaging allegations that are ex facie
outrageous or are pure civil claims. These attempts must not be
entertained and should be dismissed at the threshold. Reference was
made to a judgment of this Court in Thermax Limited and Others v.
K.M. Johny and Others,16 which held that courts should be watchful of
the difference between civil and criminal wrongs, though there can
be situations where the allegation may constitute both civil and
criminal wrongs. Further, there has to be a conscious application of
13 G. Sagar Suri and Another v. State of U.P. and Others, (2000) 2 SCC 636.
14 Vijay Kumar Ghai and Others v. State of West Bengal and Others, (2022) 7
SCC 124.
15 Deepak Gaba and Others v. State of Uttar Pradesh and Another, (2023) 3 SCC
423.
16 (2011) 13 SCC 412.
7
mind on these aspects by the Magistrate, as a summoning order has
grave consequences of setting criminal proceedings in motion. Though
the Magistrate is not required to record detailed reasons, there
should be adequate evidence on record to set criminal proceedings
into motion. The Magistrate should carefully scrutinize the evidence
on record and may even put questions to the complainant/investigating
officer etc. to elicit answers to find out the truth about the
allegations. The summoning order has to be passed when the complaint
or chargesheet discloses an offence and when there is material that
supports and constitutes essential ingredients of the offence. The
summoning order should not be passed lightly or as a matter of course.
Lastly, we would refer to another detailed judgment of this
Court in Sharif Ahmed and Another v. State of Uttar Pradesh and
Another,17 which draws out the ingredients required to establish an
offence under Sections 406, 415, 420, 503 and 506 of the IPC in the
following terms:
“36. An offence under Section 406 of
the IPC requires entrustment, which carries the
implication that a person handing over any property
or on whose behalf the property is handed over,
continues to be the owner of the said property.
Further, the person handing over the property must
have confidence in the person taking the property
to create a fiduciary relationship between them. A
normal transaction of sale or exchange of
money/consideration does not amount to entrustment.
Clearly, the charge/offence of Section 406 IPC is
not even remotely made out.
37. The chargesheet states that the offence under
Section 420 is not made out. The offence of cheating
under Section 415 of the IPC requires dishonest
inducement, delivering of a property as a result of
the inducement, and damage or harm to the person so
17 2024 SCC OnLine SC 726.
8
induced. The offence of cheating is established
when the dishonest intention exists at the time
when the contract or agreement is entered, for the
essential ingredient of the offence of cheating
consists of fraudulent or dishonest inducement of
a person by deceiving him to deliver any property,
to do or omit to do anything which he would not do
or omit if he had not been deceived. As per the
investigating officer, no fraudulent and dishonest
inducement is made out or established at the time
when the agreement was entered.
38. An offence of criminal intimidation arises when
the accused intendeds to cause alarm to the victim,
though it does not matter whether the victim is
alarmed or not. The intention of the accused to
cause alarm must be established by bringing
evidence on record. The word ‘intimidate’ means to
make timid or fearful, especially : to compel or
deter by or as if by threats. The threat
communicated or uttered by the person named in the
chargesheet as an accused, should be uttered and
communicated by the said person to threaten the
victim for the purpose of influencing her mind. The
word ‘threat’ refers to the intent to inflict
punishment, loss or pain on the other. Injury
involves doing an illegal act.
39. This Court in Manik Taneja v. State of
Karnataka, had referred to Section 506 which
prescribes punishment for the offence of ‘criminal
intimidation’ as defined in Section 503 of the IPC,
to observe that the offence under Section 503
requires that there must be an act of threating
another person with causing an injury to his person,
reputation or property, or to the person or
reputation of any one in whom that person is
interested. This threat must be with the intent to
cause alarm to the person threatened or to do any
act which he is not legally bound to do, or omit to
do an act which he is entitled to do. Mere
expression of any words without any intent to cause
alarm would not be sufficient to bring home an
offence under Section 506 of the IPC. The material
and evidence must be placed on record to show that
the threat was made with an intent to cause alarm
to the complainant, or to cause them to do, or omit
to do an act. Considering the statutory mandate,
offence under Section 506 is not shown even if we
accept the allegation as correct.”
9
Significantly, this Court in Sharif Ahmed (supra) cautioned
courts to check such attempts of making out a criminal case on the
basis of vague and ex facie false assertions.
Further, Sharif Ahmed (supra) exposits the legal position
relating to the ingredients and contents of a chargesheet, drawing
upon several earlier judgments of this Court which elucidate the
contents of a police report under Section 173(2) of the Cr.P.C. It
also clarifies the course of action to be adopted by the Magistrate
when the chargesheet is found to be incomplete or vague in content.
In this context, reference may be made to Sections 190 and 204 of
the Cr.P.C., as well as Sections 211 to 213 and 218 of the Cr.P.C.,
which collectively govern the framing and contents of a charge. Some
of the portions of this judgment are reproduced below:
“13. The question of the required details being
complete must be understood in a way which gives
effect to the true intent of the chargesheet under
Section 173(2) of the Code. The requirement of
“further evidence” or a “supplementary chargesheet”
as referred to under Section 173(8) of the Code, is
to make additions to a complete chargesheet,8 and
not to make up or reparate for a chargesheet which
does not fulfil requirements of Section 173(2) of
the Code. The chargesheet is complete when it refers
to material and evidence sufficient to take
cognizance and for the trial. The nature and
standard of evidence to be elucidated in a
chargesheet should prima facie show that an offence
is established if the material and evidence is
proven. The chargesheet is complete where a case is
not exclusively dependent on further evidence. The
trial can proceed on the basis of evidence and
material placed on record with the chargesheet.
This standard is not overly technical or fool-
proof, but a pragmatic balance to protect the
innocent from harassment due to delay as well as
prolonged incarceration, and yet not curtail the
right of the prosecution to forward further
evidence in support of the charges.
10
XX XX XX
16. This Court in Bhushan Kumar v. State (NCT of
Delhi) while referring to Sections 190 and 204 of
the Code has observed that the expression
“cognisance” in Section 190 merely means “becoming
aware of”, and when used with reference to a court
or a judge it connotes “to take notice of
judicially”. It indicates the juncture at which the
court or Magistrate takes judicial notice of the
offence with a view to initiate proceedings in
respect of such an offence. This is different from
initiation of proceedings. Rather, it is a
condition precedent to the initiation of
proceedings by a Magistrate or judge. At this stage,
the Magistrate has to keep in mind the averments in
the complaint or the police report, and has to
evaluate whether there is sufficient ground for
initiation of proceedings. This is not the same as
the consideration of sufficient grounds for
conviction, as whether evidence is sufficient for
supporting the conviction or not, can be determined
only at the stage of trial, and not at the stage of
cognisance. This aspect is important and will be
subsequently referred to when we examine the
decision of this Court in K. Veeraswami v. Union of
India, and the observations therein which have been
referred to on several occasions in other
judgments.
17. Section 204 of the Code does not mandate the
Magistrate to explicitly state the reasons for
issue of summons and this is not a prerequisite for
deciding the validity of the summons. Nevertheless,
the requirement of the Code is that the summons is
issued when it appears to the Magistrate that there
is sufficient ground for proceeding against the
accused. Summons is issued to the person against
whom the legal proceedings have commenced. Wilful
disobedience is liable to be punished under
Section 174 of the Penal Code, 1860. As a sequitur,
keeping in mind both the language of Section 204 of
the Code and the penal consequences, the Magistrate
is mandated to form an opinion as to whether there
exists sufficient ground for summons to be issued.
While deciding whether summons is to be issued to
a person, the Magistrate can take into
consideration any prima facie improbabilities
arising in the case. The parameters on which a
summoning order can be interfered with are well
settled by the decision of this court in Bhushan
Kumar (supra). The Magistrate in terms of Section
204 of the Code is required to exercise his judicial
11
discretion with a degree of caution, even when he
is not required to record reasons, on whether there
is sufficient ground for proceeding. Proceedings
initiated by a criminal court are generally not
interfered with by High Courts, unless necessary to
secure the ends of justice.
XX XX XX
19. Sections 211 to 213 and Section 218 of the Code
deal with the contents of the charge. The object
and purpose of these provisions is to bring the
nature of allegations against the accused to his
notice. These allegations have to be proved and
established by leading evidence. The accused should
not be taken by surprise or be unbeknownst so as to
cause prejudice to him. The provisions of the Code
also prescribe how to interpret the words used in
the charge in terms of Section 214 of the Code, the
effect of defects in the charge in terms of Section
215 of the Code, the power of the court to alter
the charge and recall of the witnesses when a charge
is altered in terms of Sections 216 and 217 of the
Code.
20. There is an inherent connect between the
chargesheet submitted under Section 173(2) of the
Code, cognisance which is taken under Section 190
of the Code, issue of process and summoning of the
accused under Section 204 of the Code, and thereupon
issue of notice under Section 251 of the Code, or
the charge in terms of Chapter XVII of the Code.
The details set out in the chargesheet have a
substantial impact on the efficacy of procedure at
the subsequent stages. The chargesheet is integral
to the process of taking cognisance, the issue of
notice and framing of charge, being the only
investigative document and evidence available to
the court till that stage. Substantiated reasons
and grounds for an offence being made in the
chargesheet are a key resource for a Magistrate to
evaluate whether there are sufficient grounds for
taking cognisance, initiating proceedings, and then
issuing notice, framing charges etc.
XX XX XX
26. The object and purpose of the police
investigation is manyfold. It includes the need to
ensure transparent and free investigation to
ascertain the facts, examine whether or not an
offence is committed, identify the offender if an
offence is committed, and to lay before the court
12
the evidence which has been collected, the truth
and correctness of which is thereupon decided by
the court.
27. In H.N. Rishbud and Inder Singh v. State of
Delhi21, this Court notes that the process of
investigation generally consists of : 1) proceeding
to the concerned spot, 2) ascertainment of facts
and circumstances, 3) discovery and arrest, 4)
collection of evidence which includes examination
of various persons, search of places and seizure of
things, and 5) formation of an opinion on whether
an offence is made out, and filing the chargesheet
accordingly. The formation of opinion is therefore
the culmination of several stages that an
investigation goes through. This Court in its
decision in Abhinandan Jha v. Dinesh Mishra22
states that the submission of the chargesheet or
the final report is dependent on the nature of
opinion formed, which is the final step in the
investigation.
28. The final report has to be prepared with these
aspects in mind and should show with sufficient
particularity and clarity, the contravention of the
law which is alleged. When the report complies with
the said requirements, the court concerned should
apply its mind whether or not to take cognisance
and also proceed by issuing summons to the accused.
While doing so, the court will take into account
the statement of witnesses recorded under Section
161 of the Code and the documents placed on record
by the investigating officer.
29. In case of any doubts or ambiguity arising in
ascertaining the facts and evidence, the Magistrate
can, before taking cognisance, call upon the
investigating officer to clarify and give better
particulars, order further investigation, or even
record statements in terms of Section 202 of the
Code.
XX XX XX”
The chargesheet in the present case is bereft of particulars
and details required and mandated in terms of Section 173(2) of the
Cr.P.C. It merely reproduces the contents of the FIR which makes
reference to the payments made as well as the allegation that in the
13
revenue records, the godown in question was recorded in the name of
Rakesh Birani, the son of the appellant, Rikhab Birani. It is noted
that the appellant, Rikhab Birani, informed the complainant that
Rakesh Birani had expired. The complainant had then requested refund
of money, etc. However, the FIR does not state the material and
evidence available and collected during the course of the
investigation to establish the offences under Sections 420, 406, 354,
504 and 506 of the IPC. Clearly, the ingredients of the aforesaid
are not established and made out.
In view of the aforesaid discussion, we set aside the impugned
judgment/order and allow the present appeal quashing the FIR and the
resultant proceedings, including the chargesheet.
We clarify that the present appeal only deals with the question
of criminal offence. We have not commented or made any observations
on the civil rights of complainant-respondent No.2.
We are also constrained to impose costs of ₹50,000/- (Rupees
fifty thousand only) on the State of Uttar Pradesh as, in spite of
repeated judgments/orders of this Court, we are being flooded with
cases of civil wrongs being made the subject matter of criminal
proceedings by filing chargesheets, etc.
These costs will be paid by the State of Uttar Pradesh within
a period of six weeks from the date of receipt of a copy of this
order. It will be open to the State of Uttar Pradesh to conduct
internal enquiries and collect this amount from the delinquent and
responsible officers. Registry is directed to communicate a copy of
this order to the Chief Secretary of the State of Uttar Pradesh who
shall be responsible for ensuring the payment of costs.
14
We would have imposed costs on the complainant-respondent No.2
also but are refraining from doing so on account of the possibility
that she was persuaded and guided by wrong legal advice.
Pending applications, if any, shall stand disposed of.
…………….CJI.
(SANJIV KHANNA)
………………J.
(SANJAY KUMAR)
NEW DELHI;
APRIL 16, 2025.
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