Naveen Parmar v. State Of Chhattisgarh Through Station House Officer Of Police Chowki

Heard Ms. Aditi Singhvi, learned counsel for the petitioners. Also heard 2 Mr. S. S. Baghel, learned Govt. Advocate, for the State/Respondent No.1, Mr. Adarsh Rajput, learned counsel for the Respondent No. 2.

The petitioners have filed the present petition with the following prayer: "A. The Hon'ble High Court may kindly be pleased to quash and set aside the of FIR bearing No. 237/2025 registered at Police Chowki- Tumdibod, P.S.- Lalbaug, District Rajnandgaon (C.G) (Mentioned only as PS- Lalbaug in FIR) dated 22.05.2025 at 18:14 hours under Sections 420, 34 of Indian Penal Code, 1860 which was registered against the petitioners at instance of complaint made by respondent No. 02. B. The Hon'ble High Court may kindly be pleased to quash and set aside the Chargesheet 29.07.2025 bearing No. 223/2025 filed before Judicial Magistrate First Class, Rajnandgaon filed under Sections 420, 34 Indian Penal Code, 1860 filed pursuant to FIR bearing No. 237/2025 registered at Police Chowki- Tumdibod, P.S. Lalbaug, District Rajnandgaon (C.G) (Mentioned only as PS- Lalbaug in FIR) dated 22.05.2025 at 18:14 hours under Sections 420, 34 of Indian Penal Code, 1860. C. The Hon'ble High Court may kindly be pleased to quash and set aside the Criminal Proceedings pending before Judicial Magistrate First Class. Rajnandgaon (C.G) in Criminal Case No. 7028/2025 under Sections 420/34 IPC. D. The Hon'ble High Court may kindly be pleased to quash and set aside the cognizance order dated 02.08.2025 passed in Criminal Proceedings pending before Judicial Magistrate First Class. Rajnandgaon (C.G) in Criminal Case No. 7028/2025 whereby cognisance has been taken by the Learned Trial Court under Sections 420,34 Indian Penal Code, 1860 against the petitioners. 3 E. That, this Hon'ble Court may kindly be pleased to grant any other relief, which it deems fit and proper. "

The brief facts of the case are that the petitioners are accused in FIR No. 237/2025 dated 22.05.2025 registered at Police Chowki Tumdibod, Police Station Lalbagh, District Rajnandgaon, for the offences punishable under Sections 420 and 34 of the Indian Penal Code, arising out of an agreement to sell dated 24.06.2022 executed between the petitioners and the complainant along with three other purchasers in respect of 65 acres of land. Under the agreement, the purchasers paid an advance amount of Rs. 91,00,000/- towards the total sale consideration of approximately Rs. 7.15 crore, and the sale deed was to be executed within 16 months, failing which the agreement was to become null and void. According to the petitioners, the purchasers failed to pay the balance sale consideration within the stipulated period and, consequently, the agreement lapsed by its own terms. Thereafter, the complainant issued a legal notice, lodged the impugned FIR alleging cheating on the ground that a portion of the land was mortgaged and the sale deed was not executed, and also instituted a civil suit for specific performance, while the petitioners filed a civil suit seeking declaration that the agreement had become null and void. Upon completion of investigation, the police filed a charge-sheet, and cognizance was taken by the learned Judicial Magistrate First Class, Rajnandgaon. The petitioners contend that the allegations disclose a purely civil dispute arising out of a contractual transaction, that the essential ingredients of the offence of cheating are absent, and that the criminal proceedings have been initiated only to pressurize the petitioners in respect of a civil dispute.

Learned counsel for the petitioners submits that the reply filed by the 4 respondent/State is devoid of merit and fails to disclose any material warranting continuation of the criminal proceedings. It is submitted that the dispute emanates from an agreement to sell dated 24.06.2022, under which the sale deed was to be executed within 16 months, failing which the agreement was to become null and void. Since the purchasers failed to pay the balance sale consideration within the stipulated period, the agreement lapsed by its own terms. Thereafter, the petitioners, through their advocate, replied to the legal notice issued by the complainant, specifically stating that the agreement had lost its validity. Subsequently, the petitioners instituted a civil suit seeking declaration that the agreement had become null and void, while the complainant filed a civil suit seeking specific performance. Both suits are presently pending before the competent Civil Court, clearly demonstrating that the dispute is contractual and civil in nature.

Learned counsel further submits that the allegation that a portion of the land was mortgaged with the bank does not, by itself, disclose the commission of the offence of cheating. The parties had voluntarily entered into the agreement, and the grievance of the complainant relates only to the non-execution of the sale deed after expiry of the contractual period. The impugned FIR was lodged after an unexplained delay of about one and a half years from the expiry of the agreed period for execution of the sale deed, which itself indicates that the criminal proceedings have been initiated only to exert pressure upon the petitioners. A bare reading of the FIR, the complaint and the material collected during investigation does not reveal the essential ingredients of any cognizable offence, much less the offence punishable under Section 420 IPC.

It is further submitted that even if the allegations contained in the 5 complaint are accepted in their entirety, they disclose, at the highest, a breach of contractual obligations for which the parties are already pursuing appropriate civil remedies before the competent Civil Court. The criminal proceedings have been instituted with the sole object of giving a criminal colour to a purely civil dispute and to harass the petitioners. It is, therefore, contended that permitting the prosecution to continue would amount to an abuse of the process of law. Accordingly, it is prayed that the impugned FIR, the charge-sheet and all consequential criminal proceedings deserve to be quashed.

Learned State counsel appearing for respondent No. 1, as well as learned counsel appearing for respondent No. 2, oppose the present petition and submit that the same is wholly misconceived and deserves to be dismissed. It is submitted that the impugned FIR was registered on the basis of a written complaint disclosing the commission of cognizable offences and, after a thorough investigation, the police filed the charge-sheet before the competent Court. During the course of investigation, the statements of the complainant and other witnesses were recorded, the agreement to sell, bank records, RTGS transactions, revenue records and documents relating to the mortgage of the subject property were collected. On the basis of the material so collected, the investigating agency found sufficient evidence indicating that the petitioners had entered into the agreement to sell and received an amount of Rs. 91,00,000/- from the complainant despite being aware that a substantial portion of the property had already been mortgaged with the District Cooperative Bank. It is, therefore, submitted that the allegations disclose the essential ingredients of the offences punishable under Sections 420 and 34 of the IPC. 6

It is further submitted that the mere pendency of civil proceedings between the parties does not bar criminal prosecution where the allegations disclose the commission of a cognizable offence. The plea of the petitioners that the dispute is purely civil in nature is a matter of defence, which cannot be adjudicated in a petition under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, particularly after completion of investigation and filing of the charge-sheet. It is contended that the petition involves disputed questions of fact requiring appreciation of evidence, which can only be undertaken by the Trial Court. Since the investigation has been conducted in accordance with law and sufficient material exists to proceed against the petitioners, no case is made out for exercise of the inherent jurisdiction of this Court. Accordingly, it is prayed that the present petition be dismissed.

We have heard learned counsel for the parties and perused the documents appended with this petition.

The Supreme Court in the matter of State of Haryana and others v. Bhajan Lal and others, 1992 Supp (1) SCC 335 laid down the principles of law relating to the exercise of extraordinary power under Article 226 of the Constitution of India to quash the first information report and it has been held that such power can be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice.

The Hon’ble Supreme Court in the matter of Manoj Kumar Sharma and others v. State of Chhattisgarh and others, (2016) 9 SCC 1 held as under:- “35. While discussing the scope and ambit of Section482 of the Code, a similar view has been taken by a Division Bench of this Court in Rajiv Thapar and others vs. Madan Kal Kapoor (2013) 3 SCC 330 wherein it was held as under:- 7 would have “29. The issue being examined in the instant case is the jurisdiction of the High Court under Section 482 CrPC, if it chooses to quash the initiation of the prosecution against an accused at the stage of issuing process, or at the stage of committal, or even at the stage of framing of charges. These are all stages before the commencement of the actual trial. The same parameters would naturally be available for later stages as well. The power vested in the High Court under Section 482 CrPC, at the stages referred to hereinabove, far-reaching consequences inasmuch as it would negate the prosecution’s/complainant’s case without allowing the prosecution/complainant to lead evidence.

30. Based on the factors canvassed in the foregoing paragraphs, we would delineate the following steps to determine the veracity of a prayer for quashment raised by an accused by invoking the power vested 8 in the High Court under Section 482 CrPC:

30.1 Step one: whether the material relied upon by the accused is sound, reasonable, and indubitable i.e. the material is of sterling and impeccable quality?

30.2 Step two: whether the material relied upon by the accused would rule out the assertions contained in the charges levelled against the accused i.e. the material is sufficient to reject and overrule the factual assertions contained in the complaint i.e. the material is such as would persuade a reasonable person to dismiss and condemn the factual basis of the accusations as false?

30.3 Step three: whether the material relied upon by the accused has not been refuted by the prosecution/complainant; and/or the material is such that it cannot be justifiably refuted by the prosecution/complainant?

30.4 Step four: whether proceeding with the trial would result in an abuse of process of the court, and would not serve the ends of justice?

30.5 If the answer to all the steps is in the affirmative, the judicial conscience of the High Court should persuade it to quash such criminal proceedings in exercise of power vested in it under Section 482 CrPC. Such exercise of power, besides doing justice to the accused, would save precious court time, which would otherwise be wasted in holding such a trial (as well as proceedings arising therefrom) specially when it is clear that the same would not conclude in the conviction of the accused.”

In the matter of Paramjeet Batra v. State of Uttarakhand, (2013) 11 SCC 673, the Supreme Court recognized that although the inherent powers of a High Court under Section 482 of the Code of Criminal Procedure should be exercised sparingly, yet the High Court must not hesitate in quashing such criminal proceedings which are essentially of a civil nature. It was held as under:

12. While exercising its jurisdiction under Section 482 of the Code the High Court has to be cautious. This power is to be used sparingly and only for the 9 purpose of preventing abuse of the process of any court or otherwise to secure ends of justice. Whether a complaint discloses a criminal offence or not depends upon the nature of facts alleged therein. Whether essential ingredients of criminal offence are present or not has to be judged by the High Court. A complaint disclosing civil transactions may also have a criminal texture. But the High Court must see whether a dispute which is essentially of a civil nature is given a cloak of criminal offence. In such a situation, if a civil remedy is available and is, in fact, adopted as has happened in this case, the High Court should not hesitate to quash the criminal proceedings to prevent abuse of process of the court.

(emphasis supplied)

Relying upon the decision in Paramjeet Batra (supra), the Supreme Court in Randheer Singh v. State of U.P., (2021) 18 SCC 626, observed that criminal proceedings cannot be taken recourse to as a weapon of harassment. In Usha Chakraborty & Anr. v. State of West Bengal & Anr., 2023 SCC OnLine SC 90, relying upon Paramjeet Batra (supra) it was again held that where a dispute which is essentially of a civil nature, is given a cloak of a criminal offence, then such disputes can be quashed, by exercising the inherent powers under Section 482 of the Code of Criminal Procedure.

Having heard learned counsel for the parties at length and perused the material available on record, including the FIR, the charge-sheet and the documents appended with the petition. The scope of interference under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 is well settled. Though such power is to be exercised sparingly, it can be invoked where the criminal proceedings amount to an abuse of the process of the Court or where the dispute is essentially civil in nature and has been given a criminal colour. 10

From a perusal of the record, it is evident that the genesis of the dispute lies in an agreement to sell dated 24.06.2022 executed between the parties in respect of 65 acres of land. The agreement itself stipulated that the sale deed was to be executed within the agreed period and further provided that in the event of failure to perform the contractual obligations within the stipulated period, the agreement would become null and void. It is also not in dispute that after expiry of the contractual period, legal notices were exchanged between the parties, whereafter the petitioners instituted a civil suit seeking declaration that the agreement had become null and void and the complainant instituted a suit for specific performance. Both the civil suits are pending before the competent Civil Court.

The prosecution case, as reflected in the FIR and the charge-sheet, is that the petitioners received an advance amount of Rs.91,00,000/- from the complainant and thereafter failed to execute the sale deed, and that a substantial portion of the land was found to be mortgaged with the District Cooperative Bank. During investigation, the Investigating Officer collected the agreement to sell, bank transaction details, RTGS records, revenue documents and documents relating to the mortgage of the property and, on that basis, filed the charge-sheet. However, the material collected during investigation primarily establishes the existence of a contractual transaction between the parties and the subsequent dispute regarding performance of the agreement.

The essential ingredient of the offence of cheating is the existence of dishonest or fraudulent intention at the very inception of the transaction. Mere breach of a contractual obligation or failure to execute a sale deed, by itself, does not constitute the offence of cheating unless it is shown that the 11 accused had a fraudulent intention from the very beginning. In the present case, the agreement to sell was admittedly executed between the parties, substantial consideration was paid through banking channels, and the rights and obligations of the parties under the agreement are already the subject matter of civil suits. The dispute, therefore, essentially pertains to enforcement of contractual obligations, which falls within the jurisdiction of the Civil Court.

The allegation regarding the mortgage of the property, by itself, does not conclusively establish the commission of the offence under Section 420 IPC in the facts of the present case. Whether the petitioners had disclosed the mortgage to the purchasers, whether the complainant was aware of the status of the property, whether the agreement stood terminated by efflux of time, and whether either party committed breach of the contractual terms are all disputed questions arising out of the agreement, which require adjudication by the competent Civil Court. These issues cannot be converted into criminal liability merely because the transaction has failed.

It is also significant that the complainant initiated criminal proceedings only after the contractual period had expired, legal notices had been exchanged between the parties and disputes had arisen regarding performance of the agreement. Thereafter, both parties resorted to civil remedies by instituting independent civil suits. In the considered opinion of this Court, the criminal proceedings appear to have been initiated to exert pressure in respect of a dispute which is predominantly civil in character.

In view of the facts and circumstances of the case and applying the settled principles governing the exercise of inherent jurisdiction, this Court is of the opinion that the allegations contained in the FIR and the material 12 collected during investigation, even if taken at their face value, predominantly disclose a civil dispute arising out of a contractual transaction. Permitting the criminal prosecution to continue would amount to abuse of the process of the Court.

Accordingly, the present Criminal Miscellaneous Petition deserves to be and is hereby allowed. FIR No. 237/2025 dated 22.05.2025 registered at Police Chowki Tumdibod, Police Station Lalbagh, District Rajnandgaon, for the offences punishable under Sections 420, 34 of the Indian Penal Code, the consequential Charge-sheet No. 223/2025 dated 29.07.2025, the order dated

The Criminal Miscellaneous Petition is, accordingly, allowed. No order as to costs. Sd/- Sd/- (Ravindra Kumar Agrawal) (Ramesh Sinha) Judge Chief Justice Alok