Criminal Petition No. 11093 of 2022 · The High Court · 2025

02. Heard Sri lVlohd. Muzaferullah, learned counsel for the petitioner-accused and Smt.S.Madhavi, learned Assistant Public Prosecutor for the State-respondent No '1 Even after service of notice by way of news paper publication. none appeared on behalf of the unofficial respondent No.2. Perused the material on record

03. -[he case of the prosecution, in brief, is that the complainant-respondent No.2 engaged in business under the name and style of M/s.MSLG lnfrastructures, situated at Rajshri Diannante, Kompally Village. ln the year 2017, the 2 petitioner-accused came into contact with the respondent No.2 and represented that he was engaged in business dealings, possessed land parcels for solai" projects, and had executed various projects for different companies. ln September 2019, the petitioner-accused approached the respondent No.2 and requested a hand loan of Rs.41,00,000/- to meet his urgent business requirements, assuring repayment within a period of one year. For which, the respondent No.2 advanced a total sum of Rs.41,00,000/- to the petitioner-accused on different dates through seven cheques. However, even after the expiry of the stipulated period, the petitioner-accused failed to repay the said amount. When the respondent No.2 demanded repayment, the petitioner-accused willfully refused to discharge the liability. Hence, the respondent No.2 lodged a complaint against the petitioner-accused.

04. Learned counsel for the petitioner submits that the petitioner-accused is nothing to do with the alleged offences. lt is contended that no dishonest or fraudulent intention can be attributed to the petitioner-accused from the -T : a i i I i i $ I j I t r I l' II * 1l :4 N$,: 1)* i E & H* x T {! tE t- p L *g g 3 inception r:f the transaction. All the allegations leveled against th,e petitioner-accused are false, baseless, and fabricated for the purpose of the present case, being far from truth. lt is further submitted that there is no incriminating material on record to substantiate the allegations made against the petitioner-accused. The dispute, if any, is purely civil in nature, and respondent No.2 is attempting to give a criminal colour to a civil dispute. The contents of the charge sheet do not Cisclose the necessary and essential ingredients required to constitute the offences under Sections 420 and 506 of the IPL

05. With the above submissions, learned counsel for the petitioner-accused while praying for the quashment of criminal proceedings relied upon a decision of the Honourable Supreme Court in Sripati Singh (since deceased) through his son Gaurav Singh v. The Sfafe of Jharkhand and anotherl, wherein it was held at Paragraph Nos.11& 12that'. 1 Criminal Appeal Nos.1269-127O of 2O21 4 "U. ln the background of what has been taken note by us and the conclusion reached by the High Court, insofar as the High Court arriving at the conclusion that no case punishable under Secfion 420 IPC can be made out in fhese facts, we are in agreement with such conclusion Ihis is dtte to the fact that even as per the case of the appellant the amount advanced by the appellant is towards fhe business transaction and a loan agreement had been entered into between the parties. Under the loan agreement, the period for repayment was agreed and the cheque had been issued to ensure repaymenf. /f is no doubt true that the cheques when presented for realisation were dishonoured. The mere dishonourment of the cheque cannot be construed as an act on the part of the respondent No.2 with a deliberate intention to cheat and the mens rea in that regard cannot be gathered from the point the amount had been received. ln the present facfs and circumstances, there is no sufficient evidence to indicate the offence under Secfion 420 IPC is made out and therefore on that aspect, we see no reason to interfere with the conclusion reached by the High Court.

12. Having arrived at the above conclusion and also having taken note of the conclusion reached by the High Court as extracted above, if is noted that the High Court has itself arrived at the conclusion that the instant case becomes a simpliciter case of nonrefunding of loan which cannot be a basis for initiating criminal proceedings. The conclusion to the extent of holding that it would not constitute an offence of (Arising out of SLP(C riminal) No.252-253 12020 q\^ t \ t ] I i I I i i d I I * & * $f I i A I s :r, T 4 ! I &: & EI { I II Ia s I I T { E 4 $ i I * s, ' : .-. ]ee:. ?i?'&!rr.+.' ,I ./ --- 5 cheating, as already indicated above would be justified However, when the High Court itself has accepted the fact that it is a case of non refunding of the: loan amount, the first aspect that there is a legally recoverable debt f rom the respondent No.2 to ihe appellant is pritnafacie esfa/:/lshed The only question that therefore needs consiCeration at our hands ls as fo whether the contention putforth on behalf of respondent No.2 that an offence under Section 138 of the N.l Act is not made out as the dishonourment alleged is of the cheques which were lssued by way, of 'security' and not towards discharge of any debt."

06. On the other hand, learned Assistant Public Prosecutor appearing for the State-respondent No.'1 contended that there are triable issues and factual aspects to be examined by the learned trial Court and it is not a fit case to quash the proceedings against the petitioner at this juncture and the matter is to be decided after conducting trial by the learned trial Court and prayed to dismiss this Criminal Petition.

07. ln order to attract the provisions of Section 420 lPC, it is a well-settled principle of law that there must exist a dishonest or fraudulent intention to deceive the complainant from the very inception of the transaction. Mere failure to o fulfill a promise or to repay the loan amount, without such initial dishonest intention, would not constitute an offence under Section 420 lPC. Similarly, for invoking the penal provision under Section 506 lPC, there must be a specific allegation that the accused threatened the complainant with injury to his person, reputation, or property, or to the person or reputation of someone in whom he is interested, with the intention of causing alarm or compelling him to act against his will. ln the absence of these essential ingredients, the invocation of the aforesaid penal provisions is unsustainable in law

08. Having considered the submissions advanced on either side and upon perusal of the material placed on record, it is evident that the petitioner-accused and respondent No.2 have been acquainted with each other since the year 2017. The alleged loan transactions between the petitioner-accused and the respondent No.2 is stated to have taken place in the years 2019 and 2020. According to the respondent No.2, he advanced vai"ious amounts on different dates, aggregating to a sum of Rs.41,00,000/-. lt is t \ ^v\ i a t { .; ----r 7 an admitted fact that all the said amounts were advanced through cheques on different dates during the years 2019 and 2020. lt is further alleged that, despite repeated demands, tlre petitioner-accused failed to repay the said loan arriOUnt

09. A careful perusal of the contents of the charge sheet reveals that the disprute essentially pertains to monetary transactions between the parties. [V1ere demand for repayment of the loan amount, by itself, does not prima facie satisfy the ingredients necessary to constitute the offence under Section 42O oI lPC. Furthermore, except for a vague allegation that the petitioner-accused threatened respondent No.2 with "dire consequences," there is no specific assertion indicating the nature of the act committed by the petitioner-accused which could have caused alarm in the mind of the respondent No.2 so as to attract the offence under Section 506 of lPC. lt is also an admitted fact that the alleged transactions took place during the years 2019 and 2020, whereas the complaint came to be lodged only in December 2021. Such unexplained and inordinate delay in 8 : _..:. setting the criminal law into motion casts a serious doubt on the genuineness and veracity of the allegations made against the petitioner-accused

10. lt is pertinent to note that the investigation carried out subsequent to the registration of the FIR and prior to the filing of the charge sheet constitutes a crucial stage in crirninal proceedings. The charge sheet is required to reflect the outcome of such investigation, supported by material evidence sufficient to estabrish the alleged offences. However, in the present case, to substantiate the basic allegations against the petitioner-accused, no independent witness has been examined by the tnvestigating officer. out of the seven witnesses cited, two are official witnesses, one is the de-facto complainant, two are his employees, and the remaining two are panch witnesses for the cDF. The entire allegations, however, revolve around the alleged failure of the petitioner-accused to repay the amount due to the complainant. lt is an admitted fact that the amounts were advanced through cheques in favour of the petitioner- accused, but, the lnvestigating officer failed to examine the \ ,r t. i : I r1 :, / 9 concerned bank officials to verify whether the sald cheques were actually encashed in favour of the petitioner-accused, which omission is fatal to the case of the prosecution However, the allegations on their face appear to be purely civil in nature. Therefore, initiation and continuation of crinrinal proceedings against the petitioner-accused cannot be sustained in law.

11. ln Sfate of Haryana and others v. Ch.Bhajan Lal and others2 the Hon'ble Supreme Court of lndia held that: "ln the exercise of the extra-ordinary power under Article 226 or the inherent powers under Section 482 of the Code of Criminal Procedure, the following categories of cases are given by vray of illustration wherein such power could be exercised either to prevent abuse of fhe process of any Court or otherwise to secure the ends of justice though it may not be possib/e to lay down any precise, clearly defined and sufficiently channelised and inflexible guide myriad kinds of cases wherein such power should be exercised (!) where the allegations made in the First lnformation Repoft or the complaint, even if they are taken at their face value and accepted in their ' tggz scc (suPP) 1 335 10 entirety do not prima facie constitute any offence or make out a case aga inst the accused; (!) where the allegations in the First lnformation Repoft and other ntaterials, if any, accompanying the F.l.R do not disclose a cognizable offence, justifying an investigation by police officers under Secfion 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code; @ where the uncontroverted attegations made in the FIR or 'complaint and the evidence collected in support of the same do not disc/ose the commission of any offence and make out a case against the accused,. (g where the allegations in the FtR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 1SS(2) of the Code; (fl where the allegations made in the FIR or complaint are so absurd and inherentty improbable on the basrs of which no prudent person can ever reach a just conclusion that there ,s sufficient ground for proceeding against the accused; (9) where there is an express legat bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the { \ 11 concerned Act, providing efficacious redress for the grievance of the aggrieved party; (7) where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulteri<>r motive for wreaking vengeance on the accused and with a view lo spite him due to private and personal grudge."

12. ln the present case, as discussed hereinabove, the material on record clearly indicates that the petitioner- accused and the respondent No.2 have been acquainted since the year 2017, and the alleged transactions took place during the years 2019 and 2020. The complarnt, however, came to be lodged only in December 2021, thereby resulting in an unexplained and inordinate delay in setting the criminal law in motion. The amounts alleged to have been advanced by the respondent No.2 were through cheques, yet the charge sheet is silent as to whether those cheques were actually encashed in favour of the petitioner-accused Furthermore, no independent witness or concerned bank official has been examined to establish this crucial aspect. There is no material on record to suggest any element of cheating or fraudulent intention attributable to the petitioner- 12 accused from the inception of the transaction so as to constitute an offence under section 420 of lpc. Likewise, there is no incriminating eviclence to show that the petitioner- accused caused any alarm in the mind of the respondent No.2 so as to attract the offence under section 506 of lpc. The allegations, on the face of it, appear to be of a purely civil irr nature. Therefore, even if the contents of the charge sheet are taken at their face value and accepted in their entirety, they do not prima facie disclose ilre commission of any offence against the petitioner-accused. Hence, the present case falls within the parameters of point *: a of Ch.Bhajan Lal's case cited supra.

13. ln view of the aforementioned facts and circumstances and having regard to the well-setfled principles of law enunciated by the Honourable supreme court in the decisions referred supra, this court is of the considered view that the essential ingredients necessary to constitute the offences under sections 420,506 of lpc are not made out against the petitioner-accused. Hence, the continuation of the criminal proceedings against the \ .\._ -r-- 13 petitioner-accused amounts to sheer abuse of process of law and the same are liable to be quashed. 14 Accordingly, this Criminal petition is allowed and the criminal proceedings against the petitioner-accused in C.C No 789 of 2022 on the file of the learned ll Additional Junior Civil Judge-cum-lX Additional Metropolitan Magistrate, tMedchal, Cyberabad, are hereby quashed. As a sequel, pending miscellaneous applications, if any, shall stand closed SD/- L LAKSHMI BABU UTY REGIST //TRUE COPY// SECTION OFFICER To, 1 . The ll Additional Junior Civil Judge-Cum-lX Additional Metropolitan lvlagistrate l\/ledchal, Cyberabad.

2. The Statiorr l]ouse Officer, Petitioner Basheerabad Police Station, Medchal District.

3. Two CCs to the Public Prosecutor, High Court for the State of Telangana at Hyderabad IOUT]

4. One CC to SRI MOHD MUZAFFER ULLAH KHAN, Advocate [OPUC] 5. Two CD Copies NVI}iPSI, +Ps HIGH COIJRT DATED:2410912025 ORDER CRLP.No.11093 ot 2022 + ia) ) -: -:1:=-\t .riE ul..,i:-r .J.)- 0 ,[ t'l[\, 2025 -) ): i. 0:" .,-2,.'t:-a l :i ALLOWING THE CRIMINAL PETITION 'l,-eq .---,'' ";iiiar