High Court · 2025

Legal Reasoning

cria-3653.221 IN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADCRIMINAL APPLICATION NO.3653 OF 2022Avnterpreet Singh S/o Late Narinder Singh Ghotra,Age-32 years, Occu:Business,R/o-Flat No.A-301, Harmandar Apartment-1, Bezonbagh,Nagpur-440004 ...APPLICANT VERSUS 1) The State of Maharashtra, Through its Police Officer, Police Station, MIDC (Maharashtra Industrial Development Corporation), Ahmednagar,2) Shri Sachin S/o Prakash Kate, Age-35 years, Occu:Business, R/o-C/o- “Techno Front Electronic”, PAP J 123/124, J Block, Bhosari, MIDC (Maharashtra Industrial Development Corporation), Pune-411026, Email: [email protected] ...RESPONDENTS ... Mr. Akshaya S. Chaudhari Advocate and Mr. Rohit R. Chougule Advocate for Applicant. Mr. V.K. Kotecha, A.P.P. for Respondent No.1 -State. Mr. R.S. Deshmukh, Senior Counsel i/b. Mr. Sunil P. Koli Advocate for Respondent No.2. ... cria-3653.222 CORAM: SMT. VIBHA KANKANWADI AND SANJAY A. DESHMUKH, JJ.DATE OF RESERVING ORDER : 18th JUNE 2025DATE OF PRONOUNCING ORDER : 23rd JULY 2025 ORDER [PER SMT. VIBHA KANKANWADI, J.] :1.Present Application has been filed, initially for quashingthe the First Information Report (for short “the FIR”) vide CrimeNo. 160 of 2022, registered with M.I.D.C. Police Station,Ahmednagar on 12th March 2022, for the offence punishableunder Sections 420, 468, 471 of the Indian Penal Code and lateron, by way of amendment, for quashing the Charge-sheetNo.297 of 2022, pending before the Chief Judicial Magistrate,Ahmednagar, District-Ahmednagarand further proceedingsarising out of the same. 2.Learned Advocate appearing for the applicant has taken usthrough the entire charge-sheet including the FIR. He submitsthat there was a contract between the applicant and respondentNo.2 in respect of supply of N-95 masks as it was Covid periodand the contract was entered into in June 2020. The informantappears to have filed Criminal Miscellaneous Application No.112 cria-3653.223of 2021 before the learned Judicial Magistrate First Class,Newasa, District-Ahmednagar, under Section 156(3) of the Codeof Criminal Procedure for investigation. Thereafter the FIR hasbeen lodged. Even if we consider the contents of the CriminalMiscellaneous Application and the verification that was recordedbefore the learned Judicial Magistrate First Class on 21st June2021, it can be seen that the informant was alleging that therewas a breach of contract as the goods those were ordered, werenot supplied. In the FIR also it has been stated that assurancewas given by the applicant that he would supply the order of themasks and it has been stated that it was promised that it wouldbe made available immediately. He had ordered 12,00,000masks. The agreement was entered into online. However, fortrial basis the order was for 1,00,000 masks. The amount for thesaid 1,00,000 masks was Rs.1,53,61,500/-. The informant gavethe half of the amount i.e. Rs.76,80,750/- by N.E.F.T. to theapplicant. It was given in writing by the applicant that the goodswould be supplied within ten days. However, after a months timealso when the order was not supplied, it is the statement in theFIR that the informant had asked the applicant and the applicanttold that the order is now in process and informant should wait.Informant states that he again waited for a month and thereafter cria-3653.224informant received an amount of Rs.22,85,000/- on his accounton 6th July 2020. The informant then asked the applicant as towhy he returned the amount. The applicant told him that thesaid order was placed with the company in Malaysia and he hasgiven Rs.54,00,000/- to the Malaysian Company, however, theMalaysian Company has not fulfilled the order and therefore, theremaining amount has been sent back to the informant. Whenthe informant asked, as to whether there is any receipt from theMalaysian Company, in response to the same the applicantshared with him the money transfer receipt and the bill.According to the informant, the said money transfer receipt isforged and the informant told that the applicant has cheated himand at that time the applicant told him that he may do whateverhe wants. 3.It is submitted that during the course of investigation,various documents have been seized, especially the complaintapplication given to the Economic Offence Wing, Nagpur. It alsostates that the amount has not been refunded to him. Thedocuments those have been collected from the Yes Bank wouldshow that the amount was transferred. Now the applicant isfighting with the Malaysian Company in the International Courtfor the refund of the amount. There was no intention on the part cria-3653.225of the applicant to cheat the informant. The transaction is purelyof civil nature. Learned Advocate appearing for the applicantsubmits that though the Criminal Miscellaneous ApplicationNo.112 of 2021 was filed for taking action under Section 156(3)of the Code of Criminal Procedure, but there was no order thatwas passed in the said matter. By the pursis dated 3rd October2022, it was informed by the informant that he has no desire toproceed with the matter and thereupon the said applicationcame to be disposed of as withdrawn by order dated 12thNovember 2022. Thus, there is total suppression of facts in theFIR.4.Learned Advocate for the applicant relies on the decision inVijay Kumar Ghai and others vs. State of West Bengal andothers, (2022) 7 S.C.C. 124, wherein the difference between theoffence under Sections 420, 405, 406, 415 of the Indian PenalCode has been explained and when quashment in such cases canbe said to be warranted, has been discussed.5.The learned APP as well as learned Senior Counsel Mr. R.S.Deshmukh instructed by Mr. Koli Advocate, vehemently opposedthe Application and submitted that though the base for the FIR isan agreement, yet it can be seen that the applicant had no cria-3653.226intention to obey the terms of agreement. Sending partial moneyback cannot be said to be an act which can be considered infavour of the applicant. At no point of time it can be seen that itwas disclosed by the applicant that he would be getting thosearticles from a Malaysian Company. If that disclosure would havebeen made then certainly the informant would have had asecond thought as to whether to enter into the contract or notand whether to send the substantial amount or not. The fact isthat neither the consignment was provided as ordered by theinformant to him nor his remaining amount has been sent. Nowall the other legal steps are shown to have been taken by theapplicant just to raise his defence, which cannot be consideredand therefore, this is not a fit case where this Court shouldexercise its powers under Section 482 of the Code of CriminalProcedure. 6.Learned Senior Counsel for respondent No.2 relies on thedecision in Priti Saraf and another vs. State of NCT of Delhi andanother, (2021) AIR (SC) 1531 : (2021) 2 SCR 577, wherein,after taking note of the decision of State of Haryana and othersvs. Bhajan Lal and others, 1992 Suppl. (1) SCC 335, it has beenobserved thus:- cria-3653.227“ 26. This Court has clarified the broad contours andparameters in laying down the guidelines which have to bekept in mind by the High Courts while exercising inherentpowers under Section 482 CrPC. The aforesaid principles laiddown by this Court are illustrative and not exhaustive.Nevertheless, it throws light on the circumstances and thesituation which is to be kept in mind when the High Courtexercises its inherent powers under Section 482 CrPC. 27. It has been further elucidated recently by this Court inArnab Manoranjan Goswami Vs. State of Maharashtra andothers, 2020 SCC Online SC 964 where jurisdiction of theHigh Court under Article 226 of the Constitution of India andSection 482 CrPC has been analysed at great length.28. It is thus settled that the exercise of inherent power ofthe High Court is an extraordinary power which has to beexercised with great care and circumspection beforeembarking to scrutinise the complaint/FIR/charge-sheet indeciding whether the case is the rarest of rare case, toscuttle the prosecution at its inception.” 7.Here the facts are required to be considered first. In theFIR lodged on 12th March 2022, the informant has given thedetails about the transaction as to how he entered it into withthe applicant. The transaction was the contract for supply ofN-95 masks, 3 M 8210. Since it was Covid period in June 2020,it appears that the informant had placed the said order. In facthis company is dealing with the business, as per his own story,that he would take the orders from his customers for supply of cria-3653.228any goods and after fetching it from the others, would supply thesame to his customer. His company is by name “TechnofrontElectronics Company”. The investigating officer has not collectedthe Shop Act license or any other license of the informant’scompany. The informant states that one V.S. Enterprises, Delhiwas his customer and on the behalf of that company he placedthe said order with the company of the applicant. Initial talksappear to be on mobile phone and then he demanded 12,00,000masks to be supplied. An agreement was sent by the applicantto him online and on trial basis, at that time the informantplaced the order for 1,00,000 masks of the specified quality. Theapplicant gave order confirmation in the form of proformainvoice, in which the price was quoted for 1,00,000 masks atRs.1,53,61,500/- . It was then stated that the half of the amountof the same should be sent. Accordingly, the informant hastransferred the amount of Rs.76,80,750/- from his account inIDBI Bank, Bhosari Branch, Pune, through N.E.F.T.. The otherdetails in the FIR are already reproduced and therefore, we donot want to repeat the same. The fact is that as to how theM.I.D.C. Police Station, Ahmednagar got the jurisdiction toinvestigate, is a question. Herein this case there is a totalsuppression of facts regarding Criminal Miscellaneous Application cria-3653.229No.112 of 2021 filed by the informant with Judicial MagistrateFirst Class, Newasa, District-Ahmednagar, in the FIR. Now it istried to be stated that the company of respondent No.2 is inAhmednagar M.I.D.C. area. The date of transfer or relocating hiscompany at M.I.D.C., Ahmednagar would then carry theimportance. The amount that has been sent through N.E.F.T., isfrom the IDBI Bank, Bhosari Branch, Pune. However, we may notgo much into the details about the place of investigation, but thefact remains is that on 3rd October 2022, the pursis came to befiled in Criminal Miscellaneous Application No.112 of 2021 beforethe learned Judicial Magistrate First Class, Newasa, copy of thesame has been made available, wherein the informant has statedthat he has no desire to proceed with the application andtherefore, it should be disposed of. Accordingly, the saidapplication came to be disposed of. But then prior to that, itappears that respondent No.2 had managed to get the FIRregistered with M.I.D.C. Police Station, Ahmednagar(Ahilyanagar), on 12th March 2022, as aforesaid, with thesuppression of the said Criminal Miscellaneous Application.8.On the merits of the case, certainly there was a contractwhich has not been obeyed. Of course, when there is atransaction of commercial nature, then it may give remedy under cria-3653.2210both i.e. under civil law as well as criminal law. But the fact isthat in order to constitute an offence, it has to fulfill theingredients of the offence. When the offence was registered, itwas under Section 471, 468 and 420 of the Indian Penal Code,however, when the charge-sheet has been filed, it is only underSection 420 of the Indian Penal Code and it appears that theinformant has not objected to the dropping of Sections 471 and468 of the Indian Penal Code. In the charge-sheet, the gist inColumn No.13 would show that the applicant had received anamount of Rs.76,80,650/-, out of which it was transpired that hehas transferred an amount of Rs.53,95,641/- to MalaysianCompany and the remaining amount of Rs.22,95,109/- has beenreturned to the informant, thereby the amount which was sent toMalaysian Company has not been returned nor the masks weresupplied and thereby cheating has been committed, is the storyof the prosecution, which is certainly only a civil transaction. Ifthe applicant had the intention to cheat, he would not havereturned the remaining amount. Further, the contention of theinformant that the document regarding transfer of the amountthrough Yes Bank by the applicant to the Malaysian Company isthe forged document, appears to be false contention taking into cria-3653.2211consideration the documents which have been collected from theYes Bank during the course of investigation.9.The applicant has produced the copy of FIR vide CrimeNo.248 of 2022 dated 18th April 2022, lodged by him withJaripataka Police Station, Nagpur, for the offence punishableunder Section 420 read with Section 34 of the Indian Penal Codeagainst the Malaysian Company. Now as regards, how to recoverthe remaining amount by the informant will have to beconsidered by him. But certainly the offence under Section 420of the Indian Penal Code cannot be said to have been made outin the present case.10.In Vijay Kumar Ghai and others vs. State of West Bengaland others, (supra), it has been stated that Section 415 of theIndian Penal Code defines “cheating”. A fraudulent or dishonestinducement is an essential ingredient of the offence. A personwho dishonestly induces another person to deliver any propertyis liable for the offence of cheating. Section 420 of the IndianPenal Code defines “cheating and dishonestly inducing deliveryof property”. Section 420 of the Indian Penal Code is a seriousform of cheating that includes inducement (to lead or movesomeone to happen) in terms of delivery of property as well as cria-3653.2212valuable securities. The aforesaid section is also applicable tomatters where the destruction of the property is caused by theway of cheating or inducement. It has been further observedthat there can be no doubt that a mere breach of contract is notin itself a criminal offence and gives rise to the civil liability ofdamages. However, the distinction between mere breach ofcontract and cheating, which is criminal offence, is a fine one.While breach of contract cannot give rise to criminal prosecutionfor cheating, fraudulent or dishonest intentions is the basis ofthe offence of cheating. Herein the present case, there was equalduty upon the informant before entering into the contract, tomake an inquiry as to from where the applicant would befetching the goods. He does not come with the case that theapplicant had posed himself as the manufacturer of N-95 masksof the specifications which were to be ordered by the informant.When it is a document relating to the health products, there isan additional duty on the person who is placing the order, fordetail inquiry to be made, whether the manufacturer hasappropriate license, if the goods are to be imported thenwhether the importer has proper license etc. When thestatements in respect of these things are missing and there is nosuch record collected during the investigation, we are of the cria-3653.2213opinion that it is purely a civil transaction and therefore, this is afit case for quashment of the FIR, Charge-sheet and the furtherproceedings arising out of the same. Hence, the following order:- O R D E R(I)The Application stands allowed.(II) The proceedings in Charge-sheet No.297 of2022, pending before the Chief Judicial Magistrate,Ahmednagar, District-Ahmednagar, for the offencepunishable under Section 420 of the Indian PenalCode, and further proceedings if any, arising out ofthe First Information Report vide Crime No. 160 of2022, registered with M.I.D.C. Police Station,Ahmednagar on 12th March 2022, stands quashedand set aside as against applicant - AvnterpreetSingh S/o Late Narinder Singh Ghotra. [SANJAY A. DESHMUKH] [SMT. VIBHA KANKANWADI] JUDGE JUDGEasb/JULY25