Pranav Rastogi v. State of Uttarakhand and Another

2. The applicant, Mr. Pranav Rastogi, has approached this Court invoking its inherent jurisdiction under Section 482 Cr.P.C., seeking indulgence for quashing the impugned criminal proceedings initiated against him. The genesis of the dispute lies in an e-tender floated by the Directorate of Geology and Mining, Government of Uttarakhand, for the grant of a mining lease over 25.585 hectares in Lot No. 08, Daulatpur-Hajratpur alias Budhwasheed, District Haridwar. Criminal Misc. Application No. 1605 of 2019, Pranav Rastogi Vs State of Uttarakhand And Another 1 Ashish Naithani J.

3. Pursuant to the tender notice dated 30.01.2018, the Applicant participated in the bidding process and submitted an earnest money deposit (EMD) of ₹98,50,225/- via a demand draft dated 09.02.2018.

4. It is undisputed that the Applicant was declared the H-2 (second-highest) bidder. The tender conditions stipulated that if the H-1 bidder failed to deposit 10% of the bid amount within three days of the bidding conclusion, the offer would be extended to H-2, who would then receive a similar opportunity.

5. The Applicant, alleging server malfunction and procedural anomalies during the bidding process, submitted representations dated 14.03.2018 and 22.05.2018 to the competent authorities, including the Secretary, Mining, requesting redressal and refund of the EMD. The Department, vide letter dated 07.06.2018, released the EMD unconditionally to the Applicant.

6. Subsequently, the Applicant was orally and later in writing directed to return the amount, citing the reason that the EMD had been returned for the purpose of renewal and resubmission. The Applicant denied any such undertaking and correspondence to that effect, asserting that neither had he ever been informed of the cancellation of H-1 nor had any formal offer been made to him as H-2. Eventually, an FIR was lodged on 10.10.2018, alleging the dishonest withdrawal of EMD and invoking Section 420 of the IPC. A charge sheet was filed on 30.12.2018, and cognizance was taken on 02.03.2019.

7. Heard learned counsel for the parties and perused the records.

8. Learned counsel appearing for the Applicant contended that the entire proceedings are a gross abuse of the process of law. It was submitted that the release of the EMD wasunconditional, with no communication, oral or written, requiring the Applicant to resubmit the amount. Criminal Misc. Application No. 1605 of 2019, Pranav Rastogi Vs State of Uttarakhand And Another 2 Ashish Naithani J.

9. The learned counsel further pointed out that the Applicant was never officially informed of the cancellation of the H-1 bidder or any offer being made to him in his capacity as H-2. It was also urged that the charge of cheating under Section 420 IPC is wholly misconceived, as there was no deception or dishonest intention at the inception; rather, the Applicant was legitimately entitled to a refund of the EMD. Attention was also drawn to the fact that the so-called backdated letter offering the lot to the Applicant has not been supported by any evidence of service or dispatch, making its authenticity highly suspect.

10. Reliance was placed on various documents, including letters dated

14.03.2018, 22.05.2018, 16.07.2018, and 05.10.2018, to show consistent conduct on the part of the Applicant in seeking a refund, not allotment. It was further contended that even the interim order passed by this Court on

25.10.2018, granting protection from coercive action, acknowledges the suspicious conduct of respondent no. 2 in first releasing the amount and then lodging the FIR.

11. Learned A.G.A. for the State, submitted that the EMD was returned on the express undertaking by the Applicant to renew the demand draft and resubmit it, as the H-1 bidder had failed to deposit the requisite amount, and the offer was being made to the H-2, i.e., the Applicant. It was argued that the Applicant, after receiving the refund, failed to honour his commitment and thereby committed a deliberate act of deception with the intent to cause wrongful loss to the exchequer. The Respondent further asserted that reminders, both oral and written, were given to the Applicant for re-submission of the EMD, which were ignored.

12. It was also submitted that the investigating officer, after collecting credible material, found prima facie evidence warranting prosecution under Section 420 IPC. The learned Magistrate, having applied a judicial mind, took cognizance based on the material available, and the process of Criminal Misc. Application No. 1605 of 2019, Pranav Rastogi Vs State of Uttarakhand And Another 3 Ashish Naithani J. law must be allowed to continue. The State sought to rely on the judgment of the Hon’ble Supreme Court in State of Gujarat v. Afroz Mohammed HasanfattaAIR 2019 SC 2499, wherein it was held that judicial satisfaction based on charge sheet and accompanying materials should not be interfered with lightly in a petition under Section 482 Cr.P.C.

13. Having heard the rival submissions of the learned counsels and perused the material placed on record, this Court is of the view that the present case raises substantial questions regarding the arbitrary initiation of criminal proceedings in a matter that is, at its core, civil in nature and governed by the terms of a commercial tender.

14. From the admitted facts, it is clear that the Applicant was the H-2 bidder in an e-tender process. As per the tender conditions, the H-1 bidder was obligated to deposit 10% of the bid amount within three days of the close of the auction. Upon his failure, the department had the optionbut not an obligationto extend the offer to the H-2 bidder, subject to express communication.

15. It is the Applicant’s categorical case, supported by a series of contemporaneous letters dated 14.03.2018, 22.05.2018, and 16.07.2018, that no such communication was ever received from the department informing him that the H-1 bid was cancelled or that he was being offered the lot as H-2. On the contrary, the Applicant had promptly raised objections regarding server malfunction and requested a refund of the earnest money.

16. The material on record indicates that the EMD was released to the Applicant on 07.06.2018 by the Deputy Director, Mining, without any stated condition. The letter accompanying the release does not suggest that the release was provisional, conditional, or based on any undertaking to return the draft upon renewal. This unconditional release is inconsistent with the Respondents’ present contention that the Applicant had promised Criminal Misc. Application No. 1605 of 2019, Pranav Rastogi Vs State of Uttarakhand And Another 4 Ashish Naithani J. to renew and return the draft. Notably, no contemporaneous document has been produced by the State to evidence any such undertaking in writing.

17. It is further noteworthy that the alleged offer to the Applicant as H-2 is said to have been made vide a letter dated 03.04.2018, which was never received or acknowledged by the Applicant. The fact that no communication was sent to the Applicant within the prescribed three-day period following the failure of H-1 severely undermines the respondents’ claim. By the time the department allegedly made the offer, the Applicant’s bid had legally lapsed, and there was no subsisting obligation on his part to maintain the bid or submit the amount afresh.

18. The initiation of criminal proceedings under Section 420 IPC appears to be an afterthought. The essential ingredients of the offence of cheating are : (i) deceit or dishonest inducement at the inception, and (ii) delivery of property or suffering of damage as a consequence.

19. In the present case, there is no material to suggest that at the time of seeking the refund, the Applicant had any dishonest intention or that he misrepresented any fact to the department. The EMD was his own money, and once it was returned by the authority, lawfully and unconditionally, the Applicant cannot be faulted for not returning it absent a fresh contractual obligation.

20. This Court cannot ignore the fact that the same officer who authorised the unconditional return of the EMD is also the complainant in the FIR, having later alleged that the amount was taken fraudulently. Such conduct raises serious questions about the bona fides of the prosecution and suggests that the criminal process is being employed to settle what is, at most, a contractual dispute.

21. Furthermore, the learned Magistrate, while taking cognizance, does not appear to have undertaken a judicious application of mind to the context in Criminal Misc. Application No. 1605 of 2019, Pranav Rastogi Vs State of Uttarakhand And Another 5 Ashish Naithani J. which the charge sheet was filed. The order is mechanical in nature, failing to record any consideration of the contractual backdrop or the admitted factual matrix. ORDER In view of the above, this Court is of the considered opinion that continuation of the criminal proceedings against the Applicant would amount to an abuse of the process of the court. The dispute, if any, arising from the release or non-return of the EMD falls squarely within the civil domain and does not disclose the commission of any cognizable offence, devoid of the ingredients of a criminal offence under Section 420 of the IPC. Accordingly, the charge sheet dated 30.12.2018 and the cognizance order dated 02.03.2019 passed by the learned Chief Judicial Magistrate, Haridwar, in Criminal Case No. 2569 of 2019, arising out of Case Crime No. 420 of 2018, Police Station SIDCUL, District Haridwar, are hereby quashed. The petition is allowed. Interim orders, if any, shall stand dischargedno order as to costs. Dated:04.07.2025 NR/ (Ashish Naithani J.) Criminal Misc. Application No. 1605 of 2019, Pranav Rastogi Vs State of Uttarakhand And Another 6 Ashish Naithani J.