(2025:JHHC:26651) 1 Cr. M.P. No.1678 of 2020 IN THE HIGH COURT OF JHARKHAND AT RANCHI Cr.M.P. No.1678 of 2020 ------ Shambhu Kumar Agarwal, Age about 49 years S/o M.C. Agarwal, R/o- Jahaj Kothi, Main Road Ramgarh Cantt, P.O. & P.S. Ramgarh Cantt Dist.- Ramgarh … Petitioner Versus 1. The State of Jharkhand 2. Harendra Rai, Age about 56 years (Director of M/s Rabindra Enterprises (Pvt.) Ltd., Office at- Mugma, P.O. & P.S.- Nirsa, District- Dhanbad … Opposite Parties ------ For the Petitioner : Mr. Ashim Kr. Sahani, Advocate Mr. Pankaj Verma, Advocate For the State : Ms. Kumari Rashmi, Addl.P.P. ------ P R E S E N T HON’BLE MR. JUSTICE ANIL KUMAR CHOUDHARY By the Court:- Heard the parties. 2. This Criminal Miscellaneous Petition has been filed invoking the jurisdiction of this Court under Section 482 of the Code of Criminal Procedure, 1973 with a prayer to quash the F.I.R as well as the entire criminal proceedings in connection with Nirsa P.S. Case No.156 of 2019 registered under Section 406/420 of the Indian Penal Code currently pending in the court of learned Judicial Magistrate-1st Class, Dhanbad. 3. Learned counsel for the petitioner draws the attention of this Court towards the Supplementary Affidavit dated 05.09.2024 and submits that the charge-sheet has not been submitted in this case and investigation of the case is going on. (2025:JHHC:26651) 2 Cr. M.P. No.1678 of 2020 4. The allegation against the petitioner is that the petitioner along with the co-accused persons purchased coal form the complainant worth Rs.53,04,055/- but after receiving the said coal, did not pay the consideration amount of the said coal. 5. Learned counsel for the petitioner relies upon the judgment of the Hon’ble Supreme Court of India in the case of Manish vs. State of Maharashtra & Another reported in 2025 SCC OnLine SC 707 and submits that in the facts of that case when the allegation against the appellant/accused before the Hon’ble Supreme Court of India was that, he did not pay the price of the coal purchased, in the facts of that case, it was held by the Hon’ble Supreme Court of India that the materials collected during the investigation do not show that case falls in the category of commercial disputes, which would attract penal consequences. 6. Learned counsel for the petitioner next relies upon the judgment of this Court in the case of Rana Chakraborty vs. The State of Jharkhand & Another dated 20th March, 2024 passed in Cr.M.P. No.962 of 2023 wherein this Court relied upon the judgment of the Hon’ble Supreme Court of India in the case of S.W. Palanitkar vs. State of Bihar reported in (2002) 1 SCC 241 paragraph-8 of which reads as under:- “8. Before examining respective contentions on their relative merits, we think it is appropriate to notice the legal position. Every breach of trust may not result in a penal offence of criminal breach of trust unless there is evidence of a mental act of fraudulent misappropriation. An act of breach of trust involves a civil wrong in respect of which the person wronged may seek his redress for damages in a civil court but a breach of trust with mens rea gives rise to a criminal prosecution as well.” and submits that mens rea is a sine qua non for a breach of trust giving rise to a criminal prosecution which is lacking in this case as the dispute between (2025:JHHC:26651) 3 Cr. M.P. No.1678 of 2020 the parties regarding non-payment of price of the coal, is not directly against the petitioner. 7. Learned counsel for the petitioner next relies upon the judgment of this Court in the case of Puran Chandra Poddar vs. The State of Jharkhand & Another dated 30.10.2023 passed in Cr.M.P. No.332 of 2022 wherein this Court relied upon the judgment of the Hon’ble Supreme Court of India in the case of Sarabjit Kaur vs. State of Punjab & Another reported in (2023) 5 SCC 360 para-13 of which reads as under:- “13. 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 up promise will not be enough to initiate criminal proceedings. From the facts available on record, it is evident that Respondent 2 had improved his case ever since the first complaint was filed in which there were no allegations against the appellant rather it was only against the property dealers which was in subsequent complaints that the name of the appellant was mentioned. On the first complaint, the only request was for return of the amount paid by Respondent 2. When the offence was made out on the basis of the first complaint, the second complaint was filed with improved version making allegations against the appellant as well which was not there in the earlier complaint. The entire idea seems to be to convert a civil dispute into criminal and put pressure on the appellant for return of the amount allegedly paid. The criminal courts are not meant to be used for settling scores or pressurise parties to settle civil disputes. Wherever ingredients of criminal offences are made out, criminal courts have to take cognizance. The complaint in question on the basis of which FIR was registered was filed nearly three years after the last date fixed for registration of the sale deed. Allowing the proceedings to continue would be an abuse of process of the court.” and submits that therein the Hon’ble Supreme Court of India reiterated the settled principle of law that unless fraudulent or dishonest intention is shown right at the beginning of the transaction, a breach of contract will not give rise to a criminal prosecution. (2025:JHHC:26651) 4 Cr. M.P. No.1678 of 2020 8. Hence, it is submitted that the prayer, as prayed for in the instant Cr.M.P., be allowed. 9. Learned Addl.P.P. appearing for the State vehemently opposes the prayer of the petitioner made in the instant Cr.M.P. and submits that the allegations made against the petitioner in the F.I.R. are sufficient to constitute both the offences punishable under Section 406 as well as Section 420 of the Indian Penal Code. Therefore, it is submitted that this Cr.M.P., being without any merit, be dismissed. 10. Having heard the rival submissions made at the Bar and after carefully going through the materials available in the record, it is pertinent to mention here that it is a settled principle of law as has been held by the Hon’ble Supreme Court of India in the case of Vir Prakash Sharma vs. Anil Kumar Agarwal & Another reported in (2007) 7 SCC 373 paragraph-8 of which reads as under:- “8. The dispute between the parties herein is essentially a civil dispute. Non-payment or underpayment of the price of the goods by itself does not amount to commission of an offence of cheating or criminal breach of trust. No offence, having regard to the definition of criminal breach of trust contained in Section 405 of the Penal Code can be said to have been made out in the instant case. Section 405 of the Penal Code reads, thus: “405. Criminal breach of trust.—Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits ‘criminal breach of trust’.” Neither any allegation has been made to show existence of the ingredients of the aforementioned provision nor any statement in that behalf has been made. (Emphasis supplied) (2025:JHHC:26651) 5 Cr. M.P. No.1678 of 2020 when the dispute between the parties is essentially a civil dispute, non- payment or underpayment of the price of the goods by itself does not amount to commission of an offence of cheating or criminal breach of trust. 11. Now, coming to the facts of the case, the only allegation against the petitioner is that the complainant sold some goods the price of which was not paid by the petitioner. There is nothing more than that in the F.I.R. In the considered opinion of this Court, the sale of good to a purchaser by the seller cannot be termed as entrustment and in the absence of the same, certainly even if the entire allegations made in the F.I.R. are considered to be true in its entirety, still the offence punishable under Section 406 of the Indian Penal Code is not made out against the petitioner. 12. So far as the offence punishable under Section 420 of the Indian Penal Code is concerned, it is a settled principle of law as has been held by the Hon’ble Supreme Court of India in the case of Uma Shankar Gopalika vs. State of Bihar & Another reported in (2005) 10 SCC 336 paragraph-6 of which reads as under:- “6. Xxxx xxxx xxxx It is well settled that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. In the present case it has nowhere been stated that at the very inception there was any intention on behalf of the accused persons to cheat which is a condition precedent for an offence under Section 420 IPC.” (Emphasis supplied) that the essential ingredient to constitute the offence of cheating is that the accused must have played deception since the very inception. 13. Now, coming to the facts of the case, there is no allegation against the petitioner of playing any deception since the beginning of the transaction (2025:JHHC:26651) 6 Cr. M.P. No.1678 of 2020 between the parties. Thus, even if the entire allegations made against the petitioner are considered to be true in their entirety still the offence punishable under Section 420 of the Indian Penal Code is not made out against the petitioner. 14. The other attending feature of the case is that admittedly the purchase was made on 21.10.2014 but the complaint case being C.P. Case No.1105 of 2019 was filed in the court on 22.04.2019 i.e., after more than three years, which is the period of limitation provided for recovery of the money. So, basically the said C.P. Case No.1105 of 2019 which upon being referred to police under Section 156 (3) Cr.P.C., Nirsa P.S. Case No.156 of 2019 has been registered, has been instituted for wrecking vengeance and arms twisting of the petitioner. 15. Because of the discussions made above, this Court is of the considered view that the continuation of this criminal proceeding against the petitioner will amount to abuse of process of law, therefore, this is a fit case where the F.I.R as well as the entire criminal proceedings in connection with Nirsa P.S. Case No.156 of 2019, be quashed and set aside. 16. Accordingly, the F.I.R as well as the entire criminal proceedings in connection with Nirsa P.S. Case No.156 of 2019, is quashed and set aside against the petitioner. 17. In the result, this Cr.M.P. stands allowed. 18. In view of disposal of the instant Cr.M.P., pending interlocutory application, if any, stands disposed of being infructuous. (Anil Kumar Choudhary, J.) High Court of Jharkhand, Ranchi Dated the 02nd of September, 2025 AFR/ Animesh