(2025:JHHC:23641) 1 Cr. M.P. No.1742 of 2020 with Cr.M.P. No.2233 of 2020 IN THE HIGH COURT OF JHARKHAND AT RANCHI Cr.M.P. No.1742 of 2020 ------ 1. Ranjit Ganpat Chougule @ Ranjit Cougule, aged about 47 years, son of Mr. Sham Ganpat Chougule, resident of 69, Champagne House, Khan Abdul Gaffar Khan Road, Worli Seaface, P.O.-Worli Colony, P.S.-Worli, Mumbai-400030 (Maharashtra) 2. Rajesh Bhalchandra Chalke @ Rajesh Chailka, aged about 47 years, son of Mr. Bhalchandra Chalke, resident of RH-3, Sukhshanti CHS, Plot 8, Sector, 8, P.O. & P.S.-Airoli, Navi Mumbai-400708 (Maharashtra) … Petitioners Versus 1. The State of Jharkhand 2. Vivek Agarwal @ Vivek Agrawal, son of Shri Shambhu Prasad Agarwal, Proprietor, M/s Sharda Agencies having Head Office at Pyada Toli, Upper Bazar, P.O.-G.P.O.-P.S.-Kotwali, Dist.-Ranchi- 834001 (Jharkhand) … Opposite Parties With Cr.M.P. No.2233 of 2020 1. Ranjit Ganpat Chougule @ Ranjit Cougule, aged about 47 years, son of Mr. Sham Ganpat Chougule, resident of 69, Champagne House, Khan Abdul Gaffar Khan Road, Worli Seaface, P.O.-Worli Colony, P.S.-Worli, Mumbai-400030 (Maharashtra) 2. Rajesh Bhalchandra Chalke @ Rajesh Chailka, aged about 47 years, son of Mr. Bhalchandra Chalke, resident of RH-3, Sukhshanti CHS, Plot 8, Sector, 8, P.O. & P.S.-Airoli, Navi Mumbai-400708 (Maharashtra) … Petitioners Versus 1. The State of Jharkhand 2. Vivek Agarwal, son of Shri Shambhu Prasad Agarwal, Proprietor, (2025:JHHC:23641) 2 Cr. M.P. No.1742 of 2020 with Cr.M.P. No.2233 of 2020 M/s Sharda Agencies having Head Office at Pyada Toli, Upper Bazar, P.O.-G.P.O.-P.S.-Kotwali, Dist.-Ranchi- 834001 (Jharkhand) … Opposite Parties ------ For the Petitioners : Mr. Pandey Neeraj Rai, Advocate Mr. Rohit Ranjan Sinha, Advocate (in both these cases) For the State : Mr. Anup Pawan Topno, Addl. P.P Mr. Deepankar, AC to GA-III For the O.Ps. : Mr. Nilesh Kumar, Advocate Ms. Sonal Sodhani, Advocate ------ 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 No.1742 of 2020 has been filed invoking the jurisdiction of this Court under Section 482 of the Code of Criminal Procedure with a prayer to quash the several orders passed by the learned Judicial Magistrate, 1st Class, Ranchi being the orders of bailable warrant of arrest, non-bailable warrant of arrest, proclamation under Section 82 of Cr.P.C and the attachment order of property under Section 83 of Cr.P.C respectively in connection with Complaint Case No.134 of 2010 whereas, Cr.M.P. No.2233 of 2020 has been filed with a prayer to quash the entire criminal proceeding in connection with Complaint Case No.134 of 2010 including the order dated 20.02.2010 passed by learned Judicial Magistrate, 1st Class, Ranchi, whereby and whereunder the learned Magistrate has found prima facie case for the offence punishable under Sections 420/120B of the Indian Penal Code inter alia against the petitioners. (2025:JHHC:23641) 3 Cr. M.P. No.1742 of 2020 with Cr.M.P. No.2233 of 2020 3. The allegation against these petitioners is that the petitioner no.1 being the Managing Director and petitioner no.2 being the Chief Finance Officer in Champagne Vineyards Limited approached the firm of the complainant to be C & F agent of the company. The firm of the complainant agreed for the same. The firm of the complainant deposited the security money, the work was started and the agreement was made in the year 2006. C & F business continued from December 2006 to March 2009. The petitioners did not get their license renewed, hence the business stopped. The complainant demanded either to renew the license or to return the returnable amount. The petitioners claimed that as per the book of the account, the complainant was paid Rs.43,89,895/-. But it is the case of the complainant that in fact, the complainant was entitled to receive Rs.50,00,000/-. On the basis of the complaint, statement of solemn affirmation and the statement of the enquiry witnesses, the learned Judicial Magistrate, 1st Class, Ranchi found prima facie case as already indicated above. 4. Learned counsel for the petitioners relied upon the judgment of the Hon’ble Supreme Court of India in the case of Anand Kumar Mohatta & Anr. vs. State (NCT of Delhi), Department of Home and Anr. reported in (2019) 11 SCC 706 para-27 which reads as under:- “27. We find it strange that the complainant has not made any attempt for the recovery of the money of rupees one crore except by filing this criminal complaint. This action appears to be mala fide and unsustainable.” And submits that if a person is entitled to get some money from the accused person of the case but did not file any civil proceeding for recovery of the same but only files a criminal case such action appears to be mala fide. 5. Learned counsel for the petitioners further relied upon the judgment of the Hon’ble Supreme Court of India in the case of Vesa Holdings Private (2025:JHHC:23641) 4 Cr. M.P. No.1742 of 2020 with Cr.M.P. No.2233 of 2020 Limited vs. State of Kerala & Ors. Reported in (2015) 8 SCC 283 para-12 which reads as under:- “12. From the decisions cited by the appellant, the settled proposition of law is 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 other words for the purpose of constituting an offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. Even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in the absence of a culpable intention at the time of making initial promise being absent, no offence under Section 420 of the Penal Code, 1860 can be said to have been made out.” (Emphasis supplied) and submits 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. 6. Learned counsel of the petitioners further relying in the judgment of the Hon’ble Supreme Court of India in the case of Sharon Michael & Ors. Vs. State of Tamil Nadu & Anr. reported in (2009) 3 SCC 375 para-12 of which reads as under:- “12. Indisputably respondent no.2 is the producer of the garments. The buyer is a German Company. Rightly or wrongly, the buyer refused to accept the goods, inter alia, on the premise that the same were defective and sub-standard. We will assume that the appellant Company was assured payment for such supplied. Even if that be so, it would be a del credere agent. Its liability is, therefore, a civil liability. The allegations contained in the first information report did not reveal that any misrepresentation was made at the time of formation of the contract. The goods were to be supplied by Respondent 2. They were presumably required to meet the requirements of the buyer. Even if the certificate granted by the appellant Company was incorrect, an appropriate action against them could have been taken for breach of contract.” submits that it is crystal clear that non-payment of amount claimed by one party in commercial transaction amounts to Civil Liability and in this case at best a Civil liability is made out but no criminal offence is made out. 7. Learned counsel for the petitioners further relied upon the judgment of the Hon’ble Supreme Court in the case of Satishchandra Ratanlal Shah vs. (2025:JHHC:23641) 5 Cr. M.P. No.1742 of 2020 with Cr.M.P. No.2233 of 2020 State of Gujarat & Anr. reported in (2019) 9 SCC 148 para-13 thereof reads as under:- “13. Now coming to the charge under Section 415 punishable under Section 420 IPC. In the context of contracts, the distinction between mere breach of contract and cheating would depend upon the fraudulent inducement and mens rea. (See Hridaya Ranjan Prasad Verma v. State of Bihar [Hridaya Ranjan Prasad Verma v. State of Bihar, (2000) 4 SCC 168 : 2000 SCC (Cri) 786] .) In the case before us, admittedly the appellant was trapped in economic crisis and therefore, he had approached Respondent 2 to ameliorate the situation of crisis. Further, in order to recover the aforesaid amount, Respondent 2 had instituted a summary civil suit seeking recovery of the loan amount which is still pending adjudication. The mere inability of the appellant to return the loan amount cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, as it is this mens rea which is the crux of the offence. Even if all the facts in the complaint and material are taken on their face value, no such dishonest representation or inducement could be found or inferred.” (Emphasis supplied) and submits that the mere inability of the appellant to return the loan amount cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, as it is this mens rea which is the crux of the offence. It is further submitted that in this case even if all the facts in the complaint and material are taken at their face value, still no dishonest representation or inducement could be inferred. 8. Learned counsel of the petitioners lastly relying upon the judgement of the Hon’ble Supreme Court of India in the case of Sushil Sethi & Anr. vs. State of Arunachal Pradesh reported in (2020) 3 SCC 240 para-8.2 which reads as under:- “8.2. It is also required to be noted that the main allegations can be said to be against the company. The company has not been made a party. The allegations are restricted to the Managing Director and the Director of the company respectively. There are no specific allegations against the Managing Director or even the Director. There are no allegations to constitute the vicarious liability. In Maksud Saiyed v. State of Gujarat [Maksud Saiyed v. State of Gujarat, (2008) 5 SCC 668 : (2008) 2 SCC (Cri) 692] , it is observed and held by this Court that the Penal Code does not contain any provision for attaching vicarious liability on the part of the Managing Director or the Directors of the company when the accused is the company. It is further observed and held that the vicarious liability of the Managing Director and Director would arise provided (2025:JHHC:23641) 6 Cr. M.P. No.1742 of 2020 with Cr.M.P. No.2233 of 2020 any provision exists in that behalf in the statute. It is further observed that the statute indisputably must contain provision fixing such vicarious liabilities. It is further observed that even for the said purpose, it is obligatory on the part of the complainant to make requisite allegations which would attract the provisions constituting vicarious liability. In the present case, there are no such specific allegations against the appellants being Managing Director or the Director of the company respectively. Under the circumstances also, the impugned criminal proceedings are required to be quashed and set aside.” submits that in this case also the accused being the company which is no more in existence because the same has been wound up, of course before the date of filing of the complaint; having not been arrayed an accused in this case, hence the prosecution against the petitioners alone, is not sustainable in law. It is lastly submitted that the prayer as prayed for in this Cr.M.P. may be allowed. 9. Learned Addl.P.P. appearing for the State and learned counsel for the O.P. No.2 vehemently opposes the prayer and submits that the petitioners had the intention to cheat the complainant since the beginning of transaction between them and behind the back of the complainant has wound up the company, hence they are squarely responsible for having committed the offence punishable under Section 420/120B of the Indian Penal Code. It is therefore, 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 the undisputed facts remains that the business of C & F agency was going on between the firm of the complainant and the company, of which the petitioners are the respectively the Managing Director and Chief Finance Officer, for the period from December 2006 to March 2009. It is crystal clear that there was no deception played by the petitioners since the beginning of transactions between the parties. The dispute between the parties is that the (2025:JHHC:23641) 7 Cr. M.P. No.1742 of 2020 with Cr.M.P. No.2233 of 2020 amount due and payable to the complainant was not paid by the company of the petitioners. Under such circumstances, in the absence of any allegation that the petitioners played deception since the beginning of transaction between the parties, this Court is of the considered view that even if the entire allegation made against the petitioners is considered to be true in its their entirety still the offence punishable under Section 420/120B of the Indian Penal Code is not made out against the petitioners. Therefore, continuation of criminal proceeding against the petitioners, more so, when the complainant has not made any attempt for recovery of money by filing any civil suit, is not sustainable in the law and the continuation of this criminal proceeding against these petitioners, in the absence of company, of which they are the employees, being made a party, will amount to abuse of process of law. Therefore, this court is of the considered view that this is a fit case where the entire criminal proceeding in connection with the Complaint Case No.134 of 2010 including the order taking cognizance dated 20.02.2010 passed by the learned J.M. 1st Class, Ranchi be quashed and set aside. 11. Accordingly, the entire criminal proceeding in connection with the Complaint Case No.134 of 2010 including the order taking cognizance dated 20.02.2010 passed by learned Judicial Magistrate 1st Class, Ranchi is quashed and set aside in Cr.M.P. No.2233 of 2020. 12. In view of the order passed in these Cr.M.P. the prayer made in Cr.M.P. No.1742 of 2020 has become infructuous and hence Cr.M.P. No.1742 of 2020 dismissed as being infructuous. 13. In the result, this Cr.M.P. No.2233 of 2020 stands allowed. (2025:JHHC:23641) 8 Cr. M.P. No.1742 of 2020 with Cr.M.P. No.2233 of 2020 14. In view of the disposal of these Cr.M.Ps the interim relief granted vide order dated 19.02.2021 in Cr.M.P. No.1742 of 2020 is vacated. 15. Registry is directed to intimate the court concerned forthwith. (Anil Kumar Choudhary, J.) High Court of Jharkhand, Ranchi Dated the 13th of August, 2025 AFR/ Rohit