1 2025:CGHC:17138-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR CRMP No. 1762 of 2022 Manish Koomar S/o Bhim Munda Aged About 44 Years Employed And Working For Gain At Nilai Syndicates, Fourth Floor, Nexa Showroom Building, Opposite Hotel Redisson Blu, Argora, Ranchi, Jharkhand - 834001 ... Petitioner(s) versus 1 - State Of Chhattisgarh Through - Its Secretary, Department Of Home, Mantralaya, Naya Raipur (C.G.) 2 - Thana In-Charge Police Station Dhamtari, District : Dhamtari, Chhattisgarh 3 - Sunil Dewangan S/o Late Sri Shyamlal Dewangan Aged About 48 Years Partner Of M/s Vijay Dewangan, Subhas Nagar, Dhamtari, District : Dhamtari, Chhattisgarh ... Respondent(s) For Petitioner(s) For Respondent No.1 & 2/State : : Mr. Nitin Kumar Pasari, Advocate through Video Conferencing assisted by Ms. Rajni Soren, Advocate Mr. Shailendra Sharma, Panel Lawyer For Respondent No.3 : Mr. Amit Buxy, Advocate 2 Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Shri Arvind Kumar Verma, Judge Order on Board Per Ramesh Sinha , Chief Justice 15/04/2025 Proceedings of this matter have been taken through video conferencing. Heard Mr. Nitin Kumar Pasari, Advocate through Video Conferencing assisted by Ms. Rajni Soren, learned counsel for the petitioner. Also heard Mr. Shailendra Sharma, learned Panel Lawyer for the State and Mr. Amit Buxy, learned counsel appearing for respondent No.3 . 2. The present petition under Section 482 of CrPC has been filed by the petitioner seeking quashment of FIR No. 0337/2022 registered at Police Station Dhamtari, District Dhamtari (C.G.) for the offence punishable under Section 420 of IPC against the petitioner and entire criminal proceedings pursuant to impugned FIR. 3. Brief facts of the case are that FIR has been lodged by the respondent No.3-Sunil Kumr Dewangan, who is a businessman and partner of M/s. Vijay Dewangan, residing in Subhash Nagar, Dhamtari, Chhattigarh. An FIR has been lodged under Section 420 of the IPC. The petitioner is one of the partners of M/s. Nilaai syndicates, Ranchi, Jharkhand, engaged in the business of distribution of Foreign liquor in its own brand name for which the partnership firm is registered with the Excise Department across various States and the brand name as also the label of the liquor bottles has been duly certified by the respective 3 States. Having fulfilled the modalities under the Act, the rates were also notified by the States in which the Excise license has been granted to the partnership Firm of the petitioner. 4. In order to market the product of the partnership firm, various distribution agreements in different States have been entered into between the partnership firm of the petitioner as also the individual distributors, intending to become distributors of M/s. Nilaai Syndicate. One such agreement was entered into between the partnership firm of the petitioner namely, Nilaai Syndicts long with M/s. Vijay Dewangan, a proposed distributor at Dhamtari, within the State of Chhattisgarh. The said agreement was executed on 2.12.2019, which contained reciprocal contractual obligations to be met with by and between the parties. 5. Pursuant to entering into the agreement on 2.12.2019, on various dates, a total amount of Rs. 2.55 crores was paid to the partnership firm of the petitioner. However, the petitioner and its firm failed to supply the foreign liquor to informant as was agreed upon and as such for non- supply of foreign liquor, even after payment of advance, the allege doffence under Section 420 of the IPC has been alleged to have been committed. 6. It has also been alleged that the petitioner has been sending photographs and videographs of various trucks and warehouses to the informant, but the trucks loaded with the foreign liquor never reached to the informant and as such, allegation of cheating has been made as against the petitioner. Since the promises made in terms of the agreement was not given effect too, on the request of the informant, an amount of Rs. 30,00,000/- was refunded to the informant. Aggrieved of 4 the same, the present FIR has been registered against the petitioner. 7. The petitioner, therefore, by way of this petition is praying for quashing of the entire criminal proceedings in FIR No. 0337/2022 lodged at police station Dhama tari (CG). The petitioner is seeking to assail the entire criminal proceedings in connection with FIR No. 0337/2022 lodged at police station Dhamtari under Section 420 of the Indian Penal Code. The petitioner has not committed any act of cheating that has resulted to loss to the respondent No.3 nor has committed an act of cheating to enrich or benefit himself. 8. Pursuant to entering into agreement on 2.12.2019, on various dates, total amount of Rs. 2.55 crores was paid to the partnership firm of the petitioner as advanced/security. Before the partnership firm of the petitioner could start its business with the permission of the excise Department, there was an outbreak of Covid-19 pandemic, which had shook the nation and the entire business activity had come to standstill. On account of non-issuance of supply order/purchase order by the Excise Department, the dispatches of foreign liquor has not been made by the partnership firm of the petitioner. The lodging of the FIR had come as a shock to the petitioner inasmuch as on 27.09.2022, the local police at Dhamtari without following the due process of law, raided the residential premises of the petitioner to arrest the petitioner. However, since the petitioner was not available at the residential premises the Officer-in-charge threatened the wife of the petitioner for her arrest, since the wife of the petitioner is also one of the partner in the firm. 9. Thereafter a notice under Section 41A of the Code of Criminal Procedure was issued then and there with a direction to appear 5 personally on 17.10.2022. The local police at Ranchi, Jharkhand also did not accede to the request of the local police of Dhamtari Police station in carrying out the arrest of the petitioner which would otherwise be contemptuous to the order/judgment rendered by the Apex Court in the matter of Arnesh Kumar Vs.State of Bihar. Hence, the petitioner has filed the present petition. 10. Learned counsel for the petitioner submits that the respondent No.3 did not comply with the terms and conditions of Clause 7.1 of the agreement and pursuant to the order passed by this Court on 30.01.2025, additional documents have been filed stating that the respondent No.3 was invited to give their orders. This letter of 01.02.2025 was replied by them on 07.03.2025 after 37 days and thereafter they stated that the label of the petitioner is not registered. He submits that their label M/s. Nilaai Syndicates is registered with the Chhattisgarh State and the Chhattisgarh Excise Department has granted permission to the petitioner to make supply. 11. It is further submitted by the learned counsel for the petitioner that he is praying for quashing of the FIR on the ground that in the earlier order, the terms and conditions of clause 7.1 of the agreement has been quoted which reads as under: “7.1. DISTRIBUTOR represent and warrants that it has obtained all Permits, licenses, registrations and other approvals required by every national, local or municipal government or agency, in respect of the performance of DISTRIBUTOR’s obligations under this Agreement.” 12. Secondly, there is an arbitration clause because the money was taken by the petitioner and has not supplied but the petitioner was 6 always ready and willing to make the supply. The dispute is that as per the submission of the counsel for the respondent No.3, the petitioner has created the bottlings, labels to be supplied in the State of Chhattisgarh because in every State when a supply is to be effected, a new label has to be created because printing, boxing are separate and all these expenses are carried out by the petitioner but the respondent No.3 did not place the order and therefore the allegation that the petitioner had taken the amount in advance and did not make the supply is false. He submits that the order has bee passed on 30.01.2025, he had written to the respondent on 1st February 2025 and they took time and after 37 days, the reply was filed on 7th March 2025 that the label is not registered. The Excise policy was changed on 24th of March 2025 and till that time, the petitioner has registered the application for renewal. He submits that 45 days from the last order having already lapsed and now it is not open for them to make allegation that the petitioner is at fault. 13. Learned State counsel submits that since the wife of the petitioner is also a partner of the firm and CEO, she may also be made accused. The petitioner is not cooperating in the investigation. He submits that in the present petition, the respondent No.3 has lodged a written complaint at police station Dhamtari, alleging that the firm Nilaai Syndicates caused cheating and forgery and had taken Rs. 2.55 crores. Pursuant to the said complaint, a preliminary enquiry was conducted and the documents have been collected and statement of the complainant has been recorded and offence under Section 420 IPC has been made out against the petitioner. On the basis of the said report, FIR was lodged 7 and the matter is under investigation. He submits that since the investigation is going on and the petitioner has been absconding, the instant petition is premature and therefore the present is not a fit case to quash the FIR and the same is liable to be dismissed. He submits that the FIR could be quashed in the exceptional circumstances under which the inherent jurisdiction may been extended, namely, (I) to give effect to an order under the Code (ii) to prevent abuse of the process of court and (iii) to otherwise secure the ends of justice. He submit that the petition is not maintainable on the ground of alternative and efficacious remedy and without availing the same the petitioner is seeking indulgence by filing petition under Section 482 Cr.P.C. Lastly, he submits that based on the investigation and the evidence collected during the course of investigation, a case has been registered against the petitioner, as such there is no illegality or infirmity on the part of the respondent State. Thus, the petition deserves to be dismissed. 14. Learned counsel for respondent No.3 submits that after the order passed by this Court on 30.01.2025, he had approached the Excise Department and the CSMCL and as on date, the company as well as the registration of labels have not been registered with the Excise Department. He submits that they have received documents after applying through the RTI and so far as 800 labels were registered but the labels of the petitioner/company has not been registered and therefore without registration under the Chhattisgarh Excise Foreign Rules 1996, the purchase order cannot be procured and this has been communicated to the petitioner/firm. He further submits that an amount of Rs. 2.55 crores was taken in the name of investment. He submits that the petitioner has made an agreement in the name of Master Distributor 8 in the name of JAAT BEVERAGES PRIVATE LIMITED. 15. We have heard learned counsel for the parties and perused the material available on record including the impugned FIR. 16. The legal position on the issue of quashing of criminal proceedings is well-settled that the jurisdiction to quash a complaint, FIR or a charge-sheet should be exercised sparingly and only in exceptional cases and Courts should not ordinarily interfere with the investigations of cognizable offences. However, where the allegations made in the FIR or the complaint even if taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused, the FIR or the charge-sheet may be quashed in exercise of powers under Article 226 or inherent powers under Section 482 of the Cr.P.C. 17. In the well notable judgment reported in AIR 1992 SC 605 State of Haryana and others Vs. Ch. Bhajan Lal, the Apex Court held that those guidelines should be exercised sparingly and that too in the rarest of rare cases. Guidelines are as follows: “(1) Where the allegations made in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety to do not prima facie constitute any offence or make out a case against the accused. (2) Where the allegations in the First Information Report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 156(2) of the Code. (3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the 9 commission of any offence and make out a case against the accused. (4) Where, the allegations in the FIR 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 155(2) of the Code. (5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can every reach a just conclusion that there is sufficient ground for proceeding against the accused. (6) Where there is an express legal 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 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 ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge." 18. In case of Rupan Deol Bajaj v. K.P.S. Gill; reported in (1995) SCC (Cri) 1059, Rajesh Bajaj v. State of NCT of Delhi; reported in (1999) 3 SCC 259 and Medchl Chemicals & Pharma (P) Ltd.v. Biological E Ltd. & Ors; reported in 2000 SCC (Cri) 615, the Apex Court clearly held that if a prima facie case is made out disclosing the ingredients of the offence, Court should not quash the complaint. However, it was held that if the allegations do not constitute any offence as alleged and appear to be patently absurd and improbable, Court should not hesitate to quash the complaint. The note of caution was reiterated that while considering such petitions the Courts should be very circumspect, conscious and careful. Thus, there is no controversy 10 about the legal proposition that in case a prima facie case is made out, the FIR or the proceedings in consequence thereof cannot be quashed. 19. Very recently in Neharika Infrastructure Pvt. Ltd. Vs. State of Maharashtra and others : 2021 SCC OnLine SC 315, the Apex Court has observed that the power of quashing should be exercised sparingly with circumspection in the rarest of rare cases. While examining an F.I.R./complaint, quashing of which is sought, the Court cannot inquire about the reliability, genuineness, or otherwise of the allegations made in the F.I.R./complaint. The power under Section 482 Cr.P.C. is very wide, but conferment of wide power requires the Court to be cautious. The Apex Court has emphasized that though the Court has the power to quash the F.I.R. in suitable cases, the Court, when it exercises power under Section 482 Cr.P.C., only has to consider whether or not the allegations of F.I.R. disclose the commission of a cognizable offence and is not required to consider the case on merit. 20. Therefore, it is very well settled that criminal proceedings maliciously instituted with ulterior motives can be quashed by this Court while exercising the power under Section 482 Cr.P.C. 21. In the present case, it appears that the dispute is commercial in nature leading to claims from either side and thus, from the overall scrutiny of the FIR it is clear that it is purely a dispute of civil nature between the complainant and the petitioner herein and there is a comprehensive remedy of arbitration clause available under the Regulations. Hon’ble Supreme Court dealing with the issue in Vinod Natesan v. State of Kerala, (2019) 2 SCC 401 has observed that there was no criminality on part of the accused and a civil dispute is tried to be 11 converted into a criminal dispute. Thus to continue the criminal proceedings against the accused would be an abuse of the process of law. Relevant Para of the said judgment is quoted as below:- “10.Having heard the appellant as party in person and the learned advocates appearing on behalf of the original accused as well as the State of Kerala and considering the judgment¹ and order passed by the High Court, we are of the opinion that the learned High Court has not committed any error in quashing the criminal proceedings initiated by the complainant. Even considering the allegations and averments made in the FIR and the case behalf of the appellant, it cannot be said that the ingredients of Sections 406 and 420 are at all satisfied. The dispute between the parties at the most can be said to be the civil dispute and it is tried to be converted into a criminal dispute. Therefore, we are also of the opinion that continuing the criminal proceedings against the accused will be an abuse of process of law and, therefore, the High Court has rightly quashed the criminal proceedings. Merely because the original accused might not have paid the amount due and payable under the agreement or might not have paid the amount in lieu of month's notice before terminating the agreement by itself cannot be said to be a cheating and/or having committed offence under Sections 406 and 420 IPC as alleged. We are in complete agreement with the view taken by the High Court.” 22. Recently, in Sachin Garg v. State of U.P., 2024 SCC OnLine SC 82 the Apex Court reiterated its view that a commercial dispute, which ought to have been resolved through the forum of Civil Court has been given criminal colour by lifting from the penal code certain words or phrases and implanting them in a criminal complaint. Relevant para of the said judgment is quoted as below:- “20. While it is true that at the stage of issuing summons a magistrate only needs to be satisfied with a prima facie case for taking cognizance, the duty of the magistrate is also to be satisfied whether there is sufficient ground for proceeding, 12 as has been held in the case of Jagdish Ram (supra). The same proposition of law has been laid down in the case of Pepsi Foods Ltd. v. Special Judicial Magistrate[(1998) 5 SCC 749]. The learned Magistrate's order issuing summons records the background of the case in rather longish detail but reflects his satisfaction in a cryptic manner. At the stage of issue of summons,detailed reasoning as to why a Magistrate is issuing summons, however, is not necessary. But in this case, we are satisfied that the allegations made by the complainant do not give rise to the offences for which the appellant has been summoned for trial. A commercial dispute, which ought to have been resolved through the forum of Civil Court has been given criminal colour by lifting from the penal code certain words or phrases and implanting them in a criminal complaint. The learned Magistrate here failed to apply his mind in issuing summons and the High Court also failed to exercise its jurisdiction under Section 482 of the 1973 Code to prevent abuse of the power of the Criminal Court. 21. It is true that the appellant could seek discharge in course of the proceeding itself before the concerned Court, but here we find that nocase at all has been made out that would justify invoking the machinery of the Criminal Courts. The dispute, per se, is commercial in nature having no element of criminality.” 23. Accordingly, the instant petition is allowed. The impugned First Information Report No. 0337/2022 registered at Police Station Dhamtari, District Dhamtari, CG for the offence punishable under Section 420 of IPC against the petitioner and entire criminal proceedings pursuant to impugned FIR are hereby quashed. Sd/- Sd/- (Arvind Kumar Verma) (Ramesh Sinha) Judge Chief Justice SUGUNA DUBEY Digitally signed by SUGUNA DUBEY Date: 2025.04.19 14:53:21 +0530