- 1 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR CRIMINAL PETITION NO. 3983 OF 2025 (482(Cr.PC) / 528(BNSS)-) BETWEEN: 1. DR.K.S. MUKUNDA RAO (SRI MUKUNDA RAO IN IMPUGNED COMPLAINT AND MUKUNDARAO IN IMPUGNED FIR) AGED ABOUT 74 YEARS S/O LATE K.H. SATYANARAYANA RAO DIRECTOR OF PATANJALI HOSPITALS PVT. LTD. RESIDENT OF NO. 6, GOKULA, BHEEMASAMUDRA ROAD 2ND STAGE, DHAVALGIRI EXTENSION, CHITRADURGA- 577 501 2. SMT. LATHA M RAO, (SMT. LATHA RAO K.S. IN IMPUGNED COMPLAINT A LATHARAO IN IMPUGNED FIR) W/O DR. K.S. MUKUNDA RAO AGED ABOUT 62 YEARS (AGE INCORRECTLY STATED AS 63 IN IMPUGNED COMPLAINT AND FIR) DIRECTOR OF PATANJALI HOSPITALS PVT. LTD. R/AT NO 6, GOKULA, BHEEMASAMUDRA ROAD 2ND STAGE, DHAVALAGIRI EXTENSION CHITRADURGA 577 501 3. DR. NIDHI MUKUNDA RAO NIDHI MUKUNDARAO IN IMPUGNED FIR) DAUGHTER OF DR. K.S. MUKUNDA RAO AGED ABOUT 31 YEARS RESIDENT OF NO.6, GOKULA, BHEEMASAMUDRA ROAD, 2ND STAGE DHAVALGIRI EXTENSION CHITRADURGA- 577 501. …PETITIONERS (BY SRI.MANU PRABHAKAR KULKARNI.,A/W SRI ABHILASH VAIDYANATHAN & SRI.SAMJYOR LEPCHA., ADVOCATES) Digitally signed by CHANDANA B M Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 AND: 1. THE STATE OF KARNATAKA THROUGH CHITRADURGA TOWN POLICE STATION DISTRICT POLICE OFFICE OFFICE OF TURUVANUR ROAD MANIYUR CHITRADURGA KARNATAKA - 577 501 REPRESENTED BY THE STATE PUBLIC PROSECUTOR BENGALURU – 560 001. 2. THOYAJAKSHI BAI S. W/O.VENKATASWAMY T.M AGED ABOUT 65 YEARS DIRECTOR OF PATANJALI HOSPITAL RESIDING AT NO. 03, 'INY' DAVALAGIRI BADAVANE BHEEMASAMUDRA ROAD CHITRADURGA - 577 501. …RESPONDENTS (BY SRI.CHANNAPPA ERAPPA .,HCGP FOR R-1; NOTICE SERVED TO R-2 & UNREPRESENTED) THIS CRL.P FILED U/S 482 CR.PC (FILED U/S 528 BNSS) PRAYING TO QUASH THE FIR IN CR.NO.40/2025 DATED 01.03.2025 REGISTERED BY CHITRADURGA TOWN POLICE STATION UNDER SEC.316(2),318(4) AND 3(5) OF THE BNS 2023(ANNEXURE-A) THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR - 3 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 ORAL ORDER In this petition, petitioners have sought for the following reliefs:- “ (A) Quash the First Information Report in Crime No.0040/2025 dated: 01.03.2025 registered by Chitradurga Town Police Station under Sections 316(2), 318(4) and 3(5) of the Bharatiya Nyaya Sanhita, 2023 (Annexure-‘A’); (B) Quash the Complaint in PCR No.57/2025 on the file of the Ld. Prl.Civil Judge (Jr.Dn) and JMFC Court, Chitradurga (Annexure-‘B’); (c) Quash and set aside the order dated: 30.01.20225 passed by the Ld. Prl.Civil Judge and JMFC Court, Chitradurga in PCR No.57/2025 (Annexure-‘C’) ; and (d) Pass any other orders as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case, and interests of justice.” 2. A perusal of the material on record will indicate that on 15.01.2025, 2nd respondent – complainant filed a private complaint in PCR No. 57/2025 against the petitioners – accused Nos.1 to 3 for alleged offences punishable under Sections 316 and 303 of BNS, 2023. On 30.01.2025, the trial court passed the impugned order referring the matter to the 1st respondent – police for investigation under Section 175(3) of BNSS,2023 and called for a - 4 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 report and posted the matter to 28.03.2025. In pursuance of the aforesaid order, the 1st respondent -police registered the impugned FIR in Crime No.40/2025 dated 01.03.2025 against the petitioners for alleged offences punishable under Sections 316(2), 318(4) and 3(5) of BNS, 2023. Aggrieved by the impugned complaint in PCR No.57/2025 and the impugned order passed by the trial court 30.01.2025 and impugned FIR, the petitioners are before this Court by way of the present petition. 3. Heard learned counsel for the petitioners and learned HCGP for 1st respondent – Police and and perused the material on record. The 2nd respondent – complainant having been served with the notice of this petition has chosen to remain unrepresented and has not contested the petition. 4. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioners invited my attention to the impugned order dated 30.01.2025 passed by the trial court referring the mater for investigation in order to point out that the said order was contrary to the provisions contained in Section 175(3) of BNSS, 2023, apart from being a non-speaking and unreasoned order, without - 5 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 application of mind and the same deserves to be quashed. It was submitted that along with the private complaint, necessary affidavit had not been filed by the 2nd respondent as required in law. It was further submitted that in addition to the fact that the impugned complaint did not make out the alleged offences of cheating and criminal breach of trust qua the petitioners, both the offences of cheating and criminal breach of trust cannot co-exist simultaneously and the impugned complaint seeking to give a criminal colour to the existing civil dispute between the parties was an abuse of process of law and the same deserve to be quashed. In support of his submissions, learned counsel for the petitioners has placed reliance upon the following judgments:- (i) Om Prakash Ambadkar vs. State of Maharashtra - 2025 SCC OnLine SC 238; (ii) Swarnalata Jena vs. State of Odisha - 2025 SCC OnLine Ori 278; (iii) Naresh Kumar vs. State of Karnataka - 2024 SCC OnLine SC 268; (iv) Usha Chakraborty & Others vs. State of West Bengal - 2023 SCC OnLine SC 90; - 6 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 (v) Mitesh Kumar J. Sha vs. State of Karnataka - (2022) 14 SCC 572; (vi) Paramajeet Batra vs. State of Uttarkhand - (2013) 11 SCC 673; (vii) Delhi Race Club (1940) Ltd. Vs. State of Uttar Pradesh - (2024) 10 SCC 690; (viii) Vijay Kumar Ghai vs. State of West Bengal - (2022) 7 SCC 124; (ix) Priyanka Srivastava vs. State of U.P., (2015) 6 SCC 287. 5. Per contra, learned HCGP for the 1st respondent submits that there is no merit in the petition and that the same is liable to be dismissed. As stated supra, the 2ndrespondent - complainant having been served with the notice of this petition has not chosen to contest the petition. 6. A perusal of the material on record will indicate that the petitioners 1 and 2 are husband and wife having incorporated M/s.Patanjali Hospital Pvt. Ltd., a company incorporated under the Companies Act, 1956 and are in the business of running and operating Patanjali Hospital. The petitioners 1 and 2 are also - 7 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 Directors / shareholders of the company and petitioner No.3 is their daughter. The 2nd respondent – complainant was also one of the Directors of the said company having been appointed on 18.08.2003, during which period, she joined the said hospital as a Gynaecologist consultant. 7. On 01.01.2019, petitioners 1 and 2 entered into a partnership agreement with 2nd respondent and her son Mr.Bipin V.Mood to constitute partnership firm under the name and style M/s.Venus Pharma which was initially being carried on as a proprietary concern by petitioner No.1. On 31.12.2019, a rent agreement was entered into by the said partnership with the aforesaid company to operate a Pharmacy within the premises of the Hospital. It was contended by the petitioners that when the 2nd respondent started illegally diverting patients of the said hospital to other clinics / hospital taking undue advantage of its goodwill and reputation and also started siphoning of monies of the hospital, petitioners confronted 2nd respondent, who filed the false and frivolous company petition in Co.P.No.127/2023 dated 29.09.2023 before the NCLT, Bangalore. The interim order sought for by the 2nd respondent was declined by the NCLT on 01.05.2025 and - 8 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 confirmed by the NCLAT in an appeal filed by the 2nd respondent on 17.06.2025. 8. The 2nd respondent also filed a complaint against 1st petitioner on 19.03.2024 before the Chitradurga police station and 1st petitioner also filed a complaint against the 2nd respondent on 27.03.2024 which culminated in a Non-Cognizable Report (NCR) being filed by the said police authorities on 13.04.2024. 9. The aforesaid company M/s.Patanjali Hospitals Pvt. Ltd., instituted a civil suit in O.S.No.92/2024 dated 15.04.2024,in which, civil court passed an ad-interim ex-parte order of temporary injunction against the 2nd respondent restraining her from carrying out and continuing competing business with that of the Hospital. The said suit is pending adjudication even as on today. 10. The aforesaid Patanjali Hospital also issued a Notice dated 28.08.2024 to the partnership firm M/s.Venus Pharma terminating its tenancy and calling upon the Firm to vacate the Hospital premises. The 2nd respondent filed Com.A.A.No.1/2024 against petitioners 1 and 2 seeking to restrain petitioners from giving effect to the aforesaid termination notice dated 28.08.2024 and for other reliefs. Though an ad-interim ex-parte order of - 9 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 temporary injunction was initially granted in favour of 2nd respondent on 09.09.2024, the Commercial court dismissed Com.A.A.No.1/2024 vide order dated 15.03.2025, thereby rejecting the claim of the 2nd respondent. Meanwhile, petitioners 1 and 2 having issued a notice of dissolution dated 16.11.2024 to the 2nd respondent and her son for dissolution of the partnership firm M/s.Venus Pharma, the petitioners also filed Com.A.A.No.1/2025 on 03.02.2025 against the 2nd respondent and her son which was partly allowed by the aforesaid common order dated 15.03.2025 passed by the Commercial court. 11. The 2nd respondent filed one more complaint dated 31.08.2024 against petitioners 1 and 2 and one Tarakari Basappa Prakash for alleged offences punishable under the SC/ST (PoA) Act, 1989 and Sections 3(5), 351(2) and 352 of BNS, 2023. The said complaint was registered as an FIR in Crime No.127/2024 dated 04.09.2024 which was challenged by the petitioners in Crl.P.No.10790/2024 and allowed by this Court vide final order dated 01.04.2025, thereby quashing the said proceedings against the petitioners and accused No.3. - 10 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 12. Meanwhile, the company issued a termination notice dated 26.12.2024 terminating the services of the 2nd respondent as a consultant of the Hospital. Immediately thereafter, the 2nd respondent filed a complaint dated 27.12.2024 before the 1st respondent – Police authorities. So also, the 2nd respondent issued an Arbitration notice along with her son dated 08.12.2024 to the petitioners 1 and 2, who issued a reply dated 06.01.2025. 13. In the midst of the aforesaid civil and criminal disputes between the parties, including arbitration and NCLT / NCLAT proceedings, the 2nd respondent filed the impugned complaint alleging cheating and breach of trust by the petitioners. In the backdrop of the civil arbitration and company disputes between the petitioners and 2nd respondent, it is clear that the 2nd respondent seeks to convert an essentially, overwhelmingly and predominantly civil dispute by giving the same a criminal colour / texture / flavour which is impermissible in law and the civil dispute between the 2nd respondent and the petitioners which is disguised and masquerading as a criminal action is an abuse of process of law and the same deserves to be quashed. - 11 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 14. In Naresh Kumar’s case supra, the Apex Court held as under:- “ 5. Under these circumstances, we are of the considered view that this is a case where the inherent powers should have been exercised by the High Court under Section 482 of the Criminal Procedure Code as the powers are there to stop the abuse of the process and to secure the ends of justice. 6. In the case of Paramjeet Batra v. State of Uttarakhand, (2013) 11 SCC 673, this Court recognized that although the inherent powers of a High Court under Section 482 of the Code of Criminal Procedure should be exercised sparingly, yet the High Court must not hesitate in quashing such criminal proceedings which are essentially of a civil nature. This is what was held: “12. While exercising its jurisdiction under Section 482 of the Code the High Court has to be cautious. This power is to be used sparingly and only for the purpose of preventing abuse of the process of any court or otherwise to secure ends of justice. Whether a complaint discloses a criminal offence or not depends upon the nature of facts alleged therein. Whether essential ingredients of criminal offence are present or not has to be judged by the High Court. A complaint disclosing civil transactions may also have a criminal texture. But the High Court must see whether a dispute which is essentially of a civil nature is given a cloak of criminal offence. In such a situation, if a civil remedy is available and is, in fact, adopted as has happened in this case, the High Court should not hesitate to quash the criminal proceedings to prevent abuse of process of the court.” 7. Relying upon the decision in Paramjeet Batra (supra), this Court in Randheer Singh v. State of U.P., (2021) 14 SCC 626, observed that criminal proceedings - 12 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 cannot be taken recourse to as a weapon of harassment. In Usha Chakraborty v. State of West Bengal, 2023 SCC OnLine SC 90, relying upon Paramjeet Batra (supra) it was again held that where a dispute which is essentially of a civil nature, is given a cloak of a criminal offence, then such disputes can be quashed, by exercising the inherent powers under Section 482 of the Code of Criminal Procedure. 8. Essentially, the present dispute between the parties relates to a breach of contract. A mere breach of contract, by one of the parties, would not attract prosecution for criminal offence in every case, as held by this Court in Sarabjit Kaur v. State of Punjab, (2023) 5 SCC 360. Similarly, dealing with the distinction between the offence of cheating and a mere breach of contractual obligations, this Court, in Vesa Holdings (P) Ltd. v. State of Kerala, (2015) 8 SCC 293, has held that every breach of contract would not give rise to the offence of cheating, and it is required to be shown that the accused had fraudulent or dishonest intention at the time of making the promise. 9. In the case at hand, the dispute between the parties was not only essentially of a civil nature but in this case the dispute itself stood settled later as we have already discussed above. We see no criminal element here and consequently the case here is nothing but an abuse of the process. We therefore allow the appeal and set aside the order of the High Court dated 02.12.2020. The criminal proceedings arising out of FIR No. 113 of 2017 will hereby stand quashed. - 13 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 15. In Usha Chakraborty’s case supra, the Apex Court held as under:- “ 15. The materials on record pertaining to the said pleadings instituted in the civil suit, produced in this proceeding would reveal that the respondent was in fact ousted from the membership of the trust. In the counter- affidavit filed in this proceeding, the respondent has virtually admitted the pendency of the suit filed against his removal from the post of Secretary and the trusteeship and its pendency. The factum of passing of adverse orders in the interlocutory applications in the said civil suit as also the prima facie finding and conclusion arrived at by the civil court that the respondent stands removed from the post of Secretary and also from the trusteeship are also not disputed therein. Then, the question is why would the respondent conceal those relevant aspects? The indisputable and undisputed facts (admitted in the counter-affidavit by the respondent) would reveal the existence of the civil dispute on removal of the respondent from the post of Secretary of the school as also from the trusteeship. Obviously, it can only be taken that since the removal from the office of the Secretary and the trusteeship was the causative incident, he concealed the pendency of the civil suit to cover up the civil nature of the dispute. 16. By non-disclosure the respondent has, in troth, concealed the existence of a pending civil suit between him and the appellants herein before a competent civil court which obviously is the causative incident for the respondent's - 14 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 allegation of perpetration of the aforesaid offences against the appellants. We will deal with it further and also its impact a little later. There cannot be any doubt with respect to the position that in order to cause registration of an FIR and consequential investigation based on the same the petition filed under Section 156(3) Cr.PC, must satisfy the essential ingredients to attract the alleged offences. In other words, if such allegations in the petition are vague and are not specific with respect to the alleged offences it cannot lead to an order for registration of an FIR and investigation on the accusation of commission of the offences alleged. As noticed hereinbefore, the respondent alleged commission of offences under Sections 323, 384, 406, 423, 467, 468, 420 and 120-BIPC against the appellants. A bare perusal of the said allegation and the ingredients to attract them, as adverted to hereinbefore would reveal that the allegations are vague and they did not carry the essential ingredients to constitute the alleged offences. There is absolutely no allegation in the complaint that the appellants herein had caused hurt on the respondent so also, they did not reveal a case that the appellants had intentionally put the respondent in fear of injury either to himself or another or by putting him under such fear or injury, dishonestly induced him to deliver any property or valuable security. The same is the position with respect to the alleged offences punishable under Sections 406, 423, 467, 468, 420 and 120-BIPC. The ingredients to attract the alleged offence referred to hereinbefore and the nature of the allegations contained in the application filed by the respondent would undoubtedly - 15 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 make it clear that the respondent had failed to make specific allegation against the appellants herein in respect of the aforesaid offences. The factual position thus would reveal that the genesis as also the purpose of criminal proceedings are nothing but the aforesaid incident and further that the dispute involved is essentially of civil nature. The appellants and the respondents have given a cloak of criminal offence in the issue. In such circumstance when the respondent had already resorted to the available civil remedy and it is pending, going by the decision in Paramjeet Batra [Paramjeet Batra v. State of Uttarakhand, (2013) 11 SCC 673 : (2012) 4 SCC (Cri) 76] , the High Court would have quashed the criminal proceedings to prevent the abuse of the process of the Court but for the concealment. 17. In the aforesaid circumstances, coupled with the fact that in respect of the issue involved, which is of civil nature, the respondent had already approached the jurisdictional civil court by instituting a civil suit and it is pending, there can be no doubt with respect to the fact that the attempt on the part of the respondent is to use the criminal proceedings as weapon of harassment against the appellants. The indisputable facts that the respondent has filed the pending title suit in the year 2015, he got no case that he obtained an interim relief against his removal from the office of Secretary of the School Managing Committee as also the trusteeship, that he filed the stated application for an order for investigation only in April 2017 together with absence of a case that despite such removal he got a right to get informed of the affairs of the school and also the trust, - 16 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 would only support the said conclusion. For all these reasons, we are of the considered view that this case invites invocation of the power under Section 482CrPC to quash the FIR registered based on the direction of the Magistrate Court in the aforestated application and all further proceeding in pursuance thereof. Also, we have no hesitation to hold that permitting continuance of the criminal proceedings against the appellants in the aforesaid circumstances would result in abuse of the process of court and also in miscarriage of justice.” 16. In Mitesh Kumar’s case supra, the Apex Court held as under:- “Whether the dispute is one of entirely civil nature and therefore liable to be quashed? 38. Having considered the relevant arguments of the parties and decisions of this Court we are of the considered view that existence of dishonest or fraudulent intention has not been made out against the appellants. Though the instant dispute certainly involves determination of issues which are of civil nature, pursuant to which Respondent 2 has even instituted multiple civil suits, one can by no means stretch the dispute to an extent, so as to impart it a criminal colour. As has been rightly emphasised upon by this Court, by way of an observation rendered in Indian Oil Corpn. v. NEPC India Ltd. [Indian Oil Corpn. v. NEPC India Ltd., (2006) 6 SCC 736 : (2006) 3 SCC (Cri) 188] , as under : (SCC p. 749, para 14) - 17 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 “14. While no one with a legitimate cause or grievance should be prevented from seeking remedies available in criminal law, a complainant who initiates or persists with a prosecution, being fully aware that the criminal proceedings are unwarranted and his remedy lies only in civil law, should himself be made accountable, at the end of such misconceived criminal proceedings, in accordance with law.” 39. It was also observed : (Indian Oil Corpn. case [Indian Oil Corpn. v. NEPC India Ltd., (2006) 6 SCC 736 : (2006) 3 SCC (Cri) 188] , SCC pp. 748-49, para 13) “13. While on this issue, it is necessary to take notice of a growing tendency in business circles to convert purely civil disputes into criminal cases. This is obviously on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. … There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure though criminal prosecution should be deprecated and discouraged.” 40. On an earlier occasion, in G. Sagar Suri v. State of U.P. [G. Sagar Suri v. State of U.P., (2000) 2 SCC 636 : 2000 SCC (Cri) 513] , this Court has also observed : (SCC p. 643, para 8) “8. Jurisdiction under Section 482 of the Code has to be exercised with great care. In exercise of its jurisdiction the High Court is not to examine the matter superficially. It is to be seen if a matter, which is essentially of civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing process a criminal court has to exercise a great deal of caution. For the accused it is a serious matter. This Court has laid certain principles on the basis of which the High Court is to exercise its jurisdiction under Section 482 of the Code. Jurisdiction under this section has to be exercised to prevent abuse of the process of any court or otherwise to secure the ends of justice.” - 18 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 41. Furthermore, in the landmark judgment of State of Haryana v. Bhajan Lal [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] regarding exercise of inherent powers under Section 482CrPC, this Court has laid down the following categories of instances wherein inherent powers of the Court can be exercised in order to secure the ends of justice. These are : (SCC pp. 378-79, para 102) “102. … (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 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 155(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 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 ever 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 Act concerned (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a - 19 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 specific provision in the Code or the Act concerned, 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.” 42. Applying this dictum to the instant factual matrix, it can be safely concluded that the present case clearly falls within the ambit of first, third and fifth category of the seven categories enlisted in the abovesaid judgment. The case therefore warrants intervention by this Court, and the High Court has erred in dismissing the petition filed by the appellants under Section 482CrPC. We find that there has been attempt to stretch the contours of a civil dispute and thereby essentially impart a criminal colour to it. 43. Recently, this Court in Randheer Singh v. State of U.P. [Randheer Singh v. State of U.P., (2021) 14 SCC 626] , has again reiterated the long standing principle that criminal proceedings must not be used as instruments of harassment. The Court observed as under : (SCC p. 641, para 33) “33. … There can be no doubt that jurisdiction under Section 482CrPC should be used sparingly for the purpose of preventing abuse of the process of any court or otherwise to secure the ends of justice. Whether a complaint discloses criminal offence or not depends on the nature of the allegation and whether the essential ingredients of a criminal offence are present or not has to be judged by the High Court. There can be no doubt that a complaint disclosing civil transactions may also have a criminal texture. The High Court has, however, to see whether the dispute of a civil nature has been given colour of criminal offence. In such a situation, the High Court should not hesitate to quash the criminal proceedings as - 20 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 held by this Court in Paramjeet Batra [Paramjeet Batra v. State of Uttarakhand, (2013) 11 SCC 673 : (2012) 4 SCC (Cri) 76] extracted above.” 44. Moreover, this Court has at innumerable instances expressed its disapproval for imparting criminal colour to a civil dispute, made merely to take advantage of a relatively quick relief granted in a criminal case in contrast to a civil dispute. Such an exercise is nothing but an abuse of the process of law which must be discouraged in its entirety.” 17. In Paramjeet Batra’s case supra, the Apex court held as under:- “12. While exercising its jurisdiction under Section 482 of the Code the High Court has to be cautious. This power is to be used sparingly and only for the purpose of preventing abuse of the process of any court or otherwise to secure ends of justice. Whether a complaint discloses a criminal offence or not depends upon the nature of facts alleged therein. Whether essential ingredients of criminal offence are present or not has to be judged by the High Court. A complaint disclosing civil transactions may also have a criminal texture. But the High Court must see whether a dispute which is essentially of a civil nature is given a cloak of criminal offence. In such a situation, if a civil remedy is available and is, in fact, adopted as has happened in this case, the High Court should not hesitate to quash the criminal proceedings to prevent abuse of process of the court. 13. As we have already noted, here the dispute is essentially about the profit of the hotel business and its - 21 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 ownership. The pending civil suit will take care of all those issues. The allegation that forged and fabricated documents are used by the appellant can also be dealt with in the said suit. Respondent 2's attempt to file similar complaint against the appellant having failed, he has filed the present complaint. The appellant has been acquitted in another case filed by Respondent 2 against him alleging offence under Section 406 IPC. Possession of the shop in question has also been handed over by the appellant to Respondent 2. In such a situation, in our opinion, continuation of the pending criminal proceedings would be abuse of the process of law. The High Court was wrong in holding otherwise.” 18. In the instant case, as stated supra, apart from the fact that there were other criminal proceedings between the petitioners and 2nd respondent, the pendency of various civil, commercial and arbitration proceedings are sufficient to come to the conclusion that the 2nd respondent is attempting to give a criminal colour to the said disputes by filing the impugned complaint, which deserves to be quashed. 19. As stated supra, proceedings in Crime No.127/2024 registered on the basis of a complaint filed by the 2nd respondent dated 04.09.2024 were quashed by this Court in Crl.P.No.10790/2024 dated 01.04.2025 as hereunder:- - 22 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 “ 1. The petitioners—Accused Nos.1 to 3 challenge the registration of the FIR in Crime No.127/2024 for offences punishable under Sections 3(1)(r)(s) of the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989, and Sections 3(5), 351(2), and 352 of the Bharatiya Nyaya Sanhita, 2023. 2. Respondent No.2 lodged a First Information Report stating that she had been working as a Director at Pathanjali Hospital for the last 10 to 11 months. It is alleged in the complaint that the petitioners were harassing her and preventing her from discharging her duties. The petitioners, with the intention of forcibly evicting Respondent No.2 from the hospital, allegedly closed the Pharmacy, which was entrusted to a Partnership Firm of which Respondent No.2 is one of the partners. 3. On 31.08.2024, Respondent No.2 visited the Pharmacy Shop located within the hospital and found that medicine packets had been thrown outside the Pharmacy Shop. When Respondent No.2 questioned the petitioners about the same, they allegedly abused her with reference to her caste and threatened her with dire consequences. 4. Learned counsel for the petitioners submitted that the alleged incident took place on 31.08.2024, but the FIR was lodged only on 04.09.2024 without providing any plausible explanation for the delay. He further contended that the FIR was filed to wreak vengeance against the petitioners, especially since the agreement executed in favor of the Partnership Firm for running the Pharmacy Shop in the hospital had been terminated. Therefore, he argued, the - 23 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 dispute between the parties is purely civil in nature, but has been given a criminal color. 5. In response, the learned HCGP for the State contended that the FIR discloses the commission of offences alleged against the petitioners, and that the veracity of the allegations requires investigation. He argued that such issues cannot be addressed in this petition and sought dismissal of the petition. 6. The arguments of the learned counsel for both parties have been duly considered. 7. Admittedly, an agreement was executed in favor of the Partnership Firm, of which Respondent No.2 is also a partner, permitting the Firm to run a Pharmacy Shop within the hospital, where the petitioners were Directors along with Respondent No.2. The Company issued a notice on 28.08.2024, calling upon the Partnership Firm to vacate and hand over possession of the premises to the Company following the termination of the agreement. 8. Subsequently, Respondent No.2 lodged the FIR on 04.09.2024, alleging that the petitioners forcibly removed medicines from the Pharmacy Shop, abused her with reference to her caste, and threatened her with dire consequences. 9. Although the alleged incident occurred on 31.08.2024, the FIR was lodged only on 04.09.2024. A perusal of the FIR indicates that, apart from general and omnibus allegations, there are no specific overt acts attributed to each of the petitioners involving caste-based abuse or threats of dire consequences. - 24 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 10. The dispute between the parties appears to relate to the termination of the agreement executed in favor of the Firm for operating the Pharmacy Shop within the hospital. However, the matter has been given a criminal aspect to exert pressure on the petitioners for settlement. In such circumstances, the continuation of the investigation would constitute an abuse of the process of law. 11. Accordingly, I pass the followings; ORDER i. The criminal petition is allowed. ii. The impugned First Information Report in Crime No.127/2024 dated 04.09.2024 registered by Chitradurga Town Police Station is hereby quashed. Pending I.A’s if any, does not survive for consideration and are accordingly disposed of.” 20. So also, the claim of the 2nd respondent against the petitioners and the Hospital was rejected by the NCLT vide order dated 01.05.2025 and confirmed by NCLAT vide order dated 06.06.2025 as hereunder:- Order Dated 01.05.2025 of NCLT “ 1. The Company Petition (CP) 127 of 2023 was posted for hearing on 22.05.2025. It has been taken up on mentioning on behalf of the petitioner for an urgent relief. 2. It has been pointed out that a meeting of the Board of Directors of the company was called vide letter dated - 25 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 29.04.2025 for the purpose of removing the petitioner from the directorship of the company in which a resolution to hold Extraordinary General Meeting on 23.05.2025 for considering the removal of Petitioner from the position of Director of the Respondent No. 1 company. The Forensic Audit only of the cash collections qua the petitioner was conducted with singular motive through a new Auditor without taking services of regular Auditor. The learned Counsel sought interim relief by way of a stay on the EGM to be conducted as per the notice issued on 29.04.2025. 3. During the course of the hearing on 29.04.2025, the respondent's advocate sought to rely on the audit report submitted by Yedida and Associates, CA according to which the total amount collected in cash from patients during the period 01.01.2021 to 31.03.2023 was Rs. 1,38,52,270/-, whereas the amount remitted at the hospital’s cash counter was only Rs. 56,05,900/-, leaving Rs. 82,46,370/- as the amount allegedly retained by Dr. Thoyajaskshi Bai Sakranaik (the petitioner). This amount is alleged to have been misappropriated by her. 4. When the matter was called today, Ld Senior Counsel appeared on behalf of the respondents and stated that multiple cases are pending between the parties before various forums including the Hon’ble Karnataka High Court. Documents with a list have been filed in support of the contention. It was also submitted that the amount retained by the petitioner was over and above the consultancy charges, which have been duly paid. - 26 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 5. He also drew the attention to the patient register, a copy of which has been filed, to substantiate that the audit report submitted by Yedida and Associates is based on this register and is not intended to single out the petitioner, as it also mentions other doctors at pages 4 and 5 of the report. 6. In reply, the learned counsel for the petitioner reiterated the request that if the meeting is held, it would be detrimental to the interest of the petitioner. Since The petitioner is a professional, she attends to her patients elsewhere also with complete knowledge of respondents. 7. We have heard the submissions made on behalf of the parties and perused the relevant material on record. 8. At the outset it is observed that the petitioner has shared selected information in this case. She chose not to disclose the various litigations pending between the parties even during oral submissions. It was only after the learned counsel for the respondents drew our attention to the documents filed on behalf of Respondents No. 2 and 3 that the counsel for the petitioner attempted to offer some explanation. For equitable relief, one has to come with clean hands and open all relevant facts. The petitioner had not expressed any reservation on 22.04.2024 when the resolution to appoint a Forensic Auditor was passed in her presence or soon thereafter. While using the facilities of respondent no.1, the petitioner could not have charged the patients over and above for what they have been billed at the Hospital and yet claim to be oppressed as a minority shareholder. The petitioner’s attending to her patients in - 27 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 other Medical facilities and thereby promoting such facilities may attract section 166 of the Companies act, 2013. 9. In view of this factual position, the prayer on behalf of the petitioner for keeping the proposed EGM of respondent no. 1 on hold, is declined. 10. The Company Petition will be listed for hearing on 24.06.2025 instead of 22.05.2025.” Order Dated 06.06.2025 passed by the NCLAT “ The Appellant is the Applicant to the Proceedings of Company Petition No. 127/BB/2023. She agitates her grievance being aggrieved as against the impugned order dated 01.05.2025, as it has been passed by the Ld. National Company Law Tribunal, Bengaluru Bench, whereby, post hearing of the Company Petition, on 22.05.2025, the Ld. Tribunal had declined to grant an Interim Order prayed for to the effect of keeping the proposal of the proposed EGM of Respondent No. 1 in abeyance. 2. An interlocutory application, which seeks for grant of an interim order in a pending proceeding under Sections 241 & 242 of the Companies Act, 2013, or for that matter, in any judicial proceedings before a court of law engaging deciding a right of a party, is in the nature of an absolutely discretionary remedy, which would be exclusively depending upon the establishment of a fact and the right and the likelihood of prejudice, which will be caused to the applicant who has applied for the grant of such interim order. - 28 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 3. In fact, in the finding which, has been recorded by the Ld. Tribunal while declining to grant the interim order, as against the conduct of the proposed EGM of Respondent No. 1 Company, it has observed that (a) The meeting of the Board of Directors of the company was called vide their letter dated 29.04.2025, in which a resolution to hold the EGM on 23.05.2025, for considering the removal of the Appellant from the Directorship of the Company (Respondent No. 1) was passed. (b) As per, the Audit Report, submitted by the M/s. Yedida and Associates, which was furnished by the Respondent’s Advocate the total amount collected in cash from the patients during the period from 01.01.2021 to 31.03.2023, was Rs 1,38,52,270/-, whereas the amount, remitted into cash counter of the hospital was only Rs. 56,05,900/-, leaving an amount of Rs. 82,46,370/- as allegedly retained by the Appellant which is allegedly misappropriated by her. (c) The Audit Report of M/s. Yedida and Associates is based on the patient register and is not intended to single out the Appellant as it also mentions about the other doctors in the Report. (d) Despite having committed to function as a medical professional with the Respondent Company based on the service contract, the Appellant has engaged herself in taking outside patients and providing them medical services on regular basis which were not permitted by the terms of the contract of employment of the Appellant. - 29 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 (e) The Tribunal has heard the submissions made on behalf of the parties and perused the relevant materials on record. 4. The Ld. Tribunal has further noted that, it has also come on record, that there are various other sets of litigation, which are simultaneously going on between the parties, which would be apparent from the documents which, has been placed on record, which the Appellant chose not to disclose even during oral submissions and thus has not come with clean hands. 5. It has further observed that the resolution to appoint a Forensic Auditor dated 22.04.2024, was not objected by the Appellant till she moved to press upon the stay application for the grant of the interim relief. 6. Ld. Tribunal has further observed that the Appellant had functioned in a fashion detrimental to the interest of the Respondent No. 1, to whom she was contractually bound to render the services by changing over and above what they have been billed at the hospital and therefore she cannot claim to be oppressed and that by attending to patients in other medical facilities and thereby promoting such facilities, may attract Section 166 of the Companies Act, 2013. 7. Looking into the findings as above and particularly the observations that the Appellant has to come with clean hands for grant of equitable relief, the rejection of the prayer for the grant of interim relief cannot be legally faulted with, - 30 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 because the actions of the Appellant have prima facie have resulted in continuous breach of service contract. 8. Besides that, the grant of an interim relief in a judicial proceeding, is absolutely a discretionary remedy depending upon the establishment of the prima facie case. It is not mandatory to exercise discretion by the court exercising the judicial powers, in a manner expected by the Applicant to the proceedings, for the grant of an interim relief. Owing to the apparent commissions and omissions on part of the Appellant as recorded by Ld. Tribunal being apparently in violation to the statute, the proceedings drawn by way of carrying out the proposed Extraordinary General Meeting of the Respondent Company does not appear to suffer from any legal vices. Apart from it, rejection of the interim relief as prayed for, being of an interlocutory nature, will not amount to be an adjudication of any of the rights, which is still a subject matter of the appeal, as it would still be left open to be independently decided after the exchange of pleadings and enabling the parties to lead their evidence. Thus, a denial to grant the interim relief by the impugned order of 01.05.2025 owing to the conduct which, was considered by the Ld. Tribunal as unbecoming of a medical officer for Respondent No. 1, to whom the Appellant owed an allegiance, does not suffer from any legal vices and hence does not call for any interference. 9. Apart from the fact that, it is an interlocutory order, the impugned order is based on sound reasoning, and the equity does not support the case of the Appellant. The appeal is ‘misconceived’ and the same is accordingly ‘rejected’ - 31 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 21. These orders passed by this Court, NCLT and NCLAT would also indicate that continuation of the impugned proceedings qua the petitioners would amount to an abuse of process of law warranting interference by this Court in the present petition. 22. A perusal of the impugned complaint will indicate that the alleged offences of cheating and criminal breach of trust had not been made out by the 2nd respondent whose grievances are civil / commercial in nature and in the absence of the necessary ingredients constituting the aforesaid offences, petitioners cannot be incriminated for the alleged offences as alleged by the 2nd respondent. 23. In Vijaykumar Ghai’s case supra, the Apex Court held as under:- “ 26. At the outset, Respondent 2/complainant alleged that the appellants were responsible for the offence punishable under Sections 420, 405, 406, 120-BIPC. Therefore, it is also imperative to examine the ingredients of the said offences and whether the allegations made in the complaint, read on their face, attract those offences under the Penal Code. 27. Section 405IPC defines “criminal breach of trust” which reads as under: - 32 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 “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”.” The essential ingredients of the offence of criminal breach of trust are: (1) The accused must be entrusted with the property or with dominion over it, (2) The person so entrusted must use that property, or; (3) The accused must dishonestly use or dispose of that property or wilfully suffer any other person to do so in violation, (a) of any direction of law prescribing the mode in which such trust is to be discharged, or; (b) of any legal contract made touching the discharge of such trust. 28. 28. “Entrustment” of property under Section 405 of the Penal Code, 1860 is pivotal to constitute an offence under this. The words used are, “in any manner entrusted with property”. So, it extends to entrustments of all kinds whether to clerks, servants, business partners or other persons, provided they are holding a position of “trust”. A person who dishonestly misappropriates property entrusted to them contrary to the terms of an obligation imposed is liable for a criminal breach of trust and is punished under Section 406 of the Penal Code. - 33 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 29. The definition in the section does not restrict the property to movables or immovables alone. This Court in R.K. Dalmia v. Delhi Admn. [R.K. Dalmia v. Delhi Admn., (1963) 1 SCR 253 : AIR 1962 SC 1821] held that the word “property” is used in the Code in a much wider sense than the expression “movable property”. There is no good reason to restrict the meaning of the word “property” to movable property only when it is used without any qualification in Section 405. 30. In Sudhir Shantilal Mehta v. CBI [Sudhir Shantilal Mehta v. CBI, (2009) 8 SCC 1 : (2009) 3 SCC (Cri) 646] it was observed that the act of criminal breach of trust would, inter alia mean using or disposing of the property by a person who is entrusted with or has otherwise dominion thereover. Such an act must not only be done dishonestly but also in violation of any direction of law or any contract express or implied relating to carrying out the trust. 31. Section 415IPC defines “cheating” which reads as under: “415. Cheating.—Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to “cheat”.” The essential ingredients of the offence of cheating are: - 34 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 1. Deception of any person 2. Deception of any person 2. (a) Fraudulently or dishonestly inducing that person— (i) to deliver any property to any person; or (ii) to consent that any person shall retain any property; or (b) intentionally inducing that person to do or omit to do anything which he would not do or omit if he were no so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property. 32. A fraudulent or dishonest inducement is an essential ingredient of the offence. A person who dishonestly induces another person to deliver any property is liable for the offence of cheating. 33. Section 420IPC defines “cheating and dishonestly inducing delivery of property” which reads as under: “420. Cheating and dishonestly inducing delivery of property.—Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.” 34. Section 420IPC is a serious form of cheating that includes inducement (to lead or move someone to happen) in terms of delivery of property as well as valuable securities. This section is also applicable to matters where the destruction of the property is caused by the way of cheating or inducement. Punishment for cheating is provided under this section which may extend to 7 years and also makes the person liable to fine. - 35 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 35. To establish the offence of cheating in inducing the delivery of property, the following ingredients need to be proved: (i) The representation made by the person was false. (ii) The accused had prior knowledge that the representation he made was false. (iii) The accused made false representation with dishonest intention in order to deceive the person to whom it was made. (iv) The act where the accused induced the person to deliver the property or to perform or to abstain from any act which the person would have not done or had otherwise committed. 36. As observed and held by this Court in R.K. Vijayasarathy v. Sudha Seetharam [R.K. Vijayasarathy v. Sudha Seetharam, (2019) 16 SCC 739 : (2020) 2 SCC (Cri) 454] , the ingredients to constitute an offence under Section 420 are as follows: (i) a person must commit the offence of cheating under Section 415; and (ii) the person cheated must be dishonestly induced to: (a) deliver property to any person; or (b) make, alter or destroy valuable security or anything signed or sealed and capable of being converted into valuable security. Thus, cheating is an essential ingredient for an act to constitute an offence under Section 420IPC. 37. The following observation made by this Court in Uma Shankar Gopalika v. State of Bihar [Uma Shankar Gopalika v. State of Bihar, (2005) 10 SCC 336 : (2006) 2 SCC (Cri) 49] with almost similar facts and circumstances - 36 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 may be relevant to note at this stage : (SCC pp. 338-39, paras 6-7) “6. Now the question to be examined by us is as to whether on the facts disclosed in the petition of the complaint any criminal offence whatsoever is made out much less offences under Sections 420/120-BIPC. The only allegation in the complaint petition against the accused persons is that they assured the complainant that when they receive the insurance claim amounting to Rs 4,20,000, they would pay a sum of Rs 2,60,000 to the complainant out of that but the same has never been paid. … It was pointed out on behalf of the complainant that the accused fraudulently persuaded the complainant to agree so that the accused persons may take steps for moving the consumer forum in relation to the claim of Rs 4,20,000. 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 that there was intention on behalf of the accused persons to cheat which is a condition precedent for an offence under Section 420IPC. 7. In our view petition of complaint does not disclose any criminal offence at all much less any offence either under Section 420 or Section 120-BIPC and the present case is a case of purely civil dispute between the parties for which remedy lies before a civil court by filing a properly constituted suit. In our opinion, in view of these facts allowing the police investigation to continue would amount to an abuse of the process of court and to prevent the same it was just and expedient for the High Court to quash the same by exercising the powers under Section 482CrPC which it has erroneously refused.” 38. There can be no doubt that a mere breach of contract is not in itself a criminal offence and gives rise to the civil liability of damages. However, as held by this Court in - 37 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 Hridaya Ranjan Prasad Verma v. State of Bihar [Hridaya Ranjan Prasad Verma v. State of Bihar, (2000) 4 SCC 168 : 2000 SCC (Cri) 786] , the distinction between mere breach of contract and cheating, which is criminal offence, is a fine one. While breach of contract cannot give rise to criminal prosecution for cheating, fraudulent or dishonest intention is the basis of the offence of cheating. In the case at hand, complaint filed by Respondent 2 does not disclose dishonest or fraudulent intention of the appellants. 39. In Vesa Holdings (P) Ltd. v. State of Kerala [Vesa Holdings (P) Ltd. v. State of Kerala, (2015) 8 SCC 293 : (2015) 3 SCC (Cri) 498] , this Court made the following observation : (SCC pp. 297-98, para 13) “13. It is true that a given set of facts may make out a civil wrong as also a criminal offence and only because a civil remedy may be available to the complainant that itself cannot be ground to quash a criminal proceeding. The real test is whether the allegations in the complaint disclose the criminal offence of cheating or not. In the present case, there is nothing to show 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 420IPC. In our view, the complaint does not disclose any criminal offence at all. Criminal proceedings should not be encouraged when it is found to be mala fide or otherwise an abuse of the process of the court. The superior courts while exercising this power should also strive to serve the ends of justice. In our opinion, in view of these facts allowing the police investigation to continue would amount to an abuse of the process of the court and the High Court committed [Maniprasad v. State of Kerala, 2011 SCC OnLine Ker 4251] an error in refusing to exercise the power under Section 482CrPC to quash the proceedings.” - 38 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 40. Having gone through the complaint/FIR and even the charge-sheet, it cannot be said that the averments in the FIR and the allegations in the complaint against the appellant constitute an offence under Sections 405 and 420IPC, 1860. 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 promise being absent, no offence under Section 420IPC can be said to have been made out. In the instant case, there is no material to indicate that the appellants had any mala fide intention against the respondent which is clearly deductible from the MoU dated 20-8-2009 arrived at between the parties.” 24. In the instant case, as stated earlier, the impugned complaint is bereft of necessary ingredients constituting the offences of cheating and criminal breach of trust and consequently, the impugned proceedings deserve to be quashed on this ground also. 25. A perusal of the impugned complaint will indicate that the 2nd respondent has made allegations of both cheating and criminal breach of trust which cannot co-exist simultaneously as held by the Apex Court in Delhi Race Club’s case supra as hereunder:- - 39 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 “ 26. In Legal Remembrancer v. Abani Kumar Banerji [Legal Remembrancer v. Abani Kumar Banerji, 1950 SCC OnLine Cal 49 : AIR 1950 Cal 437] , a Division Bench of the Calcutta High Court speaking through K.C. Das Gupta, J. (as he then was) held that a Magistrate is not bound to take cognizance of an offence merely because a complaint is filed before him. He is required to carefully apply his mind to the contents of the complaint before taking cognizance of any offence alleged therein. The relevant observations read as under : (SCC OnLine Cal) “… As I read Section 190 of the Code of Criminal Procedure and the subsequent sections, it seems to me to be clear that a Magistrate is not bound to take cognizance of an offence, merely because a petition of complaint is filed before him. Mr Mukherji's argument is that a Magistrate cannot possibly take any action with regard to a petition of complaint, without applying his mind to it, and taking cognizance of the offence mentioned in the complaint necessarily takes place, when the Magistrate's mind is applied to the petition. Consequently Mr Mukherji argues, whenever a Magistrate takes the action, say, of issuing search warrant or asking the police to enquire and to investigate, he has taken cognizance of the case. In my judgment, this is putting a wrong connotation on the words “taking cognizance”. What is “taking cognizance” has not been defined in the Code of Criminal Procedure, and I have no desire now to attempt to define it. It seems to me clear, however, that before it can be said that any Magistrate has taken cognizance of any offence under Section 190(1)(a) of the Code of Criminal Procedure, he must not only have applied his mind to the contents of the petition, but he must have done so for the purpose of proceeding in a particular way as indicated in the subsequent provisions of this Chapter —proceeding under Section 200, and thereafter sending it for enquiry and report under Section 202. When the Magistrate applies his mind not for the purpose of proceeding under the subsequent sections of this Chapter, but for taking action of some other kind e.g. ordering - 40 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 investigation under Section 156(3), or issuing a search warrant for the purpose of the investigation, he cannot be said to have taken cognizance of the offence. My conclusion, therefore, is that the learned Magistrate is wrong in thinking that the Chief Presidency Magistrate was bound to take cognizance of the case as soon as the petition of complaint was filed.” 27. The aforesaid observation of the Calcutta High Court was referred to and relied upon with approval by this Court in its decision in R.R. Chari v. State of U.P. [R.R. Chari v. State of U.P., 1951 SCC 250 : AIR 1951 SC 207] 28. In Tilak Nagar Industries Ltd. v. State of A.P. [Tilak Nagar Industries Ltd. v. State of A.P., (2011) 15 SCC 571 : (2012) 4 SCC (Cri) 645] , this Court held that the power under Section 156(3)CrPC can be exercised by a Magistrate even before he takes cognizance provided the complaint discloses the commission of cognizable offences and if the complaint does not disclose commission of cognizable offences, such an order of the Magistrate directing investigation is liable to be quashed. The relevant observations read as under : (SCC p. 574, paras 11-12) “11. After considering the rival submissions, we are of the view that the contentions of Mr Luthra are correct in view of Section 155(2) of the Code as explained in Bhajan Lal [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] . We are of the opinion that the statutory safeguard which is given under Section 155(2) of the Code must be strictly followed, since they are conceived in public interest and as a guarantee against frivolous and vexatious investigation. 12. The order of the Magistrate dated 21-6-2010 does not disclose that he has taken cognizance. However, power under Section 156(3) can be exercised by the Magistrate - 41 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 even before he takes cognizance provided the complaint discloses the commission of cognizable offence. Since in the instant case the complaint does not do so, the order of the Magistrate stated above cannot be sustained in law and is accordingly quashed.” 29. The aforesaid decision was in context with the power of the Magistrate to order police investigation under Section 156(3)CrPC. What is sought to be conveyed in the said decision is that when the Magistrate orders police investigation under Section 156(3)CrPC he does not take cognizance upon the complaint. It is only upon receipt of the police report that the Magistrate may take cognizance. If at the stage of pre-cognizance, the Magistrate is expected to be careful or to put it in other words, the Magistrate is obliged to look into the complaint threadbare so as to reach to a prima facie conclusion whether the offence is disclosed or not, then he is expected to be more careful when he is actually taking cognizance upon a private complaint and ordering issue of process. 30. The aforesaid aspect could be said to have been completely lost sight of by the High Court, while rejecting the application filed by the appellant herein under Section 482CrPC, seeking quashing of the summoning order. 31. In Mehmood Ul Rehman v. Khazir Mohammad Tunda [Mehmood Ul Rehman v. Khazir Mohammad Tunda, (2015) 12 SCC 420 : (2016) 1 SCC (Cri) 124] , this Court held thus : (SCC p. 430, para 22) “22. … The satisfaction on the ground for proceeding would mean that the facts alleged in the complaint would - 42 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 constitute an offence, and when considered along with the statements recorded, would, prima facie, make the accused answerable before the court. … In other words, the Magistrate is not to act as a post office in taking cognizance of each and every complaint filed before him and issue process as a matter of course. There must be sufficient indication in the order passed by the Magistrate that he is satisfied that the allegations in the complaint constitute an offence and when considered along with the statements recorded and the result of inquiry or report of investigation under Section 202CrPC, if any, the accused is answerable before the criminal court, there is ground for proceeding against the accused under Section 204CrPC, by issuing process for appearance. Application of mind is best demonstrated by disclosure of mind on the satisfaction. … To be called to appear before the criminal court as an accused is serious matter affecting one's dignity, self-respect and image in society. Hence, the process of criminal court shall not be made a weapon of harassment.” 32. The principle of law discernible from the aforesaid decision is that issuance of summons is a serious matter and, therefore, should not be done mechanically and it should be done only upon satisfaction on the ground for proceeding further in the matter against a person concerned based on the materials collected during the inquiry. 33. In the aforesaid circumstances, the next question to be considered is whether a summons issued by a Magistrate can be interfered with in exercise of the power under Section 482CrPC. In the decisions in Bhushan Kumar v. State (NCT of Delhi) [Bhushan Kumar v. State (NCT of Delhi), (2012) 5 SCC 424 : (2012) 2 SCC (Cri) 872] and Pepsi Foods [Pepsi Foods Ltd. v. Special Judicial Magistrate, (1998) 5 SCC 749 : 1998 SCC (Cri) 1400] , this Court held that a petition filed under Section 482CrPC, for - 43 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 quashing an order summoning the accused is maintainable. There cannot be any doubt that once it is held that sine qua non for exercise of the power to issue summons is the subjective satisfaction “on the ground for proceeding further” while exercising the power to consider the legality of a summons issued by a Magistrate, certainly it is the duty of the Court to look into the question as to whether the learned Magistrate had applied his mind to form an opinion as to the existence of sufficient ground for proceeding further and in that regard to issue summons to face the trial for the offence concerned. In this context, we think it appropriate to state that one should understand that “taking cognizance”, empowered under Section 190CrPC, and “issuing process”, empowered under Section 204CrPC, are different and distinct. [See the decision in Sunil Bharti Mittal v. CBI [Sunil Bharti Mittal v. CBI, (2015) 4 SCC 609 : (2015) 2 SCC (Cri) 687] ]. 34. In Sunil Bharti Mittal [Sunil Bharti Mittal v. CBI, (2015) 4 SCC 609 : (2015) 2 SCC (Cri) 687] , this Court interpreted the expression “sufficient grounds for proceeding” and held that there should be sufficiency of materials against the accused concerned before proceeding under Section 204CrPC. It was held thus : (SCC pp. 644-45, para 53) “53. However, the words “sufficient ground for proceeding” appearing in Section 204 are of immense importance. It is these words which amply suggest that an opinion is to be formed only after due application of mind that there is sufficient basis for proceeding against the said accused and formation of such an opinion is to be stated in the order itself. The order is liable to be set aside if no - 44 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 reason is given therein while coming to the conclusion that there is prima facie case against the accused, though the order need not contain detailed reasons. A fortiori, the order would be bad in law if the reason given turns out to be ex facie incorrect.” Difference between criminal breach of trust and cheating 35. This Court in its decision in S.W. Palanitkar v. State of Bihar [S.W. Palanitkar v. State of Bihar, (2002) 1 SCC 241 : 2002 SCC (Cri) 129] expounded the difference in the ingredients required for constituting of an offence of criminal breach of trust (Section 406 IPC) vis-à-vis the offence of cheating (Section 420). The relevant observations read as under : (SCC p. 246, paras 9-10) “9. The ingredients in order to constitute a criminal breach of trust are : (i) entrusting a person with property or with any dominion over property; (ii) that person entrusted : (a) dishonestly misappropriating or converting that property to his own use; or (b) dishonestly using or disposing of that property or wilfully suffering any other person so to do in violation (i) of any direction of law prescribing the mode in which such trust is to be discharged, (ii) of any legal contract made, touching the discharge of such trust. 10. The ingredients of an offence of cheating are : (i) there should be fraudulent or dishonest inducement of a person by deceiving him, (ii)(a) the person so deceived should be induced to deliver any property to any person, or to consent that any person shall retain any property; or (b) the person so deceived should be intentionally induced to do or omit to do anything which he would not do or omit if he were not so deceived; and (iii) in cases covered by (ii)(b), the act of omission should be one which causes or is likely to cause damage or harm to the person induced in body, mind, reputation or property.” - 45 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 36. What can be discerned from the above is that the offences of criminal breach of trust (Section 406 IPC) and cheating (Section 420 IPC) have specific ingredients: In order to constitute a criminal breach of trust (Section 406 IPC) (1) There must be entrustment with person for property or dominion over the property, and (2) The person entrusted: (a) Dishonestly misappropriated or converted property to his own use, or (b) Dishonestly used or disposed of the property or wilfully suffers any other person so to do in violation of: (i) Any direction of law prescribing the method in which the trust is discharged; or (ii) Legal contract touching the discharge of trust (see : S.W. Palanitkar [S.W. Palanitkar v. State of Bihar, (2002) 1 SCC 241 : 2002 SCC (Cri) 129] ) Similarly, in respect of an offence under Section 420IPC, the essential ingredients are: (1) Deception of any person, either by making a false or misleading representation or by other action or by omission; (2) Fraudulently or dishonestly inducing any person to deliver any property, or (3) The consent that any person shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit (see : Harmanpreet Singh Ahluwalia v. State of Punjab [Harmanpreet Singh Ahluwalia v. State of Punjab, (2009) 7 SCC 712 : (2009) 3 SCC (Cri) 620] ). 37. Further, in both the aforesaid sections, mens rea i.e. intention to defraud or the dishonest intention must be present, and in the case of cheating it must be there from the very beginning or inception. 38. In our view, the plain reading of the complaint fails to spell out any of the aforesaid ingredients noted above. We may only say, with a view to clear a serious misconception of law in the mind of the police as well as the courts below, that - 46 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 if it is a case of the complainant that offence of criminal breach of trust as defined under Section 405IPC, punishable under Section 406IPC, is committed by the accused, then in the same breath it cannot be said that the accused has also committed the offence of cheating as defined and explained in Section 415IPC, punishable under Section 420IPC. 39. 39. Every act of breach of trust may not result in a penal offence of criminal breach of trust unless there is evidence of manipulating act of fraudulent misappropriation. An act of breach of trust involves a civil wrong in respect of which the person may seek his remedy for damages in civil courts but, any breach of trust with a mens rea, gives rise to a criminal prosecution as well. It has been held in Hari Prasad Chamaria v. Bishun Kumar Surekha [Hari Prasad Chamaria v. Bishun Kumar Surekha, (1973) 2 SCC 823 : 1973 SCC (Cri) 1082] as under : (SCC p. 824, para 4) “4. We have heard Mr Maheshwari on behalf of the appellant and are of the opinion that no case has been made out against the respondents under Section 420 of the Penal Code, 1860. For the purpose of the present appeal, we would assume that the various allegations of fact which have been made in the complaint by the appellant are correct. Even after making that allowance, we find that the complaint does not disclose the commission of any offence on the part of the respondents under Section 420 of the Penal Code, 1860. There is nothing in the complaint to show that the respondent had dishonest or fraudulent intention at the time the appellant parted with Rs 35,000. There is also nothing to indicate that the respondents induced the appellant to pay them Rs 35,000 by deceiving him. It is further not the case of the appellant that a representation was made by the respondents to him at or before the time he paid the money to them and that at the time the representation was made, the respondents knew the same to be false. The fact that the - 47 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 respondents subsequently did not abide by their commitment that they would show the appellant to be the proprietor of Drang Transport Corporation and would also render accounts to him in the month of December might create civil liability for them, but this fact would not be sufficient to fasten criminal liability on the respondents for the offence of cheating.” 40. To put it in other words, the case of cheating and dishonest intention starts with the very inception of the transaction. But in the case of criminal breach of trust, a person who comes into possession of the movable property and receives it legally, but illegally retains it or converts it to his own use against the terms of the contract, then the question is, in a case like this, whether the retention is with dishonest intention or not, whether the retention involves criminal breach of trust or only a civil liability would depend upon the facts of each case. 41. The distinction between mere breach of contract and the offence of criminal breach of trust and cheating is a fine one. In case of cheating, the intention of the accused at the time of inducement should be looked into which may be judged by a subsequent conduct, but for this, the subsequent conduct is not the sole test. Mere breach of contract cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right from the beginning of the transaction i.e. the time when the offence is said to have been committed. Therefore, it is this intention, which is the gist of the offence. 42. Whereas, for the criminal breach of trust, the property must have been entrusted to the accused or he - 48 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 must have dominion over it. The property in respect of which the offence of breach of trust has been committed must be either the property of some person other than the accused or the beneficial interest in or ownership of it must be of some other person. The accused must hold that property on trust of such other person. Although the offence i.e. the offence of breach of trust and cheating involve dishonest intention, yet they are mutually exclusive and different in basic concept. 43. There is a distinction between criminal breach of trust and cheating. For cheating, criminal intention is necessary at the time of making a false or misleading representation i.e. since inception. In criminal breach of trust, mere proof of entrustment is sufficient. Thus, in case of criminal breach of trust, the offender is lawfully entrusted with the property, and he dishonestly misappropriated the same. Whereas, in case of cheating, the offender fraudulently or dishonestly induces a person by deceiving him to deliver any property. In such a situation, both the offences cannot co-exist simultaneously. 44. At the most, the Court of the Additional Chief Judicial Magistrate could have issued process for the offence punishable under Section 420IPC i.e. cheating but in any circumstances no case of criminal breach of trust is made out. The reason being that indisputably there is no entrustment of any property in the case at hand. It is not even the case of the complainant that any property was lawfully entrusted to the appellants and that the same has been dishonestly misappropriated. The case of the - 49 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 complainant is plain and simple. He says that the price of the goods sold by him has not been paid. Once there is a sale, Section 406IPC goes out of picture. According to the complainant, the invoices raised by him were not cleared. No case worth the name of cheating is also made out. 45. Even if the Magistrate would have issued process for the offence punishable under Section 420IPC i.e. cheating, the same would have been liable to be quashed and set aside, as none of the ingredients to constitute the offence of cheating are disclosed from the materials on record. 46. It has been held in State of Gujarat v. Jaswantlal Nathalal [State of Gujarat v. Jaswantlal Nathalal, 1967 SCC OnLine SC 58 : AIR 1968 SC 700 : (1968) 2 SCR 408] : (SCC OnLine SC para 8) “8. The term “entrusted” found in Section 405IPC governs not only the words “with the property” immediately following it but also the words “or with any dominion over the property” occurring thereafter—see Velji Raghavji Patel v. State of Maharashtra [Velji Raghavji Patel v. State of Maharashtra, 1964 SCC OnLine SC 185 : AIR 1965 SC 1433 : (1965) 2 SCR 429] . Before there can be any entrustment there must be a trust meaning thereby an obligation annexed to the ownership of property and a confidence reposed in and accepted by the owner or declared and accepted by him for the benefit of another or of another and the owner. But that does not mean that such an entrustment need conform to all the technicalities of the law of trust — see Jaswantrai Manilal Akhaney v. State of Bombay [Jaswantrai Manilal Akhaney v. State of Bombay, 1956 SCC OnLine SC 46 : AIR 1956 SC 575 : 1956 SCR 483] . The expression “entrustment” carries with it the implication that the person handing over any property or on - 50 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 whose behalf that property is handed over to another, continues to be its owner. Further the person handing over the property must have confidence in the person taking the property so as to create a fiduciary relationship between them. A mere transaction of sale cannot amount to an “entrustment”.” 47. Similarly, in CBI v. Duncans Agro Industries Ltd. [CBI v. Duncans Agro Industries Ltd., (1996) 5 SCC 591 : 1996 SCC (Cri) 1045] this Court held that the expression “entrusted with property” used in Section 405IPC connotes that the property in respect of which criminal breach of trust can be committed must necessarily be the property of some person other than the accused or that the beneficial interest in or ownership thereof must be in the other person and the offender must hold such property in trust for such other person or for his benefit. The relevant observations read as under : (SCC pp. 607-608, para 27) “27. In the instant case, a serious dispute has been raised by the learned counsel appearing for the respective parties as to whether on the face of the allegations, an offence of criminal breach of trust is constituted or not. In our view, the expression “entrusted with property” or “with any dominion over property” has been used in a wide sense in Section 405IPC. Such expression includes all cases in which goods are entrusted, that is, voluntarily handed over for a specific purpose and dishonestly disposed of in violation of law or in violation of contract. The expression “entrusted” appearing in Section 405IPC is not necessarily a term of law. It has wide and different implications in different contexts. It is, however, necessary that the ownership or beneficial interest in the ownership of the property entrusted in respect of which offence is alleged to have been committed must be in some person other than the accused and the latter must hold it on account of some person or in some way for his benefit. The expression “trust” in Section 405IPC is a comprehensive expression and has been used to denote - 51 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 various kinds of relationships like the relationship of trustee and beneficiary, bailor and bailee, master and servant, pledger and pledgee. When some goods are hypothecated by a person to another person, the ownership of the goods still remains with the person who has hypothecated such goods. The property in respect of which criminal breach of trust can be committed must necessarily be the property of some person other than the accused or the beneficial interest in or ownership of it must be in the other person and the offender must hold such property in trust for such other person or for his benefit. In a case of pledge, the pledged article belongs to some other person but the same is kept in trust by the pledgee.” (emphasis supplied) 48. The aforesaid exposition of law makes it clear that there should be some entrustment of property to the accused wherein the ownership is not transferred to the accused. In case of sale of movable property, although the payment may be deferred yet the property in the goods passes on delivery as per Sections 20 and 24, respectively, of the Sale of Goods Act, 1930. “20. Specific goods in a deliverable state.—Where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made and it is immaterial whether the time of payment of the price or the time of delivery of goods, or both, is postponed. 24. Goods sent on approval or “on sale or return”.— When goods are delivered to the buyer on approval or “on sale or return” or other similar terms, the property therein passes to the buyer— (a) when he signifies his approval or acceptance to the seller or does any other act adopting the transaction; - 52 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 (b) if he does not signify his approval or acceptance to the seller but retains the goods without giving notice of rejection, then, if a time has been fixed for the return of the goods on the expiration of such time, and, if no time has been fixed, on the expiration of a reasonable time.” 26. Viewed from this angle also, the impugned proceedings deserve to be quashed. 27. A perusal of the impugned order dated 30.01.2025 passed by the trial court referring the matter to the police authorities for investigation will indicate that the same is contrary to the provisions contained in Section 175(3) BNSS, 2023, which reads as under:- 175. Police officer's power to investigate cognizable case. (1) Any officer in charge of a police station may, without the order of a Magistrate, investigate any cognizable case which a Court having jurisdiction over the local area within the limits of such station would have power to inquire into or try under the provisions of Chapter XIV: Provided that considering the nature and gravity of the offence, the Superintendent of Police may require the Deputy Superintendent of Police to investigate the case. (2) No proceeding of a police officer in any such case shall at any stage be called in question on the ground that the case was one which such officer was not empowered under this section to investigate. - 53 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 (3) Any Magistrate empowered under section 210 may, after considering the application supported by an affidavit made under sub-section (4) of section 173, and after making such inquiry as he thinks necessary and submission made in this regard by the police officer, order such an investigation as above-mentioned.” 28. The impugned order dated 30.01.2025 passed by the trial court, reads as under:- “ Complaint present. Heard the counsel for complainant and perused the materials on record. In view of submissions made by complaint counsel and on perusal of materials on record, the matter is referred for investigation U/sec. 175(3) of BNSS to Jurisdictional Police. For report. Call on 28.03.2025.” 29. In Om Prakash Ambadkar’s case supra, the Apex Court held as under:- “ 29. Section 175 of the BNSS corresponds to Section 156 of the Cr. P.C. Sub-section (1) of Section 175 of the BNSS is in pari materia with sub-section 156(1) of the Cr. P.C. except for the proviso which empowers the Superintendent of Police to direct the Deputy Superintendent of Police to investigate a case if the nature or gravity of the - 54 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 case so requires. Sub-section (2) of Section 175 the BNSS is identical to Section 156(2) of the Cr. P.C. Section 175(3) of the BNSS empowers any Magistrate who is empowered to take cognizance under Section 210 to order investigation in accordance with Section 175(1) and to this extent is in pari materia with Section 156(3) of Cr. P.C. However, unlike Section 156(3) of the Cr. P.C., any Magistrate, before ordering investigation under Section 175(3) of the BNSS, is required to: a. Consider the application, supported by an affidavit, made by the complainant to the Superintendent of Police under Section 173(4) of the BNSS; b. Conduct such inquiry as he thinks necessary; and c. Consider the submissions made by the police officer. 30. Sub-section (4) of Section 175 of the BNSS is a new addition to the scheme of investigation of cognizable cases when compared with the scheme previously existing in Section 156 of the Cr. P.C. It provides an additional safeguard to a public servant against whom an accusation of committing a cognizable offence arising in the course of discharge of his official duty is made. The provision stipulates that any Magistrate who is empowered to take cognizance under Section 210 of the BNSS may order investigation against a public servant upon receiving a complaint arising in course of the discharge of his official duty, only after complying with the following procedure: a. Receiving a report containing facts and circumstances of the incident from the officer superior to the accused public servant; and - 55 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 b. Considering the assertions made by the accused public servant as regards the situation that led to the occurrence of the alleged incident. 31. A comparison of Section 175(3) of the BNSS with Section 156(3) of the Cr. P.C. indicates three prominent changes that have been introduced by the enactment of BNSS as follows: a. First, the requirement of making an application to the Superintendent of Police upon refusal by the officer in charge of a police station to lodge the FIR has been made mandatory, and the applicant making an application under Section 175(3) is required to furnish a copy of the application made to the Superintendent of Police under Section 173(4), supported by an affidavit, while making the application to the Magistrate under Section 175(3). b. Secondly, the Magistrate has been empowered to conduct such enquiry as he deems necessary before making an order directing registration of FIR. c. Thirdly, the Magistrate is required to consider the submissions of the officer in charge of the police station as regards the refusal to register an FIR before issuing any directions under Section 175(3). 32. The introduction of these changes by the legislature can be attributed to the judicial evolution of Section 156 of the Cr. P.C. undertaken by a number of decisions of this Court. In the case of Priyanka Srivastava v. State of U.P., (2015) 6 SCC 287, this Court held that prior to making an application to the Magistrate under Section 156(3) of the Cr. P.C., the applicant must necessarily make applications under Sections 154(1) and 154(3). It was further observed by the Court that applications made under Section 156(3) of the Cr. P.C. must necessarily be supported by an - 56 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 affidavit sworn by the applicant. The reason given by the Court for introducing such a requirement was that applications under Section 156(3) of the Cr. P.C. were being made in a routine manner and in a number of cases only with a view to cause harassment to the accused by registration of FIR. It was further observed that the requirement of supporting the complaint with an affidavit would ensure that the person making the application is conscious and also to see that no false affidavit is made. Once an affidavit is found to be false, the applicant would be liable for prosecution in accordance with law. This would deter him from casually invoking the authority of the Magistrate under Section 156(3). The relevant observations made by the Court are reproduced hereinbelow: “27. Regard being had to the aforesaid enunciation of law, it needs to be reiterated that the learned Magistrate has to remain vigilant with regard to the allegations made and the nature of allegations and not to issue directions without proper application of mind. He has also to bear in mind that sending the matter would be conducive to justice and then he may pass the requisite order. The present is a case where the accused persons are serving in high positions in the Bank. We are absolutely conscious that the position does not matter, for nobody is above the law. But, the learned Magistrate should take note of the allegations in entirety, the date of incident and whether any cognizable case is remotely made out. It is also to be noted that when a borrower of the financial institution covered under the Sarfaesi Act, invokes the jurisdiction under Section 156(3) Cr. P.C. and also there is a separate procedure under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, an attitude of more care, caution and circumspection has to be adhered to. 28. Issuing a direction stating “as per the application” to lodge an FIR creates a very unhealthy situation in society and also reflects the erroneous approach of the learned - 57 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 Magistrate. It also encourages unscrupulous and unprincipled litigants, like Respondent 3, namely, Prakash Kumar Bajaj, to take adventurous steps with courts to bring the financial institutions on their knees. As the factual exposition would reveal, Respondent 3 had prosecuted the earlier authorities and after the matter is dealt with by the High Court in a writ petition recording a settlement, he does not withdraw the criminal case and waits for some kind of situation where he can take vengeance as if he is the emperor of all he surveys. It is interesting to note that during the tenure of Appellant 1, who is presently occupying the position of Vice-President, neither was the loan taken, nor was the default made, nor was any action under the SARFAESI Act taken. However, the action under the SARFAESI Act was taken on the second time at the instance of the present Appellant 1. We are only stating about the devilish design of Respondent 3 to harass the appellants with the sole intent to avoid the payment of loan. When a citizen avails a loan from a financial institution, it is his obligation to pay back and not play truant or for that matter play possum. As we have noticed, he has been able to do such adventurous acts as he has the embedded conviction that he will not be taken to task because an application under Section 156(3) Cr. P.C. is a simple application to the court for issue of a direction to the investigating agency. We have been apprised that a carbon copy of a document is filed to show the compliance with Section 154(3), indicating it has been sent to the Superintendent of Police concerned. 29. At this stage it is seemly to state that power under Section 156(3) warrants application of judicial mind. A court of law is involved. It is not the police taking steps at the stage of Section 154 of the Code. A litigant at his own whim cannot invoke the authority of the Magistrate. A principled and really grieved citizen with clean hands must have free access to invoke the said power. It protects the citizens but when pervert litigations takes this route to harass their fellow citizens, efforts are to be made to scuttle and curb the same. 30. In our considered opinion, a stage has come in this country where Section 156(3) Cr. P.C. applications are to be supported by an affidavit duly sworn by the applicant who seeks the invocation of the jurisdiction of the Magistrate. That apart, in an appropriate case, the learned Magistrate - 58 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 would be well advised to verify the truth and also can verify the veracity of the allegations. This affidavit can make the applicant more responsible. We are compelled to say so as such kind of applications are being filed in a routine manner without taking any responsibility whatsoever only to harass certain persons. That apart, it becomes more disturbing and alarming when one tries to pick up people who are passing orders under a statutory provision which can be challenged under the framework of the said Act or under Article 226 of the Constitution of India. But it cannot be done to take undue advantage in a criminal court as if somebody is determined to settle the scores. 31. We have already indicated that there has to be prior applications under Sections 154(1) and 154(3) while filing a petition under Section 156(3). Both the aspects should be clearly spelt out in the application and necessary documents to that effect shall be filed. The warrant for giving a direction that an application under Section 156(3) be supported by an affidavit is so that the person making the application should be conscious and also endeavour to see that no false affidavit is made. It is because once an affidavit is found to be false, he will be liable for prosecution in accordance with law. This will deter him to casually invoke the authority of the Magistrate under Section 156(3). That apart, we have already stated that the veracity of the same can also be verified by the learned Magistrate, regard being had to the nature of allegations of the case. We are compelled to say so as a number of cases pertaining to fiscal sphere, matrimonial dispute/family disputes, commercial offences, medical negligence cases, corruption cases and the cases where there is abnormal delay/laches in initiating criminal prosecution, as are illustrated in Lalita Kumari, [(2014) 2 SCC 1 : (2014) 1 SCC (Cri) 524] are being filed. That apart, the learned Magistrate would also be aware of the delay in lodging of the FIR.” 33. In a recent pronouncement of this Court in the case of Babu Venkatesh v. The State Of Karnataka, (2022) 5 SCC 639, the observations made in Priyanka Srivastava (supra) were referred to and it was held as follows: - 59 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 “24. This Court has clearly held that, a stage has come where applications under Section 156(3) Cr. P.C. are to be supported by an affidavit duly sworn by the complainant who seeks the invocation of the jurisdiction of the Magistrate. 25. This Court further held that, in an appropriate case, the learned Magistrate would be well advised to verify the truth and also verify the veracity of the allegations. The Court has noted that, applications under Section 156(3) Cr. P.C. are filed in a routine manner without taking any responsibility only to harass certain persons. 26. This Court has further held that, prior to the filing of a petition under Section 156(3) Cr. P.C., there have to be applications under Sections 154(1) and 154(3) Cr. P.C. This Court emphasises the necessity to file an affidavit so that the persons making the application should be conscious and not make false affidavit. With such a requirement, the persons would be deterred from causally invoking authority of the Magistrate, under Section 156(3) Cr. P.C. Inasmuch as if the affidavit is found to be false, the person would be liable for prosecution in accordance with law.” 34. In light of the judicial interpretation and evolution of Section 156(3) of the Cr. P.C. by various decisions of this Court as discussed above, it becomes clear that the changes introduced by Section 175(3) of the BNSS to the existing scheme of Section 156(3) merely codify the procedural practices and safeguards which have been introduced by judicial decisions aimed at curbing the misuse of invocation of powers of a Magistrate by unscrupulous litigants for achieving ulterior motives. 35. Further, by requiring the Magistrate to consider the submissions made by the concerned police officer before proceeding to issue directions under Section 175(3), BNSS has affixed greater accountability on the police officer - 60 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 responsible for registering FIRs under Section 173. Mandating the Magistrate to consider the submissions of the concerned police officer also ensures that the Magistrate applies his mind judicially while considering both the complaint and the submissions of the police officer thereby ensuring that the requirement of passing reasoned orders is complied with in a more effective and comprehensive manner. 36. In the result, this appeal succeeds and is hereby allowed. 37. The impugned order passed by the High Court is set aside. The order passed by the Magistrate directing police investigation under Section 156(3) of the Cr. P.C. is also set aside. 38. Pending applications, if any, shall also stand disposed of.” 30. In Swarnalatha’s case supra, the Orissa High court placed reliance upon the aforesaid judgment of the Apex Court in Om Prakash Ambadkar’s case supra, and held as under :- “ 5. In a very recent decision in Om Prakash Ambadkar v. State of Maharashtra, 2025 Live Law (SC) 139, the Apex Court has held as under:— “The Magistrate is not expected to mechanically direct investigation by the police without first examining whether the fact and circumstances of the case, investigation by the State machinery is actually required or not. If the allegations made - 61 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 in the complaint are simple, where the Court can straight away proceed to conduct the trial, the Magistrate is expected to record evidence and proceed further in the matter, instead of passing the buck to the police u/S. 156(3) of the CrPC. Of course, if the allegations made in the complaint require complex and complication investigation which cannot be undertaken without active assistance an expertise of the State machinery, it would only be appropriate for the Magistrate to direct investigation by the police authorities. The Magistrate is, therefore, not supposed to act merely as a post office and needs to adopt a judicial approach while considering an application seeking investigation by the Police.” 6. In the aforesaid decision, the Apex Court has also held that unlike Sec. 156(3) of the CrPC, any Magistrate, before ordering investigation u/S. 175(3) of BNSS is required to:— (a) consider the application, supported by an affidavit, made by the complainant to the Superintendent of Police u/S. 173(4) of the BNSS; (b) conduct such enquiry as he thinks necessary; and (c) consider the submission made by the police officer. In view of the decision in Om Prakash Ambadkar (supra), it is mandatory for the Magistrate to consider the submissions of the concerned Police Officer, so as to apply his mind judicially while considering both the complaint and the submission of the police officer, thereby ensuring the requirement of passing reason orders is complied with in a more effective and comprehensive manner. 7. In view of the aforesaid facts and taking into account the law laid down by the Apex Court in the decisions referred to above and regard being had to the prayer of the petitioner, this Court is not inclined to issue any direction to OP Nos. 2 - 62 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 and 3 to register the FIR and, accordingly, the CRLMP stands dismissed. The petitioner is, however, at liberty to approach the appropriate forum in accordance with law.” 31. A perusal of the impugned order will indicate that the mandatory requirements of issuing notice to the police authorities, conducting such enquiry and considering the submissions made by the police officers have clearly not been fulfilled or complied with by the trial court before passing the impugned order referring the matter for investigation under Section 175(3) of BNSS by passing the impugned order, which is not only contrary to the said provisions but also is a cryptic, laconic, non-speaking and unreasoned order passed by the trial court without any application of mind and without assigning any reasons as to why the matter was being referred to the police authorities for investigation. Under these circumstances also, I am of the considered opinion that the impugned order and consequential FIR are illegal and contrary to law and facts, warranting interference by this Court in the present petition. 32. In view of the aforesaid facts and circumstances, I am of the considered opinion that continuation of the impugned - 63 - HC-KAR NC: 2025:KHC:20856 CRL.P No. 3983 of 2025 proceedings qua the petitioners would amount to an abuse of process of law and the same deserve to be quashed. 33. In the result, I pass the following:- ORDER (i) Petition is hereby allowed (ii) The impugned order dated 30.01.2025 passed by the trial court in PCR No.57/2025 is hereby set aside. (iii) The impugned FIR in Crime No.40/2025 dated 01.03.2025 registered by the 1st respondent – Police for offences punishable under Sections 316(2), 318(4) and 3(5) of BNS, 2023 and the impugned complaint in PCR No.57/2025, pending on the file of Prl.Civil Judge (Jr.Dn) & JMFC, Chitradurga, qua the petitioners are hereby quashed. Sd/- (S.R.KRISHNA KUMAR) JUDGE BMC/SRL List No.: 1 Sl No.: 49