1 2025:CGHC:59105-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR CRMP No. 2087 of 2024 1 - Sunil Kumar Agrawal S/o Late Mahavir Agrawal Aged About 58 Years Director, Bajrajnga Bali Ironmould Private Limited, A Company Registered Under The Provision Of Company Registered Under The Provision Of Companies Act, 1956 Having Its Registered Office At 10/1f, Diamond Harbour Road, Alipore, Kolkata (West Bengal), R/o 10/1f, Diamond Harbour Road, Alipore, Kolkata (West Bengal) 2 - Pradeep Agrawal S/o Late Laxmi Narayan Agrawal Aged About 58 Years R/o G-2, Civil Township, Rourkela (Orissa) Petitioner(s) Versus 1 - State Of Chhattisgarh Through Station House Officer, Police Station Sakti, District Sakti Chhattisgarh 2 - Rachi Agrawal S/o Shyam Sundar Agrawal Aged About 28 Years R/o Ward No. 7 Raghupati Bhawan, Sakti District Sakti Chhattisgarh Respondent(s) (Cause-title taken from Case Information System) For Petitioner(s) : Mr. Malay Shrivastava, Advocate For State : Mr. Shailendra Sharma, PL For Respondent No.2: Mr. Ankit Singhal, Advocate Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Shri Bibhu Datta Guru, Judge Order on Board RAHUL JHA Digitally signed by RAHUL JHA Date: 2025.12.06 12:19:58 +0530 2 Per Bibhu Datta Guru, J 05/12/2025 1. The instant CRMP has been filed under Section 528 of the Bhartiya Nagarik Surksha Sanhita, 2023 for the following prayer: “It is therefore, prayed that this Hon'ble Court may kindly be pleased to allow this petition and quash the FIR bearing Crime No.216/2024 registered against the petitioner on 10/05/2024 for the commission of offence which is punishable Under Section 406, 420, 34 of the Indian Penal Code; charge sheet filed on 09/01/2025 for the commission of offence which is punishable Under Section 406, 420, 34 of the Indian Penal Code and cognizance order dated 09/01/2025 passed by the Chief Judicial Magistrate, Sakti for the commission of offence which is punishable Under Section 406, 420, 34 of the Indian Penal Code in the interest of justice.” 2. Facts of the case are that the complainant, Rachit Agrawal, resident of Ward No. 07, Hatri Road, Sakti, submitted a written complaint stating that he is engaged in the scrap business and, between 10.08.2023 and 25.11.2023, entered into a transaction with Sunil Kumar Agrawal, Director of Bajrangbali Iron Gold Pvt. Ltd., Kolkata, and Pradeep Kumar Agrawal of Kolkata, who offered to sell scrap of a dismantled dal mill plant, including machinery, MS pipes, weighbridge, iron shed, shutters, cables, motors, MS stairs and about 1400 tons of mixed metal scrap. The agreed rate was ₹26 per kg, with dismantling and 3 transportation to be borne by the complainant. Relying on their assurances, the complainant paid ₹1,11,11,474/- through RTGS from 01.08.2023 to 25.11.2023. However, the accused supplied scrap worth only ₹61,71,434/- (around 188 tons) and thereafter stopped delivery. Despite repeated requests and visits to Kolkata on 24.12.2023, 10.01.2024 and 12.02.2024, the accused neither supplied the remaining material nor refunded the balance amount of ₹49,40,040/-, and allegedly sold the remaining stock to others. On the basis of the complaint and supporting documents including the agreement dated 10.08.2023, valuation report, bank statements, and invoices the police found a prima facie case under Sections 420, 406, and 34 IPC, registered an FIR, and commenced investigation. 3. Learned counsel for the petitioners submits that petitioner No.1 is the Director of Bajrangbali Ironmould Pvt. Ltd., a duly registered company, and the dispute in question arises purely out of a commercial transaction governed by a written scrap-sale agreement dated 10.08.2023 executed between the company and respondent No.2, who, as proprietor of Maa Kamakhya Construction, had agreed to purchase plant machinery and scrap worth ₹4.10 crore. It is submitted that respondent No.2 paid only ₹1,11,11,474/- and had already lifted machines and substantial scrap material from the site, and despite multiple extensions granted beyond the original contractual period, he failed to complete dismantling, lifting and payment obligations. Instead, after uplifting material without making corresponding payments and remaining liable for ₹2,98,88,525/-, 4 respondent No.2 lodged the present FIR to evade his contractual liability. Counsel submits that the allegations of cheating and criminal breach of trust are entirely unfounded, as the transaction is admitted, documented, and governed by contractual terms, and no dishonest intention can be attributed to the petitioners. The FIR, therefore, is a misuse of criminal machinery to convert a civil/commercial dispute into a criminal case, and even if the complaint is taken at face value, no ingredients of offences under Sections 420, 406 or 34 IPC are made out. Hence, continuation of criminal proceedings would amount to abuse of process of law. 4. Learned counsel for the State as well as Respondent No. 2 oppose the petition, submitting that the FIR and the material collected during investigation clearly disclose offences under Sections 420, 406 and 34 IPC. It is urged that from the very inception the petitioners acted with dishonest intent by inducing the complainant to enter into a scrap-sale agreement and to transfer ₹1,11,11,474/– on the assurance of supplying about 1400 tons of scrap, but supplied material worth only ₹61,71,434/– and thereafter stopped delivery, refused to supply the balance, and disposed of the remaining scrap to third parties. Their failure to either supply the remaining material or refund the amount, despite repeated demands and visits, demonstrates deception and misappropriation. It is submitted that the case involves clear elements of fraudulent inducement and breach of trust, supported by documentary evidence, and cannot be treated as a mere civil dispute. As the matter involves disputed facts 5 requiring trial and sufficient prima facie material exists, the inherent jurisdiction for quashing is not attracted. Hence, the petition deserves dismissal. 5. We have heard learned counsel for the parties and perused the pleadings as well as the material available on record. 6. The principles governing quashing of criminal proceedings under Section 528 of the BNSS, 2023 are well settled. Where the allegations in the FIR and the material collected during investigation, even if taken at their face value, do not disclose the essential ingredients of the alleged offences, or where the dispute is predominantly civil/commercial in nature arising out of a contractual relationship, continuation of criminal proceedings would amount to abuse of the process of law. 7. In the present case, the admitted position is that the parties entered into a detailed written scrap-sale agreement dated 10.08.2023, stipulating the nature of material, mode of supply, lifting schedule, obligations of both sides, and the total contractual value of ₹4.10 crores. Payments were made by respondent No.2 in pursuance of the contract, and supply of material was also made in terms of the same agreement. The correspondence placed on record, including invoices, weighment slips, and the extensions granted for dismantling and lifting of material, clearly demonstrate that the transaction was conducted in the ordinary course of business. 8. The allegations of cheating and criminal breach of trust hinge upon the 6 complainant’s assertion that after receiving ₹1,11,11,474/-, the petitioners supplied scrap of lesser quantity and failed to complete the supply. However, the material collected during investigation itself reflects that respondent No.2 had lifted substantial machinery and scrap, and the dispute essentially relates to quantum of supply, performance of reciprocal obligations, alleged delay in lifting and dismantling, and adjustment of accounts. These are core issues of contractual interpretation and commercial performance, which cannot by themselves give rise to criminal liability unless there exists clear material to show that the petitioners possessed dishonest intention at the inception of the transaction. 9. Significantly, the FIR as well as the charge-sheet do not contain any material to prima facie establish that the petitioners induced the complainant by fraudulent misrepresentation from the very beginning. The agreement was acted upon by both sides; part supply was made; accounts were maintained; and disputes arose only subsequently regarding the balance quantity and payments. The settled law is that mere breach of contract or failure to perform obligations cannot amount to cheating or criminal breach of trust in the absence of foundational allegations of initial dishonest intention. 10. This Court is also persuaded by the fact that the petitioners themselves claim substantial outstanding amount of ₹2,98,88,525/- against respondent No.2, which further demonstrates that the dispute is mutual and commercial, rather than one-sided criminal misconduct. The 7 continuation of criminal proceedings in such circumstances would convert a purely civil/commercial dispute into a criminal case, which is impermissible in law. 11. In view of the above, this Court finds that the essential ingredients of Sections 420 and 406 IPC are not made out even prima facie, and permitting the criminal prosecution to proceed would amount to abuse of the process of the Court. 12. Accordingly, the FIR bearing Crime No. 216/2024, the charge-sheet dated 09.01.2025, and the cognizance order dated 09.01.2025, insofar as they relate to the present petitioners, are hereby quashed. The petition is allowed. Sd/- Sd/- (Bibhu Datta Guru) (Ramesh Sinha) Judge Chief Justice Rahul/Amardeep