- 1 - HC-KAR NC: 2025:KHC:32371 CRL.P No. 11103 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 14TH DAY OF AUGUST, 2025 BEFORE THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM CRIMINAL PETITION NO. 11103 OF 2024 BETWEEN: 1. SRI SRINIVASAN R S/O RANGARAJAN AGED ABOUT 54 YEARS DEPUTY GENERAL MANAGER HR 2. SRI SANTOSH N.K S/O BASAVARAJAOPPA H AGED ABOUT 40 YEARS DEPUTY GENERAL MANAGER HR IR 3. SRI SRITHAR S S/O SAMBASIVAM AGED ABOUT 46 YEARS CHIEF OPERATING OFFICER 4. SRI SUNIL PANCHAPPA NARKE S/O PANCHAPPA NARKE AGED ABOUT 50 YEARS CHIEF EXECUTIVE OFFICER 5. SRI GIRISH SUBRAMANYAM S/O V S SUBRAMANYAM AGED ABOUT 53 YEARS SENIOR EXECUTIVE - PURCHASE Digitally signed by AL BHAGYA Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:32371 CRL.P No. 11103 of 2024 6. HARISH C M S/O MAHESHA C S AGED ABOUT 35 YEARS SENIOR EXECUTIVE PURCHASE 7. SRI SUNIL KUIMAR MOHINI S/O BIPRA CHARAN MOHINI AGED ABOUT 42 YEARS DEPUTY GENERAL MANAGER FINANCE 8. SRI DHANASEKARAN PALANI S/O PALANI AGED ABOUT 49 YEARS HEAD PLANT MAINTENANCE 9. SRI SURESH BABU L S/O LAKSHMINARASAPPA AGED ABOUT 36 YEARS SENIOR EXECUTIVE H R 10. SRI C.J. TERRENCE S/O P J CHERIAN AGED ABOUT 49 YEARS DY GENERAL MANAGER PURCHASE 11. SRI BOPANNA K D S/O DEVAIAH K S AGED ABOUT 46 YEARS GROUP PLANT HEAD PETITIONER NO. 1 TO 11 WORKING AT MAHINDRA CIE AUTOMOTIVE LTD., PRESENTLY CIE AUTOMOTIVE INDIA LTD., (FORGING DIVISION) PLANT 2, PLOT NO. 98, L&M , KIADB INDUSTRIAL AREA - 3 - HC-KAR NC: 2025:KHC:32371 CRL.P No. 11103 of 2024 PHASE 2, JIGANI BENGALURU - 560 105 …PETITIONERS (BY SRI. SHARATH GOWDA G.B, ADVOCATE) AND: 1. STATE BY HEBBAGODI POLICE STATION ANEKAL SUB DIVISION ANEKAL BENGALURU DISTRICT REPRESENTED BY STATE PUBLIC PROSECUTOR HIGH COURT OF KARNATAKA BUILDING BANGALORE - 560 001. 2. BASLICA ENGINEERING CONTRACTOR OPP KEB OFFICE, MAIN ROAD JIGANI TOWN AND POST, ANEKAL TALUK, BENGALURU DISTRICT - 560 105, REP. BY ITS PROPRIETOR SRI. AROCKIYASWAMY …RESPONDENTS (BY SRI. M.R. PATIL, HCGP FOR R1; SRI. R.V. SHIVANANDA REDDY, ADVOCATE FOR R2) THIS CRL.P IS FILED U/S 482 OF CR.PC (FILED U/S 528 BNNS) PRAYING TO SET ASIDE THE ORDER DATED 14.08.2024 PASSED IN PCR NO.344/2024 ON THE FILE OF IV ADDL.CIVIL JUDGE AND J.M.F.C ANEKAL AND CONSEQUENTLY QUASH THE FIR IN CR.NO.595/2024 REGISTERED BY THE HEBBAGODI P.S. ANEKAL TALUK BENGALURU RURAL DISTRICT 1ST RESPONDENT ARRAYING THE PETITIONERS AS ACCUSED FOR THE OFFENCE P/U/S 120B, 406, 420, 504, 506 OF IPC. - 4 - HC-KAR NC: 2025:KHC:32371 CRL.P No. 11103 of 2024 THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM ORAL ORDER The petitioners have filed the captioned petition seeking to set-aside the order dated 14.08.2024 in PCR No.344/2024 passed by the IV Addl. Civil Judge and JMFC, Anekal and to quash the proceedings pending in Crime No.595/2024 registered in Hebbagodi Police Station, for the offences punishable under Sections 120B, 406, 420, 504, 506 of IPC. 2. The facts leading to the case are as under: As per the version of the second respondent– complainant, it is engaged in the business of fabrication and allied works. Pursuant to a purchase order placed by the petitioners, the complainant asserts that it was entrusted with certain fabrication work during the year 2019. Upon completion of the said work, the complainant - 5 - HC-KAR NC: 2025:KHC:32371 CRL.P No. 11103 of 2024 claims to have raised invoices and bills reflecting a sum of Rs.7,00,000/- as payable by the petitioners. 3. The complainant further alleges that despite submission of invoices and repeated demands, the petitioners, referring to their own records, denied any liability. Aggrieved thereby, the complainant lodged a private complaint under Section 200 of Cr.P.C. The learned Magistrate, on receipt of the complaint, referred the matter for investigation under Section 175(3) of the Bharatiya Nyaya Sanhita, 2023. Pursuant thereto, summons were issued to the petitioners, who have now approached this Court seeking quashing of the proceedings. 4. Learned counsel for the petitioners, reiterating the grounds urged in the petition, would contend that the dispute between the parties is essentially civil in nature, arising out of alleged non-payment of contractual dues. Therefore, it is argued that continuation of proceedings in - 6 - HC-KAR NC: 2025:KHC:32371 CRL.P No. 11103 of 2024 Crime No.595/2024 is unsustainable in law. It is further submitted that the learned Magistrate has failed to comply with the mandatory requirement under Section 175(3) of the BNS, 2023, inasmuch as no report from the jurisdictional police officer was secured before making a reference for investigation. Hence, the very reference stands vitiated. 5. In support of his contention, learned counsel for the petitioners has placed reliance on the judgment of the Hon’ble Apex Court in Delhi Race Club Ltd. & Ors. v. State of Uttar Pradesh & Anr.1, to contend that the offences of criminal breach of trust and cheating cannot co-exist, and therefore, even on this count, the proceedings are liable to be interfered with. 6. Per contra, learned counsel appearing for the second respondent seeks to justify the order of reference made by the learned Magistrate. He submits that despite 1 (2024) 10 SCC 690. - 7 - HC-KAR NC: 2025:KHC:32371 CRL.P No. 11103 of 2024 due completion of the fabrication work, the petitioners have wrongfully withheld the amount legitimately due to the complainant. He further contends that when the complainant personally demanded payment, the petitioners threatened him, thereby constituting cognizable offences. On these grounds, he prays that no indulgence be shown to the petitioners. 7. I have heard the learned counsel on both sides and carefully perused the private complaint filed by the second respondent–complainant. 8. To bring the case within the ambit of Section 420 of the Indian Penal Code, 1860 (now Section 318 of the Bharatiya Nyaya Sanhita, 2023), it is incumbent upon the complainant to establish that there are sufficient materials to justify prosecution. It is a settled proposition of law that mere allegations of cheating, without more, are not sufficient. The essential ingredient of the offence is dishonest inducement, that is, the complainant must - 8 - HC-KAR NC: 2025:KHC:32371 CRL.P No. 11103 of 2024 demonstrate that the accused, at the very inception of the transaction, had a fraudulent or dishonest intention to deceive, and that by reason of such inducement, the complainant parted with property or money. 9. Therefore, the crucial enquiry for this Court is to assess whether the averments made in the private complaint, even if taken at their face value and accepted in their entirety, would prima facie disclose the commission of an offence punishable under Section 318 of the BNS, 2023. In other words, unless the allegations disclose the presence of a dishonest or fraudulent intention at the inception of the transaction, the matter would fall within the realm of civil dispute arising out of breach of contractual obligations, rather than constituting an offence of cheating. 10. It is in this backdrop that this Court finds it appropriate to reproduce paragraphs 4 to 6 of the complaint, in order to ascertain whether the necessary - 9 - HC-KAR NC: 2025:KHC:32371 CRL.P No. 11103 of 2024 ingredients constituting the offence of cheating are, in fact, made out. The said paragraphs read as under: "4. The complainant submits that, when such being the facts, the Complainant was completed the Fabrication work as per the orders issued by the Accused company since from 2019-2020 financial years, the total cost of the fabrication work amount of Rs.7,00,000/- (Rupees Seven Lakhs Only), in this regard the complainant was handed over all the Delivery Challans and Quotation receipts to Accused company, when such being the facts, the Accused company was agreed/promise to settle the outstanding bills in favour of the complainant and demanded the complainant to hand over the entire original receipts to accused company in order to finalized the Bills, as believing the words of the Accused company, the complainant was handed over original invoice and bills to Accused company, since from the date of handed over, the complainant was waiting for bill amount of Rs.7,00,000/- by taking the advantage of the same, every time the Accused company was postpone to clear the payment to complainant, after some time accused try to avoid the complainant on such complainant demanded to clear payment amount, also complainant warned them that he will lodge - 10 - HC-KAR NC: 2025:KHC:32371 CRL.P No. 11103 of 2024 police complaint, but accused with criminal back ground who is having don’t bother attitude keep on escaping, since from 2019-20 till today Accused failed to clear the payment to Complainant. The copy of the Quotations and Delivery Challans are furnished are produced herewith as DOCUMENT No.1 to 30. 5. The complainant submits that, when complainant questioned 1st Accused for such act, he always threatened of dire consequences and that he would go to any extent if the officials of the Complainant enters the premises of Accused company and further, the has given life threat to the representative of the Complainant stating that he will not leave if anyone tries to enter the premises of Accused company. It is pertinent to mentioned here that, the Complainant having invested the amount of Rs.7,00,000/- towards the work which is done by the company, such being the case, 1st Accused who is locality of the area has high influence in the society and fraud committed by the accused only when acted hostile and given life threat to him. 6. The complainant submits that, Under these circumstances, the Complainant had approached the jurisdictional Police Station on 04.07.2024 and filed the complaint before it, but however for the - 11 - HC-KAR NC: 2025:KHC:32371 CRL.P No. 11103 of 2024 reason best known to the Officer in charge, an NCR bearing No2194/1334/2024 was registered. Further, no action was taken as against the Accused persons by the concerned Officer. Left with no other option, the Complainant approached the DYSP and Superintendent of Police on 13.07.2024, filed its complaint but yet again no action whatsoever was taken against the Accused persons. The copies of the NCR No.2194/1334/2024 registered by the jurisdictional Police Station is produced herewith as DOCUMENT No.31. The copy of Postal receipts are produced herewith as DOCUMNENT NO.32 & 33." 11. On a meticulous examination of the extracted portions of the complaint, this Court finds that the second respondent–complainant has specifically alleged that he had duly completed the fabrication work entrusted to him by the petitioners. The petitioners, however, have taken a categorical stand that the entire amount payable to the complainant has already been discharged and, therefore, nothing further remains due. The pleadings extracted from the complaint clearly reveal that the controversy - 12 - HC-KAR NC: 2025:KHC:32371 CRL.P No. 11103 of 2024 essentially centres around the alleged non-payment of contractual dues. In substance, what emerges is a dispute regarding the existence of an enforceable civil liability, and not the commission of any cognizable criminal offence. 12. It is, therefore, evident that the complainant has sought to give a colour of criminality to what is, in essence, a contractual dispute. The core issue of whether the petitioners have fully satisfied their monetary obligations towards the complainant or whether any balance remains unpaid, constitutes a disputed question of fact. Such issues fall squarely within the adjudicatory domain of a competent Civil Court and cannot be resolved in the course of criminal proceedings. 13. This Court is constrained to observe that the learned Magistrate, without undertaking the necessary scrutiny and without recording satisfaction as required in law, has mechanically referred the matter for investigation. It is well-settled that investigation by the - 13 - HC-KAR NC: 2025:KHC:32371 CRL.P No. 11103 of 2024 police cannot be directed in respect of disputes which are purely civil in character. The machinery of criminal law cannot be permitted to be set in motion for settling monetary or contractual claims. Even assuming that the allegations in the complaint are accepted at their face value and in their entirety, the same do not disclose the commission of any cognizable offence. The complainant ought to have been relegated to approach the Civil Court to work out his remedies in accordance with law. 14. It is also significant to note that the private complaint has been filed alleging commission of offences both under the head of criminal breach of trust as well as cheating. The Hon’ble Supreme Court, in a catena of judgments, has unequivocally held that such allegations are mutually destructive and cannot co-exist. The offence of criminal breach of trust proceeds on the footing that the accused has misappropriated property entrusted to him, whereas the offence of cheating rests on a fraudulent or dishonest inducement at the inception of the transaction. - 14 - HC-KAR NC: 2025:KHC:32371 CRL.P No. 11103 of 2024 Both cannot simultaneously stand together on the same set of facts. Hence, on this ground as well, the complaint and the consequent proceedings are legally unsustainable and liable to be quashed. 15. In view of the foregoing discussion, this Court is of the considered opinion that continuation of the impugned criminal proceedings against the petitioners would amount to nothing but an abuse of the process of law. Accordingly, this Court finds it just and proper to exercise its inherent jurisdiction under Section 482 of the Code of Criminal Procedure, 1973. ORDER (i) The Criminal Petition is allowed. (ii) The order dated 14.08.2024 passed in PCR No.344/2024 on the file of the IV Additional Civil Judge and JMFC, Anekal, is hereby set aside. - 15 - HC-KAR NC: 2025:KHC:32371 CRL.P No. 11103 of 2024 (iii) Consequently, the proceedings in Crime No.595/2024 of Hebbagodi Police Station, Anekal Taluk, Bengaluru Rural District, registered for the offences punishable under Sections 120B, 406, 420, 504 and 506 of IPC, are hereby quashed. Sd/- (SACHIN SHANKAR MAGADUM) JUDGE Yn. List No.: 1 Sl No.: 17