( 2026:JHHC:14569 ) 1 Cr.M.P. No.536 of 2023 IN THE HIGH COURT OF JHARKHAND AT RANCHI Cr.M.P. No. 536 of 2023 Dil Moahmmad, aged about 47 years, S/o Umar Mian, R/o Village – Palamu Darjee Mohall, P.O. –Palamu, P.S. –Nawadih, District -Bokaro. .... Petitioner Versus 1. The State of Jharkhand 2. M/s Indusind Bank Ltd. Represented through its Legal Manager and Power of Attorney Holder, Amit Kumar Dey, S/o Sri Ashok Kumar Dey, Office Address –Sector –IV Branch, A-16, B.S. City, P.O. and P.S. –Sector –IV, District –Bokaro, resident of Shasti Nagar, Dhanbad, P.O., P.S. and District –Dhanbad, A/P represented through its legal Manager-cum-Attorney Holder namely Jai Prakash Prabhakar A-16, City Centre, Sector –IV, P.O. –Sector –IV, P.S. –Sector –IV, District –Bokaro. …. Opp. Parties P R E S E N T HON’BLE MR. JUSTICE ANIL KUMAR CHOUDHARY ….. For the Petitioner : Mr. Lukesh Kumar Lal, Advocate For the State : Mr. V.K. Vashistha, Spl. P.P. For O.P. No.2 : Mr. Rahul Pandey, Advocate ….. By the Court:- 1. Heard the parties. 2. This criminal miscellaneous petition has been filed invoking the jurisdiction of this Court under Section 482 of Cr.P.C. with the prayer to quash the order dated 07.08.2019, passed by the learned Additional Chief Judicial Magistrate, Bermo at Tenughat in connection with C.P. Case No. 101 of 2019 whereby and where under the learned Additional Chief Judicial Magistrate, Bermo at Tenughat has found prima facie case for the offence punishable under Section 406 of the Indian Penal Code, including the entire ( 2026:JHHC:14569 ) 2 Cr.M.P. No.536 of 2023 criminal proceeding of Protest Petition bearing C.P. Case No.101 of 2019. 3. The learned counsel for the petitioner submits that the case is fixed before the trial court to 16.06.2026 for appearance of the petitioner and charge has not yet been framed in this case. 4. The brief fact of the case is that the petitioner took a loan from the complainant-bank for purchasing a truck and while the said truck was running illegally, the same was seized by the police. The petitioner did not pay the outstanding loan amount of more than Rs.17,00,000/-. The bank filed C.P. Case No. 472 of 2017 which upon being referred to police under Section 156(3) Cr.P.C., Penk Narayanpur P.S. Case No.52 of 2017 was registered. Police submitted Final Repot and did not send up the petitioner for trial mentioning therein that the dispute is civil in nature. The bank filed protest petition. On the basis of the protest petition, statement of the complainant under solemn affirmation and statement of the inquiry witnesses, the learned Additional Chief Judicial Magistrate, Bermo at Tenughat found prima facie case for the offence punishable under Section 406 of the Indian Penal Code. 5. It is submitted by the learned counsel for the petitioner relying upon the Judgment of the Hon’ble Supreme Court of India in the case of Satishchandra Ratanlal Shah Vs. State of Gujarat and Anr., reported in 2019 Supreme (SC) 337 para -14 of which reads as under:- ( 2026:JHHC:14569 ) 3 Cr.M.P. No.536 of 2023 “14. Now coming to the charge under Section 415 punishable under Section 420 IPC. In the context of contracts, the distinction between mere breach of contract and cheating would depend upon the fraudulent inducement and mens rea. (See Hridaya Ranjan Prasad Verma v. State of Bihar [Hridaya Ranjan Prasad Verma v. State of Bihar, (2000) 4 SCC 168 : 2000 SCC (Cri) 786] .) In the case before us, admittedly the appellant was trapped in economic crisis and therefore, he had approached Respondent 2 to ameliorate the situation of crisis. Further, in order to recover the aforesaid amount, Respondent 2 had instituted a summary civil suit seeking recovery of the loan amount which is still pending adjudication. The mere inability of the appellant to return the loan amount cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, as it is this mens rea which is the crux of the offence. Even if all the facts in the complaint and material are taken on their face value, no such dishonest representation or inducement could be found or inferred.” (emphasis supplied). that therein the Hon’ble Supreme Court of India has held that mere inability of the accused person to return the loan amount cannot give rise to a criminal prosecution for cheating. It is next submitted that even if the entire allegations made against the petitioner are considered to be true, still the offence punishable under Section 406 of the Indian Penal Code is not made out. Hence, it is submitted that the prayer as prayed for by the petitioner in this criminal miscellaneous petition be allowed. 6. The learned Spl. P.P. appearing for the State and the learned counsel for the opposite party no.2 on the other hand vehemently oppose the prayer of the petitioner and submit that the materials in the record are sufficient to constitute the offence punishable under Section 406 of the Indian Penal Code. Hence, it is submitted ( 2026:JHHC:14569 ) 4 Cr.M.P. No.536 of 2023 that this criminal miscellaneous petition being without any merit be dismissed. 7. Having heard the submissions made at the Bar and after going through the materials available in the record, it is pertinent to mention here that the essential ingredients to constitute the offence punishable under Section 406 of the Indian Penal Code are as under:- (i) There must be an entrustment; and (ii) There must be misappropriation or conversion to one’s own use or use in violation of a legal direction or of any legal contract, as has been held by the Hon’ble Supreme Court of India in the case of Ram Narayan Popli vs. Central Bureau of Investigation reported in (2003) 3 SCC 641. 8. It is a settled principle of law that a loan taken by person from a bank or a lender does not amount to “property entrusted”, as the words “property entrusted” have been used in Section 405 of the Indian Penal Code. Because when a bank disburses a loan, the ownership of the money passes to the borrower to use it whereas entrustment implied that person handing over the property continues to be its owner. Moreover, the fundamental difference between a simple lending/borrowing and entrustment of property is that a loan creates civil obligation to repay the money and not a fiduciary trust which is the sine qua non for an entrustment. ( 2026:JHHC:14569 ) 5 Cr.M.P. No.536 of 2023 9. Now coming to the facts of the case, the only allegation against the petitioner is that the petitioner has taken the loan and has not repaid it. The same in the considered opinion of the Court, in the absence of any allegation of dishonest misappropriation of the entrusted property by the petitioner is not sufficient to constitute the offence punishable under Section 406 of the Indian Penal Code. 10. Under such circumstances, this Court is of the considered view that even if the entire allegations made against the petitioner are considered to be true in their entirety, still the offence punishable under Section 406 of the Indian Penal Code is not made out. Therefore, continuation of this criminal proceeding will amount to abuse of process of law. 11. Hence, this is a fit case where the order dated 07.08.2019, passed by the learned Additional Chief Judicial Magistrate, Bermo at Tenughat in connection with C.P. Case No. 101 of 2019 whereby and where under the learned Additional Chief Judicial Magistrate, Bermo at Tenughat has found prima facie case for the offence punishable under Section 406 of the Indian Penal Code, including the entire criminal proceeding of Protest Petition bearing C.P. Case No.101 of 2019, be quashed and set aside qua the petitioner. 12. 12. Accordingly, the order dated 07.08.2019, passed by the learned Additional Chief Judicial Magistrate, Bermo at Tenughat in connection with C.P. Case No. 101 of 2019 whereby and where under the learned Additional Chief Judicial Magistrate, Bermo at ( 2026:JHHC:14569 ) 6 Cr.M.P. No.536 of 2023 Tenughat has found prima facie case for the offence punishable under Section 406 of the Indian Penal Code, including the entire criminal proceeding of Protest Petition bearing C.P. Case No.101 of 2019, is quashed and set aside qua the petitioner. 13. In the result, this criminal miscellaneous petition stands allowed. (Anil Kumar Choudhary, J.) High Court of Jharkhand, Ranchi Dated the 12th May, 2026 AFR/Sonu- Uploaded on 18.05.2026