1 CGHC010360052025 2026:CGHC:37546-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR CRMP No. 2662 of 2025 Mohd. Wasim S/o Mohd Akbar Aged About 37 Years R/o House No. 51b, Samrat Nagar, Khajrana, Kanadia, Tehsil And District- Indore, Madhya Pradesh. ... Petitioner(s) versus 1. State of Chhattisgarh Through Station House Officer Police Station- Pondi, District- Manendragarh-Chirmiri-Bharatpur, Chhattisgarh. 2. Mohd. Shoaib S/o Jenual Abdeen Aged About 45 Years R/o B- Type, Ward No. 5, Pondi, District- Manendragarh-Chirmiri- Bharatpur, Chhattisgarh. ...Respondent(s) (Cause-title taken from Case Information System) For Petitioner : Mr. Siddharth Shukla, Advocate. For Respondent/State : Ms. Anusha Naik, Deputy Government Advocate. For Respondent No. 2 : Mr. Amit Xalxo, Advocate. Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Shri Ravindra Kumar Agrawal , Judge Order on Board Per Ramesh Sinha , Chief Justice 21 .08.2026 1. Heard Mr. Siddharth Shukla, learned counsel for the petitioner. Also heard Ms. Anusha Naik, learned Deputy Government Advocate, BRIJMOHAN MORLE Digitally signed by BRIJMOHAN MORLE Date: 2026.08.24 11:34:36 +0530 2 appearing for the State/respondent No. 1 and Mr. Amit Xalxo, learned counsel, appearing for respondent No. 2. 2. The present petition has been filed by the petitioner with the following prayers: “i. Set-aside and quash the order dated 10th June 2025 passed in RCC No. 1103 of 2025 by the Judicial Magistrate First Class, Baikunthpur, Chirmiri, District Koriya. ii. Quash the final report dated 8th June 2025 filed by the respondent No. 1 and FIR No. 14 of 2025 dated 2nd March 2025 registered at Police Station Pondi, District Manendragarh-Chirmiri-Bharatpur against the petitioner under Section 318(4) of Bhartiya Nyaya Sanhita, 2023. iii. Pass any other relief/order or direction, as this Hon’ble Court deems fit and proper looking to the facts and circumstances of the case in the interest of justice.” 3. Learned counsel for the petitioner submits that the petitioner is an automotive body technician having expertise in building bodies over the chassis of vehicles and is carrying on his enterprise in the name and style of “New Pragati Coach, Indore.” Respondent No.2 had voluntarily handed over three Bus Chassis of Ashok Leyland to the petitioner for construction of Sleeper AC Coaches. The details of the said chassis are as follows: (i) MBPPERHD2RAPR4993, Engine No. REEZ100889; (ii) MB1PEECDIRANR6246, Engine No. RPPZ104208; and (iii) MB1PREHD6RANR6059, Engine No. RPPZ100885. He further 3 submitted that, pursuant to the agreements dated 20.07.2024 and 10.03.2025, respondent No.2 had paid an amount of Rs.55,13,290/- to the Petitioner in installments towards the construction of the aforesaid Sleeper AC Coaches, against the agreed final amount of Rs.75,00,000/-. Respondent No.2 had also represented that he had availed financial assistance of approximately Rs.23 lakhs from Cholamandalam Investment and Finance Company. The transaction between the parties was thus purely commercial in nature and arose out of an agreement for construction of the vehicle bodies. 4. Learned counsel for the petitioner would submit that petitioner could not complete the vehicles within the originally contemplated time due to circumstances which were beyond his control. There was substantial delay in payment by respondent No.2, who made payments in more than 20 installments, apart from delay in the supply of various vehicle parts by the vendors. The petitioner also faced personal health issues during the relevant period. Despite these difficulties, substantial work had already been completed and the vehicles were almost ready, with only certain finishing work, including affixing the windshields and seat foam, and the final trial remaining to be undertaken. He further contended that respondent No.2, despite being fully aware of the progress of the work and having himself entered into a subsequent agreement dated 10.03.2025, chose to initiate criminal proceedings against the petitioner on the same commercial dispute. The conduct of respondent No.2 in continuing the contractual arrangement even after allegedly having a grievance regarding the delay itself demonstrates 4 that the dispute was essentially contractual and commercial in nature. 5. Learned counsel for the petitioner submits that FIR No.14/2025 dated 02.03.2025 was registered against the petitioner under Section 318(4) of the Bharatiya Nyaya Sanhita, 2023, corresponding to the offence of cheating under Section 420 of the Indian Penal Code, on the very same allegations arising out of the contractual transaction. The Petitioner was arrested on 12.04.2025 and was subsequently granted bail by this Hon’ble Court vide order dated 27.06.2025 passed in MCRC No.3963/2025. He further submitted that after investigation, respondent No.1 filed the final report dated 08.06.2025 before the learned Judicial Magistrate First Class, Baikunthpur, Chirmiri, District Koriya, under Section 318(4) of the Bharatiya Nyaya Sanhita, 2023. The learned Magistrate thereafter took cognizance of the matter on 10.06.2025 in Regular Criminal Case No.1103/2025. The continuation of the criminal proceedings, despite the admitted contractual relationship between the parties and the absence of any material showing dishonest intention at the inception of the transaction, amounts to an abuse of the process of law. 6. Learned counsel for the petitioner further stated that the three vehicles were constructed by the petitioner pursuant to the instructions of respondent No.2 and were almost complete when they were taken into custody by the police from the petitioner’s yard at Indore and transported to Chirmiri in working condition. The very fact that the Petitioner undertook substantial work on the vehicles and incurred 5 expenditure towards procurement of components and payment to vendors negatives any allegation that the petitioner had dishonest or fraudulent intention from the inception. He further argued that the allegations, even if taken at their face value, essentially disclose a dispute regarding delay in completion and delivery of the vehicles. Such a dispute may give rise to a claim for damages, compensation or other appropriate civil remedies, but mere failure or delay in performing a contractual obligation cannot, by itself, constitute the offence of cheating. For attracting Section 318(4) of the BNS, there must be material to demonstrate fraudulent or dishonest intention at the very inception of the transaction. In the present case, no such material has been brought on record. 7. Learned counsel for the petitioner places reliance upon the judgment of the Hon’ble Supreme Court in Indian Oil Corporation v. NEPC India Ltd. & Ors., reported in (2006) 6 SCC 736, wherein the Hon’ble Supreme Court deprecated the growing tendency of converting purely civil disputes into criminal cases and observed that criminal proceedings should not be used as a shortcut for obtaining remedies arising out of civil or commercial disputes. The Hon’ble Court has also emphasized that the jurisdiction of the High Court is required to be exercised to prevent abuse of the process of law and to secure the ends of justice. He further submitted that the Hon’ble Supreme Court in Vesa Holdings (P) Ltd. v. State of Kerala, reported in (2015) 8 SCC 293, has reiterated that every breach of contract would not constitute the offence of cheating and that the prosecution must establish fraudulent 6 or dishonest intention at the time when the promise or representation was made. In the present case, the petitioner had commenced and substantially performed the work entrusted to him, and the delay occurred during the course of performance on account of delayed payments and difficulties in procuring the required components. 8. Learned counsel also relies upon Mitesh Kumar J. Sha v. State of Karnataka, reported in (2022) 14 SCC 572, to submit that criminal proceedings cannot be permitted to be used for giving a criminal colour to a dispute which is predominantly civil or commercial in nature. Respondent No.2, having voluntarily entrusted the chassis to the Petitioner, having made payments from time to time and having subsequently entered into a further agreement, cannot convert a dispute regarding performance of the contract into a criminal prosecution in the absence of the essential ingredients of cheating. 9. It is lastly submitted by the learned counsel for the petitioner that the petitioner has already carried out substantial work on the three Sleeper AC Coaches and has incurred expenditure towards the components and services required for their construction. The petitioner never induced respondent No.2 by any dishonest representation, nor did he obtain the chassis or the money by practicing deception. At the highest, the allegations disclose a dispute regarding the time and manner of performance of a commercial contract. Continuation of the criminal proceedings in such circumstances would serve no legitimate criminal-law purpose and would amount to permitting the criminal 7 process to be used for exerting pressure in a commercial dispute. 10. In view of the aforesaid submissions, learned counsel for the petitioner submits that the allegations contained in the FIR and the material collected during investigation do not prima facie satisfy the essential ingredients of the offence under Section 318(4) of the Bharatiya Nyaya Sanhita, 2023, and that continuation of Regular Criminal Case No.1103/2025 would amount to abuse of the process of law. The petitioner, therefore, seeks appropriate relief from this Hon’ble Court in the interest of justice. 11. Per contra, learned State counsel opposes the petition and submits that the allegations contained in the FIR and the material collected during investigation disclose the commission of an offence under Section 318(4) of the Bharatiya Nyaya Sanhita, 2023. It is contended that the petitioner had undertaken to construct and deliver the Sleeper AC Coaches within the agreed period, but failed to complete and deliver the same despite receiving a substantial amount from respondent No.2. He further submits that the final report has been filed after investigation and the learned Magistrate has already taken cognizance; therefore, at this stage, this Court ought not to undertake a detailed appreciation of the evidence or conduct a mini-trial. 12. Learned counsel appearing for respondent No.2 also opposes the petition and submits that the petitioner had received a substantial amount towards construction of the three vehicles but failed to complete the work within the agreed time. It is submitted that respondent No.2 8 had suffered financial loss on account of the delay, particularly as the vehicles were required for commercial purposes and financial assistance had been obtained for the same. According to learned counsel, the subsequent agreement dated 10.03.2025 cannot, by itself, wipe out the earlier default committed by the petitioner. It is further contended that whether the petitioner was prevented from completing the work due to delayed payments, shortage of parts or other reasons is a matter of evidence and cannot be conclusively determined in proceedings under the inherent jurisdiction of this Court. 13. We have considered the rival submissions advanced on behalf of the parties and have perused the material available on record. 14. From the material placed before us, it is not in dispute that the three chassis were voluntarily entrusted by respondent No.2 to the petitioner for construction of Sleeper AC Coaches and that the parties had entered into contractual arrangements in this regard. It is also not in dispute that respondent No.2 had made payments amounting to Rs.55,13,290/- to the petitioner towards the agreed work. The dispute essentially arises from the alleged delay in completion and delivery of the vehicles. 15. The principal question which arises for consideration is whether the allegations made against the petitioner, even if accepted in their entirety, disclose the essential ingredients of the offence punishable under Section 318(4) of the Bharatiya Nyaya Sanhita, 2023. It is well settled that in a case involving cheating arising out of a contractual 9 transaction, mere failure to fulfil a promise or contractual obligation is not sufficient. The prosecution must disclose the existence of fraudulent or dishonest intention at the very inception of the transaction. 16. In the present case, the admitted circumstances do not prima facie indicate that the petitioner had any dishonest or fraudulent intention when the transaction was entered into. On the contrary, the petitioner accepted the chassis, commenced construction of the bodies, procured components and substantially completed the work. The vehicles were admittedly found in a substantially completed condition and were thereafter taken by the police from the petitioner’s premises. These circumstances assume significance while examining the allegation of dishonest intention at the inception. 17. It is also relevant that respondent No.2 continued to deal with the petitioner and entered into a subsequent agreement dated 10.03.2025. Such subsequent conduct, though not by itself determinative, is relevant for considering whether the transaction was initially entered into with fraudulent or dishonest intention. The material placed before this Court does not disclose any specific representation made by the petitioner at the inception of the transaction with an intention to deceive respondent No.2 or dishonestly induce him to part with the chassis or money. 18. The explanation furnished by the petitioner regarding delay, namely, delayed payments by respondent No.2 in more than 20 installments, delay in supply of parts by vendors and the other circumstances pleaded by him, may be a matter for determination in 10 appropriate civil proceedings. However, the existence of such disputed contractual obligations cannot, without more, be converted into an offence of cheating. 19. The Hon’ble Supreme Court in Indian Oil Corporation (supra) has cautioned against the tendency to give a criminal colour to disputes which are essentially civil in nature. Similarly, in Vesa Holdings (P) Ltd. (supra), the Hon’ble Supreme Court has reiterated that every breach of contract does not amount to cheating and that dishonest intention at the inception is the essential ingredient. The principles laid down in Mitesh Kumar J. Sha (supra) are also applicable where the criminal machinery is invoked in respect of a predominantly commercial dispute without the necessary element of criminality. 20. In the facts of the present case, continuation of the criminal proceedings would amount to permitting the criminal process to be used for resolution of a contractual dispute. The allegations may, at the highest, give rise to a claim arising out of alleged delay or non- performance of contractual obligations, for which the aggrieved party may avail such civil or other remedies as are available in law. However, the same cannot be permitted to assume the character of an offence of cheating in the absence of the foundational requirement of dishonest intention at the inception. 21. It is true that ordinarily this Court, while exercising jurisdiction under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (for short, ‘BNSS’), does not undertake appreciation of evidence or conduct 11 a detailed examination of disputed questions of fact. However, where the allegations and the material collected during investigation, even if taken at their face value, fail to disclose the essential ingredients of the alleged offence, continuation of the criminal proceedings would amount to abuse of the process of the Court. 22. Having regard to the totality of the circumstances, particularly the admitted contractual relationship between the parties, the voluntary entrustment of the three chassis, substantial performance of the work by the petitioner, payments made from time to time, subsequent agreement between the parties and absence of material indicating dishonest intention at the inception of the transaction, we are of the considered view that the ingredients of Section 318(4) of the Bharatiya Nyaya Sanhita, 2023 are not made out against the petitioner. 23. Consequently, the present petition deserves to be and is hereby allowed. The final report dated 08.06.2025 arising out of FIR No.14/2025 dated 02.03.2025 registered at Police Station Pondi, District Manendragarh-Chirmiri-Bharatpur, under Section 318(4) of the Bharatiya Nyaya Sanhita, 2023, as well as the order dated 10.06.2025 passed by the learned Judicial Magistrate First Class, Baikunthpur, Chirmiri, District Koriya in Regular Criminal Case No.1103/2025, and all consequential criminal proceedings arising therefrom, are hereby quashed qua the petitioner. 24. It is made clear that this Court has examined the matter only from the standpoint of the existence of the essential ingredients of the 12 alleged criminal offence. The parties shall remain at liberty to avail such civil or other remedies as may be available to them in accordance with law, and this order shall not prejudice the rights and contentions of either party in any such proceedings. Sd/- Sd/- (Ravindra Kumar Agrawal) (Ramesh Sinha) Judge Chief Justice Brijmohan