Telangana High Court
Kasam Sathvik vs State Of Telangana on 5 May, 2026
HIGH COURT FOR THE STATE OF TELANGANA
CRIMINAL PETITION Nos. 2809, 957, 981, 1620, 2608, 2818,
2853, 2856, 2857, 2917, 2928, 2944, 3028, 3029, 3074, 3142,
3143, 3144, 3145, 3206, 3426, 3433, 3587, 3921, 4024, 4027,
4058, 4145, 4249, 4250, 4255, 4256, 4257, 4259, 4260, 4261,
4316, 4361, 4383, 4482, 4483, 4485, 4486, 4558, 4559, 4624,
4660, 4662, 4781, 5194, 5220, 5252, 5505, 5986, 6057, 6251,
6385 and 6863 of 2026
Between :
Kasam Sathvik S/o.Kasam Jagan,
Aged: about 25 years, Occ: Managing Director,
M/s.Chamundeswari Agro Industries Pvt. Ltd.,
R/o.H.No.1-4-80, Alankar Road,
Beside Canara Bank, Ward-9, Suryapet,
Suryapet District, Telangana - 508213
....Petitioner
VERSUS
The State of Telangana
Rep. by its Public Prosecutor
High Court of Telangana at Hyderabad,
through Kethapally Police Station,
Nalgonda District, Telangana and another
... Respondents
DATE OF JUDGMENT PRONOUNCED: 05.05.2026
THE HONOURABLE SRI JUSTICE J. SREENIVAS RAO
1. Whether Reporters of Local Yes/No
newspapers may be allowed to see the
Judgments?
2. Whether the copies of judgment may Yes/No
be marked to Law Reporters/Journals?
3. Whether Their Ladyship/Lordship wish Yes/No
to see the fair copy of the Judgment?
_______________________
J. SREENIVAS RAO, J
2
THE HONOURABLE SRI JUSTICE J. SREENIVAS RAO
CRIMINAL PETITION Nos. 2809, 957, 981, 1620, 2608, 2818,
2853, 2856, 2857, 2917, 2928, 2944, 3028, 3029, 3074, 3142,
3143, 3144, 3145, 3206, 3426, 3433, 3587, 3921, 4024, 4027,
4058, 4145, 4249, 4250, 4255, 4256, 4257, 4259, 4260, 4261,
4316, 4361, 4383, 4482, 4483, 4485, 4486, 4558, 4559, 4624,
4660, 4662, 4781, 5194, 5220, 5252, 5505, 5986, 6057, 6251,
6385 and 6863 of 2026
% Dated 05.05.2026
# Kasam Sathvik S/o.Kasam Jagan,
Aged: about 25 years, Occ: Managing Director,
M/s.Chamundeswari Agro Industries Pvt. Ltd.,
R/o.H.No.1-4-80, Alankar Road,
Beside Canara Bank, Ward-9, Suryapet,
Suryapet District, Telangana - 508213
....Petitioners
VERSUS
$ The State of Telangana
Rep. by its Public Prosecutor
High Court of Telangana at Hyderabad,
through Kethapally Police Station,
Nalgonda District, Telangana and another
... Respondents
! Counsel for Petitioner/s : Mr. Sannapaneni Lohit
Mr. K. Venkataramanaiah
Mr. K. Buchi Babu,
Mr. L. Bhargavakrishna,
Mr. Gujjula Madhusudan,
Mr. K. Durga Prasad,
Mr.C.Hari Preeth,
Mr. N. Keerthi Simha,
Mr. K. Naresh,
Mr. Somavarapu Satyanaraya,
Mr.K. Venumadhav,
Mr. Banda Prasada Rao,
Mr. Praveen Kumar Veerjala,
Mr. N. Manohar,
Mr. V. Ramesh Kumar,
Mr. Chalakani Venkat Yadav,
Mrs. Devineni Radha Rani.
^ Counsel for Respondents :Advocate General
< GIST:
3
> HEAD NOTE:
? CITATIONS:
1. 2022 SCC OnLine SC 579
2. 2012 8 SCC 547
3. 2026 Supreme (SC) 288
4. 2017 Supreme (AP) 698
5. 1958 Supreme (AP) 40
6. (2020) 3 SCC 240
7. (2015) 12 SCC 781
8. 2022 SCC OnLine AP 1007
9. (1975) 1 APLJ 119
10. 1983 Supreme (Pat) 182
11. 2025 SCC OnLine SC 1732
12. 2025 Supreme (SC) 1968
13. 2024 Supreme (SC) 258
14. 2019 3 Supreme 204
15. 2024 INSC 626
16. 2025 Supreme (SC) 1137
17. 2023 5 Supreme 504
18. 2014 8 Supreme 195
19. (2024) 3 SCC 573
20. 2010 6 Supreme 516
21. 2004 (7) Supreme 126
22. 2025 Supreme (SC) 1732
23. (2014) 8 SCC 273
24. 1989 LawSuit(Pat) 222
25. (2010) 8 SCC 775
26. (2007) 12 SCC 641
27. (2000) 4 SCC 168
28. (1998) 5 SCC 170
29. AIR 2001 Supreme Court 1918
30. (2021) 18 SCC 70
31. 2022 SCC OnLine SC 579
32. 1990 (3) SCC 389
33. AIR 1954 SC 364
34. 2023 PHHC 035298
35. AIR 1959 PAT 442
36. 2026 INSC 192
37. AR 1955 Mad 648
38. (1999) 8 SCC 686
39. (1999) 3 SCC 259
40. (2021) 19 SCC 401
41. (2012) 8 SCC 547
42. 2013 SCC OnLine P & H 26723
43. 2026 SCC OnLine Chh 1948
44. 1996 SCC OnLine P & H 531
45. 2015 SCC OnLine Pat 8486
46. (1990) 1 SCC 731
4
47. (2017) 9 SCC 340
48. 2005 SCC OnLine P&H 1115
49. 2025 LiveLaw (SC) 1050
50. (2008) 2 SCC 561
51. 1992 Supp (1) SCC 335
52. (2012) 10 SCC 303
53. 2013: PHHC:059659
54. (2021) 18 SCC 70
55. (2024) 10 SCC 384
56. (2006) 6 SCC 736
57. 2005 SCC OnLine P&H 1115
58. (2012) 8 SCC 547
59. 2025 Supreme (SC) 1094
60. 2025 Supreme (SC) 657
61. 2005 Supreme (SC) 105
62. 2023 Supreme (SC) 496
63. 2011 Supreme (SC) 151
64. 2019 Supreme (SC) 1019
65. (2014) 8 SCC 273
66. 2021 (2) ALT (Crl.) 18 (SC)
67. (1999) 8 SCC 686
68. (2001) 5 SCC 407
69. (2022) 2 SCC 129
70. (1972) 1 SCC 630
71. 1996 SCC (Crl) 1025
72. 2002 (1) ALD (Crl.) 393 (AP)
73. (2014) 2 SCC 62
74. 1968 SCC OnLine SC 161
75. (1993) 3 SCC 4
76. 2023 (1) ALT (Crl.) 102 (SC)
77. (2002) 9 SCC 147
78. 2021 (3) ALT (Crl.) 480 (SC)
5
THE HONOURABLE SRI JUSTICE J. SREENIVAS RAO
CRIMINAL PETITION Nos. 2809, 957, 981, 1620, 2608, 2818,
2853, 2856, 2857, 2917, 2928, 2944, 3028, 3029, 3074, 3142,
3143, 3144, 3145, 3206, 3426, 3433, 3587, 3921, 4024, 4027,
4058, 4145, 4249, 4250, 4255, 4256, 4257, 4259, 4260, 4261,
4316, 4361, 4383, 4482, 4483, 4485, 4486, 4558, 4559, 4624,
4660, 4662, 4781, 5194, 5220, 5252, 5505, 5986, 6057, 6251,
6385 and 6863 of 2026
DATE: 05.05.2026
Between :
Crl.P.No.2809 of 2026
Kasam Sathvik
....Petitioner
AND
State of Telangana and another
....Respondents
Crl.P.No.957 of 2026
Ch. Ravikanth
....Petitioner/accused
AND
The State of Telangana and another
....Respondents
Crl.P.No.981 of 2026
Smt. Kottam Veena @ K. Veena
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
6
Crl.P.No.1620 of 2026
Battini Meena Reddy @ B. Meena Reddy
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
Crl.P.No.2608 of 2026
Mohd. Waheed
....Petitioner/accused
AND
State of Telangana and another
....Respondents
Crl.P.No.2818 of 2026
Konda Laxmaiah
....Petitioner/accused
AND
The State of Telangana and another
....Respondents
Crl.P.No.2853 of 2026
M/s. Sri Lakshmi Venkateshwara Rice Mill
....Petitioner/accused
AND
The State of Telangana and another
....Respondents
Crl.P.No.2856 of 2026
Sanka Rajendra Prasad and four others
....Petitioners/accused Nos.1, 2 and 4 to 6
AND
The State of Telangana and another
....Respondents
7
Crl.P.No.2857 of 2026
Padma Kandukuri
....Petitioner/accused No.3
AND
The State of Telangana and another
....Respondents
Crl.P.No.2917 of 2026
Musku Ranjith Reddy @ M. Ranjith Reddy
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
Crl.P.No.2928 of 2026
Konda Venkanna
....Petitioner/accused
AND
The State of Telangana and another
....Respondents
Crl.P.No.2944 of 2026
Gattu Sravan
....Petitioner/accused
AND
The State of Telangana and another
....Respondents
Crl.P.No.3028 of 2026
Rathod Dinesh
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
8
Crl.P.No.3029 of 2026
Chavan Rohidas @ Chowan Rohidas
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
Crl.P.No.3074 of 2026
Medam Krishnamurthy
....Petitioner/accused No.3
AND
The State of Telangana and another
....Respondents
Crl.P.No.3142 of 2026
Ramesh Rajanna Chiliveri @ Chiliveri Ramesh
....Petitioner
AND
The State of Telangana and two others
....Respondents
Crl.P.No.3143 of 2026
Mashetty Radha Krishna
....Petitioner/accused No.1
AND
State of Telangana and another
....Respondents
Crl.P.No.3144 of 2026
Edukulla Damodar
....Petitioner/accused No.1
AND
State of Telangana and another
....Respondents
9
Crl.P.No.3145 of 2026
Edukulla Damodar and another
....Petitioners/accused Nos.4 and 5
AND
The State of Telangana and another
....Respondents
Crl.P.No.3206 of 2026
V. Ravi Kumar
....Petitioner/accused
AND
State of Telangana and another
....Respondents
Crl.P.No.3426 of 2026
Smt. S. Ajitha
....Petitioner/accused
AND
The State of Telangana and tw o others
....Respondents
Crl.P.No.3433 of 2026
Jaggappa @ Banja Jaggappa
....Petitioner/accused
AND
The State of Telangana and another
....Respondents
Crl.P.No.3587 of 2026
Sri Burugu Bala Kishan
....Petitioner/accused No.6
AND
The State of Telangana and another
....Respondents
10
Crl.P.No.3921 of 2026
Mashetty Radha Krishna
....Petitioner/accused
AND
The State of Telangana and another
....Respondents
Crl.P.No.4024 of 2026
Mahammod Tajuddin
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
Crl.P.No.4027 of 2026
Rahul Chinuri
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
Crl.P.No.4058 of 2026
Nikhil Yadav Totavar and two others
....Petitioners/accused Nos.1 to 3
AND
State of Telangana and another
....Respondents
Crl.P.No.4145 of 2026
Smt. E. Godawari
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
11
Crl.P.No.4249 of 2026
Sri Bachu Krishna Murthy @ Krishnamurthy Bachchu
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
Crl.P.No.4250 of 2026
Saheb Rao Are
....Petitioner/accused
AND
State of Telangana and another
....Respondents
Crl.P.No.4255 of 2026
Dawood Shaik
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
Crl.P.No.4256 of 2026
Srinivasulu Baindla
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
Crl.P.No.4257 of 2026
Sri Sailu Kummari
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
Crl.P.No.4259 of 2026
12
Sri Kondhuri Yadhagiri @ Yadhagiri Kodhuri
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
Crl.P.No.4260 of 2026
Sri Srinivas Muppidi
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
Crl.P.No.4261 of 2026
Shekar Maddineni
....Petitioner/accused
AND
State of Telangana and another
....Respondents
Crl.P.No.4316 of 2026
Konda Siddi Ramulu
....Petitioner/accused
AND
The State of Telangana and another
....Respondents
Crl.P.No.4361 of 2026
Vudugula Laxman
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
Crl.P.No.4383 of 2026
Paidi Suresh Reddy
....Petitioner/accused
13
AND
The State of Telangana and another
....Respondents
Crl.P.No.4482 of 2026
Sri Maddikunta Narsa Goud and two others
....Petitioners/accused Nos.1 to 3
AND
The State of Telangana and two others
....Respondents
Crl.P.No.4483 of 2026
Smt. Maddikunta Vanaja
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
Crl.P.No.4485 of 2026
Sri Musthyala Sridhar
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
Crl.P.No.4486 of 2026
Sri Panthangi Ramakrishna @ Panthangi Rama Krishan
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
Crl.P.No.4558 of 2026
Sri Shaik Mohammed @ Mohammed Shaik
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
14
Crl.P.No.4559 of 2026
Sri N. Srinivas @ Nangunoori Srinivas
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
Crl.P.No.4624 of 2026
Padma Swamulaiah
....Petitioner/accused
AND
The State of Telangana and another
....Respondents
Crl.P.No.4660 of 2026
Chikoti Anusha
....Petitioner/accused
AND
The State of Telangana and another
....Respondents
Crl.P.No.4662 of 2026
Sri Yelagandala Raghuveer
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
Crl.P.No.4781 of 2026
Akula Ramesh @ Raghuram Ramesh
....Petitioner/accused No.6
AND
The State of Telangana and another
....Respondents
Crl.P.No.5194 of 2026
Sri Pogartha Shiva Shankar
15
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
Crl.P.No.5220 of 2026
Hanmandlu Konda
....Petitioner/accused
AND
The State of Telangana and another
....Respondents
Crl.P.No.5252 of 2026
Vasari Ramesh and two others
....Petitioners/accused Nos.1 to 3
AND
State of Telangana and another
....Respondents
Crl.P.No.5505 of 2026
Sri Karkala Naganath @ Karkala Nag Nad
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
Crl.P.No.5986 of 2026
Sri Mohammad Gouse @ Md. Gouse
....Petitioner/accused
AND
The State of Telangana and two others
....Respondents
Crl.P.No.6057 of 2026
T.Padmasri
....Petitioner/accused
AND
16
The State of Telangana and two others
....Respondents
Crl.P.No.6251 of 2026
Renikunta Padmaja and two others
....Petitioners/accused Nos.1, 2 and 5
AND
The State of Telangana and another
....Respondents
Crl.P.No.6385 of 2026
Alle Anvesh
....Petitioner/accused No.2
AND
State of Telangana and another
....Respondents
Crl.P.No.6863 of 2026
Abhynay Kamalakar and another
....Petitioners/accused Nos.1 and 2
AND
The State of Telangana and another
....Respondents
: COMMON ORDER:
Crl.P.No.2809 of 2026 has been filed by the petitioner/accused under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (for short, 'the BNSS'), seeking to quash the proceedings in F.I.R.No.32 of 2026 of Kethapally Police Station, Nalgonda District, registered for the offences punishable under Sections 316(2), 316(5) and 318(3) of the Bharatiya Nyaya Sanhita, 2023 (for short, the BNS') and Section 7 of the Essential Commodities Act, 1955 (for short, 'E.C. Act').
17
2. The other criminal petitions have been filed by the petitioner/s seeking to quash the proceedings which are set out in a tabular form for the following offences:
Crl.P.No. F.I.R.No. Name of the Name of the Registered for the Police Station District offences 957 /2026 95 of 2024 Kataram Jayashankar 403, 420, 406 of IPC Bhupalapally 981 /2026 25 of 2026 Kothakota Wanaparthy 316(2), 316(5), 318(4) of the BNS and S.7 of E.C. Act 1620 /2026 15 of 2026 Bhainsa Rural Nirmal S.316(2), 316(5), 318(4) of the BNS 2608 /2026 28 of 2026 Kotagiri Nizamabad S. 316(5), 318(4) of the BNS & S.7 of the E.C.Act 2818 /2026 75 of 2026 Nalgonda II Nalgonda S. 316(2), 316(5), Town 318(3) of the BNS & S.7 of the E.C.Act 2853 /2026 47of 2027 Nelakondapalli Khammam S.316(2), 316(5), 318(4), 61(2) of the BNS & S.7 of the E.C.Act 2856 /2026 38 of 2026 Chityal Nalgonda S. 316(2), 316(5), 318(3), 318(4) r/w.3(5) of the BNS & S.7 of the E.C.Act 2857 /2026 38 of 2026 Chityal Nalgonda S. 316(2), 316(5), 318(3), 318(4) r/w.3(5) of the BNS & S.7 of the E.C.Act 2917 /2026 22 of 2026 Bhainsa Nirmal S.316(2), 316(5), 318(4) of the BNS 2928 /2026 76 of 2026 Nalgonda II Nalgonda S. 316(2), 316(5), Town 318(3) of the BNS & S.7 of the E.C.Act 2944 /2026 37 of 2026 Nalgonda Rural Nalgonda S. 316(2), 316(5), 318(3) r/w.3(5)of the BNS 3028 /2026 30 of 2026 Narsapur Nirmal S. 316(2), 316(5), 318(3) of the BNS & S.7 of the E.C.Act 3029 /2026 29 of 2026 Narsapur Nirmal S. 316(2), 316(5), 318(3) of the BNS & S.7 of the E.C.Act 3074 /2026 36 of 2026 Nalgonda Rural Nalgonda S. 316(2), 316(5), 318(3), 318(4) r/w.3(5) of the BNS 3142 /2026 10 of 2026 Yergatla Nizamabad S. 316(5), 318(4) of the BNS & S.7 of the E.C.Act 3143 /2026 36 of 2026 Nalgonda Rural Nalgonda S. 316(2), 316(5), 318(3), 318(4) r/w.3(5) of the BNS & S.7 of the E.C.Act 18 3144 /2026 28 of 2026 Mungode Nalgonda S. 316(2), 316(5), 318(3) of the BNS & S.7 of the E.C.Act 3145 /2026 36 of 2026 Nalgonda Rural Nalgonda S. 316(2), 316(5), 318(3), 318(4) r/w.3(5) of the BNS 3206 /2026 39 of 2026 Varni Nizamabad S. 316(5), 318(4) of the BNS & S.7 of the E.C.Act 3426 /2026 69 of 2026 Nizamabad Nizamabad S. 316(5) 318(4) of Rural the BNS & S.7 of the E.C.Act 3433 /2026 5 of 2026 Sirgapur Sangareddy S. 316(2), 316(5) of the BNS & S.7 of the E.C.Act 3587 /2026 36 of 2026 Nalgonda Rural Nalongda 316(2), 316(5), 318(3), 318(4) r/w.3(5) of the BNS 3921 /2026 28 of 2026 Mungode Nalgonda S. 316(2), 316(5), 318(3) of the BNS & S.7 of the E.C.Act 4024 /2026 51 of 2026 Pitlam Kamareddy S. 316(2), 316(5), 318(3), 318(4), 314 of the BNS & S.7 of the E.C.Act 4027 /2026 50 of 2026 Pitlam Kamareddy S. 316(2), 316(5), 318(3), 318(4), 314 of the BNS & S.7 of the E.C.Act 4058 /2026 31 of 2026 Nasrullabad Kamareddy S. 316(2), 316(5), 318(3) r/w,3(5) of the BNS & S.7 of the E.C.Act 4145 /2026 62 of 2026 Sadashiv Nagar Kamareddy S. 316(2), 316(5), 318(3), 318(4), 314 of the BNS & S.7 of the E.C.Act 4249 /2026 55 of 2026 Machareddy Kamareddy S. 316(2), 316(5), 318(3), 318(4), 314 of the BNS & S.7 of the E.C.Act 4250 /2026 42 of 2026 Birkur Kamareddy 316(2), 315(3), 318(3) of the BNS & S.7 of the E.C. Act 4255 /2026 55 of 2026 Nagireddypet Kamareddy S. 316(2), 316(5), 318(3), 318(4), 314 of the BNS & S.7 of the E.C.Act 4256 /2026 53 of 2026 Nagireddypet Kamareddy S. 316(2), 316(5), 318(3), 318(4), 314 of the BNS & S.7 of the E.C.Act 4257 /2026 49 of 2026 Lingampet Kamareddy S. 316(2), 316(5), 318(3), 318(4), 314 of the BNS & S.7 of the E.C.Act 4259 /2026 75 of 2026 Yellareddy Kamareddy S. 316(2), 316(5), 318(3), 318(4), 314 of the BNS & S.7 of the E.C.Act 19 4260 /2026 54 of 2026 Nagireddypet Kamareddy S. 316(2), 316(5), 318(3), 318(4), 314 of the BNS & S.7 of the E.C.Act 4261 /2026 41 of 2026 Birkur Kamareddy S.316(2), 316(5), 318(3) of the BNS & S.7 of the E.C. Act 4316 /2026 27 of 2026 Rajampet Kamareddy S. 316(2), 316(5), 318(3), 318(4), 314 of the BNS & S.7 of the E.C.Act 4361 /2026 47 of 2026 Nizamsagar Kamareddy S. 316(2), 316(5), 318(3) of the BNS & S.7 of the E.C.Act 4383 /2026 61 of 2026 Sadashiv Nagar Kamareddy S. 316(2), 316(5), 318(3), 318(4), 314 of the BNS & S.7 of the E.C.Act 4482 /2026 62 of 2026 Ramareddy Kamareddy S. 316(2), 316(5), 318(3), 318(4), 314 of the BNS & S.7 of the E.C.Act 4483 /2026 61 of 2026 Ramareddy Kamareddy S. 316(2), 316(5), 318(3), 318(4), 314 of the BNS & S.7 of the E.C.Act 4485 /2026 74 of 2026 Yellareddy Kamareddy S. 316(2), 316(5), 318(3), 318(4), 314 of the BNS & S.7 of the E.C.Act 4486 /2026 76 of 2026 Yellareddy Kamareddy S. 316(2), 316(5), 318(3), 318(4), 314 of the BNS & S.7 of the E.C.Act 4558 /2026 77 of 2026 Yellareddy Kamareddy S. 316(2), 316(5), 318(3), 318(4), 314 of the BNS & S.7 of the E.C.Act 4559 /2026 63 of 2026 Machareddy Kamareddy S. 316(2), 316(5), 318(3), 318(4) of the BNS & S.7 of the E.C.Act 4624 /2026 63 of 2026 Sadashiv Nagar Kamareddy S. 316(2), 316(5), 318(3), 318(4), 314 of the BNS & S.7 of the E.C.Act 4660 /2026 76 of 2026 Thangallapalli Rajanna S.318(4), 316(2), Sircilla 316(5), 318(3) of the BNS & S.7 of the E.C. Act 4662 /2026 51 of 2026 Nizamsagar Kamareddy S. 316(2), 316(5), 318(3) of the BNS & S.7 of the E.C.Act 4781 /2026 52 of 2026 Sulthanabad Ramagundam S.316(2), 316(5), 318(4) r/w.3(5) of the BNS & S.7 of the E.C. Act 5194 /2026 51 of 2026 Jukkal Kamareddy S. 316(2), 316(5), 318(3), 318(4), 314 of the BNS & S.7 of the E.C.Act 20 5220 /2026 28 of 2026 Rajampet Kamareddy 316(2), 316(5), 318(3), 318(4), 314 of the BNS & S.7 of the E.C. Act 5252 /2026 67 of 2026 Bichkunda Kamareddy S. 316(2), 316(5), 318(3), 318(4), 314 of the BNS & S.7 of the E.C.Act 5505 /2026 69 of 2026 Bichkunda Kamareddy S. 316(2), 316(5), 318(3), 318(4), 314 of the BNS & S.7 of the E.C.Act 5986 /2026 75 of 2026 Madnoor Kamareddy S. 316(2), 316(5), 318(3), 318(4), 314 of the BNS & S.7 of the E.C.Act 6057 /2026 37 of 2026 Ghanpur Wanaparthy S.316(2), 316(5), 318(4) of the BNS & S.7 of the E.C. Act 6251 /2026 56 of 2026 Sirpur-T Kumrambheem S. 316(2), 316(5), Asifabad 318(3), 318(4) r/w.3(5) of the BNS & S.7-A of the E.C.Act 6385 /2026 3 of 2026 Bodhan Rural Nizamabad S. 316(5), 318(4) r/w.3(5) of the BNS & S.7 of the E.C.Act
3. The issue involved in these criminal petitions is one and the same. Hence, all these criminal petitions are clubbed together and being disposed of by way of a common order.
4. For the facility of reference, the facts from Crl.P.No.2809 of 2026 are being referred to.
5. Brief facts of the case:
5.1. On 23.02.2026, respondent No.2-The District Manager, TGSCSCL, Naglonda, lodged a complaint stating that the Government entrusted the paddy to M/s.Chamundeshwari Agro Industries, Uppalapahad, Kethepally, and entered into an agreement with Rice Miller for Custom Milling of Paddy KMS 2022-23 (Karif & Rabi) (for 21 short, 'Agreement') for the purpose of milling and delivery of Custom Milled Rice (CMR). The petitioner, namely Kasam Sathvik, being the proprietor/representative of the said mill, was acting as an agent of Telangana State Civil Supplies Corporation Limited (for short, 'the Corporation') and held the paddy in a fiduciary capacity, with ownership remaining vested in the Corporation. It is further stated that the paddy was procured from farmers under Minimum Support Price (MSP) and the same was transported various agencies including to the petitioner's rice mill and the same was duly acknowledged by the miller, who was obligated to deliver rice at prescribed out-turn ratios. After milling and partial lifting through e-auction, a balance quantity of paddy was required to be available in the mill. However, upon receipt of credible information regarding misappropriation, a joint inspection was conducted on 16.10.2025. As per records, 13,967.186 MTs of paddy ought to have been available, but physical verification revealed nil stock, resulting in total shortage of paddy is 13,967.186 MTs. The miller failed to account for the shortage despite notices and also failed to clear the dues. The petitioner could not satisfactorily explain the shortfall of the stock worth Rs.34,10,64,715/-. As per the Agreement, such shortage entails recovery at penal rates and the misappropriation of Government paddy worth Rs. 45,36,16,071/- has caused substantial loss to the public exchequer and adversely affected the Public Distribution 22 System (PDS). Hence, the present complaint is lodged for the offences under Sections 316(2), 316(5) and 318(3) of the Bharatiya Nyaya Sanhita, 2023 (for short, 'the BNS') and Section 7 of the Essential Commodities Act, 1955 (for short, 'the E.C. Act').
6. Insofar as other criminal petitions are concerned, the allegations levelled in the complaints in respect of allotment of total paddy, CMR delivered by the petitioners, shortfall of paddy and other particulars are set out in the following tabular form:
Crl.P.No. Total After Paddy Balance Shortfall Worth of Paddy milling lifted by paddy to (MTs) misappropriated allotted paddy to be the be paddy, along with (MTs) available in bidder/ available penalty and the rice mill Delivered in the interest (or) CMR mill (In Rs.) After (MTs) (MTs) milling rice to be delivered (MTs) 957 /2026 4400.120 2948.080 2003.833 1409.324 1409.324 4,26,88,216/-
981 /2026 8618.460 5774.368 2697.480 4592.370 3824.530 13,14,94,510/- 1620 /2026 7606.360 5096.255 2087.800 4490.230 4490.230 17,18,04,415/- 2608 /2026 17016.800 6620.430 -- 6620.430 6620.430 2,69,52,235/- 2818 /2026 44350.560 32815.800 1021.537 31794.263 7811.040 25,36,81,256/- 2853 /2026 3282.640 2199.368 142.986 2056.382 2942.647 10,88,39,646/- 2856 /2026 11813.280 7382.831 1428.980 5953.851 5953.851 19,33,64,859/- 2857 /2026 11813.280 7382.831 1428.980 5953.851 5953.851 19,33,64,859/- 2917 /2026 9877.120 8481.735 2833.052 5648.683 5648.851 21,48,57,299/- 2928 /2026 12856.200 8176.059 150.000 8026.059 8026.059 26,06,64,486/- 2944 /2026 21724.480 16265.657 285.265 15890.392 15890.392 51,89,99,505/- 3028 /2026 4892.640 2873.742 809.799 3683.719 3683.719 14,60,86,187/- 3029 /2026 5773.320 2408.091 1350.122 3758.213 3758.213 15,05,79,103/- 3074 /2026 24722.120 16576.620 4377.508 12199.112 6766.211 21,97,48,061/- 3142 /2026 25953.200 17761.040 -- 16011.040 16011.040 6,34,77,394/- 3143 /2026 24722.120 16782.781 4377.508 12199.112 6766.211 21,97,48,061/- 3144 /2026 9927.760 6750.021 1644.584 1782.505 450.000 1,46,14,772/- 3145 /2026 24722.120 16782.781 4377.508 12199.112 6766.211 16,52,24,106/- 3206 /2026 3762.760 2521.048 173.750 3458.367 3458.367 8,71,97,143/- 3426 /2026 1203.440 813.540 716.286 134.357 134.357 45,79,245.29/- 3433 /2026 9738.079 6575.369 117.00 5064.178 4083.498 13,19,51,861/- 3587 /2026 24722.120 16576.620 4377.508 12199.112 6766.211 21,97,48,061/- 3921 /2026 9927.760 6750.021 1644.584 1782.505 450.000 1,46,14,772/- 4024 /2026 32780.800 21963.130 19175.370 4160.830 4160.830 85,65,366.80/- 4027 /2026 48509.200 32501.160 22981.150 14208.960 14208.960 2,92,62,256.60/- 23 4058 /2026 41568.800 27851.060 17927.560 14810.870 9447.240 21,917,596.40/- 4145 /2026 41771.600 27986.900 21460.000 2863.250 2863.250 2,26,00,860/- 4249 /2026 19850.400 13299.770 6960.000 9462.340 9462.340 2,19,52,628.80/- 4250 /2026 29676.400 19883.190 11978.760 11798.000 11798.000 27,371,360/- 4255 /2026 26321.200 17635.200 12855.320 7134.140 7134.140 1,46,92,021.40/- 4256 /2026 25958.800 17405.790 14384.210 4509.820 4509.820 92,41,291.20/- 4257 /2026 22175.200 14837.280 12094.770 4093.260 4093.260 84,22,381.60/- 4259 /2026 38241.200 25621.600 21248.860 6534.750 3534.750 1,34,61,585/- 4260 /2026 30305.600 20304.75 17132.450 4736.250 4736.250 97,56,675/- 4261 /2026 40172.00 26915.240 13630.000 19829.320 17947.320 41,637,759.20/- 4316 /2026 23802.400 15947.610 8700.000 10817.320 10817.320 2,50,96,182.40/- 4361 /2026 133647.200 86879.950 64302.280 29463.310 23383.150 4,93,92,758.39/- 4383 /2026 14957.600 10021.590 5727.190 6409.560 6409.560 1,32,03,693.60/- 4482 /2026 70425.600 47185.150 22330.000 37097.230 37097.230 8,60,65,573.60/- 4483 /2026 47755.600 31896.250 14210.00 26546.630 26546.230 6,15,88,181.60/- 4485 /2026 13997.800 9378.520 7457.800 2867.680 2867.680 59,07,420.80/- 4486 /2026 28174.400 18877.380 16508.960 3535.500 3535.500 72,79,635.80/- 4558 /2026 26246.400 17584.470 13250.050 6470.200 6470.200 1,33,01,068/- 4559 /2026 17941.600 12020.870 4880.700 10656.970 10656.970 2,47,24,170.40/- 4624 /2026 11959.600 8012.930 3719.960 6407.420 6407.420 1,31,99,285.20/- 4660 /2026 2596.280 1739.508 -- 1270.623 1270.623 4,12,89,285/- 4662 /2026 47663.200 31934.340 28412.420 5047.320 5256.600 1,08,07,668/- 4781 /2026 8096.680 5505.742 1088.456 6462.237 6165.357 19,89,89,202/- 5194 /2026 76528.400 51274.030 11733.300 59015.790 56491.960 13,10,79,707/- 5220 /2026 24109.200 16153.160 3158.100 18646.350 12369.950 2,86,98,284/- 5252 /2026 135468.200 90763.370 36167.610 80620.060 54997.160 12,35,93,831.20/- 5505 /2026 25766.800 17263.750 11629.070 8405.920 8405.920 1,73,12,034.20/- 5986 /2026 51179.690 34290.390 19612.150 21907.830 21907.830 4,51,28,614.80/- 6057 /2026 7303.560 4893.385 -- 3429.082 3415.762 12,29,53,070/- 6251 /2026 2936.520 1967.468 744.219 1825.744 1825.744 6,91,95,117/- 6385 /2026 8784.171 5900.431 2024.570 4844.827 4844.827 18,23,33,730.40/-
7. Mr. R.N. Hemandranath Reddy, learned Senior Counsel representing Mr. Sannapaneni Lohit, learned counsel for the petitioner in Crl.P.No.2809 of 2026;
Mr. Vinod Kumar Deshpande, learned Senior counsel representing Mr. K. Venkataramanaiah, learned counsel for the petitioner in Crl.P.Nos.2818, 2928 and 2944 of 2026;
Mr. K. Buchi Babu, learned counsel for the petitioner in Crl.P.No.957 of 2026;
Mr. L. Bhargavakrishna, learned counsel for the petitioner in Crl.P.Nos.981, 1620, 2917, 3028, 3029, 3142, 3426, 4024, 4027, 24 4145, 4482, 4483, 4485, 4486, 5194, 5505 and 5986 of 2026, representing Mr. Gujjula Madhusudan, learned counsel for the petitioner in Crl.P.Nos.4249, 4255, 4256, 4257, 4259, 4260, 4361, 4558, 4559 and 4662 of 2026;
Mr. K. Durga Prasad, learned counsel for the petitioner in Crl.P.Nos.2608, 3206, 4058, 4250, 4261, 5252 and 6385 of 2026;
Mr.C.Hari Preeth, learned counsel for the petitioner in Crl.P.Nos.2856, 2857, 3143, 3144, 3145 and 3921 of 2026;
Mr. N. Keerthi Simha, learned counsel for the petitioner in Crl.P.No.3074 of 2026;
Mr. K. Naresh, learned counsel for the petitioner in Crl.P.No.3587 of 2026;
Mr. Somavarapu Satyanaraya, learned counsel for the petitioner in Crl.P.Nos.4316 and 4624 of 2026;
Mr.K. Venumadhav, learned counsel for the petitioner in Crl.P.Nos.4660, 4781 and 6863 of 2026;
Mr. Banda Prasada Rao, learned counsel for the petitioner in Crl.P.No.5220 of 2026;
Mr. Praveen Kumar Veerjala, learned counsel for the petitioner in Crl.P.No.2853 of 2026;
25
Mr. N. Manohar, learned counsel for the petitioner in Crl.P.No.3433 of 2026;
Mr. V. Ramesh Kumar, learned counsel for the petitioner in Crl.P.No.4383 of 2026;
Mr. Chalakani Venkat Yadav, learned counsel for the petitioner in Crl.P.No.6057 of 2026;
Mrs. Devineni Radha Rani, learned counsel for the petitioner in Crl.P.No.6251 of 2026, learned Advocate General appearing on behalf of respondent No.2; and learned Public Prosecutor appearing on behalf of respondent No.1/State.
SUBMISSIONS OF LEARNED COUNSEL FOR THE PETITIONERS :
8. Mr. R. N. Hemendranath Reddy, learned Senior Counsel in Crl.P.No.2809 of 2026:
8.1. Learned Senior Counsel submitted that the petitioner has not committed any offence and has been falsely implicated in the present case. There are no allegations, much less specific allegations, against the petitioner. The entire allegations are levelled against M/s.Chamundeswari Agro Industries Private Limited (for short, 'CAIPL'). However, respondent No.2 in his complaint it is stated that an amount of Rs.45,36,16,071/- to be recovered from 26 M/s.Sumanjali PBI PVT, Nalgonda. Therefore, the petitioner is no way concerned with the present crime. Respondent No.2 filed complaint mechanically without arraying CAIPL as an accused and the petitioner has been implicated solely on the ground that he is the Managing Director of CAIPL and the same is not permissible under law.
8.2. He further submitted that even if the allegations levelled in the complaint taken face value, the ingredients of the offences under Sections 316(2), 316(5) and 318(3) of the BNS are not attracted against the petitioner. The petitioner is neither an agent nor an employee; the work entrusted under the Agreement was purely in the nature of job work. The Corporation themselves voluntarily supplied the paddy to CAIPL for the purpose of custom milling on payment of milling charges and other charges and CMR to be delivered to the Government.
8.3. He also submitted that the offence under Section 318(5) of the BNS is not attracted, as the petitioner does not come within the ambit of agent as defined under Section 182 of the Contract Act, 1872. The nature of the work entrusted to the petitioner falls within the "job work" as defined under sub-section (68) of Section 2 of the Central Goods and Service Tax, 2017.27
8.4. Respondent No.2/District Manager of the Corporation lodged a complaint, without having authority or competency. As per G.O.Ms.No.23 dated 18.10.2022 issued by the Government of Telangana, Consumer Affairs, Food and Civil Supplies (CS.I.CCS) Department, the Collector is only the competent authority to lodge complaint. Even according to the Agreement, the Commissioner of Civil Supplies or MD, TSCSCL or Collector/Additional Collector/District Manager in writing to act on behalf of the Corporation. In the absence of any such authorization, respondent No.2 lodged the present complaint and the same is not maintainable under law.
8.5. He further submitted that the Agreement contains various terms and conditions, including Clause 13(4), which provides that, in the event of any dispute arising in relation to the Agreement, the same shall be referred to an Arbitrator. He submitted that despite the existence of this arbitration clause, the Corporation has not invoked the said clause, on the other hand, filed the present complaint.
8.6. Clause 14 of the Agreement stipulates all disputes arising under the Agreement shall be filed in the competent civil Court.
Respondent No.2 ought to have approached the competent civil Court and filed a suit for recovery of the alleged due amount for non- 28 delivery of the CMR equivalent to the paddy supplied, on the other hand filed the present complaint by giving criminal colour. 8.7. As per the Agreement, the Government had issued G.O.Ms.No.23 dated 18.10.2022, framed the Operational Guidelines for Procurement of Paddy and Delivery of Custom Milling Rice for the Kariff Marketing Season 2022-23, wherein it is mentioned that the Corporation/Government has to allot maximum limit of paddy 8000 MTs only to Rice Mills. However, the Corporation allotted huge substandard quantity of 23,405.280 MTs of paddy to CAIPL. During the Kariff season 2022-23, due to heavy rains, the paddy stored in the mills was damaged. The Rice Millers Association of Telangana State, submitted representations to the Ministry of Civil Supplies on 07.06.2023 and 19.06.2023 explaining the problems being faced by the millers due to untimely rains drenched paddy from PPCs for custom milling for Rabi 2022-2023. Based on the said representations and the report of the Commissioner, TSCSCL, dated 24.07.2023, the Government of Telangana, issued G.O.Ms.No.18 dated 10.08.2023 constituting a committee to suggest measures for enhancement of milling capacity in the State and modalities for auction of surplus paddy and to decide auction price. Thereafter, the Government issued another G.O.Ms.No.1 dated 25.01.2024 constituting a State Level Committee (SLC) for auction of surplus 29 stock of paddy lying in the mills pertaining to Rabi 2022-23 by calling for fresh global e-tenders.
8.8. He also submitted that on 01.03.2024, the Ministry of Consumer Affairs, Food and Public Distribution Department of Food and Public Distribution issued proceedings directing the District Managers, Corporation/DCSOS not to deliver CMR against Rabi 2022-23 paddy quantities allotted to successful bidders finalized through tenders. The Corporation had issued e-Tender Reference on 25.01.2024 for sale of Rabi 2022-23 FAQ paddy procured under MSP operations by TSCSCL through e-tender platform. The Government of Telangana, wherein it is stated that the paddy stock has to be physically inspected by the interested bidders, the paddy stocks are offered 'as is where is' basis. Pursuant to the tender, M.s.Suvarchala Trading Company and M/s.Trimaxi Agro Enterprises were declared as successful bidders and the bidders lifted entire paddy. 8.9. He further submitted that Corporation issued a notice dated 31.10.2025 directing the CAIPL to pay an amount of Rs.43,99,73,483/- within a period of seven days alleging that there is a shortfall of 13,967.186 MTs of paddy stocks, worth Rs.34,10,64,715/-, in the said rice mill and due to non-supply of CMR as per the Agreement, the petitioner is liable to pay for defaulted paddy at 125% of the rates of CMR along with interest @ 12% per 30 annum and also the Corporation shall invoking the provisions of Revenue Recovery Act. Pursuant to the said notice, the petitioner submitted a comprehensive reply on 03.11.2025 denying the allegations made in the said notice and requested to withdraw the same. Respondent No.2, without passing any order on the said reply, lodged the present complaint only with an intention to recover the alleged amount mentioned in the notice dated 31.10.2025 by giving a criminal colour, which is not permissible in law. Due to the pressures of the respondents, the petitioner Mill paid an amount of Rs.12,18,00,400/- to the bidder and the said firms were remitted the amount to the Government in respect of the paddy supplied by the Corporation.
8.10. He further submitted that the Corporation has not conducted a proper enquiry and has not submitted any iota of evidence as to how it arrived at the alleged shortfall of paddy, and that the alleged inspection was conducted behind the back of the petitioner. In the absence of such material, claimed huge amounts by issuing notices and the petitioner is not liable to pay the alleged amount. 8.11. He also submitted that the offences under Sections 316(2) and 318(3) of the BNS cannot co-exist, especially when there is no dishonest intention on the part of the petitioner, especially the Corporation themselves supplied the paddy for the purpose of 31 conversion into CMR and there is no criminal breach of trust is made out. The petitioner or CAIPL has not made any request the Corporation to supply the paddy. The Corporation themselves entrusted the job work. Hence, the above said ingredients are not attracted.
8.12. The respondent Corporation had issued proceedings under Revenue Recovery Act. Aggrieved by the same, some of the Rice Millers have approached this Court and filed W.P.No.17985 of 2024 and batch and this Court allowed the said writ petitions on 28.08.2024 and quashed the proceedings on the ground that the respondent authorities therein have issued the proceedings without following the mandatory procedure prescribed under the provisions of Revenue Recovery Act. However, the respondent authorities therein are not precluded from initiating proceedings afresh, by strictly following the due procedure laid down under Revenue Recovery Act, as well as the principles laid down in the judgment mentioned in the said common order. Aggrieved by the same, the Government/ Corporation have filed Writ Appeals before the Hon'ble Division Bench and the Hon'ble Division Bench had not suspended the order passed by the learned Single Judge only directed the respondents/writ petitioners or their family members are not to alienate their properties, till further orders and the said writ appeals are pending. 32 8.13. The Corporation framed the scheme in exercise of the powers conferred under Section 3 of the Essential Commodities Act, 1955 and framed guidelines. Pursuant to the said scheme only the parties have entered into the Agreement and the said Agreement is having statutory force and binding upon the parties. However, the respondent Corporation has filed the present complaint in contravention of the terms and conditions of the Agreement, without invoking the arbitration clause or without approaching the competent civil Court. The complaint has been filed by giving criminal colour for recovery of the alleged due amount, without conducting any enquiry and without determining the amount due and payable. 8.14. He further submitted that the Corporation has not paid milling charges, storage charges and other charges, and in fact, a substantial amount is due by the Corporation to CAIPL. If the Corporation invoked the arbitration clause, the real facts will come to light. 8.15. He further submitted that earlier, similar cases were registered for the offences under Sections 316(2) and 318(3) of the BNS only. With an intention to avoid following the due procedure as contemplated under Section 41-A of the Code of Criminal Procedure, 1973/35(3) of the Bharatiya Nagarik Suraksha Sanhita, 2023 (for short, 'the BNSS'), filed the present complaint by adding Section 316(5) of the BNS, though the ingredients of the said Section are not 33 attracted against the petitioner. He further submitted that in similar circumstances, this Court in Crl.P.No.895 of 2025 while disposing of the case on 25.01.2024, has held that the offence under Section 316(5) of the BNS is not attracted and the punishment for the other offences levelled against the petitioners therein is below seven years, therefore, the Investigating Officer is directed to follow the due procedure as contemplated under Section 41-A of Cr.P.C./Section 35(3) of BNSS.
8.16. He also submitted that respondent No.1, in his counter, has not stated that the competent authority had granted authorization to him to file complaint. On the other hand, the Circle Inspector of Police filed a counter-affidavit on behalf of respondent No.2, wherein it is stated that, as per clause 4(p) of the Agreement, the District Manager is authorized to act on behalf of the Corporation and the complaint lodged by respondent No.2 is maintainable. He also submitted that respondent No.2 lodged the complaint after a lapse of inordinate delay, especially not mentioned any reasons for the delay and the same is fatal to the prosecution.
8.17. He further submitted that respondent No.2, in the counter- affidavit, relied upon the order passed by this Court in Crl.P.No.3305 of 2024 dated 01.04.2024. In the above said order, this Court relied upon the judgments in Lalit Chaturvedi and others v. State of 34 Uttar Pradesh 1, and Sadhupati Nageswara Rao v. State of Andhra Pradesh 2. The said principle is not applicable to the present facts and circumstances of the case, on the ground that Sadhupati Nageswara Rao's case, the fair price shop dealer was convicted for the offence under Section 409 of IPC. The fair price shop dealer falls within the ambit of employee/agent, as he is entrusted with the distribution of commodities and he receives incentives from the Government. However, in the present case, the petitioner is not an agent or employee, and the respondent Corporation entrusted paddy for conversion into rice (CMR) and the nature of work is only job work.
8.18. In support of his contention, he relied upon the following judgments:
1. Sujoy Ghosh v. The State of Jharkhand & Anr. 3;
2. Shri Kersi H Vachha and another v. State of A.P., Represented by the Public Prosecutor, High Court of A.P., Hyderabad 4;
3. State of Madras (now A.P.) represented by District v. Jayalakshmi Rice Mill Contractors C. 5;1
2022 SCC OnLine SC 579 2 2012 8 SCC 547 3 2026 Supreme (SC) 288 4 2017 Supreme (AP) 698 5 1958 Supreme (AP) 40 35
4. Sushil Sethi and another v. State of Arunachal Pradesh and others 6;
5. Sharad Kumar Sanghi v. Sangita Rane 7;
6. N. Gopinath and Ors. v. The State of Andhra Pradesh and Ors. 8;
7. Atluri Sitaramdoss and another v. The State, S.H.C. of Police, Gudivada Town Police 9;
8. Laxmi Nr. Sah v. The State of Bihar 10;
9. Bal Kishan Das v. P.C. Nayar 11;
10. Inder Chand Bagri v. Jagadish Prasad Bagri and another 12;
11. A. M. Mohan v. The State Represented by SHO and Another 13;
12. Satishchandra Ratanlal Shah v. State of Gujarat and another 14;
13. Delhi Race Club (1940) Ltd. and Ors. v. State of Uttar Pradesh and Ors. 15;
14. S. N. Vijayalakshmi & Ors. v. State of Karanataka & Anr. 16;
6 (2020) 3 SCC 240 7 (2015) 12 SCC 781 8 2022 SCC OnLine AP 1007 9 (1975) 1 APLJ 119 10 1983 Supreme (Pat) 182 11 2025 SCC OnLine SC 1732 12 2025 Supreme (SC) 1968 13 2024 Supreme (SC) 258 14 2019 3 Supreme 204 15 2024 INSC 626 36
15. Mahmood Ali & Ors. v. State of U.P. & Ors. 17;
16. Rajib Ranjan & Ors. v. R. Vijaykumar 18:
17. Naresh Kumar v. State of Haryana 19;
18. Kishan Singh (D) through L.Rs. v. Gurpal Singh & Ors. 20;
19. Bharat Petroleum Corporation Ltd. and Anr. V. N.R. Vairamani and Anr.21; and
20. Anukul Singh v. State of Uttar Pradesh and anr. 22
9. Mr. Vinod Kumar Despande, learned Senior Counsel in Crl.P.No.2818 of 2026 9.1. Learned Senior Counsel, submitted that respondent No.2 does not have locus standi to file the complaint. As per the Clause No.8.1.3 (though it was shown as 9.1.3) of the Agreement, the Commissioner, Civil Supplies Department, VC & MD of TSCSCL alone is competent to lodge the complaint, and not respondent No.2-District Manager.
9.2. He further submitted that even according to the allegations levelled in the complaint, the inspection was conducted in the petitioner's rice mill on 08.08.2025 and a report was submitted on 16 2025 Supreme (SC) 1137 17 2023 5 Supreme 504 18 2014 8 Supreme 195 19 (2024) 3 SCC 573 20 2010 6 Supreme 516 21 2004 (7) Supreme 126 22 2025 Supreme (SC) 1732 37 22.09.2025. The present complaint was lodged on 23.02.2026, after a lapse of more than five months from the date of the alleged report, without assigning any reasons for the said delay. Hence, the complaint filed by respondent No.2 is liable to be quashed on the ground of delay.
9.3. He further submitted that as per the Agreement, the petitioner and employees of respondent Corporation are responsible and Clause 9 of the Agreement deals with joint custody. However, respondent No.2 in his counter alleged that the role of joint custody of the Corporation officials is only limited and the same is not permitted under law, especially Clause 9(1) of the Agreement specifically stated that the paddy received by the second party/rice miller from respective PPCs shall be under the joint custody of the Corporation as well as the miller. The Deputy Tahasildar, Civil Supplies, of the respective area, or any other official nominated by the Collector, Civil Supplies, shall act as the joint custodian. Respondent No.2 with an intention to save their own employees filed the present complaint against the petitioner.
9.4. He further submitted that the petitioner firm, namely Ram Laxman Paraboiled Rice Mill Limited, has approached this Court and filed W.P.No.25200 of 2024, questioning the action of the respondents therein in not lifting the paddy allotted to the petitioner 38 firm for the Rabi 2022-23, in furtherance of the global e-tender dated 25.01.2024, on 'as is where is' basis, as being illegal. This Court, by order dated 11.09.2024, disposed of the said writ petition directing the respondents to lift the CMR paddy lying in the petitioner's rice mill pertaining to the crop year Rabi 2022-23 within a period of four weeks from the date of disposal of the said writ petition. In spite of the specific direction issued by this Court, the Corporation or the respondents therein have not taken any steps to lift the paddy, and the competent authority has also not taken any action against the concerned officers. He further submitted that to constitute an offence under Section 318(4) of the BNS, there must be dishonest intention from the inception. In the present case, there is no allegation against the petitioner of any such dishonest intention from the inception. Hence, the ingredients of the offence under Section 318(4) of the BNS are not attracted.
9.5. He further submitted that respondent No.2, in the complaint, alleged that the petitioner is liable to pay an amount of Rs.25,36,81,256/- equivalent to the value of the paddy supplied by the Corporation, without any proper determination. As per the terms and conditions of the Agreement, respondent No.2 ought to have invoked the arbitration clause by referring the matter to the Arbitrator and the Arbitral Tribunal is only competent to adjudicate and determine the dispute between the parties. Without referring the 39 matter to the Arbitrator, respondent No.2 filed the present complaint only with an intention to harass the petitioner and to recover the alleged amount and the same is contrary to the terms and conditions of the Agreement and also law.
9.6. He further submitted that the petitioner does not fall within the ambit of an agent or employee. Therefore, the ingredients of Section 316(5) of the BNS are not attracted. Respondent No.2, with an intention not to follow the procedure prescribed under Section 35(3) of the BNSS and the guidelines issued by the Hon'ble Apex Court in Arnesh Kumar v. State of Bihar and another 23, implicated the petitioner for the offence under Section 316(5) of the BNS, though the same is not applicable.
9.7. In support of his contention, learned Senior Counsel relied upon the following judgments:
1. Suresh Singh v. State of Bihar 24;
2. Kishan Singh (Dead) Through LRs. V. Gurpal Singh and others 25;
3. Dilwar singh v. State of Delhi 26;
4. Hridaya Ranjan Prasad Verma and others v. State of Bihar and another 27;23
(2014) 8 SCC 273 24 1989 LawSuit(Pat) 222 25 (2010) 8 SCC 775 26 (2007) 12 SCC 641 40
5. S.K. Bhargava v. Collector, Chandigarh and others 28;
10. Mr. K. Buchi Babu, learned counsel for the petitioner in Crl.P.No.957 of 2026:
10.1. He submitted that he adopts the submissions made by Mr. R.N. Hemandranath Reddy, learned Senior Counsel, and Mr. Vinod Kumar Deshpande, learned Senior Counsel. In addition to the same, he submitted that the offences levelled against the petitioner are with imprisonment of less than seven years. The Investigating Officer, without following the due procedure prescribed under the BNSS, is proceeding with the investigation. The respondent Corporation has not issued any notice and has not determined the alleged amount mentioned in the complaint. In the absence of any such determination, the initiation of criminal proceedings is not permitted under law.
10.2. He further submitted that the Government of India issued Memo No.2809/CS-I CCS Dated 24.11.2025 extending the time for a period of 90 days for the delivery of FRK and for recovery of pending dues from the defaulter rice millers pertaining to KMS 2014-15 and KMS 2023-24. Even before the expiry of the said period, initiating criminal proceedings against the petitioner is contrary to its own proceedings.27
(2000) 4 SCC 168 28 (1998) 5 SCC 170 41 10.3. He further submitted that in 2022, due to heavy rains, the stocks lying in the petitioner's rice mill were totally damaged and the petitioner sustained a huge loss. The petitioner submitted a request to the concerned authorities seeking compensation for the said loss. Based on the representation submitted by the petitioner dated 16.07.2022, an inspection was conducted by Giridhavar and a report was submitted on 20.07.2022. Pursuant to the said report, the Tahasildar, vide proceedings, dated 20.07.2022, addressed a letter to the RDO, Jayashankar Bhupalapally District, stating that due to heavy rains from 09.07.2022 to 17.07.2022 and the resultant Godavari floods, food products and materials kept in the petitioner's rice mill were damaged and the loss was assessed at Rs.57 lakhs and the said report was forwarded to the RDO and the Government has not taken any steps to reimburse the said amount to the petitioner, on the other hand, respondent No.2 filed the present complaint alleging that the petitioner committed default and not delivered equivalent paddy supplied by the Corporation and he is liable to pay Rs.4,26,88,216/-.
10.4. He further submitted that the allegations levelled in the complaint are purely civil in nature. As per the terms and conditions mentioned in the Agreement, there is no clause imposing interest. Contrary to the terms and conditions, imposed 12% of interest and the same is not permissible under law.
42
11. Mr. Somavarapu Satyanarayana, learned counsel for the petitioner in Crl.P.Nos.4316 and 4624 of 2026:
11.1. He submitted that he adopts the submissions made by both the learned Senior Counsel. In addition to the same, he submitted that the District Manager does not have the competence to lodge the complaint. The Tahasildar does not have jurisdiction to conduct an investigation in the premises of the petitioner's rice mill. He further submitted that neither the Tahasildar nor respondent No.2 has followed the procedure contemplated under Section 105 of the E.C. Act, on the other hand, they conducted search.
11.2. He further submitted that the alleged offences pertain to the Kariff season 2022-23. The present complaint was filed on 17.03.2026 with an inordinate delay. The Corporation issued a show-cause notice on 15.12.2024. The petitioner got issued notice on 11.09.2024 through their counsel requesting the Corporation to furnish various documents mentioned therein for the purpose of issuing reply to the show-cause notice. However, neither respondent No.2 nor Corporation furnished the documents, on the other hand, filed the present complaint. The nature of the allegations levelled in the complaint is purely civil in nature and the same is liable to be quashed.43
11.3. In support of his contention, he relied upon the judgment of the Hon'ble Supreme Court in M/s.Neeharika Infrastructure Private Limited v. State of Maharashtra and others 29.
12. Mr. N. Keerthi Simha, learned counsel for the petitioner in Crl.P.No.3074 of 2026
12.1. He submitted that he adopts the submissions made by both the learned Senior Counsel. In addition to the same, he submitted that the petitioner has not committed any offence and has been falsely implicated in the present crime. The petitioner retired from the post of Director of M/s.Sumanjali PBI Private Limited much prior to the alleged entrustment of work relating to paddy for the Rabi 2022-23 season. The petitioner is not a signatory to the alleged Agreement entered into between M/s.Sumanjali PBI Private Limited and the respondent Corporation. The petitioner submitted his resignation to the Director on 23.07.2021 and his resignation was accepted by the Registrar of Companies and in Form MGT-7. He also submitted that the above said Company in their income Tax annual returns, it is specifically mentioned that the petitioner's directorship was ceased on 23.07.2021. Hence, the petitioner is no way concerned for the alleged entrustment of paddy to M/s.Sumanjali PBI Private Limited or delivery of CMR equivalent to the paddy to the Government. By virtue 29 AIR 2021 Supreme Court 1918 44 of cessation of directorship, the continuation of the proceedings against the petitioner is clear abuse of the process of law. 12.2. He further submitted that even according to the counter- affidavit filed of respondent No.1, the alleged Agreement was executed in the year 2022, whereas the stamp was purchased much subsequent to the alleged Agreement i.e., on 28.03.2025. Therefore, the alleged Agreement is not a genuine one.
13. Mr. C. Hari Preeth, learned counsel for the petitioner in Crl.P.No.3145 of 2026 13.1. He submitted that he adopts the submissions made by both the learned Senior Counsel. In addition to the same, he submitted that the petitioners have not committed any offence and have been falsely implicated in the present case. He further submitted that petitioners submitted their resignations as Directors of M/s.Sumanjali PBI Private Limited on 01.04.2018 and the same was accepted by the Board of Directors of the Company as well as Registrar of Companies. 13.2. He further submitted that the alleged Agreement was entered into by the District Manager with M/s.Sumanjali PBI Private Limited in the 2022, which is much subsequent to the said resignation of the petitioners as Directors. The petitioners were not parties to the said Agreement and they are no way concerned with the alleged allegations of entrustment of paddy to M/s.Sumanjali PBI Private 45 Limited and not delivered the CMR to Corporation/Government. Respondent No.2 has implicated the petitioners solely on the ground that earlier they were Directors of the M/s. Sumanjali PBI Private Limited.
13.3. He further submitted that even according to the documents filed along with the counter-affidavit filed by respondent No.1, particularly, the seizure/recovery panchanama, wherein it reveals that the petitioners have submitted their resignations, as Directors of the Company, to the Registry of Companies on 01.04.2018. Hence, the continuation of the proceedings against the petitioners is a clear abuse of the process of law.
14. Mr. K. Durga Prasad, learned counsel for the petitioner in Crl.P.No.4250 of 2026 14.1. He submitted that he adopts the submissions made by both the learned Senior Counsel. In addition to the same, he submitted that respondent No.2 is not having competent authority to lodge the compliant. Even according to the allegations levelled in the complaint, the officers of the Corporation conducted inspection in the rice mill of the petitioner on 26.02.2026 behind his back and lodged the present complaint on 21.03.2026 after a lapse of more than 22 days without assigning any reasons for the said delay. 46 14.2. He further submitted that the copy of the Agreement filed by respondent No.2 along with counter is incomplete and respondent No.2 has not filled the particulars of the parties in the Agreement and there are no signatures of both the parties. The Corporation supplied less quantity of paddy and substandard paddy to the petitioner rice mill. However, as per the Agreement, the petitioner rice mill has to supply 67% of raw rice and 68% of boiled rice. He also submitted that Clause 12 of the Agreement deals with joint custody and as per the said clause, the Deputy Tahsildar (Civil Supplies) of the respective area or any other Officer nominated by the Collector (Civil Supplies), shall be the joint custodian. Hence, the employees of the Corporation are also liable. On the other hand, to safeguard their own officials, respondent No.2 lodged the complaint against the petitioner. 14.3. He further submitted that as per the terms and conditions of the Agreement, the Government has to pay milling charges, storage charges, maintenance charges, gunny bag charges, and various other amounts and the respondents are due huge amounts to the petitioner.
14.4. He further submitted that in earlier Agreements, there is no penalty clause and interest clause. However, the said two clauses were included in the present Agreements and all the clauses of the Agreement are one sided and in favour of the Corporation only. 47 14.5. He further submitted that the Officers of the Corporation have not conducted proper inspection. The alleged inspection was conducted in a hurried manner behind back of the petitioner and it was completed within three days and submitted report. Based on the alleged report, respondent No.2 lodged the present complaint and the same is not permitted under law and the same is liable to be quashed.
15. Mr. K. Venumadhav, learned counsel for the petitioner in Crl.P.Nos.4660 and 4781 of 2026 15.1. He submitted that he adopts the submissions made by both the learned Senior Counsel. In addition to the same, he submitted that Government of Telangana, Consumer Affairs, Food & Civil Supplies (CS.I.CCS) Department, had issued Memo No.2809/CS.I.CCS/2025, dated 24.11.2025, wherein it is decided to recover the pending CMR dues from the default rice millers of the previous years pertaining to KMS 2014-15 to KMS 2023-24, excluding Rabi 2022-23 season auction paddy, and later, the Government of Telangana, Consumer Affairs, Food & Civil Supplies (CS.I.CCS) Department, had issued another Memo No.677/CS.I.CCS/2026, dated 25.03.2026, extending the time for supply of CMR for a further period of 3 months. Even before the expiry of the said period, respondent No.2 lodged the present complaint with an intention to recover the amount and the same is not permissible under law.
4815.2. He further submitted that the allotted stock of paddy pertaining to 2022-23 Rabi season stocks is very much available in the rice mill premises. The petitioner has submitted representations to the Corporation and other authorities requesting them to permit the petitioner to deliver the stocks of CMR by way of FRK sanna biyyam. When the authorities failed to consider the said representations, the petitioner had approached this Court and filed W.P.No.8105 of 2026 and this Court disposed the same on 17.03.2026 directing the respondent No.2 therein to consider the representation of the petitioner for grant of time to deliver the quantity of rice within a period of two weeks from the date of receipt of a copy of the order and pass appropriate orders and communicate the decision to the petitioner. Till such time, respondent authorities are directed not to take any coercive steps against the petitioner. When this Court issued a specific direction not to take any coercive steps, respondent No.2 filed the present complaint and the same is not permitted under law.
15.3. He further submitted that the Corporation, without taking proper care, supplied sub-standard paddy, which was kept in the premises of the rice mill. Respondent No.2-Corporation conducted a public auction through e-tender, however, the successful bidder had not lifted the stock and the said paddy is not suitable for the CMR. Respondent No.2-Corporation has not taken any action against the 49 said bidder. He further submitted that the petitioner has executed a Bank Guarantee and provided sureties and that in the event of failure to deliver the CMR equivalent to the paddy supplied by the Corporation, the Corporation is entitled to take necessary steps in accordance with the Agreement by invoking the Arbitration clause or by approaching a civil Court for recovery of the alleged amount due and payable, on the other hand, filed the present complaint and the same is not maintainable under law, especially there is no aspect of criminality, as the allegations made in the complaint are purely civil in nature.
15.4. He further submitted that as per Clause 9.1.2(2) of the terms and conditions of the Agreement, the Corporation is entitled to recover the equivalent quantity of rice from the defaulter. As per clause 9.1.2(3) of the terms and conditions of the Agreement, the Commissioner, Civil Supplies Department, shall initiate criminal action against the defaulting second party and all other concerned, apart from disqualifying and debarring the second party from participating in future CMR operations. The Corporation, without initiating recovery for the alleged amount in accordance with law, has filed the present complaint solely based on Clause No.9.1.2 (3) of the Agreement, especially when the said clause provides that the Commissioner, Civil Supplies Department/VC & MD, shall initiate the criminal action against the defaulting party and all other 50 concerned. Whereas respondent No.2/District Manager has filed the present complaint and not the Commissioner/Vice Chairman and Managing Director, respondent No.2 does not have authority/competency to file the complaint.
15.5. He submitted that in Crl.P.No.4781 of 2026, the petitioner is no way connected with the alleged offences and the police have implicated him as an accused solely based upon the confession statement given by accused Nos.1 and 2, when they were in police custody, stating that the petitioner acted as a mediator during the purchase of rice mill by accused Nos.1 and 2 on 16.11.2023. He further submitted that the petitioner is not a signatory to the alleged Agreement entered into between respondent No.2 and accused No.1. There is no nexus or link to connect the petitioner with alleged crime. Hence, continuation of the proceedings against the petitioner is a clear abuse of the process of law.
15.6. In support of his contention, he relied upon the following judgments/orders;
1. Ch.Anjaneyulu v. The State of Telangana and another (Criminal petition No.10576 of 2017);
2. Delhi Race Club Limited and others (supra 15); and 51
3. Mitesh Kumar J, Sha v. The State of Karnataka and others (Criminal Appeal No.1285 of 2021);
16. Mr. K. Naresh, learned counsel for the petitioner in Crl.P.No.3587 of 2026:
16.1. He submitted that he adopts the submissions made by both the learned Senior Counsel. In addition to the same, he submitted that the petitioner has not committed any offence and has been falsely implicated in the present case. The petitioner resigned as a Director of M/s.Sumanjali Parboiled Private Limited on 14.02.2017 and the same was accepted by the Registrar of Companies. The said Company filed its annual returns from 01.04.2018 to 31.03.2019, wherein it is specifically mentioned that the petitioner does not hold any equity shares.
16.2. He further submitted that in the place of the petitioner, another Director, namely Kandhukuri Padma, was appointed and his shares were transferred in her favour. In the annual returns of the Company for the period from 01.04.2022 to 31.03.2023 also the petitioner's name does not appear in the list of the Directors. Thus, the petitioner is neither a Director nor a share holder and has no role in the said Company, in terms of Section 168(2) of the Companies Act. Hence, the continuation of the proceedings against the petitioner is a clear abuse of the process of law.52
17. Mr. L. Bhargava Krishna, learned counsel for the petitioner in Crl.P.No.981 of 2026:
17.1. He submitted that he adopts the submissions made by both the learned Senior Counsel. In addition to the same, he submitted that the petitioner has not committed any offence and has been falsely implicated in the present case. The allegations levelled against the petitioner are purely civil in nature arising out of a contract. Hence, the ingredients of Sections 316(2), 316(5), 318(4) of the BNS and Section 7 of the E.C. Act are not attracted. He further submitted that the petitioner does not come within the ambit of an 'agent' or 'employee' as defined under Section 2(5) of the Central Goods and Services Tax Act, 2017 (for short 'CGST Act') and therefore, the ingredients of Section 316(5) of the BNS are not attracted against the petitioner. The Corporation entrusted the paddy to the petitioner's rice mill for conversion into CMR rice. The nature of the work entrusted to the petitioner is only 'job work' as defined under Section 2(68) of the CGST Act, and the said definition is squarely applies to the present case. The petitioner does not fall within the ambit of either an agent or an employee.
17.2. He further submitted that the allegations levelled in the complaint arise purely out of a commercial contract. As per the provisions of Section 222 of the Indian Contract Act, 1872, the entrustment of the paddy to the petitioner for conversion into CMR 53 rice is purely contractual in nature and specific terms and conditions are enumerated therein. Therefore, the initiation of the criminal proceedings is not permissible under law.
17.3. He also submitted that as per the terms and conditions of the Agreement, the petitioner shall not pledge the stock of the Corporation with any Bank or financial institution to secure any loan or financial assistance. Even according to the terms and conditions of the contract, the paddy was entrusted to the petitioner solely for the purpose of milling and for no other purpose. Hence, the petitioner does not come within the ambit of an 'agent'. 17.4. He further submitted that in respect of the Agreement pertaining to 2025-26 Rabi season, custom milling paddy KMS, the second party has been specifically described as an 'agent'. The said word was not incorporated in the earlier contract or in the present case so as to attract the ingredients of Section 316(5) of the BNS. 17.5. He further submitted that respondent No.2 Corporation has now prepared an Agreement in respect of KMS 2025-26 between Telangana State Civil Supplies Corporation Limited and rice miller, wherein the first party described as the Corporation and the second party i.e., the rice miller, is described as an 'agent'. 54 17.6. He further submitted in similar circumstances, this Court disposed of the Criminal Petition No.12037 of 2024 on 03.10.2024, Criminal petition No.12650 of 2025 on 25.09.2025, wherein it was held that Section 316(5) of the BNS is not attracted and the Investigating Officer was directed to follow the due procedure as contemplated under Section 41-A of Cr.P.C./Section 35(3) of the BNSS. Hence, the continuation of the proceedings against the petitioner is a clear abuse of the process of law. 17.7. He further submitted that the order dated 01.04.2024 in Criminal Petition No.3305 of 2024 is not applicable to the facts and circumstances of the present case, especially as the learned Judge, relied upon the judgment of the Hon'ble Apex Court in N.Raghavender v. State of Andhra Pradesh, CBI 30, dismissed the Criminal petition without properly considering the judgment of the Hon'ble Apex Court in Lalit Chaturvedi and others v. State of Uttar Pradesh 31, as well as the terms and conditions of the Agreement. 17.8. In support of his contentions, he relied upon the following judgments/orders;
1. Uco Bank v. Hem Chandra Sarkar 32;
2. Lakshminarayan Ram Gopal and Son Ltd. v. The Government of Hyderabad 33;
30(2021) 18 SCC 70 31 2022 SCC OnLine SC 579 32 1990(3) SCC 389 55
3. Ashok Kumar v. State of Punjab 34;
4. Baldeo Narain Singh and others v. State of Bihar 35;
5. Vandana Jain and others v. State of Uttar Pradesh and others 36;
6. P.Krishna Bhatta and others v. Mundila Ganapathi Bhatta and others 37;
18. Mr. Banda Prasada Rao, learned counsel for the petitioner in Crl.P.No.5220 of 2026 18.1. He submitted that he adopts the submissions made by both the learned Senior Counsel. In addition to the same, he submitted that the respondent Corporation issued a notice on 31.01.2025 and, within a short span, issued a show-cause notice dated 03.02.2025. The petitioner supplied 550 MTs of CMR to the respondent Corporation. In spite of the same, respondent No.2 filed the present complaint on 14.03.2025. He further submitted that the notice was served on the family members of the petitioner, as the petitioner was hospitalized. Though the petitioner is ready to supply shortfall of CMR by way of installments over a period of two to three years, respondent No.2, without considering the same, filed the present complaint.
33 AIR 1954 SC 364 34 2023 PHHC 035298 35 AIR 1959 PAT 442 36 2026 INSC 192 37 AIR 1955 Mad 648 56
19. Submissions of the learned Advocate General:
19.1. Learned Advocate General submitted that the petitioners have entered into a contract with the Corporation through a custom milling Agreement for KMS 2022-23 Kariff and Rabi seasons. The terms and conditions mentioned in the said Agreement are binding on the parties. The entire Agreement has to be read as a whole, and the petitioners are not entitled to rely upon any single clause in isolation. He further submitted that as per clause 3(a) of the Agreement, the petitioners agreed to custom mill the paddy of the Corporation and deliver CMR to the Government/Corporation in accordance with the terms and conditions of the Agreement and the instructions issued by the Government/F.C.I. from time to time. The Government of Telangana issued Memo No.704/CS.I-CCS/2016 dated 16.10.2017, wherein it is stated that the District Manager, CSC, shall take action to file a criminal case at the Station House Officers having jurisdiction, where the defaulting rice mill is situated, through the Assistant Manager (Tech.) CSC and the Civil Supplies Deputy Tahasildar concerned, as complainant Nos.1 and 2.
According to the said Memo, the District Manager of the Corporation is entitled to lodge a complaint against the defaulting rice millers. Hence, the contention raised by the learned counsel for the petitioners that the District Manager of the Corporation does not have the authority or competency to lodge the complaint against them is 57 not true and correct. The above said memo issued by the Government is still in force and the same is binding upon the petitioners.
19.2. He further submitted that as per sub-clause (b) of clause 3 of the Agreement, the petitioners had agreed to deliver 100% CMR to the Corporation and have also agreed not to custom mill the paddy to any other person or agency or in any other manner diverts its milling capacity for any other purposes. The petitioners further agreed to deliver CMR of the same variety of the paddy supplied to them, in accordance with the Fair Average Quality (FAQ) specifications issued by the Government of India/Telangana.
19.3. He further submitted that there is no dispute about entrustment of paddy by the Government/Corporation to the petitioners/Rice Mills for CMR. As per the clause 5(7) of the Agreement, once the paddy has been accepted by the miller through the truck chit, the paddy so received by the miller shall be considered to be correct in terms of the quality and quantity, and no dispute shall be entertained after such acceptance with regard to the quality and quantity of the paddy received by the miller. 19.4. The petitioner rice millers agreed under clause 5(8) of the Agreement to store the paddy received by them in their registered mill premises or any other place approved by the District Collector (CS), in 58 case of receipts exceeded the storage capacity of the mill, and it shall remain in the custody of the miller and the miller will be responsible for any shortage or damage to paddy/rice stocks. 19.5. He further submitted that as per clause 12(4) of the Agreement, the petitioners shall be entitled to milling charges, at the rates prescribed by the Government of India in the provisional cost sheet for KMS 2022-23 for Telangana State, only after completion of entire milling operations on satisfactory delivery of rice to F.C.I/Corporation and reconciliation of gunny accounts, paddy accounts, CMR delivery accounts and also after affecting any recoveries to be made arising after reconciliation. The petitioners have not delivered CMR to the FCI/Corporation as per the terms and conditions of the Agreement. Hence, the contention of the petitioners that the Government/Corporation have not paid the milling and other charges to the petitioners is not tenable.
19.6. He further submitted that clause 13(4) of the Agreement enumerates that in the event of any dispute with regards to this Agreement, the same shall be referred to an arbitrator. The said clause does not bar initiation of criminal proceedings merely on the ground of the non-invocation of arbitration clause. 19.7. He further submitted that the Government of Telangana issued G.O.Ms.No.23 dated 18.10.2022 introducing the policy for 59 procurement of paddy under MSP operations and delivery of custom milled rice for KMS 2022-23. In the said G.O., it is specifically stated that in order to ensure Minimum Support Price (MSP) to the farmers for their paddy produce and availability of good quality of grains i.e., rice, to the weaker sections at the affordable price for over all food security of the State.
19.8. He further submitted that in Crl.P.No.2809 of 2026, the Government/Corporation allotted a total quantity of 23,405.280 MTs of paddy during Rabi 2022-23 to the petitioner's rice mill. The petitioner's rice mill delivered CMR only 3,852.974 MTs. The balance paddy to be available in the rice mill after milling was 19,552.306 MTs. Out of the said paddy, the successful bidder lifted 5581.434 MTs as per the global e-tender for paddy dated 25.01.2024. After lifting the paddy by the bidder, the balance paddy to be available in the petitioner's rice mill is 13,884.305 MTs. During the course of physical verification, the Corporation found a shortage of 13,967.186 MTs of paddy, worth Rs.34,10,64,715/-. Consequently, the Corporation issued a notice dated 31.10.2025 directing the petitioner's rice mill to clear the dues amounting to Rs.43,99,73,483.00, after calculating penalty and interest, within seven days of receipt of the notice.
6019.9. He further submitted that the petitioners with a dishonest intention from the inception diverted/misappropriated the paddy into their personal gains and have not delivered equivalent CMR to the Government/Corporation. There are specific allegations levelled against the petitioners that the Corporation entrusted the paddy as per the Agreement for conversion into CMR. However, the petitioners have not delivered CMR to the Government/Corporation/FCI and the equivalent paddy is not available in the petitioners' rice mill. The petitioners have misappropriated/diverted a huge quantity of paddy, due to which, the Government has sustained huge loss. Hence, the allegations made in the complaint attract the ingredients of the offences under Sections 316(2), 316(5) and 318(3) of the BNS and Sections 7 of the Essential Commodities Act, 1955 and the said offences are cognizable offences and the investigation is very much required. Hence, the petitioners are not entitled to seek quashing of the proceedings at threshold.
19.10. He further submitted that there are specific allegations levelled against the petitioner that the Government/Corporation entrusted the paddy as per the Agreement for conversion into CMR. However, the petitioner with dishonest intention from the inception has not delivered CMR to the Government and the paddy is not available in the premises of the petitioner's rice mill. The petitioner has misappropriated a huge quantity of paddy, due to which, the 61 Government has sustained heavy loss. Hence, the allegations made in the complaint attract the ingredients of the offences under Sections 316(2), 316(5) and 318(3) of the BNS and Sections 7 of the E.C. Act and the said offences are cognizable offences and the investigation is very much required. Hence, the petitioner is not entitled to seek quashing of the proceedings at threshold. 19.11. In support of his contention, he relied upon the following judgments:
1. Trisuns Chemical Industry v. Rajesh Agarwal and others 38;
2. Rajesh Bajaj v. State NCT of Delhi and others 39;
3. Neeharika Infrastructure Private Limited v. State of Mahashtra and others 40;
4. Sadhupati Nageswara Rao v. State of Andhra Pradesh 41;
5. State of Punjab v. Pritam Chand and others 42;
6. Anshul Jotwani v. State of Chhattisgarh Through Station House Officer and Others 43;38
(1999) 8 SCC 686 39 (1999) 3 SCC 259 40 (2021) 19 SCC 401 41 (2012) 8 SCC547 42 2013 SCC OnLine P & H 26723 43 2026 SCC OnLine Chh 1948 62
7. Nomula Pandurangam v. The State of Telangana and another (Crl.P.No.3305 of 2024);
8. Kabal Singh v. State of Punjab 44;
9. M/s. Jai Mata Di Rice Mill and another v. The State of Bihar and others 45;
10. Md. Mustafa Ansari v. The State of Bihar and others (Crl.Appeal No.1137 of 2017);
11. Bihar State Electricity Board, Patna and others v. M/s. Green Rubber Industries and others 46;
12. Ratanlal v. Prahlad Jat and others 47; and
13. Pawan Kumar v. State of Haryana 48.
20. Submissions of the learned Public Prosecutor :
20.1. Learned Public Prosecutor submitted that there is no dispute in respect to the entrustment of paddy to the petitioner for milling and the petitioner has not delivered the equivalent quantity of CMR to the Corporation or the Government, thereby misappropriating a huge quantity of the paddy. The petitioner has neither delivered CMR nor returned the equivalent quantity of the paddy, nor paid the amount due, in spite of the notices issued by the Corporation.44
1996 SCC OnLine P&H 531 45 2015 SCC OnLine Pat 8486 46 (1990) 1 SCC 731 47 (2017) 9 SCC 340 48 2005 SCC OnLine P&H 1115 63 20.2. He submitted that in the State of Telangana, there are more than 3,600 rice mills and the Corporation has supplied paddy for CMR to several rice mills. Except the petitioners rice mills, all other rice millers have duly supplied CMR to the Corporation/FCI. The scheme introduced by the Government is a welfare scheme to the public in general. The petitioners misappropriated the paddy supplied by the Corporation for their own purposes and the sale proceeds were allegedly invested in various real estate fields, the film industries and other purposes, with an intention to avoid the due amounts and approached this Court and filed the present criminal petitions. The petitioners misappropriated huge quantity worth of Rs.3,900 crores of paddy supplied by the Government/Corporation. 20.3. He further submitted that the contentions raised by the learned counsel for the petitioner that the Corporation/Government ought to have invoked the arbitration clause or approached the competent civil Court, instead of initiating criminal proceedings by lodging the complaints, is not tenable under law on the ground that the petitioners have misappropriated the paddy supplied by the Corporation to them for conversion into CMR and the said allegations constitutes the offences under Sections 316(2), 316(5), 318(3), 318(4) and 314 of the BNS and Section 7 of the E.C. Act.
6420.4. He further submitted that in Crl.P.No.2809 of 2026, respondent No.2- de facto complainant lodged a complaint on 23.02.2026. Based on the same, Crime No.32 of 2026 was registered on 23.02.2026 for the offences under Sections 316(2), 316(5) and 318(3) of the BNS and Section 7 of the E.C. Act. Soon after the registration of the crime, the petitioner approached this Court within a span of two days, with an intention to evade the investigation. Hence, the petitioner is not entitled to seek quashing of the crime at the threshold, as the matter requires investigation.
20.5. In support of his contention he relied upon the following judgments:
1. Muskan v. Ishaan Khan (Sataniya) and others 49;
2. Onkar Nath Mishra and others v. State (NCT of Delhi) and another 50;
3. State of Haryana and others v. Bhajan Lal and others 51;
4. Gian Singh v. State of Punjab and another 52;
5. Subash Sharma v. State of Haryana and another 53;
6. B. Narsa Goud v. State of Telangana (Crl.P.No.2728 of 2024) 49 2025 LiveLaw (SC) 1050 50 (2008) 2 SCC 561 51 1992 Supp (1) SCC 335 52 (2012) 10 SCC 303 53 2013: PHHC:059659 65
7. T.Narsimhulu v. The State of Telangana (Crl.P.No.1234 of 2024)
8. N. Raghavender v. State of Andhra Pradesh, CBI 54;
9. K. Bharthi Devi and another v. State of Telangana and another 55;
10. Indian Oil Corpn. V. NEPC India Ltd. and others 56;
11. Sundari Nageshwer Rao v. The State of Telangana and another (Crl.P.No.1461 of 2022);
12. Pawan Kumar v. State of Haryana 57;
13. Nomula Pandurangam v. The State of Telangana and another(Crl.P.no.3305 of 2024); and
14. Sadhupathi Nageswara Rao v. State of Andhra Pradesh 58 REPLY SUBMISSIONS :
21. Mr. Vinod Kumar Deshpande, learned Senior Counsel in Crl.P.No.2818 of 2026 21.1. Learned Senior Counsel submitted that during the year 2022- 23, due to a natural calamity, the paddy supplied by the Government was damaged and the Government itself conducted an e-tender, pursuant to which, the auction purchaser/successful bidder lifted the stocks. Hence, the question of misappropriation of the alleged paddy by the petitioner does not arise. The judgments relied upon by 54 (2021) 18 SCC 70 55 (2024) 10 SCC 384 56 (2006) 6 SCC 736 57 2005 SCC OnLine P&H 1115 58 (2012) 8 SCC 547 66 the learned Advocate General as well as learned Public Prosecutor are not applicable to the present facts and circumstances of the case. 21.2. He further submitted that there is a clause of 'joint custody' in the Agreement. However, the respondent Corporationn has not initiated the proceedings against their own employees and lodged the complaint only against the rice mills in order to save their own employees. In the said Agreement, there is no definition of 'joint custody'. There is no allegation of criminality and the allegations levelled in the complaint do not constitute any offence. The inspection/verification was conducted on 08.08.2025, whereas the complaint was lodged on 23.02.2026 without assigning any reason for the delay.
22. Mr. R.N. Hemandranath Reddy, learned Senior Counsel in Crl.P.No.2809 of 2026 22.1. Learned Senior Counsel submitted that the terms and conditions of the Agreement clearly envisage that the Commissioner, Civil Supplies of MD, TSCSCL or Collector/Additional Collector/District Manager is competent authority to initiate appropriate proceedings against the millers. However, the District Manager/respondent No.2 has lodged the complaint without any authority or competency, especially in the absence of any authorization on behalf of the Corporation. The petitioner is only a Director, respondent No.2 has not lodged the complaint against the 67 company/rice mill. He further submitted that even as per G.O.Ms.No.23 dated 18.10.2022, the Vice Chairman and Managing Director, TSCLCL, or the Collector are competent authorities to initiate action or lodge the complaints. When a particular procedure is prescribed under the Agreement and particularly under Section 3 of the Essential Commodities Act, the Corporation ought to have followed the procedure contemplated under the Act and not resorted to any other means or procedures. The Memo dated 16.10.2017 relied upon by the learned Advocate General does not have any statutory force and the same is not applicable to the present case. 22.2. He further submitted that the respondent Corporation initiated the proceedings under the Revenue Recovery Act in respect of the very same allegations and froze the bank accounts and ordered the closure of rice mills, which was set aside by this Court in W.P.No.17985 of 2024 and batch, by order dated 28.08.2024, granting liberty to the respondents therein to initiate proceedings afresh by strictly following the procedure laid down under the Revenue Recovery Act. However, the respondent Government/Corporation has neither determined actual loss through due legal process of law nor quantified the alleged misappropriated paddy, and instead initiated criminal proceedings. 68 22.3. In the absence of such determination by the competent authority, especially when there was no cause of action to lodge the complaint, respondent No.2 has filed the complaint and the same is an abuse of the process of law.
22.4. In support of his contention, he relied upon the following judgments:
1. Shailesh Kumar Singh @ Shailesh R. Singh v. State of Uttar Pradesh and others 59;
2. Rikhab birani @ anr. V. State of Uttar Pradesh & Anr. 60;
3. Kailash Verma v. Punjab State Civil Supplies Corporation & Anr. 61;
4. Sri Gulam Mustafa v. The State of Karnataka & Anr. 62;
5. Harshendra Kumar D. v. Rebatilata Koley Etc. 63; and
6. M/s. tulsi Narayan Garg, Sarawagi Mohalla, Sheopur Through its Proprietor Tulsi Narayan Garg v. The M.P. Road Development Authority, Bhopal & Others 64
23. Mr. K. Durga Prasad, learned counsel for the petitioner in Crl.P.No.4250 of 2026 59 2025 Supreme (SC) 1094 60 2025 Supreme (SC) 657 61 2005 Supreme (SC) 105 62 2023 Supreme (SC) 496 63 2011 Supreme (SC) 151 64 2019 Supreme (SC) 1019 69 23.1. Learned counsel submitted that the Agreement filed by respondent No.2 is incomplete and one-sided and all the Clauses are in favour of the Corporation. The Corporation supplied substandard paddy and has unfairly shifted the burden on to the rice millers. Without approaching the competent Court or initiating arbitration Clause, lodged the complaint with an intention to recover the alleged amount through criminal process.
24. Mr. K. Venumadhav, learned counsel for the petitioner in Crl.P.No.4781 of 2026 24.1. Learned counsel submitted that there are no specific allegations levelled against the petitioner and that he is no way connected with the alleged offences and he is not a signatory to the Agreement. However, the petitioner has been implicated as an accused solely on the basis of the alleged confessional statements of accused Nos.1 and 2.
24.2. In support of his contention, relied upon the order of this Court in Crl.P.No.895 of 2024 between Pundru Narayana Reddy v. The State of Telangana and another.
25. Mr. L. Bhargava Krishna, learned counsel for the petitioner in Crl.P.No.981 of 2026 25.1. Learned counsel submitted that as per the provisions of Sections 94, 95 and 97 of the BSA, the custom milling Agreement 70 structurally establishes a principle-to-principle commercial job work arrangement. The relationship between the State and the petitioner is exclusively governed by a formal written contract and the determination of the petitioner's legal capacity is purely a question of law and not a question of fact. Even according to the terms and conditions of the Agreement, the nature of the work entrusted to the petitioner is only a job work and, therefore, the ingredients of the offence under Section 316(5) of the BNS are not attracted. 25.2. He further submitted that District Manager was a party to the earlier Agreements excluding the present case. In the earlier Agreements, there was no mention of agent. However, for the year 2025-26 Agreements, the second party has been described as an 'agent' only with an intention to attract the ingredients of the offence under Section 316(5) of the BNS/Section 409 of IPC. In view of the same, the ingredients of Section 316(5) of the BNS are not attracted against the petitioner in the present case. The punishment prescribed for the other offences levelled against the petitioner is below seven years. The Investigating Officer ought to have followed the due procedure under Section 35(3) of the BNSS and the guidelines issued by the Hon'ble Apex Court in Arnesh Kumar Vs. State of Bihar 65.
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(2014) 8 SCC 273 71 25.3. In support of his contention, he relied upon the following judgments:
1. Rajiv Thapar & Ors. v. Madan lal Kapoor (Criminal Appeal No.174 of 2013);
2. Sundari Nageshwer Rao v. The State of Telangana and another (Crl.P.no.1461 of 2022) ANALYSIS
26. Having considered the rival submissions made by the respective parties and upon perusal of the material available on record, it reveals that the Telangana Government has announced its Paddy Procurement Policy in the year 2015 and as per the said Policy and the Government Orders issued by the State Government, Rice Millers have to purchase paddy from the farmers at a MSP predetermined by the State Government and has to deliver 75% of the rice milled as levy to the Food Corporation of India, and the State Civil Supplies Corporation at a predetermined price. The rice millers were entitled to sell and move the remaining 25% levy free rice within and outside the State and also export the rice as per the then prevailing orders of the State Government from time to time. It was called Levy System which was abolished by the Central Government in 2015 and was duly followed by the State Governments. The newly formed State of Telangana traded the levy system for the custom milling system in order to provide more support to the farmers. The 72 FCI was replaced by the Corporation-Telangana State Civil Supplies Corporation Limited. Under the said custom milling system, the State directly purchases paddy from the farmers through different procurement centers at Village or Mandal levels and distributes the paddy to the rice millers for custom milling. The rice millers mill the paddy and supply to the State and receive predetermined custom milling charges. During Rabi 2022-23 marketing season under the paddy procurement policy, the Telangana State Civil Supplies Corporation Limited acted as the nodal agency for the State Government, procured massive quantities of paddy from the farmers at MSP and subsequently entrusted the said paddy to the various rice mills, including the petitioners' rice mills, for the purpose of CMR. In the said process, the Corporation and the petitioner/rice mill entered into an Agreement. As per the terms and conditions of the Agreement, the miller is required to convert the paddy into raw rice and boiled rice at the out-turn ratio as specified by the Corporation, confirming to the FAQ standards prescribed from time to time, including fortified rice. The miller is obligated to deliver raw rice at 67% and boiled rice at 68% to the Corporation/Government/FCI equivalent to paddy supplied by the Corporation. In the event of default in delivering the CMR, the Corporation is entitled to recover the cost of shortfall in equivalent CMR for the defaulted paddy @ 125% of the rates fixed by the Government of India, along with 73 interest @ 12% p.a. on the actual payment amount, as well as any other expenditure incurred by the Corporation. In addition to the same, the Corporation is entitled to initiate criminal action against the defaulting party, disqualify and debar the miller from participating in future CMR operations and also entitled to recover the losses or damages from the miller as well as from the sureties, jointly and severally, in accordance with law.
27. A perusal of the complaint in Crl.P.No.2809 of 2025 reveals that there are specific allegations that the Corporation supplied 23045.280 MTs of paddy for the Rabi 2022-2023 season under the Agreement to the petitioner rice mill. As per the terms and conditions of the Agreement, the petitioner was required to deliver 15905.741 MTs of CMR. However, the petitioner's rice mill delivered CMR boiled rice @ ratio of 68% to the FCI i.e., 1950.241 MTs, CMR raw rice @ 67% to the Corporation i.e., 659.932 MTs and 86.567 MTs of CMR delivered to the Philippines. The total CMR raw and boiled rice delivered to FCI/CSC is 2610.172 MTs and the paddy utilized for delivery of raw and boiled rice is 3852.974 MTs. The balance quantity of paddy that ought to have been available in the petitioner's rice mill after milling is 19552.306 MTs and that the paddy lifted by the bidder is 5581.434 MTs pursuant to the e-tender process dated 25.01.2024 and the balance paddy to be available in the petitioner's rice mill is 13884.305 MTs. The Vigilance Wing of the Corporation 74 conducted an inspection of the petitioner's rice mill premises on 16.10.2025 and upon physical verification, it is revealed that shortage of paddy is 13967.186 MTs and calculated the amount for cost of shortage of paddy comes to Rs.34,10,64,715/- and penalty @ 25% on costs and interest 12% p.a., the total amount to be recovered from the petitioner was computed at Rs.45,36,16,071/-.
28. The complaint further reveals that the Corporation issued several notices to the petitioner rice mill to clear the outstanding dues and the last notice dated 31.10.2025 was issued directing the petitioner to clear the dues within one week. However, the petitioner failed to comply with the same. The petitioner rice mill with a dishonest intention diverted and misappropriated the huge quantity of the paddy entrusted by the Corporation under the Agreement for CMR.
29. The contention raised by the learned counsel for the petitioners is that the Corporation, without proper verification of the records, inspection or determination of the actual shortfall of paddy through due process of law, has unilaterally determined and claimed a huge amount and the allegations levelled in the complaints against the petitioners are purely civil in nature and that the Corporation ought to have approached the competent civil Court for recovery of the alleged amounts or ought to have invoked the arbitration clause, 75 which is available under the Agreement, on the other hand, respondent No.2 has lodged complaints by giving a criminal colour and the same is not permitted under law. According to the respondents, the Corporation entrusted the paddy to the petitioners for CMR. However, the petitioners, with dishonest intention, diverted the paddy for their personal gain and failed to deliver the equivalent CMR as per the terms and conditions of the Agreement and the existence of an arbitration clause or not approaching the civil Court does not bar or nullify criminal prosecution, and therefore, the petitioners are not entitled to seek quashing of the proceedings merely on the ground of non-invocation of the arbitration clause.
30. It is relevant to extract the clause 13(4) of the Agreement, which read as under:
"That both the parties have agreed that in the event of any dispute with regard to this Agreement, the same shall be referred to an Arbitrator. The Arbitrator shall be appointed by Commissioner, Civil Supplies, Government of Telangana/VC & Managing Director, TSCSCL."
31. A perusal of above said Clause, it reveals that in the event of any dispute with regard to the Ageement, either of the parties is entitled to invoke the said clause. Even according to the petitioners, certain amounts towards milling charges, gunny bag charges, storage charges, and other dues remain unpaid by the 76 Corporation/Government, and they have also raised contentions with regard to the quality and quantity of paddy supplied by the Corporation. Even according to the petitioners, they have not invoked the said clause.
32. In Kabal Singh (supra 44), Pritam Chand (supra 42), Subash Sharma (supra 53), Sadhupati Nageswara Rao (supra 58), M/s Jai Mata Di Rice Mill (supra 45), NEPC India Ltd. (supra 56), Pawan Kumar (supra 57), Gian Singh (supra 52) and N. Raghavender (supra 54), the Court held that the mere existence of a civil dispute, contractual relationship, or availability or invocation of civil remedies such as arbitration, recovery proceedings, settlement, or repayment does not by itself bar or justify quashing of criminal prosecution, since civil and criminal liabilities may coexist, and where the allegations disclose the essential ingredients of a criminal offence, the proceedings must ordinarily be permitted to continue; however, by way of a limited exception, the High Court may, in exercise of its inherent powers under Section 482 Cr.P.C., quash proceedings even in non-compoundable offences where the dispute is predominantly civil in nature and has been amicably settled and the possibility of conviction is remote, though such power must be exercised with great caution and is not applicable to serious offences or those affecting society at large.
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33. It is relevant to mention that in Priti Saraf and others v. State (NCT of Delhi) and others 66, the Hon'ble Supreme Court reaffirmed that the existence of an arbitration clause or the initiation of arbitral proceedings does not bar or nullify criminal prosecution if the allegations disclose the commission of an offence. Referring to Trisuns Chemical Industry v. Rajesh Agarwal and Ors 67, the Court held that arbitration is a civil remedy for contractual breaches and cannot substitute or override the criminal process where the acts complained of constitute offences under law. An arbitrator has no jurisdiction to try criminal charges, even if they arise out of the same transaction. The Court emphasized that investigation and criminal proceedings should not be pre-empted or quashed merely because an arbitration mechanism exists, except in rare cases where the complaint is patently frivolous or malicious. It further observed that the High Court had erred in failing to consider the charge-sheet on record before concluding that no prima facie offence was made out, noting that such issues can only be properly assessed during trial.
34. In the case on hand, there are specific allegations levelled in the complaint that the Corporation entrusted paddy for the specific purpose of CMR and as per the terms and conditions of the Agreement, the petitioners/rice mills were required to deliver CMR 66 2021(2) ALT (Crl.) 18 (SC) 67 (1999) 8 SCC 686 78 equivalent to the paddy supplied by the Corporation. However, they failed to deliver the same, and the paddy is also not available with them and the same was misused and misappropriated for their personal gain. These allegations prima facie disclose a cognizable offence. Hence, the contention raised by the learned counsel for the petitioners that respondent No.2 initiated criminal proceedings, without approaching the competent civil Court or without invoking arbitration clause as available under the Agreement filed criminal complaints, is not tenable under law.
35. In respect of other contention raised by the learned counsel for the petitioners that the respondent Corporation initiated revenue recovery proceedings against some of the rice mills and aggrieved by the same, they approached this Court and filed W.P.No.17985 of 2024 and batch, and this Court, by order dated 28.08.2024, allowed the said writ petitions and aggrieved thereby, the Corporation/Government has filed Writ Appeals, which are pending before the Hon'ble Division Bench, therefore, the continuation of the proceedings is a clear abuse of the process of law. Whereas, the case of the respondents is that the issues involved in the Writ Appeals and in the present complaints are different and distinct, and that the pendency of the Writ Appeals is not a bar to prosecuting the petitioners under criminal law.
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36. It is necessary to extract the operative portion of the order passed in W.P.No.17985 of 2024 and batch:
"27. In the light of the aforesaid discussion, the respondents did not follow the aforesaid procedure laid down under the R.R. Act while issuing destraint order in Form No.1 under Section - 8 of the R.R. Act; demand prior to attachment of land in Form No.4 under Section -25 of the R.R. Act and Notice of attachment in Form No.5 under Section - 27 of the R.R. Act. Therefore, they are liable to be set aside and accordingly the same are set aside. However, this order will not preclude the respondent authorities in initiating proceedings afresh by strictly following the procedure laid down under the R.R. Act and also the principle laid down in the aforesaid judgments."
37. In the case on hand, there are specific allegations levelled in the complaints that the petitioners, with a dishonest intention, misused and misappropriated the paddy for their personal gain, thereby causing huge financial loss to the Government/Corporation and the issues involved in the Writ Petitions and the Writ Appeals pertain to revenue recovery proceedings. These allegations prima facie disclose a cognizable offence. Hence, the contention raised by the learned counsel for the petitioners that the continuation of the criminal proceedings against them is a clear abuse of the process of law, in view of pendency of the Writ Appeals, is not tenable under law.
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38. Insofar as the other contentions raised by the learned counsel for the petitioners that the Corporation supplied substandard paddy, which is not fit for CMR, and supplied excess quantity of paddy are concerned, according to the respondents, the Corporation supplied the paddy and petitioners/rice mills have received the same and at that point of time, the petitioners did not raise any objection with regard to the alleged substandard quality or excess quantity of paddy.
39. It is relevant to extract Clause 5(7) of the Agreement, which reads as under:
"Once the paddy has been accepted through the Truck Chit by the miller, the paddy so received by the miller shall be considered to be correct in terms of quantity and quality and no dispute shall be entertained after such acceptance with regard to the quality and quantity of the paddy received by the miller."
40. Similarly, Clause 5(8) of the Agreement provides that the Miller agrees to store the paddy received by him/it in his/its registered mill premises or in any other place with the approval of District Collector (CS) in case the receipts exceeded the storage capacity in the mill and it shall remain in the Miller's custody and the Miller will be responsible for any shortage or damage to the paddy/Rice stock.
41. In respect of the contention of the learned counsel for the petitioners that the Corporation is due substantial amounts to the 81 petitioners/rice mills towards milling charges, gunny bags, storage charges, etc., however, instead of discharging its obligations, the Corporation has made excessive claims against the petitioners and filed the present complaints is concerned, the specific case of the respondents is that the petitioners have not delivered CMR equivalent to the paddy entrusted by the Corporation and there is a shortfall of huge quantity and unless and until the petitioners satisfactorily deliver CMR, they are not entitled to claim the amounts under the above said heads, in view of Clause 12.4 of the Agreement. It is also relevant to extract Clause 12.4 of the Agreement, which reads as under:
"The Second Party shall be entitled to the milling charges at the rates prescribed by the Govt. of India, in the provisional cost sheet for KMS 2022-23 for Telangana state, only after completion of the entire milling operations on satisfactory delivery of rice to FCI or The First Party, and the reconciliation of gunny accounts, paddy accounts and CMR delivery accounts and also after affecting any recovery to be made arising after reconciliation"
42. The core contention of the learned counsel for the petitioners is that respondent No.2-the District Manager is not competent to lodge the criminal complaint and that as per the sub-Clause 9.1.2(3) of Clause 9.1 of the Agreement, the Commissioner, Civil Supplies Department/VC&MD, TSCSCL alone initiate criminal action against defaulted rice mill and all other concerned, apart from disqualifying 82 and debarring the rice mill from participating in future CMR operations. Whereas, the specific case of the respondents is that respondent No.2 is competent authority to lodge the complaints. In support of the said contention, the learned Advocate General relied upon a Memo No.704/CS.I-CCS/2016, dated 16.10.2017, whereby Clause 10 stated as follows:
"The District Manager, CSC, shall take action to file a criminal case at the Station House Officers where the defaulter rice mill is existing through the Asst. Manager (Tech.), CSC and Civil Supplies Deputy Tahsildar concerned as complaint Nos.1 and 2."
43. Learned Advocated General during the course of hearing submitted that the above said Memo is still subsisting and the same is binding upon the parties in terms of Clause 3(a) of the Agreement, which reads as under:
"The Second Party/rice mill agrees to custom mill the paddy of the The First Party/Corporation in accordance with the terms and conditions in this agreement and instructions of the Government/FCI issued from time to time."
44. In Ratanlal (supra 47), the Hon'ble Apex Court held in paragraph No.8, which read as follows:
"In Black's Law Dictionary, the meaning assigned to the term "locus standi" is "the right to bring an action or to be heard in a given forum". One of the meanings assigned to the term "locus standi" in The Law Lexicon of Shri P. Ramanatha 83 Aiyar, is "a right of appearance in a Court of justice". The traditional view of locus standi has been that the person who is aggrieved or affected has the standing before the court, that is to say, he only has a right to move the court for seeking justice. The orthodox rule of interpretation regarding the locus standi of a person to reach the court has undergone a sea change with the development of constitutional law in India and the constitutional courts have been adopting a liberal approach in dealing with the cases or dislodging the claim of a litigant merely on hyper technical grounds. It is now well- settled that if the person is found to be not merely a stranger to the case, he cannot be non-suited on the ground of his not having locus standi."
45. In Manohar Lal v. Vinesh Anand and Ors. 68, this Court has held that the doctrine of locus standi is totally foreign to criminal jurisprudence. To punish an offender in the event of commission of an offence is to subserve a social need. Society cannot afford to have a criminal escape his liability since that would bring about a state of social pollution which is neither desired nor warranted and this is irrespective of the concept of locus.
46. In view of clause 3(a) of the Agreement as well as the Memo dated 16.10.2017 and the principle laid down by the Hon'ble Apex Court in Ratanlal (supra 47) and Manohar Lal (supra 68), the contention raised by the learned counsel for the petitioners that 68 (2001) 5 SCC 407 84 respondent No.2 is not competent authority to lodge the complaint is not tenable under law.
47. In respect of the other contentions raised by the learned counsel for the petitioners that as per the terms and conditions of the Agreement, the Corporation was required to supply only a specified quantity of paddy. However, it supplied excessive quantities contrary to the terms of the Agreement, despite the rice mills lacking adequate storage space. As a result, the excess paddy dumped in the premises of the rice mills was damaged due to heavy rains during the year 2022-2023 and at that stage, the Rice Millers Association made a request to the Government stating that the paddy supplied by the Corporation was not fit for CMR. Accordingly, the Government has taken a decision and conducted an e-tender for the sale of Rabi 2022- 2023 FAQ paddy procured under MSP operations by the Corporation through Government of Telangana e-Tender Platform. As per the terms of the e-tender, the paddy stocks were open for physical inspection by interested bidders and were offered on an 'as is where is basis'. Pursuant to the said tender, the successful bidders, after due inspection, participated in the e-tender process and work was awarded to them. Accordingly, the successful bidders lifted the paddy from the premises of the rice mills upon payment of the requisite amount to the respondent Corporation. Therefore, the question of mis-appropriation or diversion of the stock by the 85 petitioners does not arise and the petitioners are not liable to pay the alleged amounts claimed towards shortfall of paddy, penalty and interest by the Corporation.
48. Whereas, the case of the respondents is that there is no dispute with respect to the entrustment of paddy under KMS 2022-2023 to the petitioners/rice mills and that they have not delivered equivalent quantity of CMR in terms of the Agreement and the petitioners/rice mills did not rise any dispute at the time of supply of the paddy. On the other hand, the petitioners, with a dishonest intention, misused and misappropriated the paddy for their personal and pecuniary gains.
49. Whether the petitioners diverted or misused the paddy entrusted by the Corporation for the specific purpose of CMR with dishonest intention for their personal and pecuniary gain; and whether the successful bidder lifted the entire paddy, along with the other contentions raised by the petitioners are all disputed questions of fact and the same have to be revealed during the course of investigation, especially when the investigation is at a nascent stage, and, therefore, cannot be adjudicated and decided by this Court in a proceedings under Section 528 of the BNSS.
50. In Sadhupati Nageswara Rao (supra 41 ) and K. Bharthi Devi (supra 55), the Court held that to constitute offences such as criminal 86 breach of trust or cheating, the prosecution must prima facie establish the essential ingredients--namely, entrustment and dishonest misappropriation in the case of Section 409 IPC, and fraudulent or dishonest intention at the inception in the case of cheating--and since the existence or absence of such intention is a disputed question of fact requiring evidence, the proceedings cannot be quashed at the threshold under Section 482 Cr.P.C. merely on the ground that the dispute appears to be civil in nature.
51. It is relevant to mention that in Mahendra K.C. v. State of Karnataka and others 69, the Hon'ble Supreme Court held that while exercising powers under Section 482 Cr.P.C., the High Court must not act as a trial or appellate court by weighing evidence or testing the truth of allegations. At the quashing stage, the only test is whether the allegations in the compliant, taken at face value, prima facie make out the ingredients of the alleged offence. It is further clarified that the High Court should apply two key tests while considering quashing of an FIR (i) whether the allegations, if taken as true, prima facie constitute an offence, and (ii) whether they are so improbable that no reasonable person could conclude that sufficient ground exists to proceed.
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(2022) 2 SCC 129 87
52. The other contention raised by the learned counsel for the petitioners that the offence under Section 316(5) of the BNS is not attracted against the petitioners, as they do not fall within the meaning of 'agent' as envisaged under Section 182 of the Contract Act, 1872, is concerned, there are specific allegations levelled in the complaint that the petitioners/rice mills and Corporation entered into an Agreement and pursuant to the said Agreement, the Corporation/Government entrusted a particular quantity of paddy for a specific purpose i.e., CMR. However, the petitioners/rice mills have not delivered the CMR equivalent to the paddy supplied by the Corporation, on the other hand, the petitioners, with a dishonest intention diverted, misused and misappropriated the paddy for their personal and pecuniary gains and thereby caused huge loss to the Corporation/Government.
53. In Som Nath Puri v. State of Rajasthan 70, the Hon'ble Supreme Court gave a wide and purposive interpretation to the expression "entrusted in any manner," holding that entrustment arises whenever property is handed over or comes into the possession of an accused in his official or fiduciary capacity for a specific purpose, even if such possession is initially procured by deception, and that dominion over such property, followed by dishonest misappropriation, constitutes criminal breach of trust. 70 (1972) 1 SCC 630 88
54. In Narindra Kumar Jain v. State of M.P. 71, the Hon'ble Supreme Court affirmed the conviction under Section 409 IPC, holding that criminal breach of trust is established where an accused, in a position of responsibility, fails to account for entrusted property and resorts to falsification of records to conceal misappropriation; the Court underscored that verified shortages proved through reliable evidence, coupled with false explanations, are sufficient to sustain conviction.
55. In S. Sadashiva Rao v. State of A.P. and another 72, the erstwhile of High Court of Judicature of Andhra Pradesh at Hyderabad, while relying upon the principle laid down by the Hon'ble Supreme Court in Soma Nath Puri (supra 70) held that the expression 'entrustment' in Section 409 of the IPC is used in a wider sense and includes all cases in which the property is handed over for a specific purpose and is dishonestly dispossessed contrary to the terms on which the possession has been handed over and further held in paragraph No.11, which reads as follows:
"In the instant case also, on behalf of the Visakhapatnam Steel Plant. P.W.I. has entrusted a total quantity of 41,640 metric tonnes of steel by work order dt. 31- 12-1987 and 5-1-1988 for specific purpose of fabrication and erection of trolley in two instalments on 25-3-1988 and 6-5- 1988, and the work had to be completed before 20-3-1988. 71 (1996 SCC (Cri) 1025) 72 2002 (1) ALD (Crl.) 393 (AP) 89 When the accused failed to execute the above said work, time was further extended. Thus, when the steel was entrusted to the accused for a specific purpose, he has dishonestly disposed it of contrary to the terms on which possession was handed over to him. Though the accused is an independent contractor and has to use his own means to complete the contract, in view of the wider sense given to the term Agent by the Supreme Court which include all cases in which property is voluntarily handed over for specific purpose, under Section 409 of the Penal Code, 1860 he can be treated as an agent. When the accused has not completed the work of contract, and he failed to account the steel entrusted to him, he has dishonestly and fraudulently misappropriated the steel entrusted by P.W.I. Thus, the accused is guilty of the criminal breach of trust and, therefore, he is liable to be punished for the offence under Section 409 of the Penal Code, 1860, inasmuch as, the accused as an agent on behalf of his Principal -- P.W.I. has misappropriated the steel entrusted to him. Therefore, it cannot be said that the order passed by the court below is illegal and contrary to law. Therefore the conviction was confirmed."
56. Applying the aforesaid settled principles to the present case, the contention of the petitioners that they do not fall within the ambit of Section 316(5) BNS is misconceived. The execution of the agreement and the admitted entrustment of Government paddy clearly establish a relationship of agency coupled with dominion over property. The petitioners, having entered into a contractual arrangement for custom milling, received paddy procured under the MSP scheme, which at all times remained the property of the 90 Corporation, and were under a binding obligation to convert and return the equivalent CMR. Such entrustment for a specific purpose squarely attracts Section 316(5) BNS, which encompasses cases where a person, being in any manner entrusted with property or having dominion over it in the capacity of an agent, commits breach of trust. The admitted receipt of substantial quantities of paddy, the fiduciary nature of possession, and the significant unexplained shortages revealed during inspection prima facie demonstrate that the petitioners exercised dominion over the property and failed to duly account for it. The mere characterization of the transaction as "job work" does not detract from the legal effect of entrustment, as it is the existence of control coupled with an obligation to return or account that is determinative. Accordingly, the petitioners, by virtue of contractual entrustment and resultant dominion over Government property, fall squarely within the ambit of Section 316(5) BNS, consistent with the principles laid down in the aforesaid decisions.
57. In respect of other contention raised by the learned counsel for the petitioners is that all the Clauses of the Agreement are one sided and in favour of Corporation and there are blanks in the Agreement and the dates were also not mentioned is concerned, the Agreement was entered by both the parties in the year 2022-23 and this Court is of the prima facie view that the valid of the Agreement cannot be adjudicated and decided in a proceedings under Section 528 of the 91 BNSS, especially the ground raised by the petitioners is a disputed fact.
58. In Bihar State Electricity Board (supra 46), the Hon'ble Supreme Court held that contractual terms must be interpreted holistically by reading the agreement as a whole to ascertain the true intention of the parties, and that standard form contracts are enforceable if they are fair and not opposed to public policy; hence, selective reliance on a single clause in isolation cannot justify quashing, as the matter requires a complete and contextual examination of the contract, and therefore quashing of the proceedings is not permissible when investigation is at the threshold stage.
59. Insofar as the contention raised by the learned counsel for the petitioner in Crl.P.No.2809 of 2026 that the alleged inspection was conducted on 16.10.2025, the report was submitted on 27.10.2025, and that the present complaint was lodged on 23.02.2026 after a lapse of nearly four months, and on the said ground, the complaint is liable to be quashed is concerned, merely on the ground of delay in lodging the complaint, the petitioner is not entitled to seek quashing of the proceedings at the threshold, particularly when the State Government/Corporation has adopted a welfare oriented policy of procuring paddy from farmers at the MSP and entrusted the same to 92 the petitioners/Rice Mills under the Agreement for CMR, however, the petitioners failed to deliver the equivalent quantity of CMR to the Corporation/Government as agreed and on the contrary, diverted the same for personal gain, thereby causing huge financial loss to the Government/Corporation and affecting public interest.
60. It is relevant to mention that in Sarah Mathew v. Institute of Cardio- Vascular Diseases 73, the constitutional Bench of the Hon'ble Supreme Court has specifically held that the period of limitation is to be calculated from the date of filing of the complaint or charge-sheet, not from the date of the FIR or the date of cognizance. The Court further clarified that the bar of limitation not affect the investigation process. In Assistant Collector of Customs v. L.R. Melwani 74, the constitutional Bench of the Hon'ble Apex court has observed that mere delay in filing a complaint cannot by itself be a ground to quash proceedings and may only be considered during trial. In Vanka Radhamanohari v. Vanka Venkata Reddy 75, the Hon'ble Apex court also held that when any of the offences alleged is punishable with imprisonment of more than three years, the entire prosecution is outside the scope of limitation.
73 (2014) 2 SCC 62 74 1968 SCC OnLine SC 161 75 (1993) 3 SCC 4 93
61. In Hasmukhlal D. Vora and another v. State of Tamil Nadu 76, the Hon'ble Apex Court while referring to the judgment Bijoy Singh v. State of Bihar 77 held that where inordinate and unexplained delay in prosecution can indicate mala fide intent and be fatal to the case. When there is no explanation offered for the delay, leading the court to infer a possible sinister motive. Emphasizing that criminal proceeding must serve justice and not be used to harass, the Court quashed the complaint proceedings pending in the Metropolitan Magistrate's Court. In the case on hand, the issue of delay in lodging the complaint is a matter for investigation and trial, it cannot be decided at this stage, as there are specific allegations against the petitioners.
62. In Shantaben Bhurabhai Bhuriya v. Anand Athabhai Chaudhari and others 78, the Hon'ble Supreme Court held that a delay in lodging an FIR or complaint cannot by itself be a ground to quash criminal proceedings under Section 482 Cr.P.C. The Court clarified that the issue of delay is a matter of evidence to be examined during trial, where the complainant can be questioned about and explain the reasons for such delay during cross-examination. Therefore, the mere fact that the FIR or complaint was filed belatedly does not justify the quashing of proceedings at the threshold; as such 76 2023 (1) ALT (Crl.) 102 (SC) 77 (2002) 9 SCC 147 78 2021 (3) ALT (Crl.) 480 (SC) 94 determinations require appreciation of facts and evidence, which falls within the domain of the trial court.
63. It is also relevant to mention that in cases involving misuse or misappropriation of public funds and welfare-oriented procurement schemes, delay in lodging the complaint by itself does not vitiate the criminal proceedings, particularly when the allegations pertain to misappropriation of huge quantity of paddy entrusted by the Corporation for a specific purpose under the Agreement and non- delivery of CMR equivalent to the paddy so entrusted. Therefore, this Court is of the considered view that the petitioners are not entitled to seek quashing of the Crimes on the ground of delay in lodging the complaints at this stage.
64. With regard to the other contention raised by the learned counsel for the petitioners that even according to the terms and conditions of the Agreement, the employees of the Corporation are also liable for prosecution in view Clause 10 of the Agreement, which deals with 'joint custody'. However, respondent No.2 has lodged the complaints against the petitioners/rice mills, without implicating their employees as accused. According to the respondents, the role of the employees of the Corporation is very limited only for inspection of the records and stocks during the currency of the Agreement. 95
65. It is further relevant to mention that mere non-inclusion of the employees of the Corporation as accused is not fatal to the prosecution and the petitioners are not entitled to seek quashing of the proceedings on the said ground. Whether there is any conspiracy between the employees of the Corporation and the petitioners regarding the alleged diversion of paddy and misappropriation and there is any role of the employees of the Corporation in the crimes, the same will be revealed during the course of investigation, especially the investigation is at threshold.
66. It is relevant to mention that the scope of the present criminal petition is very limited, whether the allegations levelled in the complaint prima facie discloses cognizable offences which attract the ingredients of the offences under Sections 316(2), 316(5) and 318(3) of the BNS and Section 7 of the E.C. Act or not; whether the petitioners are entitled to seek quashing of the proceedings at crime stage or not. It is already stated supra that there are specific allegations levelled against the petitioners in the complaint that the petitioners have not delivered CMR equivalent to the paddy which was entrusted for specific purpose as per the Agreement and is dishonestly and fraudulently misappropriated and diverted the paddy for their personal and pecuniary gain. The said allegations prima facie disclose cognizable offences. Whether the allegations levelled in 96 the complaint are true or not can only be revealed during the course of investigation, especially the investigation is at threshold.
67. The judgments relied upon by the learned counsel for the petitioners in Ashok Kumar (supra 34), Atluri Sitaramdas (supra 9), Sadhupati Nageswara Rao (supra 41), Sushil Sethi (supra 6), Inder Chand Bagri (supra 12), Satishchandra Ratanlal Shah (supra 14), S.N. Vijayalakshmi (supra 16), Vandana Jain (supra 36), Hridaya Ranjan Prasad Verma (supra 27), and Sharad Kumar Sanghi (supra
7), the Hon'ble Supreme Court held that mere breach of contract, non-performance of obligations, or civil disputes cannot be given a criminal colour unless the essential ingredients of the alleged offences are clearly established. For offences like cheating (Sections 415/420 IPC), dishonest or fraudulent intention must exist at the very inception of the transaction, while for criminal breach of trust (Sections 405/406/409 IPC), there must be specific entrustment coupled with dishonest misappropriation and mens rea, and in the case of Section 409, such entrustment must be in a fiduciary capacity of a specified category. The judgments further emphasize that vicarious liability cannot be presumed without specific allegations, and that civil disputes, partnership issues, or contractual breaches, in the absence of criminal intent, do not attract penal consequences. Accordingly, where allegations are vague, lack essential ingredients, or are initiated to harass or exert pressure, the 97 Courts are duty-bound, while exercising powers under Section 482 Cr.P.C./ Article 226 of the Constitution of India, to look beyond the mere averments and quash such proceedings to prevent abuse of process of law and secure the ends of justice 67.1. In Mahmood Ali (supra 17), Sujoy Ghosh (supra 3), Rajiv Thapar (supra), and Sri Gulam Mustafa (supra 62), the Hon'ble Supreme Court has held that, while exercising jurisdiction under Section 482 Cr.P.C. or under Article 226 of the Constitution of India, the High Court is not confined to a mere reading of the FIR or complaint, but is required to undertake a holistic and pragmatic evaluation of the entire material on record. If, upon such examination, the Court finds that the criminal proceedings are manifestly frivolous, vexatious, or malicious, or are instituted with ulterior motives such as to wreak personal vengeance or to give a criminal colour to a civil dispute or where unimpeachable material of sterling quality placed on record clearly demolishes the prosecution case, the Court would be justified in exercising its inherent jurisdiction to quash the proceedings, notwithstanding that the allegations in the complaint may prima facie disclose the ingredients of an offence, so as to prevent abuse of the process of law and to secure the ends of justice.
9867.2. In Anukul Singh (supra 22), A.M. Mohan (supra 13), Rajib Ranjan (supra 18), Bharat Petroleum Corporation Ltd. (supra 21), and Kailash Verma (supra 61), the Hon'ble Supreme Court held that criminal law cannot be invoked as a tool of harassment, private vendetta, or coercion in disputes which are essentially civil or contractual in nature, and mere allegations of breach of contract, non-payment, or commercial default do not constitute criminal offences unless the essential ingredients of the alleged offence are clearly established, such as dishonest intention at the inception in cases of cheating or entrustment coupled with dishonest misappropriation in cases of criminal breach of trust; it is further emphasized that initiation of criminal proceedings alongside civil remedies or through multiple or successive FIRs is indicative of mala fide intent and abuse of process, and in the absence of specific and cogent allegations demonstrating active involvement and criminal intent, continuation of such proceedings is legally unsustainable and liable to be quashed to prevent misuse of the criminal justice system. 67.3. In Delhi Race Club (1940) Ltd (supra 15), the Hon'ble Supreme Court held that: Cheating and criminal breach of trust are distinct and mutually exclusive offences. Cheating requires dishonest intention from the very beginning of the transaction, whereas criminal breach of trust arises when property is lawfully entrusted but later dishonestly misappropriated. Hence, both offences generally 99 cannot coexist on the same facts, and authorities must carefully distinguish between them.
68. The reliance placed by the learned counsel for the petitioners in paragraph Nos.66.1 to 66.3 are not applicable to the facts and circumstances of the present case. In those cases, the disputes were purely civil in nature, arising out of breaches of contract without any allegation of fraudulent or dishonest intent at the inception. However, in the present case, there are specific allegations of entrustment of paddy and failure to deliver CMR equivalent to the paddy entrusted by the Corporation. It is further alleged that the petitioners misappropriated and diverted the paddy for their personal gains, which if accepted at face value, discloses the ingredients of the offences alleged against them.
69. The judgments relied upon by the learned counsel for the petitioners in Jayalakshmi Rice Mill Contractors C. (supra 5), Lakshminarayan Ram Gopal and Son Ltd. (supra 33) and Krishna Bhatta (supra 37), the Hon'ble Supreme Court held that the true test of an agency relationship is not mere employment, payment of commission, or performance of assigned work, but the existence of authority to act on behalf of the principal and to create or affect legal relations with third parties. The distinction primarily turns on the degree of control and the presence of independent discretion: a servant is subject to complete control and supervision not only as to 100 what work is to be done but also how it is to be done; an agent, though bound by instructions, retains independence in the manner of performance and possesses a representative character enabling him to bind the principal; whereas a person who merely acts under directions, without any such authority or discretion, is only a licensee or instrumentality. Thus, authority to bind the principal, representative capacity, and the extent of control versus independence are the determinative factors in identifying the true nature of the relationship.
69.1. In UCO Bank (supra 32), the Hon'ble Supreme Court held that a bailee has only custody/possession of goods without any authority to represent or bind the bailor, whereas an agent has representative authority to create legal relations on behalf of the principal; thus, bailment lacks the element of representation essential to agency. 69.2. In Baldeo Narain Singh (supra 35), the Patna High Court held that when goods are given for a specific purpose and ownership remains with the giver, the receiver becomes a bailee under the Indian Contract Act 1872. The bailee must use the goods only for that purpose, take reasonable care, and return or deal with them as agreed--otherwise, he is liable for breach of bailment or misappropriation.
69.3. In Bal Kishan Das (supra 11) and Laxmi Nr. Sah (supra 10), it is held that where a dispute arises out of a contractual relationship 101 especially when civil remedies or arbitration are available or already invoked it remains purely civil in nature, and mere allegations of breach, shortage, or non-performance do not constitute a criminal offence. For offences like criminal breach of trust (Sections 406/409 IPC), there must be clear proof of entrustment, dishonest misappropriation, and mens rea; in their absence, the dispute cannot be given a criminal colour The Courts have emphasized that invoking criminal proceedings in such circumstances, especially when civil or arbitral remedies are available or pending, amounts to abuse of the process of law, and such proceedings are liable to be quashed to secure the ends of justice
70. The reliance placed by the learned counsel for the petitioners in paragraph Nos.68.1 to 68.3 are not applicable to the facts and circumstances of the present case, as the Corporation entrusted the paddy for a specific purpose in terms of the Agreement and the petitioners dishonestly diverted and misappropriated the same for their personal gains. These allegations prima facie fall within the ambit of criminal breach of trust.
71. In Kishan Singh (supra 20) and Dilawar Singh (supra 26), the Hon'ble Supreme Court held that lodging of an FIR is a crucial safeguard ensuring the spontaneity and authenticity of the prosecution case. Unexplained or inordinate delaying registration of the FIR raises serious doubt of embellishment, deliberation, or 102 fabrication. Such delay must be satisfactorily explained, failing which it undermines the credibility of the prosecution and may, in appropriate cases, prove fatal. Further, where the delay appears deliberate or mala fide, aimed at harassment or vengeance, the criminal proceedings amount to an abuse of process of law, justifying interference and quashing by the Court.
72. The reliance placed by the learned counsel for the petitioners in Kishan Singh (supra 20) and Dilwar Singh (supra 26) are is not applicable to the facts and circumstances of the case on the ground that in the said cases relied upon there was inordinate and unexplained delay, whereas in the present cases, there is no such delay in lodging the complaint, more particularly, in the present cases huge quantity of the paddy purchased by the Government from the farmers under MSP, entrusted through the Corporation to the petitioners/rice mills for CMR. However, the petitioners failed to deliver the CMR as per the Agreement and are alleged to have diverted for their personal gains, as a result of which, the Government/Corporation has sustained huge financial loss.
73. In S.K. Bhargava (supra 28), the Hon'ble Supreme Court held that even though the statute does not expressly provide for an opportunity of hearing, the principles of natural justice must be read into it, as the power to "determine" the "sum due" implies the existence of a lis; therefore, the authority is bound to give notice and 103 an opportunity of hearing to the affected party, and any determination made without such opportunity is vitiated in law.
74. The above said judgment in S.K. Bhargava (supra 28) relied upon by the learned counsel for the petitioners is not applicable to the present facts and circumstances of the case, especially the invocation of an arbitration clause is a civil remedy for contractual breaches and cannot substitute or override the criminal process where the acts complained of constitute offences under law an arbitrator has no jurisdiction to try criminal charges, even if they arise out of the same transaction.
75. In J. Shri Kersi H. Vachha (supra 4), Suresh Singh (supra 24), and N. Gopinath (supra 8), the courts have held that a criminal proceeding is maintainable only when it satisfies both procedural and substantive legal requirements it must be instituted by a duly authorized person in strict compliance with statutory provisions, and the complaint must contain clear, specific averments disclosing all essential ingredients of the offence. Any defect in authorization, procedural non-compliance, non-impleadment of necessary parties (e.g., company), or vague allegations in a predominantly civil dispute renders the proceedings unsustainable and an abuse of process, justifying quashing by the court.
76. The reliance placed by the learned counsel for the petitioners in J. Shri Kersi H. Vachha (supra 4), Suresh Singh (supra 24), and N. 104 Gopinath (supra 8) are not applicable to the present facts and circumstances of the case, in view of Clause 3(a) of the Agreement, wherein it is stipulated that the instructions issued by the Government/FCI from time to time are binding upon the parties to the Agreement. The Government had issued Memo dated 16.10.2017, wherein Clause 10 authorizes the District Manager, CSC, to initiate criminal action against the defaulter rice mills.
77. The contentions raised by the learned counsel for the petitioners in Crl.P.Nos.3074, 3145 and 3587 of 2026 are that the petitioners had submitted their resignations to their respective positions even prior to the execution of the Agreement between the Corporation and the Rice Millers and the same were accepted by their respective Companies as well as the competent authority and that they are not the parties to the said Agreement. Hence, the continuation of the proceedings against the petitioners is a clear abuse of the process of law. Whereas, respondent No.2 in his counter has denied the same and contended that mere resignation on paper does not absolve criminal liability, particularly when there are specific allegations regarding the entrustment of paddy and subsequent misappropriation of the said paddy. Whether the allegations levelled in the complaint against the petitioners are true or not, whether the petitioners are having any role in the respective Rice Mills or not by virtue of their resignations enclosed along with 105 the criminal petitions; and whether any other material exists to connect the petitioners with the alleged crime are to be revealed during the course of investigation, especially the investigation is at threshold and the grounds which were raised by the learned counsel for the petitioners are purely disputed questions of facts and same cannot be adjudicated at this stage.
78. Insofar as the other submission made by the learned counsel for the petitioners that in similar circumstances, this Court, while disposing of the Criminal Petition Nos.12037 of 2024 dated 03.10.2024, 895 of 2024 dated 25.01.2024 and 1461 of 2022 dated 07.06.2022, directed the Investigating Officer to follow the due procedure as contemplated under Section 41-A of Cr.P.C./Section 35(3) of the BNSS and the guidelines issued by the Hon'ble Supreme Court in Arnesh Kumar (supra 23) and the petitioners are also entitled to the very same benefit is concerned, the nature of allegations levelled against the petitioners constitute cognizable offences and the punishment prescribed for the offences levelled in the complaints is more than seven years. Once this Court comes to the conclusion that it is not a fit case to quash the proceedings, it does not have the power to issued a direction to the Investigating Officer to follow the procedure as contemplated under Section3 5(3) of the BNSS and the guidelines issued by the Honb'le Apex Court in Arnesh Kumar (supra 23).
106
79. In Bhajan Lal (supra 51), the Hon'ble Supreme Court delineated the limited scope of the High Court's jurisdiction under Article 226 of the Constitution and Section 482 Cr.P.C. to quash criminal proceedings, holding that such power may be exercised only in exceptional cases where the allegations, even if taken at face value, do not disclose any offence, are inherently improbable, legally barred, or manifestly mala fide, while cautioning that the categories so enumerated are illustrative and the power must be exercised sparingly.
80. The above said principles were reiterated in Neeharika Infrastructure (P) Ltd. (supra 29), wherein it was emphasised that the police have a statutory right and duty to investigate cognizable offences and that Courts should not interdict investigation at the threshold unless no cognizable offence is disclosed on a plain reading of the FIR; the FIR is not expected to be an encyclopedia of all facts, and criminal proceedings ought not to be scuttled at their nascent stage. In the present case, the allegations made in the complaint prima facie disclose cognizable offences, and as the investigation is still in progress, the petitioners are not entitled to seek quashing of the proceedings at the threshold.
81. It is already stated supra that there are specific allegations levelled in the complaints that the petitioners/Rice Mills have not delivered CMR equivalent to the paddy entrusted by the Corporation 107 for specific purpose as per the Agreement and they dishonestly and fraudulently misappropriated and diverted the paddy for their personal and pecuniary gains. The said allegations prima facie disclose cognizable offences and require investigation. Hence,m this Court is of the considered view that the petitioners are not entitled to seek quashing of the proceedings especially the investigation is at threshold.
82. For the foregoing reasons as well as the precedent decisions, this Court does not find any ground to quash the proceedings by exercising the powers conferred under Section 482 of the Cr.P.C./Section 528 of the BNSS and the same are liable to be dismissed.
83. Accordingly, all the criminal petitions are hereby dismissed.
Miscellaneous applications, pending if any, shall stand closed.
_______________________ J. SREENIVAS RAO, J Date:05.05.2026 L.R. Copy to be marked mar/pgp