Allahabad High Court
Ram Niwas Bansal And Another vs State Of U.P. And Another on 31 October, 2025
Author: Dinesh Pathak
Bench: Dinesh Pathak
HIGH COURT OF JUDICATURE AT ALLAHABAD Judgment reserved on 16.7.2025 Judgment delivered on 31.10.2025 HIGH COURT OF JUDICATURE AT ALLAHABAD APPLICATION U/s 482 No. - 8485 of 2021 Ram Niwas Bansal and another ..Applicant(s) Versus State of U.P. and another ..Opposite Party(s) Counsel for Applicant(s) : Prabha Shanker Mishra, Rajiv Lochan Shukla Counsel for Opposite Party(s) : Aushim Luthra, G.A., Pawan Kumar Singh, Somya Chaturvedi, Vikas Upadhyay Court No. - 37 HON'BLE DINESH PATHAK, J.
1. Heard Sri Rajiv Lochan Shukla, learned counsel for the applicant, Sri Manish Tiwari, learned Senior Counsel assisted by Sri Aushim Luthra for the opposite parties No. 2, learned AGA representing State-opposite party No. 1 and perused the material available on record.
2. The applicants have invoked the inherent jurisdiction of this Court under Section 482 CrPC assailing the cognizance/summoning order dated 18.11.2020 passed by Chief Judicial Magistrate, Gautam Buddha Nagar in Criminal Case No. 14824 of 2020 along with charge sheet No. 3 dated 10.11.2020, and the entire criminal proceedings arising out of the Case Crime No. 33 of 2017 (Old Case Crime No. 318 of 2016), under Sections 406, 420, 506, 467, 468, 471, and 120B IPC, Police Station Phase III, Noida, District-Gautam Buddha Nagar.
3. The transfer of shares and the non-payment of the proceeds thereof constitute the root cause of the instant criminal proceedings which have been initiated at the behest of the opposite party No. 2, who owns a company, namely, M/s Radius Infratel Pvt. Ltd. (in brevity, RIPL). He is also one of the directors/shareholders in RADIUS SYNERGIES Pvt. Ltd. (in brevity, RSPL). Opposite Party No. 2 has business relations with the present applicants, who own a company, namely, M/s Viresh Buildcon Pvt. Ltd. (in brevity, VBPL). Apart from these companies, two others were also involved in the share transaction i.e. M/s Neutral Access Network Operator Pvt. Ltd. (in brevity NANOPL) through its Director, namely, Hari Shankar Singh (opposite party No. 2 herein) and one Arvind Kumar Singh. With the mutual consent of both the parties, a new company, namely, M/s Nexstra Tele Services Pvt. Ltd. (in brevity, NTPL) was incorporated. As per Shareholders Agreement dated September 2, 2009, RIPL is 100% subsidiary of RSPL; and RSPL is owning five lakh equity shares in RIPL representing 50% of the authorised capital of RIPL, as on the date of said agreement. Parties entered into the aforementioned agreement to induct the VBPL as joint venture partner in RIPL. Accordingly, VBPL had held 50% of the paid up share capital of the joint venture and RSPL had held 50% of the paid up share capital of the joint venture. Aforementioned Shareholders Agreement was amended to certain extend by Addendum deed dated May 10, 2011. Subsequently, both the parties have enterd into a fresh agreement, viz; Master Agreement dated November 11, 2014, whereby NANOPL, through its Director Hari Shankar Singh, had agreed to transfer 6,76,000 fully paid equity shares held by it in RIPL to VBPL; and Shri Hari Shankar Singh had agreed to transfer 5,000 fully paid equity shares held by him in NTPL to VBPL. All the aforesaid five companies have their head offices in New Delhi.
4. Opposite Party No. 2 (complainant) came with the case that on the allurement made by Mr. Ashok Bansal (applicant No.2), he had sold 50% share of RIPL in favour of the present applicants company. Subsequently, remaining 50% share of RIPL were also transferred to the applicants company i.e. VBPL. Apart from that, in the newly incorporated subsidiary company, namely, NTPL, he held 1/3rd share, however, same was also transferred in favour of the Ashok Bansals company. The applicant No.2 had promised to pay Rs. 12 crore in lieu of the aforesaid transactions (transfer of shares); however, he cheated Opposite Party No. 2 and never paid the promised amount. Checks issued by the applicant No. 2 were dishonoured except for two checks of Rs. 5 lacs each, totalling Rs. 10 lacs. Therefore, the applicants are still liable to pay remaining amount i.e. Rs. 11 crores and 90 lacs. Having been aggrieved with the non-payment of agreed amount, the Opposite Party No. 2 and his company, viz; RIPL have separately filed four applications under Section 138 of The Negotiable Instruments Act, 1881 (in brevity, NI Act). Out of those, two complaints are dated 7.2.2015 and remaining two are dated 29.9.2015. During the pendency of the aforesaid proceedings under Section 138 of NI Act, the Opposite Party No. 2 moved an application dated 10.11.2015 under Section 156(3) CrPC alleging a transaction involving shares between the companies of both parties and non-payment of sale transaction. Aforesaid application was allowed by the learned Chief Judicial Magistrate, vide order dated 25.3.2016; and based on the aforesaid order, an FIR has been lodged, being Case Crime No. 318 of 2016, dated 26.3.2016, under Sections 420, 406 and 506 IPC indicating the occurrence of the offence before 31.5.2013. The aforementioned F.I.R has been lodged with an allegation that:-
(i) In the year 2008, the complainant established a company named Radius Infratel Pvt. Ltd., wherein technical work related to fiber was carried out in accordance with the law. Subsequently, the complainant got the said technical work patented as per law. Thereafter, orders from various customers started coming to the company, and to fulfill those orders, a larger amount of money was required.
(ii) At that time, Ashok Bansal, son of Shri Kishan Bansal, resident of D-112, Preet Vihar, Police Station Preet Vihar, Delhi, Director of M/s Viresh Buildcon Pvt. Ltd., who was previously known to the complainant, personally met him and proposed to invest money in his company and purchase shares. He assured the complainant that there would be no fraud or deceit with him and that whatever assurances Ashok Bansal was giving would be fulfilled in words and spirit.
(iii) Convinced by Ashok Bansals repeated assurances, the complainant sold 50% shares of his company Radius Infratel to Ashok Bansals company M/s Viresh Buildcon Pvt. Ltd. In return, as per the statements made by Ashok Bansal, he was to arrange and pay ₹200 crores to the complainants company for fulfilling the customers orders. However, he did not arrange the entire amount. Instead, to gain further trust, he amended the agreement to increase the amount to ₹300 crores and fully assured the complainant that he would soon arrange the entire amount, as he was now an equal partner in the company.
(iv) The entire amount was to be paid by Ashok Bansal by 31st May 2013, but he neither paid the amount within the stipulated time nor stopped procrastinating. Later, citing inability to arrange the funds, Ashok Bansal compelled the complainant by stating that he had convinced investors to invest in the company, but the investors desired that full ownership and control of the company should be in the name of Ashok Bansal, and services should be provided through another company, M/s Nexstra Tele Services Pvt. Ltd., in which the complainants shareholding would be 1/3.
(v)Ashok Bansal never introduced the complainant to the investors. On one hand, he was under pressure from customers to fulfill orders, and on the other hand, Ashok Bansal was taking advantage of this pressure and, by assuring further investment, was forcing him to transfer ownership and control of the complainants company to his name and to provide services through M/s Nexstra Tele Services Pvt. Ltd. so that all customers orders could be fulfilled on time and the companys image in the market would not be tarnished.
(vi) The complainant made efforts to raise funds for the company. Ultimately, upon Ashok Bansals full assurance that no fraud would be committed against him and that the entire amount would be paid to him at the time of transferring ownership and control to Ashok Bansals name, and that a written document would be executed in this regard, the complainant, relying on this assurance, transferred his remaining 50% shares to Ashok Bansals company M/s Viresh Buildcon Pvt. Ltd. and also transferred his 1/3 share in M/s Nexstra company to Ashok Bansals company.
(vii) The complainant demanded his amount of ₹12 crores, thereupon, Ashok Bansal requested the complainant to train his employees for four months and make them proficient, after which he would immediately pay ₹12 crores to him. Accordingly, the complainant trained Ashok Bansals employees for four months (until September 2014).
(viii) Thereafter, as per rules, the complainant submitted his resignation to Ashok Bansal and demanded his amount of ₹12 crores. Ashok Bansal, citing shortage of funds and with the intention to deceitfully cheat the complainant and to further gain his trust, issued two cheques amounting to ₹3,90,00,000:
Cheque No. 000209 for ₹2,45,00,000 dated 11.12.2014 Cheque No. 000205 for ₹1,45,00,000 dated 11.12.2014 For the remaining eight crores, he issued two cheques:
Cheque No. 000210 for ₹4,29,48,000 dated 11.08.2015 Cheque No. 000207 for ₹3,70,52,000 dated 11.08.2015
(ix) He requested the complainant that the cheques would be honoured on the date mentioned thereon. For immediate use, he gave two cheques of ₹10,00,000:
Cheque No. 000204 for ₹5,00,000 dated 11.11.2024 Cheque No. 000208 for ₹5,00,000 dated 11.11.2014
(x) When the complainant reminded Ashok Bansal of his promise, Ashok Bansal cited his inability to arrange funds and assured him that all cheques would be honoured on the first presentation on the dated mentioned. Trusting him again, the complainant found that only the two cheques of ₹5 lakh each were honoured on the due date. The two cheques totalling ₹3,90,00,000 in December 2014 were dishonoured when presented for payment. Thereafter, Ashok Bansal stopped answering the complainants calls.
(xi) Upon investigation, the complainant found that Ashok Bansal was rapidly changing the companys name, while repeatedly citing shortage of funds to the complainant and issuing post-dated cheques months later, of which the two high-value cheques were dishonoured. It then became clear to the complainant that from the very beginning, Ashok Bansal had taken him into confidence with the intention of unlawfully benefiting himself and causing unlawful loss to the complainant by fraudulently misappropriating his money and property through a well-planned conspiracy. He not only took the complainants company under his ownership but has also failed to pay ₹11,90,00,000 out of his ₹12 crores till date. Despite repeated calls, he does not speak to the complainant.
(xii) Ashok Bansal is now getting the complainant threatened by unknown goons, asking him to stay quiet at home, and warning that if he complains anywhere or demands money, he will be killed and disposed of, with no trace of the body.
(xiii) The complainant is now fully convinced that Ashok Bansal has taken him into confidence, cheated him, and misappropriated his property and ₹11,90,00,000, and upon demanding the same, is getting him threatened with death. Ashok Bansal has deliberately caused a wrongful loss of ₹11,90,00,000 to the complainant through fraud.
(xiv) The fraud committed by him is a serious offence. He has knowingly breached the agreement with the applicant and transferred the complainants shares in his name on the basis of forged interpretations. The complainant faces danger to life and property from the accused Ashok Bansal.
(xv) The complainant had submitted a written complaint regarding this incident to the Station House Officer, Phase-3, Noida, on 02.07.2015, and to the Senior Superintendent of Police, Gautam Buddh Nagar, but no action has been taken on his complaint till date.
(xvi) Since the complainants property and ₹11,90,00,000 are in the illegal possession of the accused, which can only be recovered by the police, it is necessary to register a case and get the matter investigated by the police.
(xvii) It is therefore prayed that the Station House Officer, Phase-3, Noida, be directed to register an FIR against Ashok Bansal, son of Shri Kishan Bansal, resident of D-112, Preet Vihar, Police Station Preet Vihar, Delhi, Director of M/s Viresh Buildcon Pvt. Ltd., and take appropriate legal action, and ensure recovery of ₹11,90,00,000 for the complainant.
5. The Investigating Officer after due investigation has prepared CD No. 24 and has made an observation that occurrence of offence relates to New Delhi, therefore, Investigation cannot be conducted within the territory of the district Gautam Buddha Nagar. He has prepared CD No. 34 dated 24.4.2017, as well, and filed the final report No. 9 of 2017 dated 24.4.2017 holding that no offence as alleged in the present Case Crime is made out. On the legal opinion secured from the Senior Prosecution Officer, Gautam Buddha Nagar, vide his opinion letter dated 18.5.2017, further investigation has been conducted on four points as mentioned in the opinion letter dated 18.5.2017. The Investigating Officer has again prepared Parcha No. IV dated 19.5.2017 endorsing the final report dated 24.4.2017. It appears that subsequently the case has been transferred to Economic Offence Wing (in brevity, EOW), Meerut and thereafter, EOW, Kanpur Nagar. Lastly, the Investigating Officer, EOW, Kanpur Ngar has submitted the charge sheet No. 3 of 2020 dated 10.11.2020 under Sections 406, 420, 467, 468, 471, 506 and 120B IPC. Based on the aforesaid charge sheet, cognizance/summoning order dated 18.12.2020 has been passed. Thus, having been aggrieved, the present applicants have invoked the inherent jurisdiction of this Court assailing the entire criminal proceeding arising out of Case Crime No. 33 of 2017 (Old Case Crime No. 318 of 2016).
Arguments of the Applicants:-
6 (i) Learned counsel for the applicants submits that the commercial dispute relating to the transfer of share, which is civil in nature, has illegally been given the colour of criminal intent. Opposite Party No. 2 has basically raised a question with regard to the non-payment of consideration money which was promised at the time of transfer of shares. The complainant himself alleged that a breach of agreement took place between the parties. Thus, criminal proceeding are not maintainable in the eye of law.
6 (ii) He has laid emphasis on the fact that all the companies involved in the transfer of shares belong to the New Delhi. Cheques were executed in New Delhi and the same were presented for encashment in New Delhi as well. Therefore, the court in Gataum Buddha Nagar has no territorial jurisdiction to examine the occurrence of offence, if any, as mentioned in the FIR. Complainant has himself preferred to file the complaint under Section 138 NI Act in the court of Chief Metropolitan Magistrate, Patiala House Court, New Delhi.
6 (iii) By concealing the material fact with regard to the filing of four complaints under Section 138 NI Act and their pendency, the Opposite Party No. 2 (complainant) has moved an application under Section 156(3) CrPC and in pursuance of the order passed on the aforesaid application, FIR has been lodged intending to coerce the present applicant in cases pending under Section 138 of NI Act.
6 (iv) Learned counsel for the applicant has laid emphasis on the Master Agreement dated 11.11.2014 wherein head office of all the companies are mentioned as being in New Delhi. Under Clause No. 8.11 of the Master agreement, it is stated that courts in New Delhi shall have exclusive jurisdiction. In support of his submission, learned counsel for the applicant has elaborated the provisions under Sections 177 and 178 of CrPC. In support of his submission, he has placed reliance upon the case of Y.Abraham Ajith and Others vs. Inspector of Police, Chennai and another, reported in (2004) 8 SCC 100, Ramesh vs. State of Tamil Nadu, reported in (2005) 3 SCC 507 and Swaati Nirkhi and Ors. vs. State (NCT of Delhi) and Ors., Transfer Petition (Crl.) 262 of 2018, decided by Honble Supreme Court on March 9, 2021 reported in MANU/SC/0166/2021.
6 (v) He has emphasized that until a favourable report was secured from the police, the Investigating Officer kept changing, even the investigating agency was changed. No justification has been offered in the entire report as to why the matter was transferred to the Crime Branch, thereafter to EOW, Meerut and thereafter to EOW, Kanpur despite the fact that previous Investigating Officer has raised serious questions relating to the jurisdiction at Gautam Buddha Nagar.
6 (vi) Ram Niwas Bansal (applicant No. 1) has illegally been made an accused in renumbered FIR No. 33 of 2017, whereas he was neither made an accused in the application under Section 156(3) CrPC nor in FIR No. 318 of 2016. A twisted story has been portrayed with the intention to inculpate the applicant No. 1, who has, in fact, been exonerated in proceeding under Section 138 of NI Act.
6 (vii) Learned counsel for the applicant has emphasized that the offence for cheating under Section 420 IPC and criminal breach of trust under Section 406 IPC are antithetical to each other and cannot be tried together for the same offence; therefore, on this score alone, the FIR is liable to be quashed. In support of his submission, learned counsel for the applicant has placed reliance upon the case of Delhi Race Club (1940) Ltd. & Others vs. State of Uttar Pradesh & another (2024 SCC OnLine SC 2248). He has also stressed that the proceeding under Section 138 of NI Act and offence under Section 406/420 IPC cannot run simultaneously on bald assertion that cheques were issued with dishonest intention. In this respect, he has placed reliance upon the case of G. Sagar Suri vs. State of UP, 2000(2) SCC 636.
6 (viii) It is next submitted that all the transactions were made between the companies; however, the companies have not been made parties to the criminal proceedings. Therefore, the non-payment of consideration for transfer of the shares cannot be attributed to the present applicants, and as such, the continuation of the proceedings against the applicants is wholly unjustified. In support of his submission, learned counsel for the applicant has place reliance upon Aneeta Hada vs. M/s Godfather Travels and Tours Pvt. Ltd., AIR 2012 (SC) (Cri) 892.
6 (ix) It is further submitted that criminal proceedings should be quashed where commercial/civil disputes have been given colour of criminal intent and, accordingly, criminal proceedings have been initiated maliciously with ulterior motive. In this respect, he has placed reliance on the case of State of Haryana vs. Bhajan Lal, 1992 AIR Supreme Court 604.
6 (x) Several crores of rupees has been invested by the present applicants in the company of the opposite party No. 2; however, due to losses, it could not survive. Ultimately, opposite party No.2 offered to sell his shares in favour of the present applicants.
6 (xi) Learned counsel for the applicant has also emphasized that the proceedings were also taken before the National Company Law Tribunal (in brevity, NCLT, New Delhi).
6 (xii) It is further submitted that the event pertains to the internal affairs of the company regarding the transfer/transaction of shares has already been duly communicated to the ROC. Opposite Party No. 2 has never taken any action/steps for cancellation or reversal of the said transfer before the Company Law Board or the NCLT, Delhi. Therefore, initiation of criminal proceedings on the same set of facts is unwarranted and amounts to abuse of the process of law.
6 (xiii) Offence under Section 467, 468, 471 and 120B IPC has illegally been included at subsequent stage without collecting any material during investigation. The transaction took place before the Master Agreement dated 11.11.2014 was well within the knowledge of the complainant (Opposite Party No. 2), who has submitted form 20B under the Companies Act and Rules made thereunder. However, he has never made any complaint that any forgery has been committed by the present applicants with regard to the transfer of share. Once the complainant has transferred his entire share, he cannot raise any objection with regard to the future transaction, defects, if any.
Arguments of Opposite Party No. 2:-
7 (i) Learned counsel for the Opposite Party No. 2 has relied upon all the facts as mentioned in the FIR and submits that despite the promise made by the present applicants, final payment has not been made to the complainant and all the cheques furnished by the applicants were dishonored from the drawee bank for which proceeding under Section 138 of NI Act is going on.
7 (ii) He has laid emphasis on the Master Agreement dated 11.11.2014 and submits that it was signed between the parties finalizing the issues of patent, brand name etc. and accordingly sale bills and share certificates were physically handed over by the complainant to the accused persons. In lieu thereof, the accused have furnished six cheques amounting to rupees 12 crores, out of which only two cheques having valuation of 5 lacs each were encashed while remaining three were dishonoured.
7 (iii) On 11.11.2014 an indemnity bond was signed by the complainant declaring that he has not sold/transferred the shares before 11.11.2014. Complaints U/s 138 was filed at Dwarka District Court, Delhi.
7 (iv) While running from pillar to post for his money, the complainant went to ROC to raise his objection and discovered that the shares under transaction were transferred by the accused persons backdated w.e.f. 01.07.2014 with the help of several forged documents and wrong information.
7 (v) FIR No. 318/2016 (under Section 420/406/506 of IPC, filed against Sh. Ashok Bansal) was registered at P.S. Phase III, NOIDA, Gautam Buddh Nagar pursuant to the order, dated 26.03.2016, passed by the Ld. CJM, Gautam Buddh Nagar, in the proceedings under Section 156(3) of Cr. P.C. 7 (vi) Subsequently, after lodging an F.I.R., the complainant came across several documents in the nature of Form 20 B etc. uploaded by the accused persons under their digital signatures, over the website of ROC. The documents were forged with an intention to get the shares transferred w.e.f. 01.07.2014 while the shares were actually received by the accused persons on 11.11.2014.
7 (vii) Mr. Ram Niwas Bansal (who became director of VBPL on 31.07.2014) signed a document dated 01.07.2014 in the capacity of the Director of VBPL thereby transferring one equity share of RIPL to Mr. Ashok Bansal and he accepted the transfer having knowledge that neither Ram Niwas Bansal is legally authorized to transfer the share nor the shares were owned by them on 01.07.2014. The documents were created after 11.11.2014 with an intention to justify the backdated transfer w.e.f. 01.07.2014.
7 (viii) Without being director of VBPL, Ram Niwas Bansal forged document to transfer a share to Ashok Bansal and Ashok Bansal accepted the beneficial ownership of the share. This forged trail of documents were uploaded to ROC website under the digital signatures of Ashok Bansal and Ram Niwas Bansal.
7 (ix) Economic Offences Wing, Meerut as well as Kanpur after investigation have forwarded their Last Progress Reports to the higher authorities. The investigating agency have found accused Ashok Bansal and Ram Niwas Bansal guilty of committing offences defined under sections 420, 406, 467, 468, 471 & 120B of IPC.
7 (x) In support of his contention, learned counsel for the Opposite Party No. 2 has relied upon the case of Kamal Shivaji Pokarnekar vs. The State of Maharashtra and others, reported in AIR 2019 SC 847 and Kaushik Chatterjee vs. State of Haryana and others, reported in (2020) 10 Supreme Court Cases 92.
CONSIDERATION
8. Having considered the rival submissions advanced by the learned counsel for the parties and upon perusal of the record, it manifests that both the parties had business transactions. The transfer of shares and the non-payment of their value are the points of dispute between the parties. Initially, a Shareholders' Agreement dated 2.9.2009 (SHA) was entered into between the three companies, namely, RSPL, VBPL and RIPL. Subsequently, a Technology Assignment and Transfer Agreement dated 28.8.2009 was entered into between RSPL, Hari Shankar Singh (opposite party No. 2) and RIPL. Previous SHA was subsequently modified by Addendum deed dated 10.5.2011. A later stage, both the parties entered into a Master Agreement dated 11.11.2014 whereby shares of RIPL were transferred to VBPL and VBPL paid the entire amount of sale consideration by way of post dated cheques which were subject to realization on due date. Additionally, opposite party No. 2 transferred his 25% shares held by him in NTPL in favour of VBPL and VBPL paid entire amount of sale consideration to opposite party No. 2 by way of post dated cheques subject to their realization on due dates. The grievance of the opposite party No. 2 is that the present applicant No.2, who was director of VBPL, has not made full payment as per the Master Agreement dated 11.11.2014. The post dated cheques furnished by the applicant No.2 were dishonoured by the drawee banks when they were presented, except two cheques having value of 5 lacs each, totalling Rs. 10 lacs. As per the contents of the complaint/FIR filed by the opposite party No. 2, the present applicant No.2 has committed fraud and knowingly breached the agreement. Initially, an FIR was lodged against the applicant No. 2, namely, Ashok Bansal, being FIR No. 318 of 2016 under Sections 420, 406 and 506 IPC. Subsequently, said FIR was converted into FIR No. 33 of 2017 and four sections were additionally added, viz., Sections 467, 468, 471 and 120B IPC. While submitting the charge sheet in the aforesaid FIR, the Investigating Officer has inculpated the applicant No. 1, namely, Ram Niwas Bansal, as well, levelling allegation of transferring the share without authority. However, no such allegation has been made by the opposite party No. 2 in the FIR against the applicant No. 1. In the earlier part of the charge sheet dated 10.11.2020, the allegation is with respect to the non-payment of Rs. 12 crores which was the sale consideration between the two companies. However, in the subsequent part of the charge sheet, the applicant No. 1 has been blamed for transferring shares without any authorization. In this backdrop of the facts, Sections 467, 468, 471 and 120 IPC have been added. Thus, the offence for which the present applicants have been summoned can be devided into two parts; first, under Sections 406, 420 and 506 IPC against Ashok Bansal (applicant No.2), as mentioned in the previous FIR No. 318 of 2016 and second, under Sections 467, 468, 471 and 120B IPC against Ram Niwas Bamnsal (applicant No.1) as mentioned in newly numbered F.I.R. No.33 of 2017. For ready refrence english translation of charge sheet No.3 dated 10.11.2020 is reproduced herein below:-
The lawsuit was registered on the above-mentioned vehicle Face-33, District Gautam Buddha Nagar, under the order of the Honorable Court of CJM Noida, pursuant to Section 156(3) Cr.P.C. The investigation was initially conducted at the district level, and due to the case involving an amount of 11 crore 90 lakh, it was transferred by government order to EOW Meerut, and from Meerut to Kanpur Sector EOW. From all the investigations conducted so far, through documentary and oral evidence, it has been found that the complainant and the accused were running a company (business) in partnership, wherein due to dissatisfaction with the profits and other issues, the accused took over the complainant's company and all remaining equipment, etc. In lieu of this, a liability of 12 crore was agreed upon. The accused paid 10 lakh rupees, and issued checks for the remaining amount, which were dishonored. The accused, without making payment for the shares given by the complainant, fraudulently signed as a director (though not being one) and transferred the shares through ROC by providing false information, due to which the name of accused no. 02 came to light. Consequently, sections 467, 468, 471, and 120B IPC were added. After filing charges against both, the chargesheet is being submitted to the court. Kindly summon the evidence and issue the same.
Offence Under Section 406, 420 and 506 I.P.C.
9. Offence for the cheating and breach of trust cannot co-exist simultaneously as per the ratio decided by Honble Supreme Court in the matter of Delhi Race Club (1940) Ltd. & Others (supra). Relevant paragraphs No. 24 to 30 is quoted hereinbelow:-
24. This Court in its decision in S.W. Palanitkar & Ors. v. State of Bihar & Anr. reported in (2002) 1 SCC 241 expounded the difference in the ingredients required for constituting an offence of criminal breach of trust (Section 406 IPC) viz-a-viz the offence of cheating (Section 420). The relevant observations read as under: -
9. The ingredients in order to constitute a criminal breach of trust are: (i) entrusting a person with property or with any dominion over property, (ii) that person entrusted (a) dishonestly misappropriating or converting that property to his own use; or (b) dishonestly using or disposing of that property or wilfully suffering any other person so to do in violation (i) of any direction of law prescribing the mode in which such trust is to be discharged, (ii) of any legal contract made, touching the discharge of such trust.
10. The ingredients of an offence of cheating are: (i) there should be fraudulent or dishonest inducement of a person by deceiving him, (ii)(a) the person so deceived should be induced to deliver any property to any person, or to consent that any person shall retain any property; or (b) the person so deceived should be intentionally induced to do or omit to do anything which he would not do or omit if he were not so deceived; and (iii) in cases covered by (ii)(b), the act of omission should be one which causes or is likely to cause damage or harm to the person induced in body, mind, reputation or property.
25. What can be discerned from the above is that the offences of criminal breach of trust (Section 406 IPC) and cheating (Section 420 IPC) have specific ingredients.
In order to constitute a criminal breach of trust (Section 406 IPC): -
1) There must be entrustment with person for property or dominion over the property, and
2) The person entrusted: -
a) dishonestly misappropriated or converted property to his own use, or
b) dishonestly used or disposed of the property or willfully suffers any other person so to do in violation of:
i. any direction of law prescribing the method in which the trust is discharged; or ii. legal contract touching the discharge of trust (see: S.W.P. Palanitkar (supra).
Similarly, in respect of an offence under Section 420 IPC, the essential ingredients are: -
1) deception of any person, either by making a false or misleading representation or by other action or by omission;
2) fraudulently or dishonestly inducing any person to deliver any property, or
3) the consent that any persons shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit (see: Harmanpreet Singh Ahluwalia v. State of Punjab, (2009) 7 SCC 712 : (2009) Cr.L.J. 3462 (SC))
26. Further, in both the aforesaid sections, mens rea i.e. intention to defraud or the dishonest intention must be present, and in the case of cheating it must be there from the very beginning or inception.
27. In our view, the plain reading of the complaint fails to spell out any of the aforesaid ingredients noted above. We may only say, with a view to clear a serious misconception of law in the mind of the police as well as the courts below, that if it is a case of the complainant that offence of criminal breach of trust as defined under Section 405 of IPC, punishable under Section 406 of IPC, is committed by the accused, then in the same breath it cannot be said that the accused has also committed the offence of cheating as defined and explained in Section 415 of the IPC, punishable under Section 420 of the IPC.
28. Every act of breach of trust may not result in a penal offence of criminal breach of trust unless there is evidence of manipulating act of fraudulent misappropriation. An act of breach of trust involves a civil wrong in respect of which the person may seek his remedy for damages in civil courts but, any breach of trust with a mens rea, gives rise to a criminal prosecution as well. It has been held in Hari Prasad Chamaria v. Bishun Kumar Surekha & Ors., reported in (1973) 2 SCC 823 as under:
4. We have heard Mr. Maheshwari on behalf of the appellant and are of the opinion that no case has been made out against the respondents under Section 420 Penal Code, 1860. For the purpose of the present appeal, we would assume that the various allegations of fact which have been made in the complaint by the appellant are correct. Even after making that allowance, we find that the complaint does not disclose the commission of any offence on the part of the respondents under Section 420 Penal Code, 1860. There is nothing in the complaint to show that the respondents had dishonest or fraudulent intention at the time the appellant parted with Rs. 35.000/- There is also nothing to indicate that the respondents induced the appellant to pay them Rs. 35,000/- by deceiving him. It is further not the case of the appellant that a representation was made, the respondents knew the same to be false. The fact that the respondents subsequently did not abide by their commitment that they would show the appellant to be the proprietor of Drang Transport Corporation and would also render accounts to him in the month of December might create civil liability on the respondents for the offence of cheating.
29. To put it in other words, the case of cheating and dishonest intention starts with the very inception of the transaction. But in the case of criminal breach of trust, a person who comes into possession of the movable property and receives it legally, but illegally retains it or converts it to his own use against the terms of the contract, then the question is, in a case like this, whether the retention is with dishonest intention or not, whether the retention involves criminal breach of trust or only a civil liability would depend upon the facts of each case.
30. The distinction between mere breach of contract and the offence of criminal breach of trust and cheating is a fine one. In case of cheating, the intention of the accused at the time of inducement should be looked into which may be judged by a subsequent conduct, but for this, the subsequent conduct is not the sole test. Mere breach of contract cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right from the beginning of the transaction i.e. the time when the offence is said to have been committed. Therefore, it is this intention, which is the gist of the offence. Whereas, for the criminal breach of trust, the property must have been entrusted to the accused or he must have dominion over it. The property in respect of which the offence of breach of trust has been committed must be either the property of some person other than the accused or the beneficial interest in or ownership of it must be of some other person. The accused must hold that property on trust of such other person. Although the offence, i.e. the offence of breach of trust and cheating involve dishonest intention, yet they are mutually exclusive and different in basic concept. There is a distinction between criminal breach of trust and cheating. For cheating, criminal intention is necessary at the time of making a false or misleading representation i.e., since inception. In criminal breach of trust, mere proof of entrustment is sufficient. Thus, in case of criminal breach of trust, the offender is lawfully entrusted with the property, and he dishonestly misappropriated the same. Whereas, in case of cheating, the offender fraudulently or dishonestly induces a person by deceiving him to deliver any property. In such a situation, both the offences cannot co-exist simultaneously.
10. Having considered the aforesaid dictum of the Honble Apex Court in the given circumstances of the present case, it is reflected that the transaction with regard to the transfer of share took place between the two companies. Accordingly, payment was promised to be made through post dated cheques, however, only two cheques were honoured amounting to Rs. 5 lacs each, totalling Rs. 10 lacs, and remaining cheques were dishonoured. Prima facie, if the contents of the FIR are taken to be true, the ingredients for cheating and criminal breach of trust as enunciated under Section 415 and 405 IPC respectively are not attracted. There is no entrustment of any property in favour of the present applicants, who have, allegedly, dishonestly misappropriated or converted that property to their own use. Non-payment of sale consideration (transfer of shares), or part payment thereof, prima facie, cannot be considered for the offence of criminal breach of trust. Prima facie, fraudulent and dishonest intention on the part of applicants is not shown right from the beginning of the transactions. Both the parties have had a long business relation, which is evident from the Shareholders Agreement dated 2.9.2009 which was subsequently amended by Addendum Deed dated 10.5.2011. No material has been produced on record, which was allegedly collected by the Investigating Officer during investigation to indicate that the opposite party No. 2 has ever raised any objection with respect to the alleged conduct of the present applicants showing their fraudulent and dishonest intention. All of sudden, when the cheques furnished by the applicant No. 2 were dishonoured while presented before the drawee bank, opposite party No.2 came with the case of inducement which was allegedly done by the applicant No. 2 at the time of getting the shares transferred in favour of VBPL.
11. Prima facie, criminal intention of the applicant No.2 is not made out, at the time of transfer of shares. In the given circumstances of the present case, it would be difficult to infer as to how present applicants (alleged offender) fraudulently or dishonestly induced the opposite party No.2 by deceiving him to deliver any property in the transaction with regard to transfer of shares. Opposite party No.2 has transferred his shares held in RIPL and NTPL in favour of BVPL. He himself filed Form 20B under the Companies Act and Rules made there under, pertaining to both the companies, and communicated the same to the Registrar of Companies. No objection has been raised from any corner, at any stage, against that transaction.
12. So far as offence under Section 506 IPC is concerned, opposite party No. 2 has made an allegation in his complaint that Ashok Bansal got the opposite party No.2 threatened by unknown goons asking him to stay at home, and warned that if he complains anywhere or demands money, he will be killed and disposed of with no trace of body. Offence of criminal intimidation is defined under Section 503 IPC. For ready reference, Section 503 and 506 IPC are quoted hereinbelow:-
503. Criminal intimidation.Whoever threatens another with any injury to his person, reputation or property, or to the person or reputation of any one in whom that person is interested, with intent to cause alarm to that person, or to cause that person to do any act which he is not legally bound to do, or to omit to do any act which that person is legally entitled to do, as the means of avoiding the execution of such threats, commits criminal intimidation.
506. Punishment for criminal intimidation.Whoever commits the offence of criminal intimidation shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both;
if threat be to cause death or grievous hurt, etc.and if the threat be to cause death or grievous hurt, or to cause the destruction of any property by fire, or to cause an offence punishable with death or 1[imprisonment for life], or with imprisonment for a term which may extend to seven years, or to impute unchastity to a woman, shall be punished with imprisonment of either description for a term which may extend to seven years, or with fine, or with both.
13. Honble Supreme Court, in paragraph No. 32, in the case of Mohammad Wajid and another vs. State of UP and others, reported in (2023) 20 SCC 219, has expounded that a bare perusal of Section 506 IPC makes it clear that a part of it relates to criminal intimidation. Before an offence of criminal intimidation is made out, it must be established that the accused had an intention to cause alarm to the complaint. In the given circumstances of the present case, the complainant has not made any direct allegation against the present applicant No.2 except that he threatened to the opposite party through goons. A very vague averment has been made in this respect at the subsequent part of the complaint. Prima facie, it appears that intending to coerce the present applicants in the matter under Section 138 of NI Act, an allegation of offence for criminal intimidation has been levelled against the present applicants. Time, place and name of the goons have not been mentioned in the complaint. When the investigation officer was confronted with opposite party No.2 in this respect, he did not give a satisfactory reply. Relevant portion of statement of opposite party No.2 recorded under Section 161 Cr.P.C., wherein he could not give proper reply, is reproduced herein below:-
Question to Plaintiff:- It has been recorded in the FIR that you were threatened by unknown persons at the instant of defendant Ashok Bansal when were you threatened? Please state the date that whether the threat was given orally or over the telephone, and at what place. If it was given over the telephone, mention the telephone number.
Answer of the complainant:- It was threatened by Ashok Bansal. In this respect he said, "I will tell you later, and then remain silent.
Offence Under Section 467, 468, 471 and 120-B I.P.C
14. The essential ingredients for the offence under Section 467, 468, 471 and criminal conspiracy under Section 120-B IPC, prima facie, are also lacking, for which present applicants have been summoned to face trial. Initially, present applicants were not inculpated under the aforesaid Sections. However, subsequently at the time of submitting the charge sheet, these Sections were included and the applicant No.1 has been arraigned in the charge sheet, as well, alleging the transfer of certain shares without any authority. Sections 467, 468, 471 and 120B of IPC are quoted hereinbelow:-
467. Forgery of valuable security, will, etc.Whoever forges a document which purports to be a valuable security or a will, or an authority to adopt a son, or which purports to give authority to any person to make or transfer any valuable security, or to receive the principal, interest or dividends thereon, or to receive or deliver any money, movable property, or valuable security, or any document purporting to be an acquittance or receipt acknowledging the payment of money, or an acquittance or receipt for the delivery of any movable property or valuable security, shall be punished with 1[imprisonment for life], or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.
468. Forgery for purpose of cheating.Whoever commits forgery, intending that the document 1[or electronic record] forged shall be used for the purpose of cheating, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.
471. Using as genuine a forged document 1[or electronic record].Whoever fraudulently or dishonestly uses as genuine any document 2[or electronic record] which he knows or has reason to believe to be a forged document 3[or electronic record], shall be punished in the same manner as if he had forged such document 4[or electronic record].
120-B. Punishment of criminal conspiracy.(1) Whoever is a party to a criminal conspiracy to commit an offence punishable with death, 1[imprisonment for life] or rigorous imprisonment for a term of two years or upwards, shall, where no express provision is made in this Code for the punishment of such a conspiracy, be punished in the same manner as if he had abetted such offence.
(2) Whoever is a party to a criminal conspiracy other than a criminal conspiracy to commit an offence punishable as aforesaid shall be punished with imprisonment of either description for a term not exceeding six months, or with fine or with both.]
15. Definition of forgery is enunciated under Section 463 IPC, which is quoted hereinbelow:-
463. Forgery.Whoever makes any false documents 2[or false electronic record] or part of a document 3[or electronic record,] with intent to cause damage or injury, to the public or to any person, or to support any claim or title, or to cause any person to part with property, or to enter into any express or implied contract, or with intent to commit fraud or that fraud may be committed, commits forgery.
16. Honble Supreme Court in the matter of Sushil Suri Vs. Central Bureau of Investigation and another, reported in (2011) 5 SCC 708 has elucidated the basic elements of the forgery, to wit, (1) the making of a false document or part of it and (2), such making should be with such intention as is specified in section, viz, (a) to cause damage or injury to (i) the public, or (ii) any person; or (b) to support any claim or title; or (c) to cause any person to part with property; or (d) to cause any person to enter into an express or implied contract; or (e) to commit fraud or that fraud may be committed.
17. As per Master Agreement dated 11.11.2014, in Clause 2.1, RIPL has transferred his share in favour of VBPL and in pursuance thereof VBPL has furnished post dated cheques. In Clause 2.2 of the aforementioned Master Agreement, opposite party No. 2 has transferred his shares held in NTPL in favour of VBPL and accordingly, post dated cheques have been furnished in favour of opposite party No. 2. In the transfer of shares, in fact, the opposite party No.2 has transferred his shares in favour of applicants company, namely, VBPL. There is no case of the opposite party No. 2, that applicant No. 1 has fraudulently transferred the shares in favour of the opposite party No. 2 by putting forged and fictitious signatures. All the business transactions with regard to the transfer of shares have been acknowledged by the opposite party No. 2, in Form 20-B, under the Companies Act, as mentioned in the Master Agreement dated November 11, 2014. At this belated stage, by filing the counter affidavit, the opposite party No.2 has tried to put a case that the present applicants have never invested money in the company, namely, RIPL, as promised earlier. He has further tried to put a case qua transfer of shares based on forged and fabricated documents. Learned counsel for the applicants has emphasised paragraph number 17 (k)(III) of rejoinder affidavit and submits that transaction referred to by opposite party No. 2 that applicant No. 1 signed a document dated 3.7.2014 is of no consequence for the reason that said transaction relates to an administrative action for transfer of one share in favour of the director for the reason that in terms of law, single shareholder cannot hold the entire shareholding; therefore, 100% shareholding was transferred to the VBPL and one share was transferred in favour of director of VBPL. The transfer of one share in favour of director of VBPL is mere a formality and an absolutely internal affair of VBPL. He further submits that transfer of one share by applicant No. 1 in favour of a nominee of the company has no connection with the transfer of share by opposite party No. 2, as transfer of one share is absolutely internal administrative affair of the company. Therefore, opposite party No. 2 cannot claim any forgery on account of a procedure which is an absolutely internal affair of the company, more particularly, in circumstances wherein opposite party No. 2 himself executed a memorandum of transfer of share on 1.7.2014 and relinquished all his right, title and interest in the shareholding. As per the provisions enunciated under Section 187 of the Companies Act, neither any company nor any person can have 100% share capital in a subsidiary company held in its own name. Needless to say that a private limited company (not an OPC), must have at least 2 members with no zero shareholdings.
18. It is apposite to mention that it was the VBPL Company which entered into the agreement with RIPL and NTPL to purchase the shares of both the aforesaid company. Cheques issued by director of VBPL, viz, applicant No.2 have been dishonoured for which complaints under Section 138 NI Act have been filed. No material has been placed on record to prima facie prove the criminal conspiracy between the applicants No. 1 and 2 intending to commit fraud with the opposite party No. 2 who was one of the directors of RIPL and NTPL. The essential ingredients of the offence of criminal conspiracy as enunciated under Section 120A IPC are the agreement between two or more persons to commit the offence. The Honble Supreme Court in the matter of John Pandiayn vs. State, (2010) 14 SCC 129 expounded that circumstances in a case when taken together on their face value should indicate meeting of minds between the conspirators for the intended object to commit an illegal act or an act which is not illegal, committed by illegal means. A few bits here and a few bits there on which prosecution relied upon cannot be held to be adequate for connecting the accused with the commission of the crime of criminal conspiracy. It has to be shown that all means adopted and illegal act done were in furtherance of the object of conspiracy hatched. Circumstances relied upon for the purpose of drawing inference should be prior in point of time than the actual commission of offence in furtherance of alleged conspiracy. (Emphasis applied)
19. The presence of applicant No. 1, being one of the directors of the company, does not automatically prove his involvement in the commission of any crime in furtherance of the object of any conspiracy hatched. Long business relations between both the parties and sudden loss in the business which led sale of shares, and subsequently, non-payment of sale consideration, prima facie, would not infer commission of any offence under the IPC. In a proceedings instituted under Section 138 NI Act, the applicant No. 1 has already been exonerated by the court concerned, having not been found involved in the alleged offence.
Commercial/Civil Disputes
20. On the face of record, it manifests that non-payment of value of the transferred shares promptly triggered the filing of a complaint under Section 138 of NI Act and, subsequently, an application under Section 156(3) CrPC. In the said application under Section 156(3) CrPC, the complainant (opposite party No.2) has admitted the business transactions between the parties since 2009 upto the Master Agreement dated November 11, 2014; however, the non-payment of the agreed amount under the Master Agreement dated 11.11.2014 compelled opposite party No. 2 to have recourse to legal remedies available under the criminal law. Prima facie, along side the remedy persued by opposite party No. 2 for recovery of the amount owing to dishonour of cheques, he has also adopted a retaliatory measure with the intention of settling scores with the present applicants. In his complaint, opposite party No. 2 has himself came with the case that conditions of the agreement has been breached. Prima facie, however, it appears that opposite party No. 2 has attempted to create surrounding and attending circumstances with the intent to falsely inculpate the present applicants for the offence of cheating, criminal intimidation and forgery. In the given circumstances of the present case, and upon consideration of the pleading as well as the documents available on board, prima facie the contents of the FIR are concocted and frivolous, intended merely to coerce the present applicants into compromising the complaint under Section 138 NI Act. Prima facie, it emanates from the record that transer of share, which is a commercial transaction between companies, has been given the colour of the offence of cheating, criminal breach of trust and fraud. Honble Supreme Court in its recent judgment i.e. Dinesh Gupta vs. The State of Uttar Pradesh and Ors, reported in (2024) 11 SCC 758 held as follows:-
2. Unscrupulous litigants should not be allowed to go scot-free. They should be put to strict terms and conditions including costs. It is time to check with firmness such litigation initiated and laced with concealment, falsehood, and forum hunting. Even State actions or conduct of government servants being party to such malicious litigation should be seriously reprimanded. In the instant case, we find initiation of criminal proceedings before a forum which had no territorial jurisdiction by submitting incorrect facts and giving frivolous reasons to entertain such complaints. A closer look at the Respondent's actions reveals more than just an inappropriate use of jurisdiction. The core issue of the dispute, which involves financial transactions and agreements, clearly places it in the realm of civil and commercial law. Yet, the Respondent chose to pursue criminal charges in a quest to abuse the criminal justice system with a motive to seek personal vengeance rather than seeking true justice. This unnecessary turning of a civil matter into a criminal case not only overburdens the criminal justice system but also violates the principles of fairness and right conduct in legal matters. The apparent misuse of criminal proceedings in this case not only damages trust in our legal system but also sets a harmful precedent if not addressed.
21. There may be a breach of trust or agreement between the parties; however, in my considered opinion, prima facie, there is no criminal intent on the part of the present applicants that would render them liable for any offence under different sections of the IPC for which they have been summoned to be tried. Opposite party No. 2 has already resorted to the remedy under Section 138 of NI Act for recovery of the amount reflected in the dishonoured cheques issued under the Master Agreement dated 11.11.2014. If the opposite party No. 2 has suffered any financial losses beyond that, he remains at liberty to sue the present applicants for damages in the civil court. By no stretch of imagination, however, can it be said that opposite party No.2 is entitled to initiate criminal proceedings against the present applicants merely for an alleged breach of trust or agreement.
Territorial Jurisdiction
22. Learned counsel for the applicants has emphasized that all the companies that executed the Master Agreement dated November 11, 2014, have their registered offices in New Delhi. Apart from that, the agreement took place between the parties was executed in New Delhi, and in pursuance thereof cheques were delivered by the applicant No. 2, being a director of VBPL, to the purchaser (opposite party No. 2 herein) in New Delhi. After receiving, the cheques were presented by opposite party No. 2 to the drawee bank in New Delhi; and cheques were dishonoured in New Delhi. All prior agreements since 2009 including the SHA dated September 2, 2009, Technology Assignment and Transfer Agreement dated August 28, 2009, the Addendum Deed dated May 10, 2011 as well as the Master Agreement dated November 11, 2014 demonstrate that VBPL, RIPL, RSPL, NANOPL and NTPL, all have their head/registered offices in New Delhi.
23. Moreover, Clause 8.11 of the Master Agreement dated November 11, 2014 unequivocally mentioned that the courts in New Delhi shall have exclusive jurisdiction. For ready reference, Clause 8.11 is reproduced hereinbelow:-
This agreement shall be governed and constructed in accordance with laws of Republic of India and the courts in India shall have exclusive jurisdiction.
24. Learned Senior Counsel for the opposite party No. 2 has relied upon the residential address of opposite party No. 2 at C-96, Sector 33, Noida-201301, Uttar Pradesh and upon the address of the NTPL shown in the supplementary counter affidavit dated 16.7.2025. He pressed that aforesaid company i.e. NTPL obtained a Taxpayer Identification Number (hereinafter referred to as, TIN) from the Uttar Pradesh and furnished an address in Noida, Sector 10, CTO. It is trite that a company may obtain a TIN registration in any State for the purpose of carrying on business without thereby shifting its registered office to that State. The address furnished at the time of incorporation/registration of the company under the Companies Act remains determinative of the registered office. Perusal of the information downloaded from the Commercial Tax Department, Uttar Pradesh, annexed to the supplementary counter affidavit, evinces that NTPL has its office in New Delhi at N-49, Connaught Place, New Dehli-01. It appears that the information downloaded from the VAT Department has been made basis for creating a jurisdiction in District Gautam Buddha Nagar. I am totally disagree with the submission advanced by the learned counsel for the opposite party that existence of a branch office is sufficient to vest jurisdiction in the court of that place to try an offence alleged to have been committed outside its territorial limits. The mere fact that NTPL maintains branch or obtain tax registration in Uttar Pradesh can not confer territorial jurisdiction upon the courts in Gautam Buddha Nagar.
25. To bolster his contention, learned Senior Counsel for the opposite party No. 2 has laid emphasis on Clause 2.10.1 of the Master Agreement dated 11.11.2014 which goes as follows:-
RIPL shall shift out, HPL network operation centre (NOC), office, assets and office records out of NANOPL, office in Noida within 60 days hereinafter and NANOPL/HSS shall extend due operation in this respect.
25 (A) Bare perusal of clause 2.10.1 reveals that it relates to network operation of RIPL; however, does not disclose anything with regard to shifting of registered offices of RIPL from New Delhi, mentioned in Master Agreement dated 11.11.2024, to any other State or Union Territory (UT). Mere shifting a network operation does not create a territorial jurisdiction to the Court of the particular place unless there is some dispute with regard to the network operation in that territory. Instant criminal proceedings have been filed for cheating, criminal breach of trust and forgery which allegedly emanates from three agreement signed between the parties right from SHA dated September 2, 2009 up to the Master Agreement dated November 11, 2014. All agreement were singed and executed in New Delhi.
26. It would not be out of place to refer to Sections 177 and 178 Cr.P.C., to elaborate the jurisdiction of the court at Gautam Buddha Nagar for the purpose of enquiry and trial, which are reproduced hereinbelow:-
177. Ordinary place of inquiry and trial.Every offence shall ordinarily be inquired into and tried by a Court within whose local jurisdiction it was committed..
178. Place of inquiry or trial.(a) When it is uncertain in which of several local areas an offence was committed, or
(b) where an offence is committed partly in one local area and partly in another, or
(c) where an offence is a continuing one, and continues to be committed in more local areas than one, or
(d) where it consists of several acts done in different local areas, it may be inquired into or tried by a Court having jurisdiction over any of such local areas.
27. Section 177 Cr.P.C. unequivocally denotes the general rule that every offence shall ordinarily be inquired into and tried by a Court within whose local jurisdiction it was committed. Section 198 Cr.P.C. provides exceptions to this rule, covering situations where there is uncertainty about the place of commission, or the offence is committed partly in one area and partly in another, or it is a continuing offence, or it involves a chain of events/several acts done in local areas. None of the conditions as enunciated under Sections 177 and 178 of the CrPC are attracted in the instant matter. Learned counsel for the applicant, to bolster his submission, assailing the jurisdiction of the Court of Gautam Buddha Nagar, has placed reliance upon paragraphs No. 12 to 18 of Y.Abraham Ajith (supra), which are quoted hereinbelow:-
12. The crucial question is whether any part of the cause of action arose within the jurisdiction of the concerned Court. In terms of Section 177 of the Code it is the place where the offence was committed. In essence it is the cause of action for initiation of the proceedings against the accused.
13. While in civil cases, normally the expression "cause of action" is used, in criminal cases as stated in Section 177 of the Code, reference is to the local jurisdiction where the offence is committed. These variations in etymological expression do not really make the position different. The expression "cause of action" is therefore not a stranger to criminal cases.
14. It is settled law that cause of action consists of bundle of facts, which give cause to enforce the legal inquiry for redress in a court of law. In other words, it is a bundle of facts, which taken with the law applicable to them, gives the allegedly affected party a right to claim relief against the opponent. It must include some act done by the latter since in the absence of such an act no cause of action would possibly accrue or would arise.
15. The expression "cause of action" has acquired a judicially settled meaning. In the restricted sense cause of action means the circumstances forming the infraction of the right or the immediate occasion for the action. In the wider sense, it means the necessary conditions for the maintenance of the proceeding including not only the alleged infraction, but also the infraction coupled with the right itself. Compendiously the expression means every fact, which it would be necessary for the complainant to prove, if traversed, in order to support his right or grievance to the judgment of the Court. Every fact, which is necessary to be proved, as distinguished from every piece of evidence, which is necessary to prove such fact, comprises in "cause of action".
16. The expression "cause of action" has sometimes been employed to convey the restricted idea of facts or circumstances which constitute either the infringement or the basis of a right and no more. In a wider and more comprehensive sense, it has been used to denote the whole bundle of material facts.
17. The expression "cause of action" is generally understood to mean a situation or state of facts that entitles a party to maintain an action in a court or a tribunal; a group of operative facts giving rise to one or more bases for sitting; a factual situation that entitles one person to obtain a remedy in court from another person. (Black's Law Dictionary a "cause of action" is stated to be the entire set of facts that gives rise to an enforceable claim; the phrase comprises every fact, which, if traversed, the plaintiff must prove in order to obtain judgment. In "Words and Phrases" (4th Edn. ) the meaning attributed to the phrase "cause of action" in common legal parlance is existence of those facts, which give a party a right to judicial interference on his behalf.
18. In Halsbury Laws of England (Fourth Edition) it has been stated as follows:
"Cause of action" has been defined as meaning, simply a factual situation the existence of which entitles one person to obtain from the Court a remedy against another person. The phrase has been held from earliest time to include every fact which is material to be proved to entitle the plaintiff to succeed, and every fact which a defendant would have a right to traverse. "Cause of action" has also been taken to mean that particular act on the part of the defendant which gives the plaintiff his cause of complaint, or the subject matter of grievance founding the action, not merely the technical cause of action".
28. He has also placed reliance upon Ramesh vs. State of Tamil Nadu (supra), wherein Honble Supreme Court has consistently held that a criminal case ought to be enquired and tried ordinarily where the cause of action has occurred.
29. In the matter of Swaati Nirkhi and Ors. vs. State (NCT of Delhi) and Ors. (supra), it has been held by Honble Supreme Court that in Criminal Case, the place of enquiry and trial has to be decided by the court within whose local jurisdiction the crime was allegedly committed as provided by Section 177 of CrPC, every offence shall ordinarily be enquired into and tried by a court within whose jurisdiction it was committed.
30. Learned Senior Counsel for the opposite party, refuting the submission advanced by the learned counsel for the applicant, has placed reliance upon paragraphs No. 38, 40 and 41 of the judgment of Honble Supreme Court in the matter of Kaushik Chatterjee vs. State of Haryana and others (supra), which are quoted hereinbelow:-
38. But be that as it may, the upshot of the above discussion is:
38.1. That the issue of jurisdiction of a court to try an "offence" or "offender" as well as the issue of territorial jurisdiction, depend upon facts established through evidence 38.2. That if the issue is one of territorial jurisdiction, the same has to be decided with respect to the various Rules enunciated in Sections 177 to 184 of the Code.
38.3. That these questions may have to be raised before the court trying the offence and such court is bound to consider the same.
40. As seen from the pleadings, the type of jurisdictional issue, raised in the cases on hand, is one of territorial jurisdiction, at least as of now. The answer to this depends upon facts to be established by evidence. The facts to be established by evidence, may relate either to the place of commission of the offence or to other things dealt with by Sections 177 to 184 of the Code. In such circumstances, this Court cannot order transfer, on the ground of lack of territorial jurisdiction, even before evidence is marshaled. Hence the transfer petitions are liable to be dismissed. Accordingly, they are dismissed.
41. However, it is open to both parties to raise the issue of territorial jurisdiction, lead evidence on questions of fact that may fall within the purview of Sections 177 to 184 read with Section 26 of the Code and invite a finding. With the above observations the transfer petitions are dismissed. There will be no order as to costs.
31. In the aforesaid cited case of Kaushik Chatterjee (supra), Honble Supreme Court, while deciding the Transfer Petitions (Crl.), has drawn distinction between the territorial jurisdiction in civil cases and territorial jurisdiction in criminal cases. For the purpose of deciding the territorial jurisdiction in civil and criminal cases, Honble Supreme Court has considered the provisions under Sections 177 to 184 of the CrPC, Chapter XIII, and summarized the simple terms of the local jurisdiction, which are quoted hereinbelow:-
20. The principles laid down in Sections 177 to 184 of the Code (contained in Chapter XIII) regarding the jurisdiction of criminal Courts in inquiries and trials can be summarized in simple terms as follows:
20.1. Every offence should ordinarily be inquired into and tried by a Court within whose local jurisdiction it was committed. This Rule is found in Section 177. The expression "local jurisdiction" found in Section 177 is defined in Section 2(j) to mean "in relation to a Court or Magistrate, the local area within which the Court or Magistrate may exercise all or any of its or his powers under the Code"
20.2. In case of uncertainty about the place in which, among the several local areas, an offence was committed, the Court having jurisdiction over any of such local areas may inquire into or try such an offence.
20.3. Where an offence is committed partly in one area and partly in another, it may be inquired into or tried by a Court having jurisdiction over any of such local areas.
20.4. In the case of a continuing offence which is committed in more local areas than one, it may be inquired into or tried by a Court having jurisdiction over any of such local areas.
20.5. Where an offence consists of several acts done in different local areas it may be inquired into or tried by a Court having jurisdiction over any of such local areas. (Numbers 2 to 5 are traceable to Section 178) 20.6. Where something is an offence by reason of the act done, as well as the consequence that ensued, then the offence may be inquired into or tried by a Court within whose local jurisdiction either the act was done or the consequence ensued. (Section 179) 20.7. In cases where an act is an offence, by reason of its relation to any other act which is also an offence, then the first mentioned offence may be inquired into or tried by a Court within whose local jurisdiction either of the acts was done. (Section 180) 20.8. In certain cases such as dacoity, dacoity with murder, escaping from custody etc., the offence may be inquired into and tried by a Court within whose local jurisdiction either the offence was committed or the Accused person was found.
20.9. In the case of an offence of kidnapping or abduction, it may be inquired into or tried by a Court within whose local jurisdiction the person was kidnapped or conveyed or concealed or detained.
20.10. The offences of theft, extortion or robbery may be inquired into or tried by a Court within whose local jurisdiction, the offence was committed or the stolen property was possessed, received or retained.
20.11. An offence of criminal misappropriation or criminal breach of trust may be inquired into or tried by a Court within whose local jurisdiction the offence was committed or any part of the property was received or retained or was required to be returned or accounted for by the Accused person.
20.12. An offence which includes the possession of stolen property, may be inquired into or tried by a Court within whose local jurisdiction the offence was committed or the stolen property was possessed by any person, having knowledge that it is stolen property. (Nos. 8 to 12 are found in Section 181) 20.13. An offence which includes cheating, if committed by means of letters or telecommunication messages, may be inquired into or tried by any Court within whose local jurisdiction such letters or messages were sent or received.
20.14. An offence of cheating and dishonestly inducing delivery of the property may be inquired into or tried by a Court within whose local jurisdiction the property was delivered by the person deceived or was received by the Accused person.
20.15. Some offences relating to marriage such as Section 494, Indian Penal Code (marrying again during the life time of husband or wife) and Section 495, Indian Penal Code (committing the offence Under Section 494 with concealment of former marriage) may be inquired into or tried by a Court within whose local jurisdiction the offence was committed or the offender last resided with the spouse by the first marriage. (Nos. 13 to 15 are found in Section 182) 20.16. An offence committed in the course of a journey or voyage may be inquired into or tried by a Court through or into whose local jurisdiction that person or thing passed in the course of that journey or voyage. (Section 183).
20.17. Cases falling Under Section 219 (three offences of the same kind committed within a space of twelve months whether in respect of the same person or not), cases falling Under Section 220 (commission of more offences than one, in one series of acts committed together as to form the same transaction) and cases falling Under Section 221, (where it is doubtful what offences have been committed), may be inquired into or tried by any Court competent to inquire into or try any of the offences. (Section 184).
32. In the given facts and circumstances of the present case, it can prima facie be inferred from the record that all the transactions between the parties took place in New Delhi. It is pertinent to note that the company petition was filed before the NCLT, New Delhi Branch. Apart from that, opposite party No. 2 himself invoked the jurisdiction of the court in New Delhi by filing complaints under Section 138 NI Act. The mere registration of a branch with Tax Department in Uttar Pradesh, or the mention of an address in Noida in the VAT records, does not confer jurisdiction on the Court in district Gautam Buddha Nagar. It is also pertinent to note that in the information downloaded from the VAT department, the address of NTPL is mentioned as Noida, Sector 8, CTO, which appears to be vague, lacking specific plot or house numbers. Additionally, one Mr. Bake Bihari Mittal has been shown as a dealer of the company (NTPL) with an address at H-98, Sector 63, Noida. The previous investigation report submitted by the Investigating Officer i.e. CD 24, CD 34 dated 24.7.2017 and Final Report No. 9 of 2017 dated 24.7.2017 cannot be brushed aside. Despite these reports, opposite party No. 2 persistently attempted to pursue his complaint in district Gautam Buddha Nagar and ultimately succeeded in doing so. Subsequently, the EOW, Kanpur, submitted a charge sheet, adding new sections and inculpated the applicant No. 1 as well. It appears that information downloaded from the website of the VAT Department was relied upon to artificially create jurisdiction in Gautam Buddha Nagar. In my considered opinion, said information from VAT Department is insufficient to establish the jurisdiction of the Courts situated in district Gautam Buddha Nagar; whereas, admittedly, all the transactions took place in New Delhi and head offices of all the companies are situated in New Delhi.
Jurisdiction under Section 482 CrPC:-
33. Opposite party No. 2 did not come with the clean hands. He suppressed the material fact of having filed complaints under Section 138 NI Act owing to dishonour of cheques which were issued to him by the applicant No. 2 pursuant to the Master Agreement dated 11.11.2014. During his statement under Section 161 CrPC, when confronted by the Investigation Officer, opposite party No. 2 categorically denied having initiated any legal proceedings regarding the dishonoured cheques. However, prior to filing the application under Section 156(3) CrPC dated 10.11.2015, opposite party No. 2 had already filed the following four complaints dated 7.2.2015 and 29.9.2015 respectively under Section 138 NI Act in New Delhi:-
(i) CC Nos.4991399/2016 (old No.239/2015 & 207/1/2015) (Neutral Access Network Operator Pvt. Ltd. vs. Viresh Buildcon Pvt. Ltd., Ram Niwas Bansal & Ashok Bansal).
(ii) CC No.4994170/2016 (old No.240/2015 & 208/1/2015)(Hari Shankar Singh vs. Viresh Buildcon Pvt. Ltd, Ram Niwas Bansal & Ashok Bansal).
(iii) CC No.4990346/2016 (old No.241/2015)(Hari Shankar Singh vs. Viresh Buildcon Pvt. Ltd, Ram Niwas Bansal & Ashok Bansal).
(iv) CC No.4990345 (old No.242/2015) (Neutral Access Network Operator Pvt. Ltd. vs. Viresh Buildcon Pvt. Ltd., Ram Niwas Bansal & Ashok Bansal).
34. Relevant portion of statement of complainant recorded under Section 161 CrPC, in the form of Question-Answers, is mentioned hereinbelow :-
Question to the Complainant:- Have you taken any action against the defendant in relation to dishonour of cheques by the bank?
Answer of Complainant:- No, I have not taken any action.
35. When the plaintiff was asked to get the place of occurrence inspected, he referred to his urgent work and stated that he had to go, and that he would get the sight inspected later.
36. Prima facie, it appears that the opposite party No. 2 has attempted to conceal the facts pertaining to the pendency of the complaints under Section 138 NI Act and has failed to extend proper co-operation to the Investigation Officer. The FIR lodged at his behest, based on application under Section 156(3) CrPC, is prima facie, an abuse of process of law. While dealing with the jurisdiction of the Court to quash the proceedings under Section 482 CrPC, the Hon'ble Supreme Court in the matter of Pradeep Kumar Kesarwani vs. State of UP & Another; MANU/SCOR/68068/2025, Criminal Appeal No. 3831 of 2025, decided on 02.09.2025, has laid down certain steps which should ordinarily determined the veracity of prayer for quashing. Relevant paragraph Nos. 17 & 20 of the said judgment is reproduced hereinbelow :-
17. The duty of the court in cases where an accused seeks quashing of an FIR or proceedings on the ground that such proceedings are manifestly frivolous, or vexatious, or instituted with an ulterior motive for wreaking vengeance was delineated by this Court in Mohammad Wajid v. State of U.P., reported as 2023 SCC OnLine SC 951. We may refer to the following observations:
34. At this stage, we would like to observe something important. Whenever an accused comes before the court invoking either the inherent powers under Section 482 of the Code of Criminal Procedure (CrPC) or extraordinary jurisdiction under Article 226 of the Constitution to get the FIR or the criminal proceedings quashed essentially on the ground that such proceedings are manifestly frivolous or vexatious or instituted with the ulterior motive for wreaking vengeance, then in such circumstances the Court owes a duty to look into the FIR with care and a little more closely. We say so because once the complainant decides to proceed against the accused with an ulterior motive for wreaking personal vengeance, etc., then he would ensure that the FIR/complaint is very well drafted with all the necessary pleadings. The complainant would ensure that the averments made in the FIR/complaint are such that they disclose the necessary ingredients to constitute the alleged offence. Therefore, it will not be just enough for the court to look into the averments made in the FIR/complaint alone for the purpose of ascertaining whether the necessary ingredients to constitute e the alleged offence are disclosed or not. In frivolous or vexatious proceedings, the Court Ques a duty to look into many other attending circumstances emerging from the record of the case over and above the averments and, if need be, with due care and circumspection try to read in between the lines. The Court while exercising its jurisdiction under Section 482 of the CrPC or Article 226 of the Constitution need not restrict itself only to the stage of a case but is empowered to take into account the overall circumstances leading to the initiation/registration of the case as well as the materials collected in the course of investigation. Take for instance the case on hand. Multiple FIRs have been registered over a period of time. It is in the background of such circumstances the registration of multiple FIRs assumes importance, thereby attracting the issue of wreaking vengeance out of private or personal grudge as alleged. (emphasis supplied)
20. The following steps should ordinarily determine the veracity of a prayer for quashing, raised by an accused by invoking the power vested in the High Court under Section 482 of the Cr.P.C.:-
(i)Step one, whether the material relied upon by the accused is sound, reasonable, and indubitable, i.e., the materials is of sterling and impeccable quality?
(ii) Step two, whether the material relied upon by the accused, would rule out the assertions contained in the charges levelled against the accused, i.e., the material is sufficient to reject and overrule the factual assertions contained in the complaint, i.e., the material is such, as would persuade a reasonable person to dismiss and condemn the factual basis of the accusations as false.
(iii) Step three, whether the material relied upon by the accused, has not been refuted by the prosecution/complainant; and/or the material is such, that it cannot be justifiably refuted by the prosecution/complainant?
(iv) Step four, whether proceeding with the trial would result in an abuse of process of the court, and would not serve the ends of justice?
If the answer to all the steps is in the affirmative, judicial conscience of the High Court should persuade it to quash such criminal proceedings, in exercise of power vested in it under Section 482 of the Cr.P.C. Such exercise of power, besides doing justice to the accused, would save precious court time, which would otherwise be wasted in holding such a trial (as well as, proceedings arising therefrom) specially when, it is clear that the same would not conclude in the conviction of the accused. [(See: Rajiv Thapar & Ors. v. Madan Lal Kapoor (Criminal Appeal No. 174 of 2013)].
37. In the matter of Nitin Ahluwalia vs. State of Punjab And Another; Criminal Appeal No.187 of 2020 decided on September 18, 2025, the Hon'ble Supreme Court has held that law on the exercise of High Court's inherent powers under Section 482 Cr.P.C., have been repeatedly expounded and reiterated to the point that they ought not to require restatement, and hence, we will not go down that route. The scope of the exercise to be carried out by the Court while adjudicating such an application for quashing is also well established. The Court is only to look to the prima facie possibility of the offence having been committed. In this regard reference can be made to CBI v. Arvan Singh reported in (2023) 18 SCC 399 and Rajeev Kourav v. Baisahab reported (2020) 3 SCC 317. (emphasis supplied)
37. The Hon'ble Supreme Court in the matter of Mahmood Ali & Others v. State of U.P. & Others; Criminal Appeal No.2341 of 2023 decided on 08.08.2023 reported in 2023 Livelaw (SC)613 has explored the possibility of interference by the High Court in invoking its jurisdiction under Section 482 Cr.P.C. and under Article 226 of the Constitution of India. The Hon'ble Supreme Court has drawn distinction in the aforesaid matter also between the consideration of materials that were tendered as evidence and appreciation of such evidence. Paragraph nos. 12 & 13 of the said judgment is reproduced hereinbelow:-
12. At this stage, we would like to observe something important. Whenever an accused comes before the Court invoking either the inherent powers under Section 482 of the Code of Criminal Procedure (CrPC) or extraordinary jurisdiction under Article 226 of the Constitution to get the FIR or the criminal proceedings quashed essentially on the ground that such proceedings are manifestly frivolous or vexatious or instituted with the ulterior motive for wreaking vengeance, then in such circumstances the Court owes a duty to look into the FIR with care and a little more closely. We say so because once the complainant decides to proceed against the accused with an ulterior motive for wreaking personal vengeance, etc., then he would ensure that the FIR/complaint is very well drafted with all the necessary pleadings. The complainant would ensure that the averments made in the FIR/complaint are such that they disclose the necessary ingredients to constitute the alleged offence. Therefore, it will not be just enough for the Court to look into the averments made in the FIR/complaint alone for the purpose of ascertaining whether the necessary ingredients to constitute the alleged offence are disclosed or not. In frivolous or vexatious proceedings, the Court owes a duty to look into many other attending circumstances emerging from the record of the case over and above the averments and, if need be, with due care and circumspection try to read in between the lines. The Court while exercising its jurisdiction under Section 482 of the CrPC or Article 226 of the Constitution need not restrict itself only to the stage of a case but is empowered to take into account the overall circumstances leading to the initiation/registration of the case as well as the materials collected in the course of investigation. Take for instance the case on hand. Multiple FIRs have been registered over a period of time. It is in the background of such circumstances the registration of multiple FIRs assumes importance, thereby attracting the issue of wreaking vengeance out of private or personal grudge as alleged.
13. In State of Andhra Pradesh v. Golconda Linga Swamy, (2004) 6 SCC 522, a two-Judge Bench of this Court elaborated on the types of materials the High Court can assess to quash an FIR. The Court drew a fine distinction between consideration of materials that were tendered as evidence and appreciation of such evidence. Only such material that manifestly fails to prove the accusation in the FIR can be considered for quashing an FIR. The Court held:-
"5.... Authority of the court exists for advancement of justice and if any attempt is made to abuse that authority so as to produce injustice, the court has power to prevent such abuse. It would be an abuse of the process of the court to allow any action which would result in injustice and prevent promotion of justice. In exercise of the powers court would be justified to quash any proceeding if it finds that initiation or continuance of it amounts to abuse of the process of court or quashing of these proceedings would otherwise serve the ends of justice. When no offence is disclosed by the complaint, the court may examine the question of fact. When a complaint is sought to be quashed, it is permissible to look into the materials to assess what the complainant has alleged and whether any offence is made out even if the allegations are accepted in toto.
6. In R.P. Kapur v. State of Punjab, AIR 1960 SC 866: 1960 Cri LJ 1239, this Court summarised some categories of cases where inherent power can and should be exercised to quash the proceedings: (AIR p. 869, para 6)
(i) where it manifestly appears that there is a legal bar against the institution or continuance eg. want of sanction;
(ii) where the allegations in the first information report or complaint taken at its face value and accepted in their entirety do not constitute the offence alleged;
(iii) where the allegations constitute an offence, but there is no legal evidence adduced or the evidence adduced clearly or manifestly fails to prove the charge.
7. In dealing with the last category, it is important to bear in mind the distinction between a case where there is no legal evidence or where there is evidence which is clearly inconsistent with the accusations made, and a case where there is legal evidence which, on appreciation, may or may not support the accusations. When exercising jurisdiction under Section 482 of the Code, the High Court would not ordinarily embark upon an enquiry whether the evidence in question is reliable or not or whether on a reasonable appreciation of it accusation would not be sustained. That is the function of the trial Judge. Judicial process, no doubt should not be an instrument of oppression, or, needless harassment. Court should be circumspect and judicious in exercising discretion and should take all relevant facts and circumstances into consideration before issuing process, lest it would be an instrument in the hands of a private complainant to unleash vendetta to harass any person needlessly. At the same time the section is not an instrument handed over to an accused to short-circuit a prosecution and bring about its sudden death...." (Emphasis supplied)
39. The verdict of Hon'ble Supreme Court in the matter of State of Haryana vs. Bhajan Lal reported in AIR 1992 SC 604 still holds law of land wherein following seven parameters have been set up to quash the criminal proceedings :-
(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima face constitute any offence or make out a case against the accused.
(2) Where the allegations in the first information report and other materials, if any accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an ordar of a Magistrate within the purview of Section 155(2) of the Code (3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make oute case against the accused.
(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.
(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused, (6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act. providing efficacious redress for the grievance of the aggrieved party (7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge."
40. In my considered opinion, case of the present applicants falls within parameters Nos. 1 & 7 set up by the Honble Apex Court in the case of State of Haryana vs. Bhajan Lal (supra). The lodging of an FIR, based on an order passed on an application under Section 156(3) CrPC, at a belated stage, is also one of the paramount consideration which raises a question qua bona fides of opposite party No. 2 in initiating criminal proceedings against the present applicants, especially after complaints had already been filed under Section 138 NI Act. In the entire FIR., the opposite party No. 2 has not disclosed the date, time and place for the occurrence of the offence; however, general allegations have been made regarding cheating, criminal breach of trust and forgery before 31.5.2013. It is needless to say that both the parties have been in a long business relationship, the first agreement between them being dated September 2, 2003 and the last agreement dated 11.11.2014. It is also a matter of surprise that on the first page of the FIR, time and place of occurrence of offence are mentioned as "before 31.5.2013"; however, relevant facts regarding non payment of sale transaction, as mentioned in the FIR., pertain to 2014 and stem from the Master Agreement dated 11.11.2014. It is apposite to note as well that the agreements took place amongst the companies; however, neither in the application under Section 156(3) Cr.P.C. nor in the FIR., have the companies been made parties. The Hon'ble Supreme Court in the case of Anita Hada (supra) has held that company must be arrayed as a party in the FIR.
49. In this conspectus, as above, I am of the considered view that opposite party No. 2 has lodged the FIR as a retaliatory measure intending to settle score with the present applicants. He has suppressed material facts while filing the application under Section 156(3) CrPC. He has tried his utmost and succeeded in getting the FIR registered and the final report submitted within the jurisdictional territory of the court situated in Gautam Buddha Nagar; whereas all the commercial transactions since the year 2009 to 2014 took place in New Delhi.
42. Prima facie, none of the offences for which present applicants have been summoned to face trial are made out from the contents of the FIR. It is purely a commercial transaction between the companies which has been dragged into criminal proceedings. There is no justification to harass the present applicants by implicating them under penal provisions; whereas opposite party No. 2 can resort to civil remedy for any damage, in case, he suffers financial loss. Initiating criminal action at a belated stage creates doubt about the mala fides of opposite party No. 2. The continuation of the criminal proceedings arising out of Case Crime No. 33 of 2017 (Old Case No.318 of 2016), under Sections 406, 420, 506, 467, 468, 471 and 120-B IPC is nothing but an abuse of process of court. Such proceedings are required to be quashed to prevent abuse of process of court and to secure the ends of justice.
43. Resultantly, the instant application under Section 482 CrPC succeeds and is allowed. The entire proceedings of Criminal Case No. 14283 of 2020, arising out of Case Crime No. 33 of 2017 (Old Case No. 318 of 2016), under Sections 406, 420, 506, 467, 468, 471 and 120-B IPC, are hereby quashed.
44. Order of the date shall be transmitted to the court below for necessary action.
(Dinesh Pathak,J.) October 31, 2025 vinay/vkg/VR