Bombay High Court
Ajay Kulshreshtha vs State Of Maharashtra on 19 August, 2025
Author: Amit Borkar
Bench: Amit Borkar
2025:BHC-AS:35701
85-ia3121-2025 with ia3055-2025.doc
AGK
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
BAIL APPLICATION NO.3121 OF 2025
Ajay Kulshreshtha ... Applicant
V/s.
The State of Maharashtra ... Respondent
WITH
INTERIM APPLICATION NO.3055 OF 2025
ATUL
IN
GANESH
KULKARNI BAIL APPLICATION NO.3121 OF 2025
Digitally signed by
ATUL GANESH
KULKARNI
Date: 2025.08.19
13:27:04 +0530
Dharmesh Mahendra Mehta ... Applicant
In the matter between
Ajay Kulshreshtha ... Applicant
V/s.
The State of Maharashtra ... Respondent
Mr. A.R. Gole for the applicant in BA.
Mrs. Mahalakshmi Ganapathy, APP for the respondent-
State.
CORAM : AMIT BORKAR, J.
DATED : AUGUST 19, 2025
P.C.:
1. By the instant bail application filed under Section 483 of the Bhartiya Nagarik Suraksha Sanhita, 2023 ("BNSS", for short), the applicant seeks his enlargement on bail in connection with Crime Register No. 292 of 2025 registered at N.M. Joshi Marg Police Station, Mumbai, for offences alleged under Sections 316(5), 318(4), 336(2), 336(3), 340(2), and 3(5) of the Bhartiya Nyaya 1 ::: Uploaded on - 19/08/2025 ::: Downloaded on - 19/08/2025 21:32:40 ::: 85-ia3121-2025 with ia3055-2025.doc Sanhita, 2023 ("BNS", for short).
2. The prosecution narrative, in brief, is that the complainant company, ABCOM Private Limited, is engaged in the business of renting laptops and mobile phones. In the course of business, it entered into dealings with the accused company, Innovative Tree Solutions, situated at Regal Cooperative Housing Society, Vasai (East), District Palghar. The parties agreed upon terms and conditions with respect to delivery of laptops and mobile phones, deposit amounts, and payment of rent. A Rental IT Certificate Agreement was duly executed, and on that basis the complainant delivered laptops and mobile phones to the accused company after receiving initial payment. A specific covenant of the agreement interdicted the accused company from parting with possession of the rented property to any third person. In defiance of this covenant, it is alleged, the accused sold a portion of the entrusted laptops to third parties, which fact came to light to the complainant company through its software application. The applicant was thereafter arrested on 3rd July 2025.
3. The learned Advocate for the applicant, however, disputes the substratum of the prosecution case. He submits that the initial transaction in September 2024 related to supply of 183 laptops on ownership basis and 50 laptops on rental basis, aggregating to 233 units, duly delivered. Subsequently, the applicant's proprietary concern placed another order of 50 laptops on rent. Towards this, the applicant's son Siddhant tendered a cash payment of ₹6,70,000/- to the complainant's employee. Though receipt of this cash amount stands admitted by the complainant's director in 2 ::: Uploaded on - 19/08/2025 ::: Downloaded on - 19/08/2025 21:32:40 ::: 85-ia3121-2025 with ia3055-2025.doc WhatsApp communication, the promised 50 laptops were never delivered. Upon repeated reminders and even a request for refund, the complainant, instead of performance, presented the post-dated security cheque of the applicant, which came to be dishonoured for want of procedural updating of the account. The learned counsel urges that, in these circumstances, the applicant had no option but to alienate 50 laptops already in his possession from earlier lease, after due intimation to the complainant vide communication dated 23rd October 2024. The applicant has already paid an aggregate sum of ₹29,51,627/-, which exceeds the fair value of the refurbished laptops delivered. He further stresses that the communications were largely made by the applicant's son, who already enjoys protection in anticipatory bail proceedings. It is contended that the allegations, at their highest, partake the nature of a civil dispute emanating out of contractual breach, and do not attract the rigours of Sections 406 and 420 IPC--corresponding to Sections 316(2) and 318(4) of the BNS. Reliance is placed on Delhi Race Club (1940) Ltd. v. State of U.P. (2024) 10 SCC 690 and S.W. Palanitkar v. State of Bihar (2002) 1 SCC 241, to emphasise that criminal process ought not to be employed to settle contractual or civil disputes.
4. Per contra, the learned APP, assisted by counsel for the complainant, opposes the prayer for bail. It is urged that the applicant's own showing is that 50 laptops received on rent were sold away to third parties, which squarely satisfies the ingredients of criminal breach of trust. The investigation is at a nascent stage and filing of charge-sheet is awaited. It is further pointed out that 3 ::: Uploaded on - 19/08/2025 ::: Downloaded on - 19/08/2025 21:32:40 ::: 85-ia3121-2025 with ia3055-2025.doc the accused's firm is a proprietary concern, and thus, the applicant as proprietor bears sole responsibility for its acts. The transaction of 183 laptops sold outright, 50 laptops rented earlier, and the subsequent proposed rental of 50 more laptops, are all distinct and independent transactions. The dishonest misappropriation of entrusted goods by disposing them contrary to the mode prescribed by contract prima facie fulfills the ingredients of Section 406 IPC (analogous to Section 316 BNS). Whether there existed fraudulent intention ab initio or dishonest appropriation later, are matters for trial. At this stage, given the prima facie satisfaction of ingredients and the incomplete investigation, it is submitted that the applicant does not deserve indulgence of regular bail.
5. I have given my anxious consideration to the rival submissions advanced at the Bar. The factual narrative as disclosed in the FIR and the material placed by the prosecution, at this stage, cannot be brushed aside lightly. It does prima facie appear that certain laptops entrusted on rental basis to the applicant's proprietary concern have been sold away to third persons. The covenant of the contract clearly interdicts such transfer. Prima facie, therefore, the allegation of breach of trust, coupled with dishonest disposal of property in violation of the prescribed mode, brings the case within the ambit of Section 316(2) read with Section 316(5) of the BNS, which is substantially analogous to Section 406 IPC.
6. The learned counsel for the applicant has placed heavy reliance on the judgments in S.W. Palanitkar and Delhi Race Club (1940) Ltd., wherein it has been emphasized that mere breach of 4 ::: Uploaded on - 19/08/2025 ::: Downloaded on - 19/08/2025 21:32:40 ::: 85-ia3121-2025 with ia3055-2025.doc contract or non-performance of contractual obligations, without the element of mens rea, does not ipso facto constitute a criminal offence. It is true that the dividing line between a civil wrong and a criminal offence is often thin, but it is not imperceptible. Where the complaint discloses that goods entrusted for a specific purpose are dishonestly misappropriated or disposed of in violation of the terms of entrustment, the offence of criminal breach of trust may, prima facie, be attracted. At the same time, it must also be borne in mind that bail proceedings are not trials in miniature. The Court, at this stage, does not undertake a meticulous dissection of evidence but merely satisfies itself whether the accusation discloses a prima facie case and whether, on the touchstone of established principles, the applicant deserves liberty pending trial.
7. The contention of the prosecution that the applicant, being the sole proprietor, bears personal liability for the acts of his firm, is not without substance. The entrustment was made to the proprietary concern of the applicant. Hence, the applicant cannot, at this stage, absolve himself of the responsibility. The plea that most communications were by the applicant's son, who has obtained protection in anticipatory bail, does not, by itself, efface the legal accountability of the proprietor.
8. The investigation is still in progress. The charge-sheet has not yet been filed. The investigation, at this stage, is said to be directed at tracing the laptops sold away and ascertaining the money trail. The possibility of tampering with witnesses or obstructing investigation, therefore, cannot be ruled out.
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9. The principle of presumption of innocence and the guarantee of personal liberty under Article 21 of the Constitution cannot be overlooked. The law leans in favour of bail rather than jail. Yet, liberty is not unqualified. It is hedged by the necessity of fair investigation and the interest of justice. Where the offence alleged is of economic nature involving breach of trust in commercial transactions, the Courts are called upon to strike a delicate balance.
10. On an overall conspectus of facts, two competing considerations emerge: one, that the dispute has its roots in a commercial arrangement and some part of the grievance appears contractual in nature; two, that prima facie there is material suggestive of dishonest misappropriation of entrusted property. At this stage, the latter consideration cannot be ignored.
11. In the totality of circumstances, and having regard to the stage of investigation, I am of the opinion that this is not a fit case to grant regular bail to the applicant at present. However, the applicant shall be at liberty to renew his request for bail after filing of the charge-sheet .
12. The bail application is disposed of.
13. In view of disposal of the bail application, interim application also stands disposed of.
(AMIT BORKAR, J.) 6 ::: Uploaded on - 19/08/2025 ::: Downloaded on - 19/08/2025 21:32:40 :::