Karnataka High Court
Mr. Anil Tomar vs State Of Karnataka on 4 February, 2026
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
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WP No. 28541 of 2024
C/W WP No. 28555 of 2024
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 4TH DAY OF FEBRUARY, 2026
BEFORE
THE HON'BLE MR. JUSTICE M.NAGAPRASANNA
WRIT PETITION NO.28541 OF 2024 (GM-RES)
C/W
WRIT PETITION NO.28555 OF 2024 (GM-RES)
IN W.P. NO.28541/2024
BETWEEN:
1. MR. NIRMAL KUMAR MISHRA
S/O SIYA RAM MISHRA,
AGED ABOUT 42 YEARS,
WORKING FOR GAINS AT
ASHIRVAD PIPES PRIVATE LIMITED
HAVING REGISTERED
OFFICE AT PLOT NO.27-P, 28-P,
29 & 30, BOMMASANDRA-
JIGANI LINK ROAD, INDUSTRIAL AREA,
BENGALURU-560 105.
Digitally 2. MR. SUDHEER KUMAR POBBATHI
signed by
SANJEEVINI J S/O SRI RAMAPPA POBBATHI,
KARISHETTY AGED ABOUT 43 YEARS,
Location:
High Court of WORKING FOR GAINS AT
Karnataka
ASHIRVAD PIPES PRIVATE LIMITED,
HAVING REGISTERED OFFICE AT
PLOT NO. 27-P, 28-P, 29 & 30,
BOMMASANDRA JIGANI LINK ROAD,
INDUSTRIAL AREA, BENGALURU-560 105
(NAME WRONGLY MENTIONED IN
THE FIR AS SUDHEER POBATTI)
3. MRS. BASHARI CHAKRABORTI
W/O SHRI ARIJIT CHAKRABORTI
AGED ABOUT 49 YEARS,
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WP No. 28541 of 2024
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HC-KAR
WORKING FOR GAINS AT
ASHIRVAD PIPES PRIVATE LIMITED
HAVING REGISTERED OFFICE AT
PLOT NO.27-P, 28-P, 29 & 30,
BOMMASANDRA JIGANI LINK ROAD,
INDUSTRIAL AREA,
BENGALURU-560 105
(NAME WRONGLY MENTIONED AS
BHASHRI CHAKRABORTY IN THE FIR)
...PETITIONERS
(BY SRI DHYAN CHINNAPPA, SENIOR ADVOCATE A/W
SRI SUSHAL TIWARI N., ADVOCATE)
AND:
1. STATE OF KARNATAKA
THROUGH HEBBAGODI PS
REPRESENTED BY THE LD.
STATE PUBLIC PROSECUTOR
HIGH COURT BUILDING,
HIGH COURT, BENGALURU-560 001.
2. MR. ROHIT NARA
AGED ABOUT 32 YEARS,
S/O RAVINDER SINGH
RESIDING AT B 60 B
BOMMASANDRA, INDUSTRIAL AREA,
ATTIBELE HOBLI, ANEKAL TALUK,
BENGALURU-560106.
...RESPONDENTS
(BY SRI B.N. JAGADEESHA, ADDL. SPP FOR R-1;
R-2 SERVED & UNREPRESENTED)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF CONSTITUTION OF INDIA, PRAYING TO QUASH THE FIRST
INFORMATION REPORT IN CRIME NO.0641/2024 DATED 21.10.2024
REGISTERED BY THE RESPONDENT NO.1 POLICE FOR OFFENCES
WHICH ARE MADE PENAL UNDER SECTIONS 506, 149, 420, 284 &
284 OF THE INDIAN PENAL CODE, 1860 PRODUCED AT (ANNEXURE-
B) AND COMPLAINT DATED 21.10.2024 LODGED BY THE
RESPONDENT NO.2 (ANNEXURE-A) AND ALL SUCH OTHER
PROCEEDINGS ARISING OUT OF THE SAME.
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WP No. 28541 of 2024
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HC-KAR
IN W.P. NO.28555/2024
BETWEEN:
1. MR. ANIL TOMAR
S/O SHRI. RAM SINGH TOMAR,
AGED ABOUT 47 YEARS,
WORKING FOR GAINS AT
ASHIRVAD PIPES PRIVATE LIMITED,
HAVING REGISTERED OFFICE AT
PLOT NO.27-P, 28-P, 29 & 30,
BOMMASANDRA JIGANI LINK ROAD,
INDUSTRIAL AREA,
BENGALURU-560 105.
2. MR. SHIREESH PANKAJ
S/O. SHRI PANKAJ KUMAR MITTAL,
AGED ABOUT 42 YEARS,
WORKING FOR GAINS AT
ASHIRVAD PIPES PRIVATE LIMITED
HAVING REGISTERED OFFICE AT
PLOT NO.27-P, 28-P, 29 & 30,
BOMMASANDRA JIGANI LINK ROAD,
INDUSTRIAL AREA,
BENGALURU-560 105.
3. MR. PARTHA SARATHI BASU
S/O SHRI. PRAMATHA RANJAN BASU,
AGED ABOUT 58 YEARS,
WORKING FOR GAINS AT
ASHIRVAD PIPES PRIVATE LIMITED
HAVING REGISTERED OFFICE AT
PLOT NO.27-P, 28-P, 29 & 30,
BOMMASANDRA JIGANI LINK ROAD,
INDUSTRIAL AREA,
BENGALURU-560 105.
(NAME WRONGLY MENTIONED
AS PARTHA BASU IN THE FIR )
4. MR. SUDEEP AGARWAL
S/O GOPAL AGARWAL,
AGED ABOUT 52 YEARS,
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NC: 2026:KHC:6609
WP No. 28541 of 2024
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HC-KAR
WORKING FOR GAINS AT
ASHIRVAD PIPES PRIVATE LIMITED
HAVING REGISTERED OFFICE AT
PLOT NO.27-P, 28-P, 29 & 30,
BOMMASANDRA JIGANI LINK ROAD,
INDUSTRIAL AREA,
BENGALURU-560 105.
...PETITIONERS
(BY SRI DHYAN CHINNAPPA, SENIOR ADVOCATE A/W
SRI SUSHAL TIWARI N., ADVOCATE)
AND:
1. STATE OF KARNATAKA
THROUGH HEBBAGODI PS
REPRESENTED BY THE LD.
STATE PUBLIC PROSECUTOR
HIGH COURT BUILDING,
HIGH COURT, BENGALURU-560 001.
2. MR. ROHIT NARA
AGED ABOUT 32 YEARS,
S/O RAVINDER SINGH,
RESIDING AT B 60 B
BOMMASANDRA, INDUSTRIAL AREA,
ATTIBELE HOBLI, ANEKAL TALUK,
BENGALURU-560 106.
...RESPONDENTS
(BY SRI B.N. JAGADEESHA, ADDL. SPP FOR R-1;
R-2 SERVED & UNREPRESENTED)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF CONSTITUTION OF INDIA, PRAYING TO QUASH THE FIRST
INFORMATION REPORT IN CRIME NO.0641/2024 DATED 21.10.2024
REGISTERED BY THE RESPONDENT NO-1 POLICE FOR OFFENCES,
WHICH ARE MADE PENAL UNDER SECTIONS 506, 149, 420, 284 &
284 OF THE INDIAN PENAL CODE, 1860 PRODUCED AT (ANNEXURE-
B) AND COMPLAINT DATED 21.10.2024 LODGED BY THE
RESPONDENT NO.2 (ANNEXURE-A) AND ALL SUCH OTHER
PROCEEDINGS ARISING OUT OF THE SAME WITH RESPECT TO THE
PETITIONERS.
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WP No. 28541 of 2024
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HC-KAR
THESE PETITIONS COMING ON FOR HEARING -
INTERLOCUTORY APPLICATION, THIS DAY, ORDER WAS MADE
THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE M.NAGAPRASANNA
ORAL ORDER
Petitioners - accused Nos.3 to 5 in W.P.No.28541/2024 and petitioners - accused Nos.1, 2, 6 and 7 in W.P.No.28555/2024, are before this Court calling in question a solitary crime in Crime No.641/2024, for the offences punishable under Sections 149, 420, 284, 268 and 506 of the IPC.
2. The complainant in both the petitions remains the same, therefore, the two are taken up together and considered by this common order.
3. Heard Sri. Dhyan Chinnappa, learned senior counsel along with Sri. Sushal Tiwari, learned counsel appearing for the petitioners and Sri. B.N. Jagadeesha, learned Additional State Public Prosecutor representing the State in both the petitions.
The complainant, though served in the month of December 2024, has remained unrepresented even today. Therefore, the -6- NC: 2026:KHC:6609 WP No. 28541 of 2024 C/W WP No. 28555 of 2024 HC-KAR learned senior counsel for the petitioners and the State are heard.
4. Facts, in brief, germane are as follows:
Respondent No.2 is the complainant. The petitioners are the directors and other key managerial personnel of one M/s Ashirvad Pipes Private Limited ('the company' for short). The complainant enters into a transaction with the company for a product supply agreement on 24.09.2022. An advance payment of 50% of the purchase order is made for the supply of 30,000 nos. of the product - Plumber Mitra, prior to entering into the product supply agreement. It is alleged that respondent No.2 had supplied some non-conforming products, which were rejected by the company and sent back to the 2nd respondent -
complainant. The dispute between the two thus gets generated on payment of money, short supply, or wrong supply or otherwise. The parties in terms of the product supply agreement were before the Arbitrator, by filing an application under Section 9 of the Arbitration and Conciliation Act, 1996. A complaint comes to be registered before the jurisdictional police, which becomes a crime in Crime No.641/2024. This -7- NC: 2026:KHC:6609 WP No. 28541 of 2024 C/W WP No. 28555 of 2024 HC-KAR Court, owing to the submissions made on 23.10.2024, had passed the following order:
"Heard the learned Senior counsel Sri.Dyan Chinnappa, appearing for the petitioners.
Learned Addl. SPP is directed to accept notice for respondent No.1.
Issue emergent notice to respondent No.2.
The petitioners institute a commercial AA. No.18/2024 in which the concerned Court passes the following order:
" ORDER The respondent is hereby restrained by way of an order of temporary injunction from alienating the joint intellectual property of the parties to anybody in any manner as prayed for in IA No.1 till appearance of respondent.
The petitioner shall comply the provisions of Rule 9 of High Court of Karnataka, Arbitration (proceedings before the courts) Rules 2001.
On such compliance, issue ex-parte TI order against the respondent as prayed for in IA No.1.
Issue notice of IA No.1 and Emergent Notice on IA.No.2 along with notice on main petition to the respondent through court and RPAD if PF is paid.
Returnable by 24.08.2024."
The complainant then after the restraint order issues a notice for Arbitration. On 25.07.2024, the complainant issues a notice for Arbitration seeking to appoint an Arbitrator even. After all these proceedings, emerges the impugned crime.
The crime is registered on 21.10.2024 and the SHO records the complaint verbatim as a part of the crime and issues notice on 21.10.2024 under Section 35(3) of the BNSS directing the petitioners to appear.
-8-NC: 2026:KHC:6609 WP No. 28541 of 2024 C/W WP No. 28555 of 2024 HC-KAR The way in which the Police have proceeded does not inspire confidence.
The Police have proceeded on war footing to secure the presence of the petitioners at the instance of the complainant, as the complaint itself is copied and pasted to become a part of the FIR.
None of the ingredients of the offences can be considered to be present in the case at hand even to its remotest sense, albeit, prima facie.
Therefore, there shall be an interim order of stay of all further investigation in Crime No.641/2024, qua the petitioners, till the next date of hearing.
Tag this petition along with W.P.No.28555/2024."
The interim order is in subsistence even today.
5. Learned senior counsel appearing for the petitioner submits that the crime so registered against these petitioners by the complainant arises out of a contractual dispute and if it is a contractual dispute, the criminal law could not have been set into motion on breach of contract, notwithstanding the fact that the complainant himself is before the Arbitrator and the claims are now pending before the Arbitrator. In that light, learned senior counsel submits that further investigation, if permitted to continue, would become an abuse of the process of the law.
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6. The learned Additional State Public Prosecutor representing the State would submit that though in the first blush it looks like a contractual dispute, the investigation in the case at hand is imperative, as the complaint so registered would make out cognizable offences against these petitioners and would thus seek dismissal of the petition.
7. I have given my anxious consideration to the submissions made by the respective learned counsel and have perused the material on record.
8. The afore-narrated facts, though not in dispute, would require a skeletal reiteration. The agreement between the two, i.e., the company and respondent No.2, happens on 24.09.2022. It is a product supply agreement. The product supply agreement contains a dispute resolution mechanism.
The dispute resolution is by way of arbitration under the Arbitration Conciliation Act, 1996. The clause reads as follows:
"DISPUTE RESOLUTION 15.1 Any dispute, controversy or claim arising out of or in connection with the Party Transaction Documents shall be attempted to be first resolved through discussions between the Senior Executives. If the dispute is not resolved through such discussions within a period of
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NC: 2026:KHC:6609 WP No. 28541 of 2024 C/W WP No. 28555 of 2024 HC-KAR thirty (30) business days after a Party has served a written notice on the other Party requesting the commencement of discussions or such other period as may be agreed by the Parties. such dispute shall be referred to the most Senior Executive of each of the Parties for resolution. If the dispute is still not resolved through discussions between the most Senior Executives of each Party after thirty (30) business days or such other period as may be agreed by the Parties, then the dispute shall be resolved and finally settled by arbitration in accordance with the substantive provisions of the (Indian) Arbitration and Conciliation Act, 1996. by the arbitrator mutually appointed by both Parties. The seat of the arbitration shall be in Bengaluru. The language of the arbitral proceedings shall be English, and all awards shall be in the English language."
(Emphasis added)
9. The dispute between the two arose on account of wrong supply or otherwise, and payment to be made by the petitioners to the complainant or the other way around. The complainant files an application under Section 9 of the Arbitration and Conciliation Act, 1996. During the pendency of those proceedings, a complaint comes to be registered, which becomes a crime in Crime No.641/2024. Since the entire issue has now sprung from the complaint, I deem it appropriate to notice the complaint so registered:
"To, Date:21-10-2024
Police Inspector,
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HC-KAR
Hebbagodi Police Station,
Anekal Sub Division, Hebbagodi,
Bengaluru.
Sir,
Sub: Formal Complaint Against Ashirvad Pipes Private Limited for Negligent Conduct, Unfair Trade Practices, Economic Harm, and Request for Protection I, Rohit Nara, representative of Agua Wireless Systems Private Limited, writing to formally lodge a detailed complaint against Ashirvad Pipes Private Limited represented by Shireesh Pankaj, Nirmal Mishra, Partha Basu, Sudeep Agarwal, Anil Tomar, Bhasrhi Chakraborty, Sudheer Pobatti and Raghavendra Raju regarding their negligent conduct and unfair trade practices, which have resulted in severe financial losses for Agua Wireless Systems Private Limited and have caused broader economic damage in the community. Agua Wireless Systems Private Limited and Ashirvad Pipes Private Limited entered into a Product Supply Agreement on September 24, 2022. Despite Ashirvad Pipes Private Limited's two-year delay in providing data and approvals, Agua Wireless Systems Private Limited has diligently worked to complete the project. Ashirvad Pipes Private Limited appears uninterested in the originally ordered product, instead focusing on an independently designed upgrade by Agua Wireless Systems Private Limited that falls outside the agreement's scope. Ashirvad Pipes Private Limited has not shared any confidential information but is now seeking ownership of Agua Wireless Systems Private Limited core technology via a patent, which was not included in the original agreement. Despite several reminders and explanations of circumstances, Ashirvad Pipes Private Limited chose to cause collapse of Agua Wireless Systems Private Limited's financial stability. Furthermore, I wish to report instances of harassment and threats directed towards our company's premises by individuals associated with production activities for Ashirvad Pipes Private Limited. This complaint is being filed under the relevant sections of the Indian Penal Code (IPC), the Consumer Protection Act, 1986, and the Competition Act, 2002. I also request
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NC: 2026:KHC:6609 WP No. 28541 of 2024 C/W WP No. 28555 of 2024 HC-KAR police protection for our employees and company premises.
Ashirvad Pipes deliberately caused losses and liabilities to Agua Wireless Systems Private Limited of greater than INR 16,00,00,000.
Details of the Complaint:
1. Negligence (Section 284 IPC- Negligent Conduct Endangering Life or Property): Ashirvad Pipes Private Limited, as a dominant business entity, owed a duty of care to Agua Wireless Systems Private Limited, including the employees and the broader community. Their failure to adhere to responsible business practices and their breach of contract caused foreseeable harm that could have been avoided. Their actions have resulted in the complete closure of Agua Wireless Systems Private Limited, leading to job losses, financial ruin, and disruption to the community's economic welfare.
Evidence: Attached are business contracts and correspondence illustrating the negligent actions of Ashirvad Pipes Private Limited.
2. Economic Tort-(Intentional Interference with Contractual Relations): Ashirvad Pipes Private Limited intentionally interfered with Agua Wireless Systems Private Limited's contractual relationships by imposing unfair terms, forcing the smaller company into unsustainable agreements, and manipulating business deals to drive us out of the market. This calculated interference directly led to significant financial loss and the eventual shutdown of Agua Wireless Systems Private Limited.
Application: Attached is evidence of email communications and contracts showing the imposition of unfair conditions, deliberately targeting and damaging Agua Wireless Systems Private Limited.
3. Cheating (Section 420 IPC- Cheating): Ashirvad Pipes Private Limited engaged in deceptive practices, making false promises regarding future contracts, and
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NC: 2026:KHC:6609 WP No. 28541 of 2024 C/W WP No. 28555 of 2024 HC-KAR misrepresenting material facts to induce Agua Wireless Systems Private Limited into agreements that later caused financial harm.
Application: Documentation attached includes specific instances of promises made and later revoked by Ashirvad Pipes Private Limited.
4. Public Nuisance (Section 268 IPC and Section 133 CPC- Public Nuisance): The actions of Ashirvad Pipes Private Limited have had a broader socio-economic impact, affecting not only Agua Wireless Systems Private Limited but also the surrounding community. The forced closure of the company led to widespread job losses and economic instability, thereby constituting a public nuisance as defined under Section 268 of the IPC and Section 133 of the CPC.
Application: Community impact statements and data showing the ripple effect on local businesses and families are enclosed.
5. Criminal Intimidation (Section 506 IPC- Criminal Intimidation): Over the past few weeks, individuals believed to be former employees or vendors related to the production for Ashirvad Pipes Private Limited have been harassing and intimidating employees of Agua Wireless Systems Private Limited and manufacturing entities in the same building. These individuals have been making verbal threats and have physically appeared at our former company premises, causing disruption and fear among our former staff.
Application: Witness statements and security footage have been attached to provide evidence of these incidents of intimidation.
6. Criminal Breach of Trust: Ashirvad Pipes has not returned prototypes of products submitted by Agua Wireless Systems despite several demands made for the same.
7. Mental Harassment: Ashirvad Pipes has caused severe mental agony to the former management of Agua Wireless Systems Private Limited by causing financial
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NC: 2026:KHC:6609 WP No. 28541 of 2024 C/W WP No. 28555 of 2024 HC-KAR stability collapse and harassment by former employees, vendors and lenders for the project related to Ashirvad Pipes.
8. Reputation Damage: Ashirvad Pipes has caused irreparable damage to Agua Wireless Systems spotless reputation by causing collapse of financial stability of Agua Wireless Systems Private Limited.
Additional Legal Recourse:
1. Unfair Trade Practices (Consumer Protection Act, 1986) Ashirvad Pipes Private Limited has engaged in unfair trade practices by forcing exclusive dealing arrangements and misrepresenting the nature of business contracts. Their actions restricted competition and resulted in the financial downfall of Agua Wireless Systems Private Limited, which had previously served as a reputable business in the industry.
Evidence: Contractual documentation showing exclusive dealing arrangements imposed by Ashirvad Pipes Private Limited.
2. Abuse of Dominant Position (Competition Act, 2002) Ashirvad Pipes Private Limited, as a dominant market player, abused its position by denying market access to Agua Wireless Systems Private Limited through the imposition of unfair conditions. This abuse of market dominance directly resulted in the financial hardship and ultimate closure of our company.
Application: Contracts and communications demonstrating unfair terms are attached to highlight the anti-competitive conduct.
3. Fortious Interference: Ashirvad Pipes Private Limited caused economic harm and financial loss to Agua Wireless Systems Private Limited, typically as a result of intentional or negligent interference with contractual relationships and business operations.
Section 73 of the Indian Contract Act: Agua Wireless Systems Private Limited is eligible for compensation for the losses and damages incurred
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NC: 2026:KHC:6609 WP No. 28541 of 2024 C/W WP No. 28555 of 2024 HC-KAR due to a breach of contract by Ashirvad Pipes Private Limited.
Section 74 of the Indian Contract Act: Agua Wireless Systems Private Limited is eligible for compensation for breaches of contract by Ashirvad Pipes Private Limited that involve penalties.
Derivative Actions:
If Agua Wireless Systems Private Limited were a public company, shareholders would have grounds to initiate derivative suits against the directors and officers of Ashirvad Pipes Private Limited for causing significant harm to the company through negligent and unfair practices. Their actions have deprived shareholders of value and caused irreparable financial harm to the business.
Threats to Premises and Request for Protection:
In addition to the aforementioned business-related grievances, there has been a series of threats and harassment incidents directed at our premises. Former employees or vendors associated with project of Ashirvad Pipes Private Limited have been appearing at our premises, making verbal threats and causing disruption. We fear for the safety of our employees, and I request immediate police protection to ensure no further incidents occur.
I respectfully request that the police initiate an immediate investigation into these matters and take legal action against Ashirvad Pipes Private Limited under the applicable sections of the IPC, Consumer Protection Act, and Competition Act. Their actions have not only destroyed Agua Wireless Systems Private Limited but have also resulted in significant socio-economic damage to the community. Additionally, I request increased security and protection for our company premises to prevent further harassment and threats."
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NC: 2026:KHC:6609 WP No. 28541 of 2024 C/W WP No. 28555 of 2024 HC-KAR The entire complaint is reproduced by the police while registering the crime as the gist of the complaint in column 10 of the FIR. Be that as it may.
10. A perusal at the complaint would clearly indicate that a contractual dispute is blown to become a crime for the offences punishable under Sections 284, 268, 420, 506 and 149 of the IPC. The said crime so registered, on the face of it, would become an abuse of the process of the law, as a contractual dispute cannot be given a cloak of criminality. The criminal law cannot be set into motion on a breach of contract is by now a well-settled principle of law, as held by the Apex Court in a plethora of cases.
10.1. The Apex Court in the case of ANUKUL SINGH v.
STATE OF UTTAR PRADESH1, has held as follows:
"... ... ...
11.5. Thus, the cumulative principles that emerge are: while the jurisdiction under Section 482 Cr.P.C. is extraordinary and must be exercised sparingly, it is the duty of the High Court to intervene where continuation of criminal proceedings would amount to an abuse of process of law, or where the dispute is purely of a civil nature and 1 2025 SCC OnLine SC 2060
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NC: 2026:KHC:6609 WP No. 28541 of 2024 C/W WP No. 28555 of 2024 HC-KAR criminal colour has been artificially given to it. Conversely, where disputed questions of fact arise requiring adjudication, the matter must ordinarily proceed to trial.
12. The specific case of the appellant is that his father purchased land comprised in Khasra Nos. 18, 19, 20, 21 and 22 situated at Village Sherpur Mafi, District Moradabad, from one Akil Hussain. This land was used for the purposes of Qurbani. According to the appellant, in order to usurp the said property, the Shaher Imam of Bilari, in collusion with the district administration and under pressure exerted upon the local police, ensured that a series of false criminal cases were foisted against him. As many as eight FIRs were lodged against the appellant, including the present one, all of which, in substance, arise out of a civil dispute relating to ownership and possession of the property. Initiation of the present criminal proceedings, therefore, amounts to a clear abuse of the process of law, squarely falling within the illustrative categories delineated in Bhajan Lal, particularly where the dispute is manifestly civil in nature and the prosecution is maliciously instituted with an ulterior motive.
13. The record reveals that within a short span, as many as eight FIRs were registered against the appellant. The gravamen of the allegations in the present FIR is that Respondent No. 2/complainant approached the appellant for a loan of Rs. 2,00,000/-, but was allegedly advanced only Rs. 1,40,000/-. It is further alleged that, in connection with the said transaction, an agreement to sell dated 09.11.1998 was executed in respect of a plot owned by the complainant, and that the appellant procured three cheques from Respondent No. 2, which, upon presentation, were dishonoured for insufficiency of funds. Even if accepted in entirety, these allegations disclose, at best, a civil dispute and do not prima facie constitute the essential ingredients of the criminal offences alleged.
14. It is significant to note that prior to registration of the present FIR, the appellant had already initiated proceedings against Respondent No. 2, namely a complaint under Section 138 of the N.I. Act (Complaint No. 2402840/2005) before the N.I. Court, Moradabad, as well
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NC: 2026:KHC:6609 WP No. 28541 of 2024 C/W WP No. 28555 of 2024 HC-KAR as FIR No. 120/2002, in which, the complainant himself was arrested. The present FIR was lodged nearly three months after the filing of the Section 138 complaint and seven months after FIR No. 120/2002. The plea that the FIR is a retaliatory counterblast to the proceedings legitimately initiated by the appellant, therefore, carries substantial weight.
15. The mala fide nature of the complaint is further fortified by the fact that, by judgment dated 15.01.2025, the trial Court convicted Respondent No. 2 under Section 138 of the N.I. Act, sentencing him to one month's imprisonment and imposing a fine of Rs. 90,000/-. This conviction lends strong support to the appellant's case that the initiation of the present FIR was a retaliatory measure, maliciously instituted with an ulterior motive to neutralise the lawful action taken by him.
16. Despite this background, the police proceeded to file a charge sheet dated 16.04.2003 against the appellant for offences under sections 420, 467, and 468 IPC. Even if the allegations are assumed to be true, they unmistakably arise out of a commercial/contractual transaction relating to loan and repayment, which has been given a criminal colour. The case thus falls squarely within categories (1) and (7) of Bhajan Lal, namely, where the allegations do not disclose the commission of an offence, and where the proceedings are maliciously instituted with an ulterior motive. Continuation of such prosecution would amount to an abuse of process of law and consequently, warrant quashing under Section 482 Cr.P.C.
17. This Court has, in a long line of decisions, deprecated the tendency to convert civil disputes into criminal proceedings. In Indian Oil Corporation v. NEPC India Ltd., it was held that criminal law cannot be used as a tool to settle scores in commercial or contractual matters, and that such misuse amounts to abuse of process. The following paragraphs from the decision are apposite:
"9. The principles, relevant to our purpose are:
(i) A complaint can be quashed where the allegations made in the complaint, even if they are taken at their face value and
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NC: 2026:KHC:6609 WP No. 28541 of 2024 C/W WP No. 28555 of 2024 HC-KAR accepted in their entirety, do not prima facie constitute any offence or make out the case alleged against the accused. For this purpose, the complaint has to be examined as a whole, but without examining the merits of the allegations. Neither a detailed inquiry nor a meticulous analysis of the material nor an assessment of the reliability or genuineness of the allegations in the complaint, is warranted while examining prayer for quashing of a complaint.
(ii) A complaint may also be quashed where it is a clear abuse of the process of the court, as when the criminal proceeding is found to have been initiated with malafides/malice for wreaking vengeance or to cause harm, or where the allegations are absurd and inherently improbable.
(iii) The power to quash shall not, however, be used to stifle or scuttle a legitimate prosecution. The power should be used sparingly and with abundant caution.
(iv) The complaint is not required to verbatim reproduce the legal ingredients of the offence alleged. If the necessary factual foundation is laid in the complaint, merely on the ground that a few ingredients have not been stated in detail, the proceedings should not be quashed. Quashing of the complaint is warranted only where the complaint is so bereft of even the basic facts which are absolutely necessary for making out the offence.
(v) A given set of facts may make out: (a) purely a civil wrong; or (b) purely a criminal offence; or (c) a civil wrong as also a criminal offence.
A commercial transaction or a
contractual dispute, apart from
furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. As the nature and scope of a civil proceedings are different from a criminal proceeding, the mere fact that the complaint relates to a commercial
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NC: 2026:KHC:6609 WP No. 28541 of 2024 C/W WP No. 28555 of 2024 HC-KAR transaction or breach of contract, for which a civil remedy is available or has been availed, is not by itself a ground to quash the criminal proceedings. The test is whether the allegations in the complaint disclose a criminal offence or not.
10. While on this issue, it is necessary to take notice of a growing tendency in business circles to convert purely civil disputes into criminal cases. This is obviously on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. Such a tendency is seen in several family disputes also, leading to irretrievable break down of marriages/families. There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure though criminal prosecution should be deprecated and discouraged."
18. Similarly, in Inder Mohan Goswami v. State of Uttaranchal, it was emphasized that criminal prosecution must not be permitted as an instrument of harassment or private vendetta. In Ganga Dhar Kalita v. State of Assam, this Court again reiterated that criminal complaints in respect of property disputes of civil nature, filed solely to harass the accused or to exert pressure in civil litigation, constitute an abuse of process.
19. Most recently, in Shailesh Kumar Singh @ Shailesh R. Singh v. State of Uttar Pradesh, this Court disapproved the practice of using criminal proceedings as a substitute for civil remedies, observing that money recovery cannot be enforced through criminal prosecution where the dispute is essentially civil. The Court cautioned High Courts not to direct settlements in such matters but to apply the settled principles in Bhajan Lal. The following paragraphs are relevant in this context:
"9. What we have been able to understand is that there is an oral agreement between the parties. The
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NC: 2026:KHC:6609 WP No. 28541 of 2024 C/W WP No. 28555 of 2024 HC-KAR Respondent No. 4 might have parted with some money in accordance with the oral agreement and it may be that the appellant - herein owes a particular amount to be paid to the Respondent No. 4. However, the question is whether prima facie any offence of cheating could be said to have been committed by the appellant.
10. How many times the High Courts are to be reminded that to constitute an offence of cheating, there has to be something more than prima facie on record to indicate that the intention of the accused was to cheat the complainant right from the inception. The plain reading of the FIR does not disclose any element of criminality.
11. The entire case is squarely covered by a recent pronouncement of this Court in the case of "Delhi Race Club (1940) Limited v. State of Uttar Pradesh", (2024) 10 SCC 690. In the said decision, the entire law as to what constitutes cheating and criminal breach of trust respectively has been exhaustively explained. It appears that this very decision was relied upon by the learned counsel appearing for the petitioner before the High Court. However, instead of looking into the matter on its own merits, the High Court thought fit to direct the petitioner to go for mediation and that too by making payment of Rs. 25,00,000/- to the 4th respondent as a condition precedent. We fail to understand why the High Court should undertake such exercise. The High Court may either allow the petition saying that no offence is disclosed or may reject the petition saying that no case for quashing is made out. Why should the High Court make an attempt to help the complainant to recover the amount due and payable by the accused. It is for the Civil Court or Commercial Court as the case may be to look into in a suit that may be filed for recovery of money or in any other proceedings, be it under the Arbitration Act, 1996 or under the provisions of the IB Code, 2016.
12. Why the High Court was not able to understand that the entire dispute between the parties is of a civil nature.
13. We also enquired with the learned counsel appearing for the Respondent No. 4 whether his client has filed any civil suit or has initiated any other proceedings for recovery of the money. It appears that
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NC: 2026:KHC:6609 WP No. 28541 of 2024 C/W WP No. 28555 of 2024 HC-KAR no civil suit has been filed for recovery of money till this date. Money cannot be recovered, more particularly, in a civil dispute between the parties by filing a First Information Report and seeking the help of the Police. This amounts to abuse of the process of law.
14. We could have said many things but we refrain from observing anything further. If the Respondent No. 4 has to recover a particular amount, he may file a civil suit or seek any other appropriate remedy available to him in law. He cannot be permitted to take recourse of criminal proceedings.
15. We are quite disturbed by the manner in which the High Court has passed the impugned order. The High Court first directed the appellant to pay Rs. 25,00,000/- to the Respondent No. 4 and thereafter directed him to appear before the Mediation and Conciliation Centre for the purpose of settlement. That's not what is expected of a High Court to do in a Writ Petition filed under Article 226 of the Constitution or a miscellaneous application filed under Section 482 of the Criminal Procedure Code, 1973 for quashing of FIR or any other criminal proceedings. What is expected of the High Court is to look into the averments and the allegations levelled in the FIR along with the other material on record, if any. The High Court seems to have forgotten the well- settled principles as enunciated in the decision of this Court in the "State of Haryana v. Bhajan Lal", 1992 Supp (1) SCC 335"
20. Applying the above principles to the facts of the present case, it is manifest that the dispute - concerning repayment of loan money and the alleged coercion in execution of documents - is purely civil in character. The essential ingredients of cheating or forgery are not prima facie made out. The institution of multiple FIRs in quick succession, particularly after the appellant had already initiated lawful proceedings, reinforces the inference of mala fides.
21. The High Court, in refusing to quash the proceedings, misdirected itself in law by failing to apply the ratio laid down in Bhajan Lal, and the subsequent authorities referred to above, which uniformly hold that the machinery of criminal law
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NC: 2026:KHC:6609 WP No. 28541 of 2024 C/W WP No. 28555 of 2024 HC-KAR cannot be permitted to be misused for settling civil disputes or to wreak vengeance.
22. Accordingly, the impugned judgment dated 22.10.2019 of the High Court is set aside. FIR No. 47 of 2003 dated 05.02.2003 and the consequential charge sheet dated 16.04.2003, pending before the trial Court, are hereby quashed. This judgment, however, shall not preclude the parties from pursuing civil remedies as may be available to them in accordance with law."
(Emphasis supplied) 10.2. The Apex Court in the case of ARSHAD NEYAZ KHAN v. STATE OF JHARKHAND2, has held as follows:
"... ... ...
17. In Inder Mohan Goswami v. State of
Uttaranchal, (2007) 12 SCC 1 ("Inder Mohan Goswami"), while dealing with Section 420 IPC, this Court observed thus:
"42. On a reading of the aforesaid section, it is manifest that in the definition there are two separate classes of acts which the person deceived may be induced to do. In the first class of acts he may be induced fraudulently or dishonestly to deliver property to any person. The second class of acts is the doing or omitting to do anything which the person deceived would not do or omit to do if he were not so deceived. In the first class of cases, the inducement must be fraudulent or dishonest. In the second class of acts, the inducing must be intentional but need not be fraudulent or dishonest. Therefore, it is the intention which is the gist of the offence. To hold a person guilty of cheating it is necessary to show that he had a fraudulent or dishonest intention at the time of making the promise. From his mere failure to subsequently keep a promise, one cannot presume that he all along had a culpable intention to break the promise from the beginning."2
2025 SCC OnLine SC 2058
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18. In light of the facts and circumstances of the present case, we find that the complainant/respondent No. 2 has failed to make out a case that satisfies the basic ingredients of the offence under Section 420 IPC. We fail to understand as to how the allegations against the appellant herein could be brought within the scope and ambit of the aforesaid section. On a bare perusal of the FIR as well as the complaint, we do not find that the offence of cheating as defined under Section 420 IPC is made out and we do not find that there is any cheating and dishonest inducement to deliver any property or a valuable security involved in the instant case.
19. It is settled law that for establishing the offence of cheating, the complainant/respondent No. 2 was required to show that the appellant had a fraudulent or dishonest intention at the time of making a promise or representation of not fulfilling the agreement for sale of the said property. Such a culpable intention right at the beginning when the promise was made cannot be presumed but has to be made out with cogent facts. In the facts of the present case, there is a clear absence of dishonest and fraudulent intention on the part of the appellant during the agreement for sale. We must hasten to add that there is no allegation in the FIR or the complaint indicating either expressly or impliedly any intentional deception or fraudulent/dishonest intention on the part of the appellant right from the time of making the promise or misrepresentation. Nothing has been said on what the misrepresentations were and how the appellant intentionally deceived the complainant/respondent No. 2. Mere allegations by the complainant/respondent No. 2 that the appellant failed to execute the agreement for sale and failed to refund the money paid by the complainant/respondent No. 2 does not satisfy the test of dishonest inducement to deliver a property or part with a valuable security as enshrined under Section 420 IPC.
.... .... ....
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23. Furthermore, in Inder Mohan Goswami, it was held by this Court that the Court must ensure that criminal prosecution is not used as an instrument of harassment or for seeking private vendetta or with an ulterior motive to pressurise the accused. It was further held by this Court that it is neither possible nor desirable to lay down any inflexible rule that would govern the exercise of inherent jurisdiction. In view of the above and for the reasons stated above, we are of the firm opinion that to continue the criminal proceedings against the appellant herein would cause undue harassment to him because as observed hereinabove, no prima facie case for the offence under Sections 406 or 420 IPC is made out.
24. In this regard, it would be apposite to rely on the judgment in the case of State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 ("Bhajan Lal") with particular reference to paragraph 102 therein, where this Court observed:
"102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power Under Article 226 or the inherent powers Under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.
(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 facie 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
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NC: 2026:KHC:6609 WP No. 28541 of 2024 C/W WP No. 28555 of 2024 HC-KAR do not disclose a cognizable offence, justifying an investigation by police officers Under Section 156(1) of the Code except under an order 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 out a 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."
25. On a careful consideration of the aforementioned judgment in the light of the facts of this case, we find that none of the offences alleged against the appellant herein is made out. In fact, we find that the allegations of criminal intent and other allegations against the appellant herein have been made with a mala
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NC: 2026:KHC:6609 WP No. 28541 of 2024 C/W WP No. 28555 of 2024 HC-KAR fide intent and therefore, the judgment of this Court in the case of Bhajan Lal and particularly sub-paragraphs 1, 3, 5 and 7 of paragraph 102, extracted above, squarely apply to the facts of this case. In our view, it is neither expedient nor in the interest of justice to permit the present prosecution to continue.
26. At this juncture, we find it apposite to mention the observations of this Court in Vishal Noble Singh v. State of Uttar Pradesh, 2024 SCC OnLine SC 1680 wherein it was observed that in recent years the machinery of criminal justice is being misused by certain persons for their vested interests and for achieving their oblique motives and agenda. Courts have therefore to be vigilant against such tendencies and ensure that acts of omission and commission having an adverse impact on the fabric of our society must be nipped in the bud. We say so for the reason that while the complainant/respondent No. 2 has made grave allegations against the appellant herein, he has failed to justify the same before this Court. Such actions would create significant divisions and distrust among people, while also placing an unnecessary strain on the judicial system, particularly criminal courts."
(Emphasis supplied) If the law laid down by the Apex Court in the afore-quoted judgments is pitted against the facts of the case at hand, what would unmistakably emerge is that, the criminal law ought not to be set into motion in a case of breach of contract, a one that is civil in nature, especially when appropriate civil remedies exist.
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11. In that light, permitting further investigation against the petitioners would be an abuse of the process of law.
I deem it appropriate to obliterate the crime registered against the petitioners.
12. For the aforesaid reasons, the following:
ORDER
(i) Writ petitions are allowed.
(ii) Crime No.641/2024 pending before the II Additional Civil Judge (Junior Division) and Judicial Magistrate First Class, Anekal, Bangalore for the offences punishable under Sections 506, 149, 420, 284 and 268 of the IPC stands quashed qua the petitioners.
Sd/-
(M.NAGAPRASANNA) JUDGE MBM List No.: 1 Sl No.: 67