Case Note & Summary
The applicant, Surendrakumar Bhagat, filed an application under Section 482 of the Code of Criminal Procedure, 1973, seeking quashing of FIR No.221 of 2020 registered at Chandwad Police Station, Nashik, for offences under Sections 120-B, 34, 409, 420, 504, and 506 of the Indian Penal Code. The FIR was lodged by Respondent No.2, Paras Zaverilal Dungarwal, who is engaged in the business of trading onions through his company M/s. Paras Trading Company at APMC Complex, Chandwad, Nashik. The allegations in the FIR were that the applicant had two companies, M/s. Surendra Kumar Bhagat (H.U.F) and Shri Laxmi Trader, and that the complainant had paid an advance of Rs. 10,00,000 to the applicant for supply of onions, but the applicant failed to supply the onions and misappropriated the amount. The applicant contended that the dispute was purely civil in nature, arising out of a business transaction, and that the ingredients of criminal offences were not made out. The court examined the facts and found that the transaction was a commercial one where the complainant paid an advance for supply of onions, and due to a rise in prices, the applicant could not supply the onions. The court held that the dispute was essentially civil in nature and that the ingredients of criminal breach of trust under Section 409 IPC and cheating under Section 420 IPC were not satisfied. The court also noted that there was no evidence of any criminal conspiracy or intention to cheat from the inception. Consequently, the court allowed the application and quashed the FIR and all proceedings arising therefrom.
Headnote
A) Criminal Procedure Code - Quashing of FIR - Section 482 CrPC - Inherent Powers - Dispute arising out of a business transaction for supply of onions, where the complainant paid advance but the applicant failed to supply onions due to price rise, is essentially civil in nature. The court held that the ingredients of criminal breach of trust under Section 409 IPC and cheating under Section 420 IPC are not made out, and continuing criminal proceedings would be an abuse of process of law. (Paras 1-9) B) Indian Penal Code - Criminal Breach of Trust - Section 409 IPC - Ingredients - For an offence under Section 409 IPC, there must be entrustment of property and dishonest misappropriation or conversion. In the present case, the advance payment was made for supply of goods, and there was no entrustment of property in the sense of a fiduciary relationship. The court held that the dispute is purely contractual and does not attract criminal liability. (Paras 5-7) C) Indian Penal Code - Cheating - Section 420 IPC - Ingredients - To constitute cheating, there must be deception from the inception of the transaction. The court found that the applicant had a genuine business and the failure to supply onions was due to price rise, not an intention to cheat from the beginning. Hence, no case under Section 420 IPC is made out. (Paras 5-7)
Issue of Consideration
Whether the FIR and criminal proceedings arising out of a business transaction for supply of onions, where the dispute is essentially civil in nature, should be quashed under Section 482 CrPC.
Final Decision
The court allowed the application and quashed FIR No.221 of 2020 and all proceedings arising therefrom.
Law Points
- Inherent powers under Section 482 CrPC
- Quashing of FIR
- Civil dispute masquerading as criminal case
- Ingredients of criminal breach of trust under Section 409 IPC
- Ingredients of cheating under Section 420 IPC
- Criminal conspiracy under Section 120-B IPC
