Allowed

Manish Rai and Ors. v. State of U.P. and Ors.

Allahabad HC27 Nov 2025/4538/2017

Case brief

AI extract

What is this about?

Accused in a tractor-supply dispute sought quashing of charge sheet under Sections 406, 420, 504, 506 IPC. Court held no entrustment or dishonest inducement was shown; the dispute was civil in nature, and citing Supreme Court precedent, quashed the charge sheet and all proceedings arising from it.

What did the court decide?

Charge sheet no.2 dated 14.10.2016 in Case Crime No. 697 of 2016 and entire proceedings before Additional Chief Judicial Magistrate, Lucknow quashed.

Manish Rai and Ors. Vs State of U.P. and Ors. — Quashing and FIR | Allahabad HC (2025)

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HIGH COURT OF JUDICATURE AT ALLAHABAD LUCKNOW APPLICATION U/S 482 No. - 4538 of 2017

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Manish Rai And Ors.

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.....Applicant(s)

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Versus State Of U.P. And Ors. .....Opposite Party(s) Counsel for Applicant(s) : Om Prakash Yadav, Suresh Chandra Shukla Counsel for Opposite Party(s) : Govt. Advocate, Pranshu Agrawal Court No. - 29

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HON'BLE MANOJ BAJAJ, J.

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Applicants being accused have filed this application under Section 482 Cr.P.C. for quashing of the impugned charge sheet no.2 dated 14.10.2016 filed in Case Crime No. 697 of 2016, under Sections 420, 406, 504, 506 I.P.C., registered at Police Station Thakurganj, District Lucknow, bailable warrants dated 17.5.2017 issued by Additional Chief Judicial Magistrate, Lucknow and the entire proceedings arising therefrom.

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The above F.I.R. was registered on the basis of a complaint given by Nitin Verma-opposite party no.3, wherein it is alleged that he alongwith his partner Mohd. Amaan Siddiqui is running a business firm namely, M/s Evaluate Enterprises, situated at 3/193 Vikas Khand Gomit Nagar, Lucknow. In February, 2016, Manish Kumar Rai (applicant no.1) being employed as Head Sales and Marketing with M/s Vishwas Tractor Company Ltd. got deposited Rs.5 lacs from him as a security, as part of total assured investment of Rs. 50 lacs for appointing him as Super Stockiest of M/s Vishwas Tractor Company Ltd. The complainant-opposite party no.3 had purchased three tractors bearing model no.445 DC, Chassis No. VIP 44500138, Engine No. 1213-4100, Battery No.A3A5-B-008840-7B 62 Exide Express; Model No.445 DC, Chassis No. VIP-445-00-141, Engine No.12134143, Battery No. A3J5I-043834-76B62 Exide Express; Model No.435 SC, Chassis No. BIM-435-00-137, Engine No. 1406-1464, Battery No. A1A L5B22-7443-1A61 (Exide Boss), colours royal blue for a sum of Rs.13,16,784/- through invoice no.115-116, and the tractors were delivered at his place of work. Manish Kumar Rai-applicant no.1 came to Luckonw

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and asked the complainant to deliver these three tractors to authorized dealer M/s Raj Laxmi Enterprises, Jalalpur, Khori Kapar, Ballia, as there was some urgent need, who had also assured that the payment of these three tractors would be made by the company with applicable interest rates within 60 days. Believing, Manish Kumar Rai, the complainant delivered three tractors on 18.3.2016 against the invoice no.4 (amounting to Rs.4,73,147/-) dated 18.3.2016, invoice no.5 (amounting to Rs.4,71,147/-) dated 18.3.2016, and invoice no.6 (amounting to Rs.4,17,195/-) dated 20.3.2016 countersigned by Manish Kumar Rai and issued to M/s Raj Laxmi Enterprises and the receipt was endorsed by proprietor Smt. Neelam Devi. After sometime, the complainant requested Smt. Neelam Devi and her husband Raj Kumar Gupta for payment of Rs.13,63,989/-, who asked the complainant to talk to Manish Kumar Rai. The complainant also contacted the company for payment, but he was advised to talk to those three persons. Later, the complainant came to know that all these persons in connivance with each other have taken his three tractors and also embezzled the amount of Rs.13,63,989/-. On these broad allegations, the above F.I.R. was registered for the alleged commission of offences punishable under Sections 406, 420, 504, 506 I.P.C.

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After completion of investigation, the charge sheet under Section 173(2) Cr.P.C. was filed against the applicants under Sections 406, 420, 504, 506 I.P.C. Hence, this application.

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Learned counsel for the applicants has argued that the applicant no.1 is a sales and marketing head with M/s Vishwas Tractor Company Ltd., manufacturer of alleged three tractors supplied by complainant to M/s Raj Laxmi Enterprises, whereas applicant no.2-Neelam Devi is the proprietor of the said dealer firm. Learned counsel further submits that applicant no.3-Raj Kumar has nothing to do with the entire transactions, who has been implicated being husband of applicant no.2. Learned counsel submits that according to the allegations itself, three tractors manufactured by M/s Vishwas Tractor Company Ltd. were supplied to the dealer M/s Raj Laxmi Enterprises through super stockiest M/s Evaluate Enterprises and the dispute, if any, between manufacturer and dealer/ stockiest is purely of civil nature. He submits that the offences under Sections 406 and 420 I.P.C. would not be made out and further, the ingredients to constitute these offences cannot coexist, therefore, it is apparent that no criminal case against the applicants would be made out. He prays that the impugned charge sheet dated 14.10.2016 and the proceedings arising out of it be quashed, in the interest of

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justice.

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The prayer is opposed by learned A.G.A. assisted by learned counsel for the complainant, who have argued that the material was supplied by the complainant to M/s Raj Laxmi Enterprises, which is a proprietorship firm of applicant no.2 and transactions between the two was facilitated by applicant no.1-Manish Kumar Rai being sales and marketing head of the manufacturing company, but against the supply of three tractors, no payment has been made to the complainant, therefore, case of cheating and criminal breach of trust is clearly made out against the accused persons. According to learned counsel for opposite parties, the prosecution case is based upon the documentary evidence and the bills/ invoices issued by complainant are signed by both applicant no.1 and applicant no.2. Lastly, it is prayed that the application be dismissed.

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After hearing the learned counsel for the parties and considering their submissions, this Court finds that according to complainant, he being super stockiest of manufacturing company M/s Vishwas Tractor Ltd. had supplied three tractors to the dealer M/s Raj Laxmi Enterprises and had issued three separate invoices total amounting to Rs.13,63,989/-. The complainantopposite party no.3 in his counter affidavit has clearly mentioned in para 9-b that the complainant had agreed to sell the tractors of M/s Vishwas Tractor Ltd. only on the guarantee of payment by the applicant no.1-Manish Kumar Rai, and the said undertaking is on record as Annexure No.CA-4. Further, a reading of Annexure No. CA-4 would show that the complainant had supplied the material on credit basis as the payment was to be made in next 15 days in the account of M/s Evaluate Enterprises.

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Most importantly, the ingredients to constitute the offence punishable under Section 406 I.P.C. are missing, as it is not a case of any voluntarily entrustment by complainant to M/s Raj Laxmi Enterprises as it is the case of the complainant himself that he had delivered three tractors to the dealer of M/s Vishwas Tractors Ltd. as the said dealer was facing shortage of supply. The definition of "criminal breach of trust " as contained in Section 405 I.P.C. reads as under :-

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"405. Criminal breach of trust.

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Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or

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dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits "criminal breach of trust"."

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A reading of the above makes it absolutely clear that in the given facts and circumstances of the case, no offence punishable under Section 406 I.P.C. would be made out against the accused-applicants for lack of entrustment and its misappropriation.

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Similarly, the offence of cheating would also not be made out, because there is no inducement by applicant no.2 proprietor M/s Raj Laxmi Enterprises, dealership firm of manufacturing company M/s Vishwas Tractors Ltd. as the supply was made on the asking of the official of the manufacturing company. Notably, invoices issued against the supply of tractors are of different dates and the supply was also on credit basis, therefore, merely, because the payment of supplied material is delayed or has not been made, that alone would not be sufficient to constitute the offence of cheating, as there is nothing on record to indicate that the complainant had alleged dishonest intention on the part of the accused at the very beginning of the transaction. Likewise, the allegations regarding commission of offence of criminal intimidation punishable under Sections 504, 506 I.P.C. are also vague, which lack material particulars like date, time etc., therefore, the same are not enough to strictly constitute the said offences. The super stockiest and the dealership firm are both working with the manufacturer M/s Vishwas Tractors Ltd. and the dispute raised by the complainant, is apparently of civil nature, therefore, under such circumstances, the prosecution of the applicants would not be justified.

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At this juncture, reliance can be placed upon the decision of the Hon'ble Apex Court in Paramjeet Batra v. State of Uttarakhand and others, passed in Criminal Appeal No. 2069 of 2012, wherein while examining a similar issue in the context of exercise of inherent powers under Section 482 Cr.P.C. The Hon'ble Apex Court made the following observations:-

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"7. While exercising its jurisdiction under Section 482 of the Code the High Court has to be cautious. This power is to be used sparingly and only for the purpose of preventing abuse of the process of any court or otherwise to secure ends of justice. Whether a complaint discloses a criminal offence or not depends upon the nature of facts alleged therein. Whether essential ingredients of criminal offence are present or

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not has to be judged by the High Court. A complaint disclosing civil transactions may also have a criminal texture. But the High Court must see whether a dispute which is essentially of a civil nature is given a cloak of criminal offence. In such a situation, if a civil remedy is available and is, in fact, adopted as has happened in this case, the High Court should not hesitate to quash criminal proceedings to prevent abuse of process of court."

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In Vesa Holdings Pvt. Ltd. and another vs. State of Kerala & Ors reported in 2015 (8) SCC 293, the Hon'ble Supreme Court examined the abuse of process of law in the context of civil disputes between the parties and made the following observations:-

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"9. It is true that a given set of facts may make out a civil wrong as also a criminal offence and only because a civil remedy may be available to the complainant that itself cannot be a ground to quash a criminal proceeding. The real test is whether the allegations in the complaint disclose the criminal offence of cheating or not. In the present case there is nothing to show that at the very inception there was any intention on behalf of the accused persons to cheat which is a condition precedent for an offence under Section 420 IPC. In our view the complaint does not disclose any criminal offence at all. Criminal proceedings should not be encouraged when it is found to be malafide or otherwise an abuse of the process of the court. Superior courts while exercising this power should also strive to serve the ends of justice. In our opinion, in view of these facts allowing the police investigation to continue would amount to an abuse of the process of court and the High Court committed an error in refusing to exercise the power under Section 482 Criminal Procedure Code to quash the proceedings."

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Further, the Hon'ble Apex Court in State of Haryana and others v. Ch. Bhajan Lal and others, 1991(1) RCR (Criminal) 383 : 1992 Supp(1) Supreme Court Cases 335, had laid down the principles and guidelines for exercise of inherent powers under Section 482 Cr.P.C. The relevant portion of the judgment is reproduced below :-

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"The following categories of cases can be stated by way of illustration wherein the extraordinary power under Article 226 or the inherent powers under Section 482, Cr.P.C., 1973 can be exercised by the High Court 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:-

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(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

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constitute any offence or make out a case against the accused.

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(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 order of a Magistrate within the purview of Section 155 (2) of the Code.

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(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.

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(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 Magistrate as contemplated under Section 155(2) of the Code.

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(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.

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(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 specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of aggrieved party.

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(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.

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We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whim or caprice."

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Thus, in the considered opinion of this Court, this case is a fit case for exercise of inherent powers under Section 482 Cr.P.C. to avoid the misuse of law.

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Resultantly, the application succeeds and charge sheet no.2 dated 14.10.2016 filed in Case Crime No. 697 of 2016, under Sections 420, 406, 504, 506 I.P.C., registered at Police Station Thakurganj, District Lucknow,

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and the entire proceedings arising therefrom, pending before the Additional Chief Judicial Magistrate, Lucknow, are ordered to be quashed.

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