Dismissed¶43

Abhishek Avala v. State of Chhattisgarh

Chhattisgarh HC1 May 2025CRMP/228/2023

Case brief

AI extract

What is this about?

High Court of Chhattisgarh, CRMP No. 228/2023 (Ramesh Sinha, CJ authoring; Arvind Kumar Verma, J), decided 02/05/2025: Section 482 CrPC petition to quash FIR No. 308/2022, PS Gol Bazar Raipur (Sections 409 & 420 IPC) DISMISSED. Franchise/C&F-agreement cheating and criminal-breach-of-trust allegation of Rs. 60 lakh by complainant Deepak Jaisinghani against petitioner Abhishek Avala; FIR held to disclose cognizable offence; quashing power to be used sparingly, merits not to be examined (Neeharika Infrastructure relied on); Arnesh Kumar, Bhajan Lal, Amish Devgan cited in submissions only.

What did the court decide?

The jurisdiction to quash a complaint, FIR or charge-sheet is well-settled to be exercisable sparingly and only in exceptional cases, and courts should not ordinarily interfere with investigations of cognizable offences. ¶39

Abhishek Avala Vs State of Chhattisgarh — Cheating and Forgery | Chhattisgarh HC (2025)

What the court decided

AI extract

Outcome

Dismissed

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Issue for consideration

Whether the FIR in Crime No. 308/2022 registered at Police Station Gol Bazar, District Raipur under Sections 409 and 420 IPC against the petitioner ought to be quashed in exercise of powers under Section 482 Cr.P.C., the petitioner contending the dispute is essentially civil in nature.

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Court's answer

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Ratio / Principle

Where the allegations made in the FIR or complaint, even if 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, the FIR or charge-sheet may be quashed in exercise of powers under Article 226 or inherent powers under Section 482 of the Cr.P.C.

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Key takeaways

While exercising power under Section 482 Cr.P.C., the Court has only to consider whether the allegations of the FIR disclose the commission of a cognizable offence and is not required to consider the case on merits; the power, though very wide, must be exercised with caution (per M/s. Neeharika Infrastructure).ratio¶42
On perusal of the FIR and materials, the petitioner fraudulently obtained Rs. 60 Lacs from respondent No. 2, did not give the franchisee and committed criminal breach of trust; a bare perusal of the FIR shows it discloses a cognizable offence, and it mentions two other cases of fraud and criminal breach of trust against the petitioner-Company.ratio¶38

Detailed headnote1 paragraphs

Section 482 Cr.P.C. petition by Abhishek Avala, proprietor of M/s Vay India Corporation, seeking quashing of FIR Crime No. 308/2022 (PS Gol Bazar, Raipur) under Sections 409 & 420 IPC — alleging he fraudulently obtained Rs. 60 lakh from respondent Deepak Jaisinghani towards a franchise and Carry Forward Agreement for 7 Hills Manikchand Pan Masala without supplying goods — dismissed. Held: quashing jurisdiction is to be exercised sparingly and only in exceptional cases, and courts should not ordinarily interfere with investigations of cognizable offences; in exercising Section 482 power the Court need only consider whether the FIR alleges a cognizable offence, not the merits (M/s. Neeharika Infrastructure relied on). A bare perusal of the FIR showed it discloses a cognizable offence — fraudulent obtaining of Rs. 60 Lacs, non-supply of franchisee goods and criminal breach of trust — so the petition was dismissed.

2025:CGHC:20184

NAFR

HIGH COURT OF CHHATTISGARH AT BILASPUR

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CRMP No. 228 of 2023

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Abhishek Avala S/o Suresh Kumar Avala Aged About 40 Years R/o 4th Floor, Uma Enclave, Road No. 9, Banjara Hill, Hyderabad, District : Hyderabad, Telangana

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... Petitioner(s)

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Versus

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1 - State Of Chhattisgarh Through Police Station Gol Bazar, District : Raipur, Chhattisgarh

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2 - Deepak Jaisinghani S/o Harilal Jaisinghani Aged About 41 Years R/o Shyam Nagar, In Front Of Maharana Pratap Garden, Telibandha, District : Raipur, Chhattisgarh

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... Respondent(s)

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For Petitioner(s) : Mr. Pritam Singh, Advocate. For Respondent(s) /State : Mr. Shashank Thakur, Deputy Advocate General For Respondent No. 2 : Mr. Sudhanshu Upadhyay, holding the brief of Mr. Sangeet Kumar Kushwaha, Advocate.

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Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Shri Arvind Kumar Verma , Judge

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Judgment on Board

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Per Ramesh Sinha, Chief Justice

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02/05 /2025

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1 Heard Mr. Pritam Singh, learned counsel for the petitioner, Mr. Shashank Thakur, learned Deputy Advocate General for the State/respondent No. 1 as well as Mr. Sudhanshu Upadhyay, learned

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counsel for the respondent No. 2.

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2 In the present petition under Section 482 of the Code of Criminal Procedure, 1973 ( for short, the Cr.P.C ), the petitioner has prayed for the following relief(s):

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“ (1) quash FIR in Crime No. 308/2022 registered at Police Station Gol Bazar, District Raipur (C.G.), u/s 409 & 420 of Indian Penal Code in relation to the present petitioner.

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(2) pass any other order in view of the special facts and circumstances mentioned in the present petition, in the interest of justice.”

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3 The facts, as projected by the petitioner are that as per the FIR, the petitioner who is the Proprietor of M/s Vay India Corporation, executed a Franchisee Agreement dated 13.12.2018 with the respondent No. 2 for granting franchise to sell 7 Hills Manikchand Pan Masala against the consideration of Rs. 5,00,000/-which was received on 03.12.2018. On 13.12.2018, amount of Rs. 10,00,000/- and Rs.25,00,000/-was received in the name of franchisee and franchisee agreement was executed, but did not give any franchisee. Thereafter, more money was demanded from the respondent no. 2, then the respondent no. 2 provided Rs.10,00,000/- on 18.12.2018. Carrying forward Agreement (CF Agreement) was sent to the respondent No. 2 and it was told that the goods will be sent against the amount deposited, after that the Carry Forward Agreement dated 14.12.2019 was executed. After this, pressurizing the respondent No. 2 in the name of sending the goods, more money was demanded. On which the respondent no. 2 deposited Rs. 10,00,000/- on 25.03.2019 and Rs.37,584/- on 27.03.2019 was sent from the bank account, even after which the goods were not sent and the respondent No.2 behalf of the Company was put on the financial burden of advertising and employees, even after that the goods were not sent

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and the petitioner sent a termination letter through mail, but the respondent No.2 deposit was not given. Thus the total amount in the course of business of the respondent No.2 being a trader, is Rs.60,00,000/-, fraud was committed with the respondent No.2 by deceit and trick while breaching the trust by receiving it in installments. Thereafter the FIR was registered by the Police Station Gol Bazar for alleged offence under Sections 409 and 420 of IPC.

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4 Mr. Pritam Singh, learned counsel for the petitioner submits that on 09.01.2021, the petitioner notified the respondent No. 2 through an email regarding sellout of the Company to M/s Sreepada Nakshatra Corporation. In that email the petitioner clearly mentioned that particulars of the person to whom the Company was sold. He also mentioned the all backlogs will be paid by M/s Sreepada Nakshatra Corporation. From bare reading of the FIR shows that there is no specific allegation against the individual petitioner i.e., Abhishek Avala. A dispute arose between both firms i.e., M/s Jai Singhani & Sons and M/s Vay India Corporation not between individual capacity. The petitioner earlier tried to send the goods to the respondent No. 2. The respondent No. 2 through email dated 17.01.2019 asked for extension of time of 45 to 60 days to receive goods due to personal land/space issues. After completion of the said period, the petitioner Company contacted again to deliver the goods but respondent No. 2 orally asked to extend time. No case under Section 409 or 420 IPC is made out in the present case. The dispute is of civil nature and has been tried to be given a colour of criminal offence. In FIR the respondent No. 2 admitted that he signed and gave consent on Carry Forward Agreement (C&F) with the petitioner Company. So whenever a agreement comes into picture, that agreement whatsoever in nature will be governed as per the Indian Contract Act, 1872. As per C&F

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agreement, it is clearly mentioned in clause 19 subject to any disputes arise between both parties either party must approach Single Arbitrator under Arbitration and Reconciliation Act, 1996. Further in clause 20 it was clearly mentioned that jurisdiction of all matters arising out of agreement will be subject to jurisdiction of Hyderabad. The agreement was signed and executed on 04.03.2019 at Hyderabad. Due to fire accident at work place of petitioner on 02.09.2022, the original documents are not available. As per the contents of the complaint the respondent No. 2 alleged that he has paid an amount of Rs. 60,00,000/to petitioner Company for purpose of franchisee agreement and Carry Forward Agreement but the respondent no. 2 utterly failed to submit any document before the Police Station, Gol Bazar. There is delay in lodging the FIR for which there is no explanation. Even otherwise, the respondent No. 2 has the remedy to approach the competent civil court for resolving any dispute. This Hon’ble Court has the discretionary power to quash such vexatious criminal proceedings under Section 482 Cr.P.C. In this context it is submitted that the Hon'ble Apex Court in a catena of decisions, held that a criminal complaint should be quashed when the matter is essentially civil in nature and has been given a cloak of a criminal offense as the continuation of such proceedings will amount to an abuse of process of the court. Reliance is placed on the decision of the Apex Court in Arnesh Kumar v. State of Bihar & Another {(2014) 8 SCC 273} and State of Haryana v. Bhajan Lal {AIR 1992 SC 604} and prays that this petition may be allowed.

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5 On the other hand, Mr. Thakur, placing reliance on the return filed submits that he present petition as framed and filed by the petitioner is without any substance and merit, thus, the same is liable to be dismissed at its threshold. The petitioner has failed to show any good cause in this

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petition for seeking indulgence of this Hon'ble Court and the petition is not of such nature where this Hon'ble Court may exercise its discretionary jurisdiction. Further apart, the pleadings of the present petition disclose the defence of the petitioner accused and that can be very well raised by the petitioner before the learned Trial Court during the course of trial. The defence of the accused petitioner is subject matter of the evidence and in the present case, the defence of the petitioner cannot be visualized being the matter of fact. The present petition is untenable since the proceedings have gone past the stage of FIR and the case is under investigation and after due investigation, the charge sheet would be filed before the concerned Jurisdictional Magistrate for its kind consideration. It is further submitted that as regards the facts of the present case are concerned, a perusal of the entire FIR clearly discloses prima facie commission of offence as alleged against the petitioner and there is also sufficient material available on record against the petitioner, so in the humble submission of the Answering Respondents/State, present case is not a fit case for quashing of FIR. Mr. Thakur submits that the respondent had made a written complaint against the present petitioner before the Police Station Gole Bazar Raipur regarding the commission of offence committed by the present petitioner. On the basis of such written complaint, an FIR under aforesaid Sections of the IPC has been registered against the petitioner, as prima facie, the Police was obliged to register an FIR as per law and there is no infirmity or illegality in the same and the same is strictly in accordance with law. The Police has registered FIR on the basis of the written complaint made by the complainant / Respondent No. 2 on disclosing commission of cognizable offence committed by the petitioner. A free, fair and transparent investigation is being carried out by the investigating authority and the

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Police are not at all influenced by the status or position of any of the parties concerned and the matter is being duly investigated in accordance with law and after due investigation, final report/charge sheet would be filed against the present petitioner in the matter before the concerned learned Jurisdictional Magistrate. Quashing of an FIR or framing of charges is an extra ordinary jurisdiction and inherent jurisdiction of the Hon'ble Court which should sparingly be exercised only in extraordinary circumstances. Reliance is placed on the decision of the Apex Court in Amish Devgan Vs. Union of India & Others , {2020 SCC Online SC 994}. The impugned proceedings initiated by the Police authority is based on cogent evidences and materials available on record and the impugned proceeding after considering all the aspects and in view of the facts and circumstances of the case, has rightly been initiated by the police authority based on the complaint made by the Complainant and after due investigation, the charge sheet would be filed before the concerned Jurisdictional Magistrate for its kind consideration, therefore, the basic ingredients of the aforesaid provisions of law, is on record against the present petitioner. Mr. Thakur further submits that after considering all the aspects of the matter and the material available on records, the impugned criminal proceedings have been initiated by the police authority on the basis of the written report filed by the complainant after due investigation and inquiry, therefore, in view of the facts and circumstances of the case and the submissions made by the respondent/State, the impugned proceedings initiated by the police authority, are proper, legal, strictly in accordance with law and within the jurisdiction and there is no infirmity or illegality in the same and as such, this petition deserves to be dismissed.

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6 Mr. Sudhanshu Upadhyay, learned counsel appearing for the respondent

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No. 2 supports the contentions raised by the learned State counsel and prays for dismissal of this petition. He further submits that the petitioner company is a habitual offender as there are two more criminal cases registered against it of similar nature. The petitioner company has deceived two other parties in a similar manner and hence, no relief whatsoever may be granted to the petitioner.

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7 On a query being made by this Court as to whether there are any cases pending against the petitioner Company, Mr. Singh submits that though there are two cases pending against the petitioner-Company which relate to the year 2017 and are pending at Hyderabad and the petitioner is trying to settle the dispute through compromise.

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8 From perusal of the FIR and the materials available on record, it transpires that the petitioner has obtained a sum of Rs. 60 Lacs from the respondent No. 2 in a fraudulent manner and has not given the franchisee and committed a criminal breach of trust. A bare perusal of the FIR itself goes to show that it discloses a cognizable offence. In the FIR itself, it is mentioned that there are two other cases registered against the petitioner-Company which also relates to fraud and criminal breach of trust.

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9 The legal position on the issue of quashing of criminal proceedings is well-settled that the jurisdiction to quash a complaint, FIR or a chargesheet should be exercised sparingly and only in exceptional cases and Courts should not ordinarily interfere with the investigations of cognizable offences. However, where the allegations made in the FIR or the complaint even if 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, the FIR or the charge-sheet may be quashed in exercise of

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powers under Article 226 or inherent powers under Section 482 of the Cr.P.C.

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10 In M/s. Neeharika Infrastructure Pvt. Ltd. v. State of Maharashtra and others {2021 SCC OnLine SC 315}, the Apex Court has observed that the power of quashing should be exercised sparingly with circumspection in the rarest of rare cases. While examining an FIR/complaint, quashing of which is sought, the Court cannot inquire about the reliability, genuineness, or otherwise of the allegations made in the FIR/complaint. The power under Section 482 Cr.P.C. is very wide, but conferment of wide power requires the Court to be cautious. The Apex Court has emphasized that though the Court has the power to quash the FIR in suitable cases, the Court, when it exercises power under Section 482 Cr.P.C., only has to consider whether or not the allegations of FIR disclose the commission of a cognizable offence and is not required to consider the case on merits.

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11 From perusal of the materials available on record, prima facie, it cannot be held that no cognizable offence is made out against the petitioner and as such, this Court is of the view that this is not a fit case where this Court should exercise its powers under Section 482 of the Cr.P.C. and quash the FIR and as such, this petition stands dismissed .

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Sd/- Sd/(Arvind Kumar Verma) (Ramesh Sinha) JUDGE CHIEF JUSTICE

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Amit

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AMIT KUMAR DUBEY Digitally signed by AMIT KUMAR DUBEY Date: 2025.05.06 13:09:16 +0530

Abhishek Avala v. State of Chhattisgarh

Case brief

What is this about?

What did the court decide?

Abhishek Avala v. State of Chhattisgarh

Case brief

What is this about?

What did the court decide?

What the court decided

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