Shri Anurag Kumar Chaudhary Vs State of Nagaland and Anr.

Heard Mr. R. S. Mishra, the learned counsel appearing on behalf of the Petitioner and Ms. Livika V. Sumi, the learned Government Advocate appearing on behalf of the Respondent No.1. I have also heard Mr. T. B. Jamir, the learned counsel appearing on behalf of the Respondent No.2.

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The present application has been filed under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (for short ‘BNSS’) for quashing of the FIR in Dimapur East P.S. Case No. 133/2025 registered under Sections 420/406 of the Indian Penal Code, 1860.

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A perusal of the FIR which has been enclosed as Annexure-E to the instant application would show that the Respondent No.2 who is the informant was appointed as the distributor/supplier of LPG gas under Bharti Gas of Dimapur District by a company in the name and style of “M/S Shristhi Bottling Plant Private Limited”.

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It is alleged in the FIR that on account of illegal activities of tampering the weight of the LPG gas, the Respondent No.2/the informant requested for cancellation of the distributorship in the month of January, 2024. Upon cancellation of the distributorship, the Petitioner who was the Director of the company, namely, M/S Shristhi Bottling Plant Limited, issued two HDFC Bank cheques bearing Nos. 000658 and 000659 amounting to Rs.6,00,000/- each to be presented on two different dates. The Cheque bearing No. 000658 dated 14.06.2024 was rejected due to overwriting for which another cheque was issued by the Petitioner being HDFC Cheque No. 000664 dated 28.06.2024. Both the Cheques bearing No. 000664 dated 28.06.2024 and Cheque No. 000659 dated 13.07.2024 were dishonoured due to insufficient balance/drawer’s signature differs. The Respondent No.2 tried to contact the Petitioner but the Petitioner did not respond. It is under such circumstances, the First Information Report was filed against the company, namely, M/S Shristhi Bottling Plant Limited so that the security deposit amounting to Rs.12,00,000/- can be recovered.

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On the basis of the said First Information Report, a case was registered being East Dimapur P.S. Case No. 133/2025

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under Sections 420/406 of the Indian Penal Code.

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In the backdrop of the above, the Petitioner has sought for quashing of the FIR dated 25.07.2024 which was registered on 04.08.2025, primarily on two grounds. First, a perusal of the First Information Report would show that no case of cognizable offence made out and as such, the proceedings could have been only initiated under Section 138 of the Negotiable Instruments Act, 1881 (for short ‘the N.I. Act’). Secondly, a perusal of the said First Information Report would clearly show that the said FIR was filed for the purpose of recovery of money, as would be seen from the last paragraph of the FIR itself and as such, it being a civil dispute, the criminal proceedings could not have been set into motion.

¶30

Mr. R. S. Mishra, the learned counsel appearing on behalf of the Petitioner referred to various judgments of the Supreme Court which are:

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(i) Delhi Race Club (1940) Limited and Others Vs. State of Uttar Pradesh and Another reported in AIR 2024 SC 4531;

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(ii) Shailesh Kumar Singh Alias Shailesh R. Singh Vs. State of

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Uttar Pradesh and Others reported in AIR Online 2025 SC 896 ; and

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(iii) Ajay Bahadur Singh Vs. State of Nagaland and Another reported in 2026 (3) GLR 748 .

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On the other hand, Mr. T. B. Jamir, the learned counsel who represents the informant submitted that there is no bar in a simultaneous proceedings to be initiated under Section 138 of the N.I. Act along with a criminal proceedings under Section 406 and 420 of the Indian Penal Code and in that regard, referred to the judgment of the Supreme Court in the case of Sangeetaben Mahendrabhai Patel Vs. State of Gujarat and Another reported in (2012) 7 SCC 621 . The learned counsel appearing on behalf of the Respondent No.2 further submitted that the company namely, M/S Shristhi Bottling Plant Limited never had the intention of returning the amount of Rs.12,00,000/- which the informant paid at the commencement of the distributorship as a Security Deposit and as such, there was a trust created upon depositing the Security Deposit and the action on the part of the said company and more particularly the Petitioner to issue one cheque by overwriting initially and thereupon to issue a

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replacement cheque knowing fully well that the cheques would be dishonoured clearly shows a case of criminal breach of trust and cheating. In that regard, Mr. T. B. Jamir, the learned counsel referred to a recent judgment of the Supreme Court in the case of C.S. Prasad Vs. C. Satyakumar and Others reported in 2026 SCC OnLine SC 50 wherein the Supreme Court laid down the parameters of the exercise of jurisdiction under Section 482 of the Code of Criminal Procedure, 1973 (for short ‘Cr.P.C.’) and presently 528 of the BNSS while taking up an FIR for quashing.

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This Court has heard the learned counsels appearing on behalf of the parties and has perused the materials on record.

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From a perusal of the FIR, it is alleged that the Respondent No.2/informant had paid Rs.12,00,000/- as Security Deposit for becoming the distributor/supplier of LPG gas under Bharti Gas of Dimapur District with M/S Shristhi Bottling Plant Limited. The said amount of Rs.12,00,000/which was deposited was in the form of a Security Deposit to be kept by M/S Shristhi Bottling Plant Limited. The said distributorship agreement was cancelled as alleged in the FIR and thereupon, steps were taken to return the Security

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Deposit by issuance of two cheques. The first of such Cheque bearing No.000658 dated 14.06.2024 was rejected on account of overwriting. The said cheque was replaced by another Cheque bearing No.000664 dated 28.06.2024. The two Cheques bearing Cheque No.000664 dated 28.06.2024 and Cheque No. 000659 dated 13.07.2024 were both dishonoured on account of insufficient balance/drawer's signature differ. It is also alleged that the informant tried to contact the Petitioner, but the Petitioner did not respond.

¶43

In the backdrop of the above, it is very pertinent to take note of the settled principles of law for the purpose of exercise of the jurisdiction under Section 482 of the Cr.P.C., presently Section 528 of the BNSS. It is well settled that while exercising the jurisdiction under Section 482 of the Cr.P.C., the High Court must avoid usurping the function of the Trial Court or conducting a mini trial when disputed factual questions attend the maintainability of the complaint. The only requirement is to examine whether the uncontroverted allegations as contained in the FIR taken at its face value disclose the commission of any cognizable offence.

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In the backdrop of the above, if this Court takes up the

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first ground of attack on the FIR, it was submitted that the FIR did not disclose a cognizable offence for the police to register a case under Sections 420/406 of the Indian Penal Code and at best, it may be a case of a proceedings under Section 138 of the N.I. Act.

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This Court finds it very pertinent to observe that in the case of Sangeetaben Mahendrabhai Patel (supra) , a similar question arose. In the said proceedings before the Supreme Court, a cheque was issued which upon being presented, was dishonoured. A proceedings under 138 of the N.I. Act was initiated. The Appellant therein was initially convicted by the Trial Court and thereupon acquitted by the Sessions Judge. In the meantime, while those proceedings was going on, the complainant also filed an FIR under Sections 406/420 read with Section 114 of the Indian Penal Code with the Sidhpur Police Station for committing the offence of criminal breach of trust, cheating, and abetment, etc. The question which was before the Supreme Court was as to whether a proceedings under Sections 406/420 of the Indian Penal Code could have been initiated in a case where a proceedings under Section 138 of the N.I. Act was instituted and the Appellant therein was acquitted.

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The Supreme Court in the said judgment after taking into account various precedents, observed that both the proceedings are different inasmuch as, in a proceedings under Section 138 of the N.I. Act, there is no requirement of a mens rea, inasmuch as there is a legal presumption that a cheque had been issued for discharging the antecedent liability and the presumption can be rebutted only by the person who draws the cheques. On the other hand, in a proceedings involving Sections 406/420 of the Indian Penal Code, the element of mens rea is there i.e. the fraudulent or dishonest intention at the time of issuance of the cheque. Paragraph Nos. 37, 38 and 39 of the said judgment in the case of Sangeetaben Mahendrabhai Patel (supra) being relevant are reproduced herein under:

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“ 37. Admittedly, the appellant had been tried earlier for the offences punishable under the provisions of Section 138 of the NI Act and the case is sub judice before the High Court. In the instant case, he is involved under Sections 406/420 read with Section 114 IPC. In the prosecution under Section 138 of the NI Act, the mens rea i.e. fraudulent or dishonest intention at the time of issuance of cheque is not required to be proved. However, in the case under IPC involved herein, the issue of mens rea may be relevant. The offence punishable under Section 420 IPC is a serious one as the sentence of 7 years can be imposed.

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38. In the case under the NI Act, there is a legal presumption that the cheque had been issued for discharging the antecedent liability and that presumption can be rebutted only by the person who draws the cheque. Such a requirement is not there in the offences under IPC. In the case under the NI Act, if a fine is imposed, it is to be adjusted to meet the legally enforceable liability. There cannot be such a requirement in the offences under IPC. The case under the NI Act can only be initiated by filing a complaint. However, in a case under IPC such a condition is not necessary.

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39. There may be some overlapping of facts in both the cases but the ingredients of the offences are entirely different. Thus, the subsequent case is not barred by any of the aforesaid statutory provisions.”

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Taking into account the above proposition of law laid down by the Supreme Court, it is the opinion of this Court that the first ground of attack on the First Information Report cannot be sustained in law inasmuch as the question as to whether the cheques were issued with a mens rea to cheat/cause criminal breach of trust is a question which can be investigated by the Investigating Authority. Merely because of the fact that the Respondent No.2/informant had the remedy to initiate proceedings under Section 138 of the N.I. Act, (which, as on date is not available), the question of quashing the FIR on the said ground does not arise.

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Let this Court now deal with the second ground of attack on the FIR. The second ground of attack on the FIR is primarily on the last sentence of the FIR wherein the informant had mentioned that he had filed the FIR against the company, namely, M/S Shristhi Bottling Plant Private Limited, so that he can get back the Security Deposit amounting to Rs.12,00,000/-. No doubt, the said sentence has the flavour of a civil claim. But merely because of the fact that there is a civil claim, it does not automatically render the contents of the FIR a pure case of a civil liability. The said aspect is well settled inasmuch as a transaction can have both civil liability dimension as well as a criminal liability dimension and merely because there a transaction involving a civil liability dimension, it does not mean that the transaction cannot constitute a criminal offence.

¶57

In the instant case, it prima facie appears from the allegations in the FIR that an amount of Rs.12,00,000/- was paid as a Security Deposit at the time of appointing the Respondent No.2/informant as distributor of M/S Shristhi Bottling Plant Private Limited. The said distributorship agreement was cancelled and two cheques were issued as regards refunding the Security Deposit. The said cheques

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were dishonoured on account of insufficient balance/drawer's signature differ and it is alleged that the informant tried to contact the company M/S Shristhi Bottling Plant Private Limited. However, nobody responded. From a reading of the FIR, it cannot be said that no case of cheating as well as criminal breach of trust is made out. It would depend upon investigation.

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In this regard, this Court finds it relevant to take note of the recent judgment of the Supreme Court in the case of C.S. Prasad (supra) , wherein the Supreme Court after dealing with various judgments observed that when a factual foundation for prosecution exists, criminal law cannot be short-circuited by exercise of the inherent powers under Section 482 of the Cr.P.C. The Supreme Court further observed that where allegations require adjudication on evidence, the proper course is to permit the trial to proceed in accordance with law. Paragraph 30 and 31 of the said judgment being relevant are reproduced herein under:

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“ 30. We are not impressed with the above findings reached by the High Court. In Neeharika Infrastructure Private Limited (supra), this Court had made it clear that while exercising the powers under Section 482 of the Cr. P.C., the High Court cannot undertake

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a roving inquiry into the disputed questions of fact or record findings on the merits of the allegations. On perusal of the above observations of the High Court, we find that the High Court has erred in law by embarking upon an inquiry with regard to the conduct of the appellant and credibility or otherwise of the allegations in the complaint and the FIR. Delay in filing a complaint, by itself, is never a ground for quashing criminal proceedings at the threshold. Whether the delay stands satisfactorily explained or whether it impacts the credibility of the prosecution, is a matter of appreciation of evidence before the Trial Court and not for summary determination by the High Court under Section 482 of the Cr. P.C.

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31. It is a settled proposition that when a factual foundation for prosecution exists, criminal law cannot be short-circuited by invoking inherent jurisdiction under Section 482 of the Cr. P.C. Where allegations require adjudication on evidence, the proper course is to permit the trial to proceed in accordance with law. In the present case, the issues relating to the state of mind of the executants at the time of execution of the settlement deeds, the role of respondent Nos. 1 to 3 in the execution and the use of the settlement deeds, the existence of fraudulent intent, and the manner in which proprietary advantage was obtained by them, all require a full-fledged trial on evidence.”

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In the instant case, the investigation is at the nascent stage. The question as to whether there was a dishonest intention/mens rea on the part of the company, namely, M/S Shristhi Bottling Plant Private Limited and the persons who

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are involved in the day-to-day functioning of the said company, is a question of fact which requires investigation.

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Considering the above, it is therefore the opinion of this Court that this is not a fit case for exercise of jurisdiction under Section 528 of the BNSS to quash the FIR dated 25.07.2024 registered as East Dimapur P.S. Case No.133/2025.

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Accordingly, the instant application stands rejected. No costs.

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JUDGE

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Comparing Assistant

Shri Anurag Kumar Chaudhary v. State of Nagaland and Anr.

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Shri Anurag Kumar Chaudhary v. State of Nagaland and Anr.

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