Ms Zillion Infra Projects Pvt. Ltd. Through Its Managing Director Sh Anant Saxena And Anr. Vs The State Of Jharkhand And Anr.

(2025:JHHC:33557)

IN THE HIGH COURT OF JHARKHAND AT RANCHI Cr. M. P. No. 844 of 2016

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1. M/S Zillion Infra projects Pvt. Ltd., a Company incorporated under the Companies Act, 1956, having regd. Office at: 5^th Floor, Anushka Shopping Mall Plot No. 2, Garg Trading Centre Sector – 11, Rohini, New Delhi – 110085, represented through its Managing Director and authorized signatory Sh. Anant Saxena, s/o late Shri R.K. Dundha, aged about 50 years, resident of 5^th Floor, Anushka Shopping Mall, Plot No. 2 Garg Trading Centre Sector – 11, Rohini, PO – Rohini, PS – Prashant Vihar, New Delhi – 110085.

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2. Anant Saxena, s/o late Shri R.K. Dundha, aged about 50 years, resident of 5^th Floor, Anushka Shopping Mall, Plot No. 2 Garg Trading Centre Sector – 11, Rohini, PO – Rohini, PS – Prashant Vihar, New Delhi – 110085. … Petitioners

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Versus

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1. The State of Jharkhand.

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2. M/S Fusion Engineering Products Pvt. Ltd., a company incorporated under the Companies Act, 1956, having its regd. Office at: B – 16, VIth Phase, PO – Gamharia, PS – Adityapur, District – Saraikela Kharsawan through its Director Finance Mr. Jyotirmayee Ghosh s/o late Shre SK Ghosh, r/o House No. A – 4, Elite Residency, near 9 and 10, Loyola School, Bistupur, PO & PS - Bistupur, Jamshedpur – 831001, District – East Singhbhum. … Opp. Parties

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For the Petitioners : Mr. Prashant Kumar, Advocate : Mr. Vikas Kumar, Advocate : Mr. Parambir Singh Bajaj, Advocate For the State : Mr. Bishambhar Shastri, APP For the Opp. No. 2 : Ms. Diksha Dwivedi, Advocate : Mr. Deepak Sinha, Advocate : Mr. Vikas Pandey, Advocate ------

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P R E S E N T

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HON’BLE MR. JUSTICE ANIL KUMAR CHOUDHARY

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By the Court:- Heard the parties.

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Cr. M. P. No. 844 of 2016

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(2025:JHHC:33557)

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2. This Criminal Miscellaneous Petition has been filed invoking the jurisdiction of this Court under section 482 of the Code of Criminal Procedure with the prayer to quash the entire criminal proceeding in connection with Adityapur P.S. Case No. 08 of 2015 dated 04.01.2015 corresponding to G.R. No. 19 of 2015.

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3. It is submitted by the learned counsel for the petitioners that though chargesheet has been submitted but charge has not yet been framed nor the witnesses have been examined. The allegation against the petitioners is that the petitioners have allured the complainant – company for making supply of goods mentioned in the purchase order to them and initially they paid the amount within a reasonable time but later on they delayed payment on one pretext or the other. Later on, Opp. Party No. 2 filed a complaint which upon being referred to police under Section 156(3) of the Cr.P.C., case in connection with Adityapur P.S. Case No. 08 of 2015 was registered and police after investigation of the case, submitted chargesheet alleging that the petitioners having committed the offence punishable under Sections 406 and 420 of the Indian Penal Code.

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4. Learned counsel for the petitioners by relying upon the judgment of the Hon’ble Supreme Court of India in the case of Delhi Race Club (1940) Ltd. & Others Vs. The State of Uttar Pradesh & Another reported in 2024 SCC OnLine SC 2248 wherein it has been reiterated that every act of breach of trust may not result in penal offence of criminal breach of trust unless there is evidence of manipulating act of fraudulent misappropriation. An act of breach of trust involves a civil wrong in respect of which the person may seek his remedy for damages in civil courts but, any breach of trust only with a mens rea , gives rise to a criminal prosecution as well.

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5. It is next submitted that therein the Hon’ble Supreme Court of India also reiterated the settled principles of law that in case of criminal breach of trust, the offender has to be lawfully entrusted with the property and dishonestly misappropriated the same.

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6. Learned counsel for the petitioners further submits that in the judgment of Delhi Race Club (1940) Ltd. and Others v. State of Uttar

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Cr. M. P. No. 844 of 2016

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(2025:JHHC:33557)

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Pradesh and Another (supra), para no. 36 of which reads as under:-

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“36. From the aforesaid, there is no manner of any doubt whatsoever that in case of sale of goods, the property passes to the purchaser from the seller when the goods are delivered. Once the property in the goods passes to the purchaser, it cannot be said that the purchaser was entrusted with the property of the seller. Without entrustment of property, there cannot be any criminal breach of trust. Thus, prosecution of cases on charge of criminal breach of trust, for failure to pay the consideration amount in case of sale of goods is flawed to the core. There can be civil remedy for the non-payment of the consideration amount, but no criminal case will be maintainable for it. [See : Lalit Chaturvedi v. State of Uttar Pradesh, 2024 SCC OnLine SC 171 & Mideast Integrated Steels Ltd. (MESCO Steel Ltd.) v. State of Jharkhand, 2023 SCC OnLine Jhar 301]” (emphasis supplied)

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it has been categorically held that once the property in the goods passes to the purchaser, it cannot be said that the purchaser was entrusted with the property of the seller.

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7. Learned counsel for the petitioners next relies upon the judgment of the Hon’ble Supreme Court of India in the case of Kunti & Another Vs. State of Uttar Pradesh & Another passed in Criminal Appeal No. 1380 of 2023 dated 03.05.2023 and submits that in the fact of that case, the Hon’ble Supreme Court of India relied upon its own judgment in the case of Sarabjit Kaur Vs. State of Punjab & Another reported in 2023 SCC OnLine 210 wherein the Hon’ble Supreme Court of India observed that a breach of contract does not give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction. Merely on the allegation of failure to keep up promise will not be enough to initiate criminal proceedings.

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8. Learned counsel for the petitioners further relies upon the judgment of the Hon’ble Supreme Court of India in the case of Anukul Singh Vs. State of Uttar Pradesh & Another reported in 2025 INSC 1153 and submits that in the fact of that case, the Hon’ble Supreme Court of India relied upon its own judgment in the case of Anand Kumar Mohatta Vs. State (NCT of Delhi) reported in (2019) 11 SCC 706 wherein the Hon’ble Supreme Court of India reiterated the settled principles of law that Section 482 of the CrPC

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Cr. M. P. No. 844 of 2016

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(2025:JHHC:33557)

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is not confined to the stage of FIR and can be exercised even after filing of chargesheet, to prevent abuse of process of law. He further submits that the allegations made against the petitioners are false and even if the entire allegation made against the petitioners are considered to be true, still neither of the offence punishable under Section 406 nor the offence punishable under Section 420 of the Indian Penal Code is made out. Hence, it is submitted that the prayer as prayed for in this criminal miscellaneous petition, be allowed.

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9. Learned Addl. P.P. as well as learned counsel for the Opp. Party No. 2 on the other hand vehemently opposes the prayer of these petitioners and submits that the petitioners have cheated and dishonestly misappropriated Rs. 14,84,968/-. Hence, both the offences punishable under Sections 406 and 420 of the Indian Penal Code is made out; if the allegations made against these petitioners are considered to be true. Relying upon the judgment of the Hon’ble Supreme Court of India in the case of Vijayander Kumar and Others vs. State of Rajasthan and Another reported in (2014)

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3 SCC 389, paragraph 12 of which reads as under:-

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“12. The learned counsel for the respondents is correct in contending that a given set of facts may make out a civil wrong as also a criminal offence and only because a civil remedy may also be available to the informant/ complainant that itself cannot be a ground to quash a criminal proceeding. The real test is whether the allegations in the complaint disclose a criminal offence or not. This proposition is supported by several judgments of this Court as noted in para 16 of the judgment in Ravindra Kumar Madhanlal Goenka v. Rugmini Ram Raghav Spinners (P) Ltd. [(2009) 11 SCC 529 : (2010) 3 SCC (Cri) 1011]”

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it is submitted by the learned counsel for the Opposite Party No. 2 that a given set of facts may make out a civil wrong as also a criminal offence and only because a civil remedy may also be available to the informant/ complainant that itself cannot be a ground to quash a criminal proceeding. The real test is whether the allegations in the complaint disclose a criminal offence or not.

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Cr. M. P. No. 844 of 2016

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(2025:JHHC:33557)

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10. It is next submitted that in this case also merely because a civil remedy is available to the informant, the same is not a ground to quash the entire criminal proceeding. Hence, it is submitted that this criminal miscellaneous petition being without any merit, be dismissed.

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11. Having heard the rival submissions made at the bar and after going through the materials available on record, it is pertinent to mention here that it is a settled principles of law as has been held by the Hon’ble Supreme Court of India in the case of Uma Shankar Gopalika Vs. State of Bihar & Another reported in (2005) 10 SCC 336 , Paragraph no. 6 of which reads as under: -

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“ 6. Xxxx xxxx xxxx It is well settled that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. In the present case it has nowhere been stated 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.” (Emphasis supplied)

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that in order to constitute the offence of cheating, the accused must have played deception at the beginning of the transaction between the parties. If the accused plays deception subsequently, the same will not amount to cheating.

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12. Now coming to the facts of this case, since at the beginning of the transaction, the petitioners did not play deception rather admittedly the petitioners initially used to pay the value of the goods purchased within reasonable time.

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13. In view of this fact, this Court has no hesitation in holding that even if the entire allegation made against the petitioners are considered to be true, still the offence punishable under Section 420 of the Indian Penal Code, is not made out. It is also a settled principles of law as has been held by the Hon’ble Supreme Court of India in the case of Vir Prakash Sharma

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Cr. M. P. No. 844 of 2016

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(2025:JHHC:33557)

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v. Anil Kumar Agarwal reported in (2007) 7 SCC 373 , paragraph no. 8 of which reads as under:-

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“8. The dispute between the parties herein is essentially a civil dispute. Non-payment or underpayment of the price of the goods by itself does not amount to commission of an offence of cheating or criminal breach of trust. No offence, having regard to the definition of criminal breach of trust contained in Section 405 of the Penal Code can be said to have been made out in the instant case. Section 405 of the Penal Code reads, thus:

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“405. Criminal breach of trust .—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 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 wilfully suffers any other person so to do, commits ‘criminal breach of trust’.”

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Neither any allegation has been made to show existence of the ingredients of the aforementioned provision nor any statement in that behalf has been made.” (Emphasis supplied)

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that when a dispute between the parties, is essentially a civil dispute, non-payment or under payment of the price of goods itself does not amount to commission of an offence of cheating or criminal breach of trust. 14. It is also a settled principles of law as has it has been held by the Hon’ble Supreme Court of India in the case of Binod Kumar and Others vs. State of Bihar and Another reported in (2014) 10 SCC 663 , paragraph no. 18 of which reads as under:-

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“18. In the present case, looking at the allegations in the complaint on the face of it, we find that no allegations are made attracting the ingredients of Section 405 IPC. Likewise, there are no allegations as to cheating or the dishonest intention of the appellants in retaining the money in order to have wrongful gain to themselves or causing wrongful loss to the complainant. Excepting the bald allegations that the appellants did not make payment to the second respondent and that the appellants utilised the amounts either by themselves or for some other work, there is no iota of allegation as to the dishonest intention in misappropriating the property. To make out a case of criminal breach of trust, it is not sufficient to show that money has been retained by the appellants. It must also be shown that the appellants dishonestly disposed of the same in some way or

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Cr. M. P. No. 844 of 2016

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(2025:JHHC:33557)

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dishonestly retained the same. The mere fact that the appellants did not pay the money to the complainant does not amount to criminal breach of trust.” (Emphasis supplied)

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that in order to establish the offence of criminal breach of trust, it must be established that the accused dishonestly misappropriated the entrusted property. Now as already mentioned above in the case of Delhi Race Club (1940) Ltd. & Others Vs. The State of Uttar Pradesh & Another (supra), in paragraph no. 36, it has been held by the Hon’ble Supreme Court of India that a purchaser purchasing goods cannot be said to be entrusted with the purchased goods.

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15. Now in absence of any dishonest misappropriation of any entrusted property against the petitioners, this Court is of the considered view that even if the entire allegation made against these petitioners are considered to be true, still offence punishable under Section 406 of the Indian Penal Code, is not made out.

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16. In view of the discussions made above, as neither of the offences punishable under Sections 406 or Section 420 of the Indian Penal Code, is made out; therefore, this Court is of the considered view that the continuation of this criminal proceeding against these petitioners will amount to an abuse of process of law. Therefore, this is a fit case where the entire criminal proceeding in connection with Adityapur P.S. Case No. 08 of 2015 corresponding to G.R. No. 19 of 2015, be quashed and set aside against the petitioners.

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17. Accordingly, Adityapur P.S. Case No. 08 of 2015 corresponding to G.R. No. 19 of 2015, is quashed and set aside against the petitioners.

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18. In the result, this criminal miscellaneous petition is allowed .

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(Anil Kumar Choudhary, J . )

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High Court of Jharkhand, Ranchi Dated the 10^th of November, 2025 AFR/ Aditi

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Cr. M. P. No. 844 of 2016

Ms Zillion Infra Projects Pvt. Ltd. Through Its Managing Director Sh Anant Saxena And Anr. v. The State Of Jharkhand And Anr.

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Ms Zillion Infra Projects Pvt. Ltd. Through Its Managing Director Sh Anant Saxena And Anr. v. The State Of Jharkhand And Anr.

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