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Judgment
Heard the parties.
The present application has been filed for quashing the order dated 27.06.2018 passed in Complaint Case No. 785 of 2018 by the learned Chief Judicial Magistrate, Bhagalpur, whereby cognizance has been taken against the petitioner for the offences punishable under Sections 406 and 420 of the Indian Penal Code and summons has been directed to be issued.
The prosecution, in brief, arises out of allegations made by the complainant, who was associated with the company under the name and style of Vastu Vihar/Technoculture Building Centre Pvt. Ltd. According to the complainant, the petitioner was working as a Marketing Executive and, in the course of such engagement, was required to deal with customers and to receive certain amounts from them in connection with the business of the company.
It is the case of the complainant that complaints were received from customers regarding payment of money and non-completion of the consequential formalities. Upon inquiry, it allegedly came to light that certain amounts received from customers had not been deposited or accounted for in the manner required. It is further alleged that, on inquiry, the petitioner admitted receipt of an amount of Rs. 25,70,500/- and agreed to return the same in instalments. According to the complainant, further complaints subsequently came to light and the alleged amount increased to Rs. 34,49,900/-.
The complaint further contains allegations concerning subsequent events between the parties and their family members. The petitioner, however, is the person against whom the learned court below ultimately found a prima facie case under Sections 406 and 420 of the Indian Penal Code. Cognizance was not taken against all the persons named in the complaint.
It is the specific case of the petitioner that the entire prosecution is false and has been instituted as a counterblast to an earlier criminal case instituted at the instance of the petitioner against certain officers of the company. It is also the case of the petitioner that she had been working merely as a Marketing Executive; that her function was to contact customers and provide them information regarding the schemes of the company; and that she had no responsibility with regard to registration or completion of the transactions undertaken by the company.
The petitioner has further pleaded that whenever any amount was received from a customer, a receipt was issued and the amount was handed over to the concerned persons of the company. According to the petitioner, the company, instead of taking action against its own officers and employees responsible for the alleged irregularities, has falsely attributed the entire liability to the petitioner.
The petitioner has also referred to the previous criminal litigation between the parties and has asserted that the present complaint is retaliatory in nature. It is further contended that the complainant did not institute any civil proceeding for recovery of the alleged amount and that the circumstances in which the complaint came to be instituted demonstrate its mala fide character.
It is further the case of the petitioner that several persons were arrayed as accused in the complaint, including family members of the petitioner, although they had no concern with the affairs of the company. According to the petitioner, the fact that cognizance was ultimately taken only against the petitioner itself demonstrates that the allegations against the other accused persons were exaggerated and that the complaint was instituted with an ulterior motive.
The supplementary affidavit brought on record by the petitioner also refers to the subsequent stage of the complaint proceeding, including recording of evidence before charge and the filing of an application under Section 245 of the Code of Criminal Procedure. The petitioner has relied upon such subsequent developments to contend that the criminal proceeding ought not to be permitted to continue.
Learned counsel appearing for the petitioner submits that the impugned order has been passed in a mechanical manner and without proper application of judicial mind. It is submitted that the essential ingredients of either criminal breach of trust or cheating are not disclosed from the complaint and that continuation of the proceeding would amount to an abuse of the process of the Court.
Learned counsel further submits that there is no specific material to establish dishonest intention on the part of the petitioner. It is argued that the allegations are essentially based upon an internal dispute concerning the functioning of the company and the alleged liability of different employees and officers.
Learned counsel for the petitioner has placed reliance upon S.N. Vijayalakshmi and Ors. v. State of Karnataka and Anr. [2025 SCC OnLine SC 1575] to contend that criminal proceedings cannot be permitted to continue merely because allegations are couched in the language of criminal law, unless the basic ingredients of the offence are disclosed. It would also be apposite to reproduce the relevant paragraph nos.37, 38 and 42 of S.N. Vijayalakshmi Case (supra) which reads as under:-
“37.Purely from a legal lens, it is now settled that the same person cannot be simultaneously charged for offences punishable under Sections 406 and 420 of the IPC with regard to one particular transaction, as per the decision rendered in Delhi Race Club (1940) Limited (supra). In this regard, reference may also be made to a subsequent decision by us in V D Raveesha v. State of Karnataka, 2024 INSC 1060 (penned by Ahsanuddin Amanullah, J.), which noticed the exposition in Delhi Race Club (1940) Limited (supra). In V D Raveesha (supra), the distinction between Sections 406 and 420 of the IPC was duly taken note of, but charges under Sections 406 and 420 of the IPC against the same person were upheld, not being part of a single transaction and committed against different persons. The relevant passage from V D Raveesha (supra) reads thus: ‘21. Though, having regard to the afore-enumerated position of law, on an overall conspectus of the factual aspects juxtaposed with the evidence on record, as regards fulfilment of the ingredients of Sections 406 and 420 of the IPC, at first sight, it may appear that the petitioner cannot be convicted both under Sections 406 and 420 of the IPC, but, in the present case, on a proper consideration of the issue in its entirety, there is a fine distinction inasmuch as, there are two different persons against whom the petitioner has committed the respective offences under the Sections supra : first, the Company and second, Mallikarjuna (PW4 and husband of purchaser Savithramma). Thus, in the facts and circumstances of the present case, evidently the petitioner is guilty of offence committed against the Company punishable under Section 406 of the IPC and also, of offence committed against Mallikarjuna (PW4 and husband of purchaser Savithramma) punishable under Section 420 of the IPC.’
38.Section 406 deals with punishment for criminal breach of trust, which itself has been defined under Section 405 of the IPC. Section 420 of the IPC deals with cheating and dishonestly inducing delivery of property, the substantive offence of cheating has been defined in Section 415 of the IPC. We now apply the ingredients to the factual position.
42.Coming to the second question i.e., whether civil and criminal proceedings both can be maintained on the very same set of allegations qua the same person(s), the answer stricto sensu, is that there is no bar to simultaneous civil and criminal proceedings. If the element of criminality is there, a civil case can co-exist with a criminal case on the same facts. The fact that a civil remedy has already been availed of by a complainant, ipso facto, is not sufficient ground to quash an FIR, as pointed out, inter alia, in P Swaroopa Rani v. M Hari Narayana, (2008) 5 SCC 765 and Syed Aksari Hadi Ali Augustine Imam v. State (Delhi Admn.), (2009) 5 SCC 528. The obvious caveat being that the allegations, even if having a civil flavour to them, must prima facie disclose an overwhelming element of criminality. In the absence of the element of criminality, if both civil and criminal cases are allowed to continue, it will definitely amount to abuse of the process of the Court, which the Courts have always tried to prevent by putting a stop to any such criminal proceeding, where civil proceedings have already been instituted with regard to the same issue, and the element of criminality is absent. If such element is absent, the prosecution in question would have to be quashed. In this connection, Paramjeet Batra v. State of Uttarakhand, (2013) 11 SCC 673 can be referred to:
‘12. … 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 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 the criminal proceedings to prevent abuse of process of the court.”
Reliance has also been placed upon Arshad Neyaz Khan v. State of Jharkhand and Anr. [2025 SCC OnLine SC 2058], in support of the submission that the High Court, while exercising jurisdiction for quashing, is required to examine whether the allegations, taken at their face value, disclose the necessary ingredients of the offences alleged and whether the continuation of the prosecution would amount to an abuse of the process of the Court. It would also be appropriate to reproduce the paragraph no.21 of Arshad Neyaz Khan Case (supra), which reads as under:-
“21.Furthermore, it is pertinent to mention that if it is the case of the complainant/respondent No. 2 that the offence of criminal breach of trust as defined under Section 405 IPC, punishable under Section 406 IPC, is committed by the accused, then in the same breath it cannot be said that the accused has also committed the offence of cheating as defined in Section 415, punishable under Section 420 IPC. This Court in Delhi Race Club (1940) Limited v. State of Uttar Pradesh, (2024) 10 SCC 690 observed that there is a distinction between criminal breach of trust and cheating. For cheating, criminal intention is necessary at the time of making false or misleading representation i.e. since inception. In criminal breach of trust, mere proof of entrustment is sufficient. Thus, in case of criminal breach of trust, the offender is lawfully entrusted with the property, and he dishonestly misappropriates the same. Whereas, in case of cheating, the offender fraudulently or dishonestly induces a person by deceiving him to deliver a property. In such a situation, both offences cannot co-exist simultaneously. Consequently, the complaint cannot contain both the offences that are independent and distinct. The said offences cannot co-exist simultaneously in the same set of facts as they are antithetical to each other.”
It is further submitted that the ingredients of Sections 406 and 420 of the Indian Penal Code are distinct and that the allegations, as made, do not establish the foundational requirements of entrustment and dishonest misappropriation, nor do they disclose fraudulent or dishonest intention at the inception.
Learned counsel for the petitioner further submits that the circumstances in which the present complaint came to be instituted assume significance in view of the fact that the petitioner had already set the criminal law in motion against three persons, namely, Abhishek Mishra, Hemlal Mahto and Santu Patel, by lodging P.S. Case No. 199 of 2018, the First Information Report whereof has been brought on record as Annexure-3 to the present application.
It is submitted that the aforesaid three persons are themselves witnesses in the present complaint instituted against the petitioner. Learned counsel submits that the petitioner had made allegations against the said persons prior in point of time and had already lodged the aforesaid FIR against them. It is, therefore, contended that the subsequent prosecution of the petitioner, in which the very persons against whom she had earlier lodged the FIR have figured as witnesses, cannot be viewed in isolation and furnishes a relevant circumstance supporting the petitioner's plea that the present proceeding has been initiated as a counterblast and with an ulterior motive to pressurise the petitioner.
Learned counsel further submits that, apart from the aforesaid circumstance, the petitioner had specifically alleged that owing to the financial liability sought to be fastened upon her, she was subjected to pressure and was compelled to have an illicit sexual relationship with Abhishek Mishra, who, according to the petitioner, was her reporting boss in the company. It is submitted that the petitioner had thereafter lodged P.S. Case No. 199 of 2018 against Abhishek Mishra, Hemlal Mahto and Santu Patel, and that the fact that these very persons subsequently figure as witnesses in the complaint against the petitioner is a circumstance which lends substantial support to her plea of retaliatory prosecution.
It is also submitted that the present complaint was subsequently instituted to create pressure upon the petitioner and to protect the company and its officers from the consequences of the earlier allegations made by the petitioner.
Per contra, learned counsel appearing for the opposite party no. 2 submits that the prayer made by the petitioner requires this Court to enter into disputed questions of fact and to accept the defence of the accused at the threshold. It is submitted that such an exercise is impermissible while considering a petition for quashing.
Learned counsel submits that the complaint specifically alleges that the petitioner, while acting in connection with the affairs of the company and dealing with customers, received money which was required to be accounted for and deposited. The further allegation is that, upon inquiry, the petitioner admitted receipt of a substantial amount and undertook to return the same in installments.
Learned counsel for the opposite party no. 2 has referred to Vishwa Mitter v. O.P. Poddar and Ors. [(1983) 4 SCC 701], to support the submission that, unless a statutory provision prescribes otherwise, criminal law may be set in motion by a person placing before the competent court facts constituting an offence. It would also be apposite to reproduce the paragraph no.5 of Vishwa Mitter Case (supra), which reads as under:-
“5.It is thus crystal clear that anyone can set the criminal law in motion by filing a complaint of facts constituting an offence before a Magistrate entitled to take cognizance under Section 190 and unless any statutory provision prescribes any special qualification or eligibility criteria for putting the criminal law in motion, no court can decline to take cognizance on the sole ground that the complainant was not competent to file the complaint. Section 190 of the Code of Criminal Procedure clearly indicates that the qualification of the complainant to file a complaint is not relevant. But where any special statute prescribes offences and makes any special provision for taking cognizance of such offences under the statute, the complainant requesting the Magistrate to take cognizance of the offence must satisfy the eligibility criterion prescribed by the statute. Even with regard to offences under the Penal Code, 1860, ordinarily, anyone can set the criminal law in motion but the various provisions in Chapter XIV prescribe the qualification of the complainant which would enable him or her to file a complaint in respect of specified offences and no court can take cognizance of such offence unless the complainant satisfies the eligibility criterion, but in the absence of any such specification, no court can throw out the complaint or decline to take the cognizance on the sole ground that the complainant was not competent to file the complaint.”
Learned counsel further submits that the subsequent developments relied upon by the petitioner cannot retrospectively render the cognizance order illegal. The legality of the order has to be tested primarily with reference to the complaint and the material available to the Magistrate at the relevant stage.
It is further submitted by learned counsel for O.P No. 2 that upon facial perusal of Tilka Manjhi P.S. Case No. 199/2018, by petitioner, it can be gathered safely that same was lodged only when petitioner was asked to deposit defalcated amount with company. It also failed to explain that why petitioner was given Rs. 2,38,000(Two lakh thirty eight thousand) by co-accused Abhishek Mishra to deposit with bank account of the company, when loan was advanced by co-accused Hemlal Mahto in his personal capacity.
Having heard the parties and upon perusal of the materials available on record, this Court finds that the controversy raised in the present application lies within a narrow compass.
The jurisdiction of this Court to prevent abuse of the process of any Court and to secure the ends of justice is undoubtedly wide. At the same time, the width of the jurisdiction is not a warrant for substituting a proceeding for quashing with a full-fledged adjudication of the defence of the accused.
Where the allegations, even if accepted in their entirety, do not disclose the commission of any offence, interference would be justified. Equally, where the proceeding is manifestly attended with mala fide and continuation of the prosecution would amount to abuse of the process of the Court, the High Court is not powerless to interfere. At the same time, the inherent jurisdiction is not intended to enable the Court to weigh the reliability of rival versions, determine the truthfulness of a defence or undertake a mini-trial.
The Constitution guarantees that no person shall be deprived of personal liberty except according to procedure established by law. The protection of personal liberty under Article 21 necessarily requires that criminal law cannot be permitted to operate arbitrarily or oppressively. However, the constitutional guarantee of fairness does not justify termination of a prosecution which, on its face, discloses a prima-facie offence merely because the accused has placed a competing factual version before the Court.
The presumption of innocence and the right to a fair trial are cardinal principles of criminal jurisprudence. They protect the accused against conviction except upon proof in accordance with law. They do not, however, authorise the High Court to accept the defence as established and to terminate proceedings where the prosecution allegations require adjudication upon evidence.
The constitutional requirement of fair procedure therefore requires a balance between protection against an unjustified prosecution and the requirement that a prima facie criminal accusation should not be terminated by a premature judicial evaluation of disputed evidence.
In State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335, the Supreme Court illustrated the categories in which the extraordinary jurisdiction may be exercised. The categories are not exhaustive and were never intended to authorise the High Court to conduct a meticulous examination of evidence.
The principles of judicial restraint at the threshold have also been reiterated in Neeharika Infrastructure Pvt. Ltd. v. State of Maharashtra, (2021) 19 SCC 401. Disputed questions of fact are ordinarily not to be adjudicated in proceedings seeking quashing.
The defence of the petitioner substantially proceeds on the assertion that she was only a Marketing Executive; that she had no responsibility in relation to registration or completion of the customers' transactions; that all money received by her was handed over to the company; and that the present complaint is a counterblast to earlier litigation.
These submissions cannot be rejected as irrelevant. However, relevance of a defence is entirely different from its conclusiveness at the stage of quashing.
The complaint, on the other hand, proceeds on the allegation that the petitioner received money from customers in connection with the affairs of the company and that such amounts were not properly accounted for. The further allegation regarding admission of receipt of a substantial amount and an undertaking to return the same is also part of the prosecution case.
Whether such admission was in fact made, whether the alleged amounts were actually received by the petitioner, whether they were deposited or handed over to the company, and whether the petitioner acted dishonestly are questions which cannot be answered by accepting the petitioner's explanation as established truth.
The petitioner has emphasised the absence of independent customer support. The adequacy, credibility and ultimate evidentiary worth of the prosecution material are matters for adjudication by the competent court in accordance with law.
The circumstance that cognizance was not taken against every person named in the complaint does not automatically lead to the conclusion that the allegation against the present petitioner must also fail. The role attributed to each accused is required to be independently considered.
The existence of a prior dispute may provide material for a defence regarding motive, but motive for institution of a complaint and the existence of a prima facie offence are not identical questions.
The petitioner has relied upon S.N. Vijayalakshmi Case (supra) and Arshad Neyaz Khan case (supra). The principle emerging from the authorities relied upon by the petitioner is that criminal proceedings cannot be sustained merely by giving a civil or private dispute the colour of criminality and that the foundational ingredients of the offence must be disclosed. The same principles, however, require examination of the allegations as they stand and do not permit acceptance of a disputed defence at the threshold.
This Court has also considered the specific submission advanced on behalf of the petitioner regarding the previous institution of P.S. Case No. 199 of 2018, in which Abhishek Mishra, Hemlal Mahto and Santu Patel have been arrayed as accused and which, according to the petitioner, was lodged prior to the present proceeding. The First Information Report relating to the said case has been brought on record as Annexure-3. It is further the specific case of the petitioner that the aforesaid three persons are witnesses in the present complaint instituted against her.
The aforesaid circumstance cannot be said to be wholly irrelevant. The fact that the petitioner had already instituted a criminal case against persons who subsequently figure as witnesses in the complaint against her is certainly a circumstance which may be relied upon by the petitioner in support of her plea that the present proceeding is retaliatory in nature. The Court is also conscious of the petitioner's allegation that she had been subjected to pressure on account of the financial liability attributed to her and that she was allegedly compelled to have an illicit sexual relationship with Abhishek Mishra, stated to be her reporting boss in the company.
However, the question whether the aforesaid circumstances, individually or cumulatively, establish that the present complaint was instituted as a counterblast is essentially a question of fact. The mere existence of a previous FIR lodged by the petitioner against persons who are witnesses in the present case, though a relevant circumstance, cannot by itself lead this Court to conclude, at the stage of quashing, that the allegations forming the basis of the present prosecution are false or that the cognizance taken by the learned Magistrate is wholly without jurisdiction.
Equally, this Court cannot, at this stage, enter into the truth or otherwise of the allegation made by the petitioner regarding the alleged conduct of Abhishek Mishra. Such an allegation is undoubtedly serious, but its truth, the circumstances in which the alleged conduct took place, the effect thereof upon the petitioner and its connection, if any, with the financial allegations forming the subject matter of the present complaint are matters which would require appreciation of evidence. This Court, while exercising jurisdiction for quashing, cannot undertake such an exercise or record a finding on disputed questions of fact.
It is accordingly held that, although the aforesaid circumstances constitute a relevant part of the defence of the petitioner and may assume significance at the appropriate stage of the criminal proceeding, this Court is unable to hold, solely on the basis thereof, that the present prosecution is so manifestly mala fide or inherently improbable that its continuation would amount to an abuse of the process of the Court. The petitioner shall, however, remain at liberty to place on record and rely upon the FIR in P.S. Case No. 199 of 2018 and all other permissible materials before the learned court below in accordance with law.
It is clarified that this Court has not expressed any opinion regarding the truthfulness of the allegations contained in P.S. Case No. 199 of 2018, the culpability of Abhishek Mishra, Hemlal Mahto or Santu Patel, or the allegation made by the petitioner concerning Abhishek Mishra. Likewise, no finding is being recorded as to whether the said FIR was the actual cause or motive for institution of the present complaint. These matters are left open for consideration by the competent forum in accordance with law.
At this stage, this Court is unable to hold that the allegations regarding receipt of money in the course of the petitioner's dealings with customers, failure to account for the same and the alleged subsequent admission and undertaking are so inherently improbable or devoid of factual foundation that no offence whatsoever can be said to be disclosed.
The precise nature of entrustment, the circumstances in which the money was received, the capacity in which it was retained, the existence or otherwise of dishonest intention and the alleged inducement are matters which emerge from the factual matrix and may require appreciation of evidence.
In Vishwa Mitter Case (supra), the Supreme Court explained that, in the absence of a statutory restriction, a person can set the criminal law in motion by placing before the competent court facts constituting an offence. The emphasis is upon the disclosure of facts constituting the offence, and not upon a preliminary adjudication of whether the complainant would ultimately succeed in proving every allegation.
The absence of a civil proceeding for recovery of the alleged amount also cannot be treated as determinative. Civil remedies and criminal proceedings operate in distinct fields, and the absence of a civil action cannot, by itself, erase allegations which otherwise disclose a prima facie criminal offence.
The impugned order is assailed as mechanical. An order taking cognizance is not required to contain an elaborate judgment evaluating every conceivable defence of the accused. The requirement is that the order should reflect application of judicial mind to the material placed before the Magistrate.
In the present case, cognizance was not taken against all the persons named in the complaint. The learned court below found a prima facie case against the petitioner under Sections 406 and 420 of the Indian Penal Code. This circumstance, by itself, does not support the contention that every allegation was mechanically accepted.
The subsequent proceedings and the petitioner's application under Section 245 of the Code of Criminal Procedure do not furnish a ground for substituting the present jurisdiction for the remedies available before the competent court. The petitioner remains at liberty to pursue every remedy available to her in accordance with law.
This Court has not expressed any opinion on the ultimate guilt or innocence of the petitioner. All observations are confined to the limited question whether the impugned cognizance order and the criminal proceeding warrant interference at this stage.
Upon an overall consideration of the allegations, the nature of the defence raised by the petitioner and the settled limits of jurisdiction for quashing, this Court is of the considered view that the present case does not fall within the exceptional categories warranting interference.
The petitioner seeks, in substance, an adjudication that the money was never misappropriated by her, that all amounts received were handed over to the company and that the present complaint is retaliatory. These are matters of defence and disputed facts which cannot appropriately be decided in the present proceeding.
The extraordinary jurisdiction of this Court exists to prevent miscarriage of justice, but it cannot be exercised to pre-empt the ordinary criminal process whenever the accused places before the Court a plausible competing version of the facts.
Accordingly, this Court does not find any good ground to interfere with the order dated 27.06.2018 passed in Complaint Case No. 785 of 2018 by the learned Chief Judicial Magistrate, Bhagalpur.
The present application, accordingly, stands dismissed.
It is, however, made clear that the petitioner shall be at liberty to raise all permissible factual and legal pleas before the learned court below at the appropriate stage. The learned court below shall consider the matter independently and strictly in accordance with law, without being influenced by any observation made in the present judgment, which is confined only to the prayer for quashing of cognizance order.
Any pending interlocutory application shall also stand disposed of.
Let the records, if called for, be transmitted to the learned trial court forthwith.