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Judgment
Date : 10-08-2026 Heard learned counsel for petitioners and learned APP for the State duly assisted by learned counsel appearing for the complainant/O.P. No.2.
The present application has been filed on behalf of the petitioners for quashing of the order dated 28.09.2016 as passed by learned J.M.-1st Class, Bihar Sharif at Nalanda in Complaint Case No.849 C of 2016, whereby the learned Magistrate has taken cognizance for the offences punishable under Section 406 of the Indian Penal Code (in short ‘IPC’) against the petitioners.
The prosecution case as per complainant/O.P. No.2 is that his firm was appointed as the authorized dealer of Swaraj Tractors in the year 2007 for the entire Nalanda district. He had opened bank account for the purpose of dealership business. It was further alleged that he continued the business with about 11% market share in tractor business, however, the accused persons allegedly demanded Rs.5,00,000/- by way of rangdari and also threatened to terminate his dealership. It was also alleged that the petitioner no.1 by letter dated 24.12.2013 separated Hilsa Sub Division from his dealership and also increased the target to 16 % of market share. On 05.03.2016, the petitioners alleged to appoint another person as dealer without giving any information to the O.P. No.2. They also allegedly encashed bank guarantee of Rs.20,98,000/- without settlement of accounts. The O.P. No.2 claimed that out of total incentives amount of Rs.8,00,000/-, he was paid a sum of Rs.1,60,000/-only. It was also alleged that upon the instruction of the petitioners, he sold tractors worth Rs.1,50,00,000/- to different purchasers on credit and the petitioners were responsible to recover the said amount from them. It was also alleged that spare parts worth Rs.15,00,000/- was also lying with him, which could not be returned back due to fraudulent intention of the petitioners. Thereafter, the O.P. No.2 sent a legal notice to the petitioners in this regard but, a reply allegedly containing incorrect statement was sent by them. It was further alleged that the accused persons intended to misappropriate the amount of incentive and cause loss to him by not taking back the spare parts.
It is submitted by learned counsel appearing for petitioners that the complaint filed by complainant/O.P. No.2 cannot be accepted true on its face for the reasons that the averment qua allegation as raised through complaint petition not appears supporting by the affidavit and, therefore, same is contrary to the legal ratio as settled by Hon’ble Supreme Court through Priyanka Srivastava v. State of Uttar Pradesh [(2015) 6 SCC 287].
It is further argued that the entire allegation is available against the company i.e. M/s. Mahindra & Mahindra Ltd. (hereinafter referred to as ‘the Company’) but, it was not arrayed as an accused and, therefore, due to non-implication of the company, the cognizance order is also bad in eyes of law. In support of this submission, learned counsel has also relied upon the legal report of Hon’ble Supreme Court as available through Manjula Kapoor vs. the State of Himachal Pradesh and Anrs. [ 2026 Livelaw (SC) 763].
It is also pointed out that the bank guarantee as alleged to be deposited by O.P. No.2 was with company and it was the Company, who encashed the bank guarantee of Rs.20,98,000/- for which, these petitioners cannot be held responsible in their private capacity being the office bearers of the Company.
On the other hand, Mr. Raju Giri, learned senior counsel appearing for complainant/O.P. No.2 submitted that these petitioners have entered into agreement with O.P. No.2 on behalf of the Company and they collectively concealed the original agreement executed between the parties, in absence of which, it was not acted upon by O.P. No.2. It is submitted that due to fault of the petitioners, the agreement was not complied in its true spirit. It is submitted that without giving any opportunity of hearing encashing the bank guarantee straightway was unjustified on behalf of the Company. However, learned senior counsel conceded that the Company was not arrayed as an accused in this case.
In view of aforesaid factual submissions and by taking note of fact as the complaint in issue not appears to be filed with supporting affidavit contrary to Priyanka Srivastava’s case (supra) and also the company i.e. M/s. Mahindra and Mahindra Ltd. not appears impleaded as an accused in this case as per Manjula Kapoor’s case (supra), facing thrust of allegation, accordingly, the impugned cognizance order dated 28.09.2016 as passed by learned J.M.-1st Class, Bihar Sharif at Nalanda in Complaint Case No.849 C/2016 is hereby quashed/set aside qua all three above-named petitioners with all its consequential proceedings.
The present application stands allowed.
This quashing order has no bearing on any legal proceeding qua recovery of bank guarantee encahsed by the Company.
Let a copy of this judgment be communicated to the learned trial court forthwith.