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IN THE HIGH COURT AT CALCUTTA

CRIMINAL APPELLATE JURISDICTION

APPELLATE SIDE

Present:-

HON’BLE JUSTICE CHAITALI CHATTERJEE DAS.

CRR 4464 OF 2024

ARJUN SINGH & ORS.

VS

THE STATE OF WEST BENGAL

For the Petitioners : Mr. Arabinda Chatterjee , Sr. Adv.

Mr. Pradyat Saha, Adv.

For the Opposite Party

No. 2 : Mr. Avishekh Guha, Adv.

Mr. Subham Chatterjee, Adv.

Ms. Sonal Agarwal. Adv.

Mr. A. Dutta, Adv.

Reserved on : 22.06.2026

Judgement on : 07.08.2026

Uploaded on : 07.08.2026

CHAITALI CHATTERJEE DAS, J. :-

1. This is an application under Section 528 of BNSS, 2023 for filed by the

petitioners, for quashing the proceedings being complaint case no. 48937 of

2024 and order dated 22.7.2024, under Section 200 of the Code of Criminal

Procedure, 1973, under Section 406/411/417/418/420/422 of the Indian

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Penal Code pending before the learned chief Metropolitan Magistrate at

Calcutta.

Facts of the case

2. M/s. Global mega ventures Private Limited(GMV) is a company registered

under the Companies Act, 1956 having its registered office at Bhopal and

petitioner no. 2 is the Director of GMV company .In pursuit of development, in

a property of non-agricultural land, GMV Company in the year 2014 through

its petitioners approached the Opposite Party no. 2 for sanction loan for the

construction of the property located in the District of Bhopal, Madhya Pradesh,

as the developer of the same property. The opposite party no. 2 is a non-

banking finance company having its registered office at Mumbai. The loan

application dated 29.5.2014, for sanctioning of construction finance loan up to

INR 15,00,00,000 for the purpose of construction of GMV Ananta was

sanctioned for 10 years for a tenure of 36 months by a sanction letter dated

25.6.2014 and the loan amount of ₹12,44,82,844 was disbursed to GMV

company on 30.11.2015. The company through the petitioners made regular

EMI payments as per schedule provided by opposite party No. 2 however, due

to financial constraint faced by demonetisation, the company experienced

severe economic difficulties, leading to a shortfall in the payment of certain

EMI’s and the opposite party no. 2 issued the demand notice under section

13(2) of SARFAESI Act, 2002 dated 22.3.2018. Challenging the same an

application was filed before the Debt Recovery Tribunal, Jabbalpur Madhya

Pradesh by the petitioner and the said demand notice was withdrawn by the

opposite party no. 2 on 22.3.2018, vide affidavit dated 31.7.2019.

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3. The Tribunal disposed of the application on 17.2.2020 at the instance of the

counsel of the Opposite Party no.2 and on account of settlement arrived at

between the parties and the Opposite Party withdrew the demand draft dated

22.3.2018, along with all subsequent actions and the recovery proceeding was

dismissed. No appeal was preferred against the orde r passed by DRT.

Jabalpur. Suppressing the said fact and about the proceedings before

DRT,Jabalpur the opposite party filed a complaint under section 200 of Code

of Criminal Procedure before the learned Chief Judicial Magistrate, Calcutta on

22.3.2024 against the petitioners alleging commission of offences under the

aforesaid sections as mentioned as above.

4. The learned Magistrate took cognizance of the said complaint and transferred

the case to the court of learned Metropolitan magistrate, 11th Court, Calcutta

for further enquiry and disposal according to law. The learned Metropolitan

Magistrate, 11th Court, Calcutta vide order dated 12.6.2024, admitted the

application under Section 200 of Cr.P.C and directed to issue Summons. On

22nd of July 2024, the learned Magistrate passed an order issuing warrant of

arrest against the petitioners without affording any opportunity to the

petitioners to appear before the court. Being aggrieved thereby this revisional

has been filed.

Submissions

5. The learned Advocate representing the petitioner argued that the initiation of

the impugned proceeding is bad in law and while issuing warrant of arrest the

Learned Court did not satisfy himself regarding compliance of the provisions

laid down either Code of Civil Criminal Procedure since no cause of action

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arose within the jurisdiction of the Learned Magistrate . No reason has been

assigned while allowing the application under section 200 of the Cr.P.C and

therefore the order is liable to be set aside. It is further argued that the issue

relates to recovery of money from the petitioners, which is technically of a civil

nature, but it has given a colour of criminal content. The complaint has been

lodged when civil remedy before the Debt recovery tribunal has already been

availed and issue was resolved after arriving at a settlement and the

proceeding initiated by the complainant was dismissed in the year 2020. It is

further argued that since the petitioners paid the EMI regularly no question

of deception at the inception could arise . No ingredients to constitute offence

under Section 406 and 420 of the IPC can be inferred from any of the

averment made by Opposite Party no.2. The learned advocate relied upon a

decision of Lalit Chaturvedi and others versus State of Uttar P radesh

and Another.

1

. Accordingly, prayed for quashing of the entire proceeding.

6. On the other hand it is argued by the learne d advocate representing the

Opposite Party no. 2 that the order issuing summons was never challenged

and no prayer is made for quashing the entire proceeding. On 22.7.2024, the

order was passed issuing warrant and the petitioner cannot pray for quashing

the entire proceeding when specific prayer was made for setting aside the order

of the Learned Magistrate. It is further argued the cognizance was not taken in

accordance with law and without adhering to the procedure to be observed

where the accused res9ides outside the jurisdiction of the court and in this

regard relied upon the decision reported in Vijay Dhanuka and Others vs.

1

2024 SCC online SC 171

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Najima Mamtaj and Ors.

2

In view of the observation made by the Hon’ble

Supreme Court, the learned Magistrate held enquiry as the complainant was

examined during S/A and hence no infirmities can be found in the said order.

Moreover the order taking cognizance or issuing summons were never

challenged but since they failed to turn up the Learned Magistrate passed the

order issuing warrant. It is further submitted that further the petitioners never

intended to pay despite demand notice and therefore the complaint had to be

lodged. Therefore the matter should be returned to the magistrate for

considering the procedural corrections if found by the court.

Analysis

7. Heard the submissions of both the learned advocates and perused the

materials on record.

8. In the case of Vijay Dhanuka and others versus Najima Mamtaj and

others (Supra), two questions arose for consideration before the Hon’ble

Supreme Court, which are, i) in case in which the accused is residing at a

place beyond the area in which the Magistrate exercises his jurisdiction,

whether it would be mandatory to hold enquiry or investigation as he thinks fit

for the purpose of deciding whether or not, there is sufficient ground for

proceeding? 2) whether Magistrate before issuing summons has hel d the

enquiry as mandated under Section 202 Cr.P.C.

9. Section 200 of the Code inter alia provides for examination of complainant on

oath and the witnesses present , if any which reads as follows:-

“Section 200. Examination of complainant - A

Magistrate taking cognizance of an offence on

complaint shall examine upon oath the complainant

2

(2014) 14 SCC 638

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and the witnesses present, if any, and the substance

of such examination shall be reduced to writing and

shall be signed by the co mplainant and the

witnesses, and also by the Magistrate:

Provided that, when the complaint is made in writing,

the Magistrate need not examine the complainant and

the witnesses--

(a) if a public servant acting or purporting to act in the

discharge of his official duties or a Court has made

the complaint; or

(b) if the Magistrate makes over the case for inquiry or

trial to another Magistrate under section 192:

Provided further that if the Magistrate makes over the

case to another Magistrate under section 192 after

examining the complainant and the witnesses, the

latter Magistrate need not re-examine them.”

10. In Vijay Dhanuka (supra) it was held that in case in which the accused is

residing beyond the territorial jurisdiction of the Magistrate whether it would

be mandatory for the Magistrate to hold inquiry or the investigation as he

thinks fit for the purpose of deciding whether or not there is sufficient ground

for proceeding. The Hon’ble Supreme Court discussed the provision under

Section 202 of Cr.P.C and held that the use of the expression ‘shall’ and the

background and the purpose for which the amendment was made with effect

from 23.06.2006, there is no doubt that inquiry of the investigation as the case

may be, is mandatory before summons are issued against the accused living

beyond the territorial jurisdiction of the Magistrate. At the same time it was

held as in paragraph 14 of Vijay Dhanuka(Supra) that-

“In view of our answer to the aforesaid question, the

next question which falls for our determination is

whether the learned Magistrate before issuing

summons has held the inquiry as mandated under

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Section 202 of the Code. The word “inquiry” has been

defined under Section 2(g) of the Code, the same

reads as follows:

“2.(g)inquiry” means every inquiry, other than a trial,

conducted under this Code by a Magistrate or Court”;

It is evident from the aforesaid provision, every

inquiry other than a trial conducted by the Magistrate

or Court is an inquiry. No specific mode or manner of

inquiry is provided under Section 202 of the Code. In

the inquiry envisaged under Section 202 of the Code,

the witnesses are examined whereas under Section

200 of the Code, examination of the complainant only

is necessary with the option of examining the

witnesses present, if any.This exercise by the

Magistrate, for the purpose of deciding whether or not

there is sufficient ground for proceeding against the

accused, is nothing but an inquiry envisaged under

Section 202 of the Code.”

11. In the instant case since the complainant as well as another witness was

examined there remains no doubt that the enquiry as envisaged under Section

202 of the Code was held by the Learned Magistrate but the question arises

how far the Learned Magistrate was justified in issuing summons or about the

prima facie existence of materials to issue the summon or any reflection if any

can be found in his order or not when it is glaringly visible that no part of the

cause of action arose within the jurisdiction of the Learned Magistrate ,the

complaint company had no privity of contract with the petitioners and the

alleged loan agreement was executed with Reliance Home Finance with the

present petitioners and both the parties had their respective place of business

either at Mumbai or at Bhopal, Madhya Pradesh .

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12. Therefore from the above facts and circumstances and on close scrutiny of

the complaint lodged under Section 200 and the order passed on 26

th

April,

2024 there remains no rooms left than to hold that the Leaned Magistrate

failed to apply his judicial mind while making the enquiry . In addition the

Learned Magistrate further failed to ascertain sufficiency of ingredients to

constitute the offences under Section 406,420 of IPC or even it is a fit case for

issuing process.

In the decision of Delhi Race Club (1940) Ltd. & Ors. Vs State of Uttar

Pradesh & Anr. (Supra) the Hon’ble Supreme Court discussed the

differences of criminal breach of trust and cheating and took reference of the

case of S.W Palantikar & ors vs State of Bihar where it was held ;

24. This Court in its decision in S.W. Palanitkar &

Ors. v. State of Bihar & Anr. reported in (2002) 1 SCC

241 expounded the difference in the ingredients

required for constituting an of offence of criminal

breach of trust (Section 406 IPC) viz-a-viz the offence

of cheating (Section 420). The relevant observations

read as under: -

“9. The ingredients in order to constitute a criminal

breach of trust are: (i) entrusting a person with

property or with any dominion over property, (ii) that

person entrusted (a) dishonestly misappropriating or

converting that property to his own use; or (sb)

dishonestly using or disposing of that property or

wilfully suffering any other person so to do in

violation (i) of any direction of law prescribing the

mode in which such trust is to be discharged, (ii) of

any legal contract made, touching the discharge of

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such trust. 10. The ingredients of an offence of

cheating are: (i) there should be fraudulent or

dishonest inducement of a person by deceiving him,

(ii)(a) the person so deceived should be induced to

deliver any property to any person, or to consent that

any person shall retain any property; or (b) the person

so deceived should be intentionally induced to do or

omit to do anything which he would not do or omit if

he were not so deceived; and (iii) in cases covered by

(ii)(b), the act of Criminal Appeal No. 3114 of 2024

Page 21 of 31 omission should be one which causes

or is likely to cause damage or harm to the person

induced in body, mind, reputation or property.”

It was further held in paragraph 25 that ;

“ 25. What can be discerned from the above is

that the offences of criminal breach of trust (Section

406 IPC) and cheating (Section 420 IPC) have specific

ingredients.

In order to constitute a criminal breach of trust

(Section 406 IPC): -

1) There must be entrustment with person for

property or dominion over the property, and

2) The person entrusted: - a) dishonestly

misappropriated or converted property to his own use,

or

b) dishonestly used or disposed of the property or

willfully suffers any other person so to do in violation

of: i. any direction of law prescribing the method in

which the trust is discharged; or ii. legal contract

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touching the discharge of trust (see: S.W.P. Palanitkar

(supra).

Similarly, in respect of an offence under Section

420 IPC, the essential ingredients are: - 1) deception

of any person, either by making a false or misleading

representation or by other action or by omission; 2)

fraudulently or dishonestly inducing any person to

deliver any property, or 3) the consent that any

persons shall retain any property and finally

intentionally inducing that person to do or omit to do

anything which he would not do or omit (see:

Harmanpreet Singh Ahluwalia v. State of Punjab,

(2009) 7 SCC 712 : (2009) Cr.L.J. 3462 (SC))”

13. After the decision of Delhi Race Club (1940) Ltd. Vs. State of UP and

Anr.

3

there is plethora of decision that both the allegations of 406 /420 of

Indian Penal Code against same accused cannot go simultaneously but the

Learned Magistrate passed the order issuing summons against the petitioners

under Section 406 and 420 IPC.

14. In the said case of Lalit Chaturvedi (supra) the charge-sheet was submitted

under Section 420 and 406 of the Indian Penal code. The allegations was

regarding purchase of woods, waste and there was non -payment and

outstanding due amount of Rs. 1,92,91,358 which was not paid and the

complaint was lodged against the accused persons. The Hon’ble Supreme

Court held in paragraph 5 which is as follows:-

3

2026 INSC 626

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“5” This court ,in a number of judgements has

pointed out the clear distinction between a civil

wrong in the form of breach of contract, non-payment

of money or disregard to an violation of the

contractual terms ; and criminal offence under

Sections 420 and 406 of the IPC. Repeated

judgements of this court, however, are somehow over

looked and are not being applied and enforced. We

will be referring to these judgements. The impugned

judgement dismisses the application filed by the

appellants under Section 482 of Cr.P.C on the ground

of delay /laches and also the factum that the charge

sheet had been filed on 12.12.19 this ground and

reason is also not valid.”

15. The Hon’ble Supreme Court further took note of the case of Md. Ibrahim Vs.

State of Bihar

4

where the ingredients of the offence of cheating were

discussed. Similarly took note of V. Y. Jose Vs. State of Gujarat

5

and held:-

“which explicitly states that a contractual dispute of

breach of contract per se should not lead to initiation

of a criminal proceeding. The ingredient of cheating

as defined under Section 415 of the IPC is promise or

representation thereof, from the very beginning of the

formation of contract. Further in the absence of the

averments made in the complaint petition where from

the ingredients of the offence can be found out, the

High Court should not hesitate to exercise its

jurisdiction under Section 482 of Cr.P.C.”

4

(2009) 8 SCC 751

5

(2009) 3 SCC 78

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16. The factual matrix unveils in this case that the complaint was filed under

Section 200 of the Code of Criminal Procedure by Reliance Commercial

Finance limited against the accused persons out of whom petitioner no 1 was a

co-borrower and petitioner no. 2 was the Director of borrower company and

the other two are the wife and son of petitioner no 2 .On perusal of the said

complaint prima facie execution of a loan agreement dated June 30, 2014

between the abovenamed petitioners with Reliance Home Finance Ltd. are

found to be admitted .The said Reliance Home Finance had its registered office

at Mumbai and a Branch office at Bhopal, Madhya Pradesh .The office of

Global Mega Venture was at Bhopal and all the petitioners are residents of

Bhopal .Primarily it appears that the agreement was executed at Bhopal .The

Complainant Company is having its registered office at Park street but

apparently no agreement was executed with the said company. The record

reveals that a Debt Recovery proceeding was initiated against the petitioners

by said Reliance Home Finance in the year 2019 and on the basis of an

application filed on behalf of the authorised agent of Reliance Home Finance

to withdraw the said proceeding, by an order dated 17.2.2020 the proceeding

was dismissed .The written complaint is bereft of any of the said fact rather

averred that the petitioner was entrusted with huge sum of money of Rs

124482844/-.

17. The opposite party did not file any Affidavit in opposition challenging such

fact of withdrawal of the proceeding at DRT,Jabalpur despite receiving the

copy of this revisional application. The complaint further disclosed that

pursuant to the resolution plan of RHFL by its lenders and in terms of the

circular of RBI, RHFL has entered into the agreement to transfer its business

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by way of sale on a going concern basis ,to Reliance Commercial Finance Ltd.

In the written complaint nothing is found mentioned that subsequently this

complaint company developed any further business relation or at all any

intimation was given after the change of the company. In the decision of Vijay

Kumar Kela & Anr. Vs CBI

6

it was observed and held by the Hon’ble

Supreme Court that dispute arises out of Banking transaction are commercial

transactions having overwhelmingly or predominantly elements of civil

disputes . More so where the settlement is arrived of the loan account before

DRT and if the Bank is allowed to proceed with the criminal prosecution after

such settlement, it would adversely impact the sanctity of the settlement which

has become the part of the judicial forum like DRT.

18. On taking overall factors the complainant company appears to be an alien

in the entire transaction to lodge the complaint against the petitioners after the

order of Debt Recovery Tribunal dismissing the proceeding on arrival of

settlement of the dispute between the petitioners and the Reliance Home

Finance Company .The Learned Magistrate without considering the above

factors mechanically issued the summon s against the petitioners for

committing offence under Section 406 and 420 IPC which has no sanctity in

the eye of law.

19. It is settled proposition of law that the power of High Court in quashing a

criminal proceeding or FIR or Complaint in exercise of its inherent jurisdiction

under Section 482 Cr.P.C is distinct and different and is of wide plenitude

with no statutory limitation but to be exercised in accordance with the

guidelines engrafted in such power like to prevent abuse of the process of the

6

2026 INSC 588

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court or to secure the end of justice. It is further settled that criminal cases

having overwhelmingly and predominantly civil flavour stands on a different

footing for the purpose of quashing particularly the offences arising from

commercial, financial, mercantile ,civil ,partnership etc.

20. When on the face of the complaint itself ,it is evident that the dispute

essentially pertains to a loan transaction ,in respect of which some part of the

loan amount has already been repaid and the complaint is bereft of the

essential ingredients necessary to constitute offences under sections 406 or

420 IPC, continuation of the criminal proceedings would be wholly

unwarranted .This is particularly situation where proceedings under the

SARFASEI Act had been initiated by the company which had sanctioned the

loan and same were withdrawn at the instance of the said company; where

there is no privity of contract whatsoever between the present complainant

company and the petitioners ; and where the order passed by the of DRT,

Jabalpur has attained finality . In such circumstances, there remains no

justifiable basis for permitting the criminal proceedings to continue against the

petitioners .Allowing such proceedings to continue would amount to nothing

but gross abuse of process of law and the criminal justice system.

Conclusion

21. Hence this CRR being 4464 OF 2024 is hereby allowed. All connected

applications are hereby disposed of.

22. The entire proceedings pending before the learned chief Metropolitan

Magistrate at Calcutta are here by quashed against the petitioners and all

orders passed in that proceedings are set aside.

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23. Urgent certified copy Urgent of the order if applied for be provided to the

parties upon observance of all necessary requirements.

[CHAITALI CHATTERJEE (DAS), J.]