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CGHC010440282025 2026:CGHC:35946-DB

NAFR

HIGH COURT OF CHHATTISGARH AT BILASPUR

WPCR No. 539 of 2025

1 - Kirti Ahluwalia W/o Shri Parvinder Ahluwalia Aged About 43 Years

Proprietor Of K.S. Enterprises, R/o House No. 5, Jal Vihar Colony,

Ward No. 42, Raipur (C.G.)

2 - Jasbir Ahluwalia S/o Kishan Dave Ahluwalia Aged About 53 Years

Proprietor Of R.R. Enterprises, R/o House No. 5, Jal Vihar Colony,

Ward No. 42, Raipur (C.G.)

--- Petitioners

Versus

1 - State of Chhattisgarh Through The Station House Officer, Police

Station Civil Lines, Raipur, District Raipur (C.G.)

2 - Santosh Rai S/o Late Jagdev Rai Aged About 59 Years Authorized

Signatory Of S.G. Mart Ltd. Having Office At Land Bearing Sr No. 4/1,

4/2, 3/1, 3/1, 3/3 Vpo Dhaneli, Nimora, Raipur (C.G.)

--- Respondents

WPCR No. 580 of 2025

1 - Smt. Sharda Agrawal S/o Late Satyanarayan Agrawal Aged About

68 Years R/o Budhwari Bazar Road, Sakti, District : Sakti, Chhattisgarh

2 - Surendra Agrawal S/o Late Satyanarayan Agrawal Aged About 48

Years Police And Tahsil- Sakti, District : Sakti, Chhattisgarh

---Petitioners

Versus

1 - State of Chhattisgarh Through The Station House Officer, Police

Station Civil Lines, Raipur, District : Raipur, Chhattisgarh

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2 - Santosh Rai S/o Late Jagdev Rai Aged About 59 Years Authorized

Signatory Of S.G. Mart Ltd. Having Office At Land Bearing Sr. No. 4/1,

4/2, 3/1, 3/1, 3/3 V.P.O. Dhaneli, Nimora, Raipur, Chhattisgarh

--- Respondents

WPCR No. 552 of 2025

1 - Ashok Dodeja S/o Late Girdhari Lal Dodeja Aged About 68 Years

R/o M I G 6, M P H B Colony, Katora Talab, Raipur, C.G.

2 - Khushal Dodeja (Deleted) As Per Honble Court Order Dated 17-10-

2025.

---Petitioners

Versus

1 - State of Chhattisgarh Through The Station House Officer, Police

Station Civil Lines, Raipur, District Raipur, C.G.

2 - Santosh Rai S/o Late Jagdev Rai Aged About 59 Years Authorized

Signatory Of S.G. Mart Ltd. Having Office At Land Bearing Sr. No. 4/1,

4/2, 3/1, 3/1, 3/3, V P O Dhaneli, Nimora, Raipur, C.G.

--- Respondents

WPCR No. 616 of 2025

Parvinder Ahluwalia S/o Shri Kishan Dev Ahluwalia Aged About 48

Years R/o House No. 5, Jal Vihar Colony, Raipur, District Raipur

Chhattisgarh

---Petitioner

Versus

1 - State of Chhattisgarh Through The Station House Officer, Police

Station Civil Lines, Raipur, District Raipur Chhattisgarh

2 - Santosh Rai S/o Late Jagdev Rai Aged About 59 Years Authorized

Signatory Of S.G. Mart Ltd. Having Office At Land Bearing Sr No. 4/1,

4/2, 3/1, 3/1, 3/3 V P O Dhaneli, Nimora, Raipur Chhattisgarh

... Respondents

(Cause-title taken from Case Information System)

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For Petitioners :Mr. B.P. Sharma, Mr. Sanjay Agrawal and

Mr. Chakresh Tiwari, Advocates

For State :Mr. Shaleen Singh Baghel, Government

Advocate

For Respondent No.2:Mr. Sunil Otwani, Senior Advocate

assisted by Mr. Vikas Dubey, Advocate

Hon'ble Shri Ramesh Sinha, Chief Justice

Hon'ble Shri Ravindra Kumar Agrawal , Judge

Order on Board

Per Ramesh Sinha , Chief Justice

13.08.2026

1.Heard Mr. B.P. Sharma, Mr. Sanjay Agrawal and Mr. Chakresh

Twiari, learned counsel for the petitioners, Mr. Shaleen Singh Baghel,

learned Government Advocate, appearing for State and Mr. Sunil

Otwani, learned Senior Counsel, assisted by Mr. Vikas Dubey, learned

counsel appearing for respondent No.2.

2.Since all these petitions arise out of the same set of facts and

circumstances and involve a common question as to the legality and

validity of FIR No.464/2025 dated 24.09.2025 registered at Police

Station Civil Lines, Raipur, under Sections 316 and 3(5) of the

Bharatiya Nyaya Sanhita, 2023, and as the reliefs sought in all the

petitions are substantially identical, they have been heard together and

are being decided by this common order.

3.For the sake of convenience and with the consent of learned

counsel for the parties, W.P.(Cr.) No.539 of 2025 is being treated as the

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lead case, and the facts and pleadings of the said petition are being

referred to for deciding all the connected petitions.

4.By filing the present petitions under Article 226 of the Constitution

of India read with the inherent and extraordinary jurisdiction of this

Court, the petitioners call in question the legality and validity of FIR

No.464/2025 dated 24.09.2025 registered at Police Station Civil Lines,

Raipur, under Sections 316 and 3(5) of the Bharatiya Nyaya Sanhita,

2023, and the consequential criminal proceedings arising therefrom.

The petitioners principally contend that the dispute between the parties

emanates from commercial transactions relating to sale and purchase

of steel products and the alleged outstanding payment arising

therefrom, which is essentially civil in nature, and that the criminal

machinery has been invoked as a means of exerting pressure for

recovery of the alleged dues. It is further contended that even if the

allegations contained in the FIR are accepted in their entirety and taken

at their face value, the essential ingredients of the alleged offences are

not made out against the petitioners and, therefore, continuation of the

criminal proceedings would amount to an abuse of the process of law.

5.In WPCR No.539/2025, the petitioners have sough for following

relief(s):-

“a. A writ and/or an order in the nature of

mandamus do issue calling for records

pertaining to case of petitioner from

respondent concerned for perusal of this

Hon'ble Court, if deem fit.

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b. A writ and / or an order in the nature of

appropriate writ or certiorari or any other writ

which may this Hon'ble Court deem fit do

issue for quashment of the FIR no. 464/2025

dated 24.09.2025 under Section 316, 3(5) of

the Bharatiya Nagarik Suraksha Sanhita,

2023, registered at Police Station Civil Lines,

Raipur being abuse of process of court and

abuse of process of law and also in violation

of fundamental rights guaranteed under

Constitution of India, in the facts and

circumstance of the matter in the interest of

justice.

c. Cost of the proceedings.

d. Any other writs and directions that may be

deemed fit and just in the facts &

circumstances of case as the case in hand is

a way of arm twisting method to recover the

alleged due amount of a commercial

transaction.”

6.In WPCR No.552/2025, the petitioners have sough for following

relief(s):-

“a. A writ and/or an order in the nature of

mandamus do issue calling for records

pertaining to case of petitioner from

respondent concerned for perusal of this

Hon'ble Court, if deem fit.

b. A writ and / or an order in the nature of

appropriate writ or certiorari or any other writ

which may this Hon'ble Court deem fit do

issue for quashment of the FIR no. 464/2025

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dated 24.09.2025 under Section 316, 3(5) of

the Bharatiya Nagarik Suraksha Sanhita,

2023, registered at Police Station Civil Lines,

Raipur being abuse of process of court and

abuse of process of law and also in violation

of fundamental rights guaranteed under

Constitution of India, in the facts and

circumstance of the matter in the interest of

justice.

c. Cost of the proceedings.

d. Any other writs and directions that may be

deemed fit and just in the facts &

circumstances of case as the case in hand is

a way of arm twisting method to recover the

alleged due amount of a commercial

transaction.”

7.In WPCR No.580/2025, the petitioners have sough for following

relief(s):-

“10.1 A writ and/or an order in the nature of

mandamus do issue calling for records

pertaining to case of petitioner from

respondent concerned for perusal of this

Hon'ble Court, if deem fit.

10.2 A writ and / or an order in the nature of

appropriate writ or certiorari or any other writ

which may this Hon'ble Court deem fit do

issue for quashment of the FIR no. 464/2025

dated 24.09.2025 under Section 316, 3(5) of

the Bharatiya Nagarik Suraksha Sanhita,

2023, registered at Police Station Civil Lines,

Raipur being abuse of process of court and

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abuse of process of law and also in violation

of fundamental rights guaranteed under

Constitution of India, in the facts and

circumstance of the matter in the interest of

justice.

10.3 Cost of the proceedings.

10.4 Any other writs and directions that may

be deemed fit and just in the facts &

circumstances of case as the case in hand is

a way of arm twisting method to recover the

alleged due amount of a commercial

transaction.”

8.In WPCR No.616/2025, the petitioner has sough for following

relief(s):-

“a. A writ and/or an order in the nature of

mandamus do issue calling for records

pertaining to case of petitioner from

respondent concerned for perusal of this

Hon'ble Court, if deem fit.

b. A writ and / or an order in the nature of

appropriate writ or certiorari or any other writ

which may this Hon'ble Court deem fit do

issue for quashment of the FIR no. 464/2025

dated 24.09.2025 under Section 316, 3(5) of

the Bharatiya Nagarik Suraksha Sanhita,

2023, registered at Police Station Civil Lines,

Raipur being abuse of process of court and

abuse of process of law and also in violation

of fundamental rights guaranteed under

Constitution of India, in the facts and

circumstance of the matter in the interest of

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justice.

c. Cost of the proceedings.

d. Any other writs and directions that may be

deemed fit and just in the facts &

circumstances of case as the case in hand is

a way of arm twisting method to recover the

alleged due amount of a commercial

transaction.”

9.Brief facts relevant for disposal of the present batch of petitions

are that the petitioners have approached this Court questioning the

legality and validity of the common criminal action initiated against them

pursuant to FIR No.464/2025 dated 24.09.2025 registered at Police

Station Civil Lines, Raipur, under Sections 316 and 3(5) of the

Bharatiya Nyaya Sanhita, 2023, arising essentially out of commercial

transactions between the parties relating to purchase and sale of steel

products. Since all the petitions arise out of the same FIR, involve

substantially overlapping questions of fact and law and seek

substantially similar reliefs, they were heard together and are being

decided by this common order. The petitioners contend that the genesis

of the dispute is a commercial transaction between the concerned

firms, involving supply of goods, corresponding entries in the respective

accounts, payments made from time to time and an alleged outstanding

amount claimed by the complainant. According to the petitioners, the

dispute, at its core, concerns the alleged non-payment of a monetary

liability arising from business transactions and does not disclose the

commission of any criminal offence.

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10.It is the case of the petitioners that petitioner Nos.1 and 2 are

proprietors of M/s R.R. Enterprises and M/s K.S. Enterprises,

respectively, and are engaged in the business of trading various

products, including steel products. In the ordinary course of their

business dealings, the parties maintained accounts and business

records evidencing the transactions undertaken between them. It is

pleaded that, for facilitating the commercial transactions, corresponding

accounts were opened and maintained in the names of the respective

firms, and regular entries relating to purchase, sale, receipt of goods

and payment of consideration were made therein. The petitioners rely

upon the relevant account statements and bank statements to contend

that the transactions were not fictitious or sham transactions but were

genuine commercial dealings carried out over a period of time.

According to them, the documents forming part of the petition itself

demonstrate movement of goods and corresponding monetary

transactions, thereby showing the existence of a genuine business

relationship between the parties.

11.The petitioners further contend that, in the course of such

business, goods were supplied from time to time and payments were

also made from time to time. According to the petitioners, certain

amounts thereafter remained outstanding between the parties and,

being engaged in a continuing commercial business, the concerned

firms were themselves required to make recoveries from their

customers and were repeatedly requesting the concerned party to

make payment of the outstanding amount. It is pleaded that such

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correspondence, including reminders exchanged between the parties,

itself demonstrates that the dispute was essentially one relating to

accounts and payment of the price of goods supplied. The petitioners

submit that the correspondence does not disclose any allegation that,

at the inception of the transactions, they had dishonestly or fraudulently

induced the complainant to part with any property. Rather, the

correspondence indicates that the parties had admittedly entered into

commercial transactions and that the dispute subsequently arose

regarding payment and adjustment of the amounts claimed by either

side.

12.It is further the case of the petitioners that, on the allegation of

non-payment of the outstanding amount, the complainant caused legal

notices dated 15.03.2024 to be issued through counsel to M/s K.S.

Enterprises and M/s R.R. Enterprises, respectively, raising a monetary

demand towards the alleged outstanding amount together with interest

and enclosing copies of bills and other documents relating to the

transactions. The said notices were replied to by the petitioners through

their counsel on 20.03.2024. According to the petitioners, the very

issuance of the legal notices and the nature of the demand raised

therein demonstrate that the grievance of the complainant was, at its

foundation, a claim for recovery of money allegedly due under

commercial transactions. If any amount was legally recoverable, the

complainant had an efficacious remedy before the competent civil

forum for adjudication of the accounts, liability, adjustment, interest and

other contractual/commercial disputes between the parties.

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13.The petitioners allege that, instead of pursuing the appropriate

civil remedy for recovery of the alleged outstanding amount, the

complainant approached the police authorities and set the criminal law

into motion. The petitioners contend that the allegations incorporated in

the FIR themselves disclose the underlying transaction between the

parties and the alleged monetary liability arising therefrom. According to

them, there is no allegation of any dishonest or fraudulent intention

existing at the inception of the transaction and no specific overt act has

been attributed to the petitioners demonstrating that they had entered

into the transaction with a predetermined intention to cheat or defraud

the complainant. It is their specific case that subsequent non-payment

or failure to discharge an alleged monetary liability, by itself, cannot

retrospectively establish the existence of fraudulent or dishonest

intention at the inception of a commercial transaction. The petitioners

therefore contend that the criminal prosecution has been initiated

essentially to exert pressure upon them for recovery of an alleged civil

liability and that permitting such prosecution to continue would amount

to permitting the criminal process to be used as an instrument for

recovery of money.

14.It is in the aforesaid factual background that the present batch of

petitions has been filed. The petitioners have questioned not merely the

existence of the commercial dispute but the very invocation of criminal

jurisdiction in respect of such dispute, contending that the allegations

contained in the FIR, even if accepted in their entirety, do not satisfy the

essential ingredients of the offences alleged against them. They further

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contend that the FIR does not disclose the necessary factual

foundation for attracting the allegation of conspiracy or common

intention against the concerned petitioners and that there is no specific

allegation demonstrating any prior meeting of minds or participation by

the respective petitioners in any fraudulent design. According to the

petitioners, the continuation of the criminal proceedings in such

circumstances would constitute an abuse of the process of law and

would unjustifiably affect their right to personal liberty guaranteed under

Article 21 of the Constitution of India.

15.Mr. B.P. Sharma, Mr. Sanjay Agrawal and Mr. Chankresh Tiwari,

learned counsel appearing for the respective petitioners, jointly submit

that the impugned FIR and the consequential criminal proceedings are

liable to be quashed at the threshold as the entire foundation of the

prosecution is a commercial dispute concerning sale and purchase of

goods and alleged outstanding payment. It is submitted that the Court,

while exercising its jurisdiction under Article 226 of the Constitution of

India, is not required to determine the correctness of the rival accounts

or adjudicate upon the actual amount payable between the parties;

rather, the limited question is whether the allegations contained in the

FIR, taken at their face value and accepted in their entirety, disclose the

commission of the offences alleged. According to learned counsel, even

on such a prima facie test, the basic ingredients of the offences are

conspicuously absent. They jointly submit that the documents placed

on record, including the account statements, bank statements, invoices,

correspondence, legal notices dated 15.03.2024 and replies dated

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20.03.2024, unmistakably demonstrate that the relationship between

the parties was commercial and transactional in nature. It is argued that

the parties had admittedly entered into business transactions, goods

had been supplied, payments had been made and accounts had been

maintained. The subsequent emergence of a dispute regarding the

outstanding balance cannot, without more, transform an otherwise

lawful commercial transaction into an offence of cheating or any other

criminal offence. According to learned counsel, there is a fundamental

distinction between a mere failure to fulfil a contractual or monetary

obligation and an act committed with dishonest intention from the very

inception. In the present case, there is no allegation or material

demonstrating such dishonest intention at the inception of the

transactions.

16.Learned counsel further submit that the essential distinction

between a civil dispute and a criminal offence has repeatedly been

emphasized by the Hon’ble Supreme Court. It is argued that the mere

availability of a civil remedy does not, by itself, bar criminal prosecution

where the ingredients of a criminal offence are otherwise disclosed;

however, equally well settled is the principle that where the allegations,

even if accepted as true, essentially disclose a civil/commercial dispute

and fail to satisfy the ingredients of the alleged criminal offence, the

criminal proceedings cannot be permitted to continue merely because

the complainant seeks a more coercive mechanism for recovery of

money. According to learned counsel, the present case falls squarely

within the latter category, as the entire dispute revolves around the

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alleged outstanding amount arising from sale and purchase

transactions.

17.In support of the aforesaid submissions, learned counsel place

reliance upon the judgment of the Hon’ble Supreme Court in State of

Haryana v. Bhajan Lal, reported in 1992 Supp (1) SCC 335,

particularly the principles enumerated therein regarding the

circumstances in which the extraordinary jurisdiction of the High Court

may be exercised to prevent abuse of the process of law. It is submitted

that the present case falls within the categories where the allegations

made in the FIR, even if taken at their face value and accepted in their

entirety, do not prima facie constitute the alleged offence and where the

criminal proceeding is manifestly attended with mala fides and/or has

been instituted with an ulterior motive for wreaking vengeance or

exerting pressure upon the accused.

18.Learned counsel also rely upon the judgment of the Hon’ble

Supreme Court in Indian Oil Corporation v. NEPC India Ltd., (2006)

6 SCC 736, submitting that the Hon’ble Supreme Court has deprecated

the growing tendency to convert purely civil disputes arising out of

commercial or contractual transactions into criminal cases. It is

submitted that criminal law cannot be permitted to become a tool for

settling scores in commercial disputes and that the fact that a

transaction is commercial or contractual does not automatically

immunize it from criminal law, but the Court must examine whether the

allegations actually disclose the ingredients of a criminal offence.

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According to learned counsel, applying the said test to the present

case, the FIR merely narrates commercial transactions and non-

payment of alleged dues and does not disclose the necessary

ingredients of cheating or conspiracy.

19.Strong reliance has also been placed upon the recent judgment

of the Hon’ble Supreme Court in Anukul Singh v. State of Uttar

Pradesh & Anr., reported as 2025 INSC 1153. Learned counsel

submit that in the said case the Hon’ble Supreme Court reiterated the

settled principle that criminal law cannot be employed as a tool to settle

scores in commercial or contractual matters and that disputes

essentially concerning repayment of money and execution of

documents, in the absence of the essential ingredients of cheating or

forgery, remain civil in character. It is submitted that the Hon’ble

Supreme Court has once again cautioned against the misuse of the

criminal process for exerting pressure in disputes which essentially

concern monetary claims and contractual/business obligations.

Learned counsel contend that the factual matrix of the present case is

even stronger inasmuch as the documents relied upon by the

petitioners demonstrate the existence of actual commercial

transactions between the parties.

20.Learned counsel next place reliance upon the judgment of the

Hon’ble Supreme Court in Vinod Natesan v. State of Kerala,

reported in (2019) 2 SCC 401, to contend that where the allegations in

the FIR do not satisfy the ingredients of the offences alleged and the

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dispute between the parties is, at the most, civil in nature, continuation

of criminal proceedings amounts to an abuse of the process of law. It is

submitted that mere non-payment of an amount allegedly due under an

agreement, without any allegation or material indicating fraudulent

intention from the inception, cannot constitute cheating merely because

the complainant chooses to describe the transaction in criminal terms.

Learned counsel submit that the ratio of Vinod Natesan (supra)

squarely applies to the present case.

21.Learned counsel further rely upon Vineet Kumar v. State of

Uttar Pradesh, reported in (2017) 13 SCC 369, and submit that the

inherent jurisdiction of the High Court is intended to prevent abuse of

the process of the Court and to secure the ends of justice. Referring to

the principles reiterated therein, it is submitted that the power of the

High Court is not confined merely to situations where the prosecution is

demonstrably impossible, but extends to cases where permitting the

criminal proceeding to continue would itself result in abuse of the

process of law. Learned counsel emphasize the observations of the

Hon’ble Supreme Court that criminal proceedings ought not to be

permitted to degenerate into a weapon of harassment or persecution

and that the ends of justice are higher than the ends of mere law.

22.Learned counsel have also relied upon Inder Mohan Goswami

v. State of Uttaranchal, AIR 2008 SC 251, and Ganga Dhar Kalita v.

State of Assam, (2015) 9 SCC 647, to submit that the criminal process

cannot be permitted to be used for private vendetta, harassment or

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exerting pressure in disputes which are essentially civil in nature. It is

contended that where the predominant object behind initiating criminal

proceedings is to compel the opposite party to settle a monetary or

commercial dispute, the continuation of such prosecution would defeat

the very purpose of the criminal justice system.

23.Learned counsel have further placed reliance upon the recent

decisions of the Hon’ble Supreme Court, including Rikhab Birani v.

State of Uttar Pradesh, 2025 SCC OnLine SC 823 , and Sharif

Ahmed v. State of U.P., 2024 SCC OnLine SC 726, to submit that the

principles governing exercise of jurisdiction for quashing criminal

proceedings continue to apply where the criminal prosecution is

founded upon allegations which, even if accepted in their entirety, do

not constitute the offence alleged, or where the prosecution is

demonstrably motivated by an ulterior purpose. According to learned

counsel, these decisions reaffirm that the High Court must intervene

where the continuation of criminal proceedings would amount to abuse

of the process of law rather than permitting the accused to undergo the

ordeal of a criminal trial in a matter which is fundamentally civil in

character.

24.Learned counsel lastly submit that, so far as the allegation of

conspiracy/common intention is concerned, the FIR contains no

specific allegation disclosing any prior meeting of minds, concerted

action or intentional participation on the part of the respective

petitioners. It is argued that criminal conspiracy cannot be inferred

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merely from the existence of a business relationship or from the fact

that different persons are associated with commercial entities. The

allegation of conspiracy must have a factual foundation demonstrating

the meeting of minds to commit an unlawful act. According to learned

counsel, in the absence of such foundational facts, the petitioners

cannot be subjected to criminal prosecution merely on the basis of

omnibus allegations. It is therefore submitted that the present petitions

fall within the parameters laid down in Bhajan Lal (supra) and the

subsequent judgments of the Hon’ble Supreme Court, and that

continuation of the impugned criminal proceedings would amount to

abuse of the process of Court, misuse of criminal law for recovery of a

commercial debt and an unwarranted invasion upon the petitioners’

right to personal liberty under Article 21 of the Constitution of India. On

these submissions, learned counsel jointly pray that FIR No.464/2025

dated 24.09.2025 and all consequential proceedings arising therefrom,

insofar as they relate to the respective petitioners, be quashed.

25.On the other hand, Mr. Shaleen Singh Baghel, learned

Government Advocate, appearing for the State in all the writ petitions,

opposes the submissions advanced by learned counsel for the

respective petitioners and submits that the present batch of petitions,

seeking quashment of FIR No.464/2025 dated 24.09.2025 registered at

Police Station Civil Lines, Raipur, under Sections 316 and 3(5) of the

Bharatiya Nyaya Sanhita, 2023, is premature and does not warrant

interference by this Court at the stage of investigation. It is submitted

that the FIR has been registered on the basis of a complaint made by

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respondent No.2, Santosh Rai, who is the authorised signatory of M/s

S.G. Mart Limited, Raipur, and the allegations contained therein

disclose commission of cognizable offences. According to learned State

counsel, the FIR cannot be examined in isolation by selectively

referring to the commercial nature of the transactions, as the

allegations, when read as a whole, disclose that the accused persons

obtained steel products from the complainant's firm on the assurance

that payment would be made within 7 to 10 days of delivery, but

thereafter failed to make the requisite payment and, according to the

prosecution, dishonestly misappropriated the amount/value of the

goods.

26.Learned Government Advocate further submits that the FIR

contains specific allegations regarding the manner in which the

business transactions were conducted between the complainant's firm

and the accused persons. It is submitted that the FIR refers to the role

of different persons involved in facilitating the transactions, including

the proprietor of the concerned firms and the persons who acted as

representatives/agents on their behalf. According to the prosecution,

the present petitioners were not merely parties to an ordinary business

transaction but were involved in the transactions pursuant to a common

intention, and the allegation is that the steel products, including billets,

were obtained from the complainant's firm upon assurances regarding

payment and that the consideration was thereafter not paid. Learned

counsel submits that, at the stage of investigation, these allegations

cannot be discarded merely on the basis of the defence set up by the

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petitioners or on the ground that the parties had commercial dealings

with each other. Whether the petitioners had dishonest intention,

whether the goods were obtained pursuant to a fraudulent design, what

was the actual outstanding liability and what role was played by each

accused are all matters which require investigation on the basis of oral

as well as documentary evidence.

27.It is next submitted that the investigation in the matter is still in

progress and out of the seven accused persons, two accused persons,

namely, Parvinder Ahluwalia and Kushal Dudeja, have already been

arrested. Learned Government Advocate submits that the arrest of the

co-accused persons and the continuing investigation demonstrate that

the investigating agency is collecting material concerning the

transactions, the role of the respective accused persons and the

alleged financial dealings between the parties. It is therefore contended

that, at this nascent stage, when the complete material is not before the

Court, this Court ought not to undertake an appreciation of the defence

documents or enter into disputed questions relating to accounts,

payments, agency, the actual outstanding amount or the alleged

intention of the accused persons. It is submitted that the petitioners will

have adequate opportunity to place their defence before the competent

criminal Court in accordance with law, if the investigation ultimately

culminates in filing of the final report/charge-sheet.

28.Learned Government Advocate places reliance upon the

principles laid down by the Hon'ble Supreme Court in Bhajan Lal

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(supra), and submits that although the High Court possesses wide

powers under Article 226 of the Constitution of India and Section 482 of

the Code of Criminal Procedure, such powers are extraordinary in

nature and are required to be exercised sparingly, with circumspection

and in exceptional cases. It is submitted that the present case does not

fall within any of the categories illustratively enumerated in Bhajan Lal

(supra). According to learned counsel, the allegations in the FIR, if

taken at their face value, disclose cognizable offences and therefore

the investigating agency is statutorily entitled to investigate the matter.

The Court, at this stage, cannot conduct a mini-trial or examine the

reliability, genuineness or sufficiency of the evidence proposed to be

collected during investigation.

29.Learned Government Advocate also places reliance upon the

judgment of the Hon'ble Supreme Court in Neeharika Infrastructure

Pvt. Ltd. v. State of Maharashtra, (2021) 19 SCC 401, and submits

that the police have a statutory right and duty to investigate a

cognizable offence and that ordinarily the Courts should not thwart a

legitimate investigation at its inception. It is contended that the first

information report is not expected to constitute an encyclopaedia

containing every minute detail of the prosecution case and that the

Court, while examining a prayer for quashing, is required primarily to

ascertain whether the allegations disclose commission of a cognizable

offence. Learned counsel submits that the present case involves

disputed questions of fact and allegations concerning commercial

transactions, receipt of goods, assurances regarding payment, alleged

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dishonest conduct and the respective roles of the accused persons, all

of which require investigation. On these grounds, learned Government

Advocate submits that no exceptional circumstance has been

demonstrated warranting exercise of the extraordinary jurisdiction of

this Court and, therefore, all the petitions deserve to be dismissed.

30.Mr. Sunil Otwani, learned Senior Counsel, assisted by Mr. Vikas

Dubey, learned counsel appearing for respondent No.2 in all the writ

petitions, submits that the petitions are misconceived, premature and

deserve to be dismissed as the petitioners have invoked the

extraordinary jurisdiction of this Court at a stage when the investigation

into serious cognizable offences is still underway. It is submitted that

the petitioners are essentially seeking a pre-trial adjudication of

disputed questions of fact by inviting this Court to examine the defence

version, the account statements, the nature of the commercial

transactions and the alleged liability between the parties. According to

learned Senior Counsel, such an exercise is impermissible in

proceedings for quashing of an FIR, particularly when the allegations in

the FIR, taken at their face value, disclose commission of cognizable

offences and the investigating agency is yet to complete the

investigation.

31.Learned Senior Counsel submits that the allegations cannot be

characterised as a mere dispute relating to recovery of money.

According to him, the FIR discloses a specific and coordinated course

of conduct on the part of the accused persons, including the petitioners,

23

pursuant to which meetings were allegedly held, representations were

made regarding the proposed purchase of MS billets, assurances were

given that payment would be made within 7 to 10 days of delivery, and

goods valued at approximately Rs.4,10,94,470/- were thereafter

supplied. It is submitted that despite repeated demands and reminders,

the accused persons failed to discharge the liability and, according to

the complainant, subsequently entered into a tripartite arrangement and

issued post-dated cheques despite allegedly knowing that the requisite

funds were not available. Learned Senior Counsel contends that these

allegations, viewed cumulatively, disclose more than a simple case of

non-payment and raise questions regarding dishonest intention,

criminal breach of trust, forgery and common intention/conspiracy,

which necessarily require investigation and cannot be conclusively

determined at the threshold.

32.Learned Senior Counsel further submits that the petitioners

cannot seek quashing merely by asserting that the transaction was

commercial or that the complainant has an alternative civil remedy. It is

submitted that availability of a civil remedy does not operate as a bar to

criminal prosecution where the factual allegations also disclose the

ingredients of a criminal offence. Reliance is placed upon the judgment

of the Hon'ble Supreme Court in K. Jagdish v. Udaya Kumar G.S.,

reported in (2020) 14 SCC 552, to contend that the nature of the

transaction alone is not determinative and that the Court is required to

examine whether the allegations disclose the necessary criminal intent

and ingredients of the offence. Learned Senior Counsel submits that

24

the petitioners' attempt to portray the entire matter as a dispute

concerning outstanding commercial dues overlooks the specific

allegations regarding the manner in which the goods were allegedly

procured and the subsequent conduct of the accused persons.

33.Learned Senior Counsel also submits that the principles

governing exercise of the extraordinary jurisdiction under Article 226 of

the Constitution of India and the inherent jurisdiction of the High Court

require considerable self-restraint at the stage of investigation.

Reliance is placed upon Bhajan Lal (supra), and Neeharika

Infrastructure Pvt. Ltd. (supra), to submit that quashing of an FIR is

an exceptional remedy and that the High Court ought not to undertake

an enquiry into the reliability or genuineness of the allegations or

conduct an assessment of the evidence which is still being collected by

the investigating agency. It is submitted that the FIR is not an

encyclopaedia of the entire prosecution case and the absence of

minute particulars at the initial stage cannot itself be made a ground for

quashing where the allegations, read as a whole, disclose cognizable

offences.

34.Learned Senior Counsel lastly submits that substantial material

has already been collected during investigation, including statements of

persons acquainted with the transactions and documentary material,

and therefore the petitioners cannot seek to terminate the proceedings

by relying upon their own disputed defence. It is further submitted that

the petitioners were granted interim protection from arrest by order

25

dated 14.10.2025 subject to their cooperation with the investigation, but

according to respondent No.2, the petitioners have not adequately

cooperated despite notices issued by the investigating agency. Learned

Senior Counsel therefore submits that the petitioners have failed to

demonstrate any exceptional circumstance warranting interference

under Article 226 of the Constitution of India. It is accordingly prayed

that the petitions be dismissed and the interim protection granted to the

petitioners be vacated, leaving the investigating agency to complete the

investigation in accordance with law.

35.Reliance has been placed upon the judgment rendered by the

Hon’ble Suprme Court in S.N. Vijayalakshmi and others v. State of

Karnataka and another, 2025 SCC OnLine SC 1575 as well as the

order passed by this Court in Nagesh Naidu v. State of Chhattisgarh

and anohter, 2026:CGHC:27018-DB to buttress his submissions.

36.We have heard learned counsel appearing for the respective

parties at considerable length and have carefully considered their rival

submissions, the pleadings placed on record, the allegations contained

in the impugned FIR, the documents relied upon by the respective

parties and the material available before this Court. We have also

bestowed our anxious and thoughtful consideration to the legal

principles governing the exercise of extraordinary jurisdiction under

Article 226 of the Constitution of India in matters seeking quashment of

an FIR and consequential criminal proceedings. Since the petitions

arise out of the same FIR and involve substantially identical questions

26

of fact and law, the rival contentions have been examined in their

proper perspective, keeping in view the stage of the proceedings, the

nature of the allegations and the documents forming part of the record.

37.Before adverting to the rival contentions on merits, it would be

apposite to reiterate that the jurisdiction of this Court under Article 226

of the Constitution of India, in a matter seeking quashing of an FIR, is

undoubtedly extraordinary and is required to be exercised with great

care and circumspection. At the same time, the extraordinary nature of

the jurisdiction cannot be understood to mean that the High Court is

powerless to interdict a criminal proceeding even in a case where the

allegations, taken at their face value, fail to disclose the essential

ingredients of the offence alleged, or where the criminal process is

demonstrably being employed for an impermissible purpose. The power

exists precisely to prevent abuse of the process of law and to secure

the ends of justice. The principles enunciated in Bhajan Lal (supra)

continue to govern the exercise of such jurisdiction, subject to the

subsequent exposition of law by the Hon'ble Supreme Court.

38.The principal question which, therefore, arises for consideration in

the present batch of petitions is not whether the complainant has a

monetary claim against the petitioners, nor whether some amount may

in fact be outstanding between the parties. The question is a narrower

but fundamental one: whether the allegations contained in FIR

No.464/2025, even if taken at their face value and accepted in their

entirety, disclose the essential ingredients of the offences for which the

27

criminal law has been set in motion against the petitioners, or whether

the criminal prosecution is, in substance, an attempt to give a criminal

colour to a commercial dispute concerning sale and purchase of steel

products and recovery of the alleged outstanding consideration.

39.From a careful consideration of the FIR and the material placed

on record, it is not in dispute that the genesis of the dispute lies in

commercial transactions between M/s S.G. Mart Ltd. and the firms

associated with the petitioners. The complainant itself asserts that steel

products, including MS billets, were supplied to the concerned firms

and that payment was to be made within a stipulated period. The

petitioners, on the other hand, rely upon account statements, bank

transactions, invoices, correspondence, reminders and the legal

notices dated 15.03.2024 and their replies dated 20.03.2024 to

demonstrate the existence of continuing commercial dealings between

the parties. Thus, the foundational relationship between the parties is

admittedly one arising out of business transactions. The dispute,

therefore, is not one where the petitioners are alleged to have obtained

property under a transaction which was from its inception wholly

fictitious or non-existent. On the contrary, the existence of the business

relationship, supply of goods and corresponding financial dealings is

itself apparent from the material placed before this Court.

40.The distinction between a mere breach of a commercial obligation

and the commission of a criminal offence has repeatedly engaged the

attention of the Hon'ble Supreme Court. The mere fact that a monetary

28

liability remains unpaid does not, by itself, constitute criminal breach of

trust or cheating. Criminality cannot be inferred merely because a

commercial transaction subsequently results in a dispute concerning

payment. There has to be a factual foundation for the ingredients of the

particular offence alleged. In M/s. Indian Oil Corporation Ltd. (supra),

the Hon'ble Supreme Court specifically deprecated the tendency of

converting purely civil disputes arising out of commercial or contractual

transactions into criminal cases and cautioned that criminal law cannot

be used as a tool for settling scores or exerting pressure for recovery of

civil claims. The Court, however, also clarified that a commercial

transaction may, in an appropriate case, give rise to both civil and

criminal consequences; the determinative consideration is whether the

allegations disclose the ingredients of a criminal offence.

41.The aforesaid principle has received renewed emphasis in the

recent judgment of the Hon'ble Supreme Court in Rikhab Birani

(supra). The Hon'ble Supreme Court, while considering allegations

arising from an agreement and alleged non-payment, noticed with

concern that notwithstanding the settled distinction between a civil

wrong and a criminal offence, cases continue to reach the Court where

an FIR is registered, investigation is conducted and even charge-sheet

is filed in disputes which essentially remain civil. The Court emphasized

that breach of contractual terms, non-payment of money or violation of

contractual obligations cannot automatically be converted into criminal

offences unless the ingredients of the alleged offence are

independently satisfied.

29

42.The decision in Rikhab Birani (supra) is particularly instructive

for the present controversy because the Hon'ble Supreme Court not

only reiterated the distinction between civil liability and criminality but

also ultimately quashed the criminal proceedings where the allegations

did not furnish the requisite material to establish the essential

ingredients of the offences alleged. The Court further cautioned that the

prevalent impression that civil remedies are time-consuming and,

therefore, criminal process may be employed to apply pressure upon a

debtor or contracting party is wholly impermissible. Criminal procedure

cannot be converted into a mechanism for enforcing a monetary claim.

The principle is of considerable relevance here because the record

before us shows that the dispute between the parties had already

acquired the character of a monetary and accounting dispute much

prior to registration of the impugned FIR.

43.The principle has been reiterated even more recently in Anukul

Singh (supra). In that case also, the Hon'ble Supreme Court examined

the misuse of criminal proceedings in a dispute having essentially civil

characteristics and reiterated that criminal law cannot be permitted to

be used as a tool for settling civil disputes or for wreaking vengeance.

The Supreme Court ultimately set aside the criminal proceedings after

finding that the essential ingredients of the offences alleged were not

prima facie made out. The said judgment is significant inasmuch as it

reiterates that the width of the High Court's jurisdiction to prevent abuse

of process remains available even where the criminal proceedings have

progressed beyond the stage of registration of the FIR.

30

44.Coming to the specific offence alleged in the present case,

namely, Section 316 of the Bharatiya Nyaya Sanhita, 2023, the

provision substantially corresponds to the offence of criminal breach of

trust under the erstwhile Section 405 of the Indian Penal Code. The

foundational requirement of the offence is entrustment of property, or

dominion over property, followed by dishonest misappropriation,

conversion, use or disposal thereof in violation of the law or of any legal

contract. Thus, entrustment or dominion over the property is not a mere

technicality but an essential constituent of the offence. In the present

case, the allegations, taken at their highest, disclose that steel products

were sold and supplied by the complainant to the concerned firms

pursuant to commercial transactions and that the consideration

allegedly remained unpaid. There is a fundamental distinction between

property being entrusted to a person and property being delivered to a

purchaser pursuant to a contract of sale. Once goods are supplied

pursuant to a commercial sale transaction, the failure to pay the sale

consideration ordinarily gives rise to a claim for recovery of the price

and other consequential civil remedies; it does not, without the requisite

entrustment and dishonest misappropriation, automatically constitute

criminal breach of trust.

45.The allegation that the petitioners received MS billets and

thereafter did not make payment, therefore, cannot by itself satisfy the

essential ingredient of entrustment necessary to constitute an offence

under Section 316 of the BNS. The FIR does not disclose that the steel

products were entrusted to the petitioners for being held in trust, dealt

31

with for a particular purpose, or returned to the complainant. Rather, the

prosecution case itself proceeds on the footing that the goods were

supplied in the course of sale and purchase transactions and that the

dispute arose because the agreed consideration was allegedly not

paid. Such allegations, even if accepted in their entirety, principally

disclose a dispute regarding performance of a commercial obligation

and recovery of the alleged price of goods supplied.

46.The subsequent allegation that a tripartite agreement was

entered into and post-dated cheques were furnished does not

materially alter the character of the original transaction. Indeed, the

existence of such subsequent arrangements, if established, prima facie

demonstrates that the parties were attempting to regulate, restructure

or secure the outstanding commercial liability. The mere fact that such

cheques were allegedly dishonoured or that payment was not ultimately

made cannot, in the absence of further foundational facts,

retrospectively establish that the goods were initially obtained pursuant

to a dishonest criminal design. Subsequent conduct may, in an

appropriate case, constitute relevant evidence of prior intention;

however, the Court cannot infer such intention merely from the fact of

subsequent default, particularly where the parties admittedly engaged

in continuing commercial transactions and payments were made in the

course thereof.

47.The question of dishonest intention is equally important. It is

settled that, in cases founded upon cheating arising out of a

32

commercial transaction, the dishonest or fraudulent intention must

ordinarily exist at the inception of the transaction. A mere subsequent

failure to honour a promise or contractual obligation does not, by itself,

establish that the promise was made dishonestly at the very inception.

In Vinod Natesan (supra), the Hon'ble Supreme Court upheld quashing

where the allegations essentially concerned non-payment of amounts

under an agreement and observed that mere non-payment of an

amount due under an agreement, by itself, cannot constitute cheating

or criminal breach of trust.

48.The same principle finds further support from M/s Indian Oil

Corporation Ltd. (supra), Rikhab Birani (supra) and Anukul Singh

(supra). The common thread running through these authorities is that

the Court must guard against a situation where the mere existence of a

commercial liability is used as the foundation for criminal prosecution.

The criminal process cannot become a substitute for a civil suit for

recovery of money. At the same time, the Court is not holding that every

commercial dispute is immune from criminal law. Where a commercial

transaction is accompanied by allegations which independently satisfy

the ingredients of cheating, criminal breach of trust, forgery or other

offences, the criminal law may legitimately be invoked. But the

foundational facts necessary to constitute the particular offence must

nevertheless be present.

49.Tested on the aforesaid principles, the impugned FIR does not

disclose the essential ingredients of criminal breach of trust against the

33

petitioners. The allegation of non-payment of the price of goods

supplied pursuant to a commercial transaction is sought to be elevated

into an allegation of criminal breach of trust, but the essential element

of entrustment is conspicuously absent. The prosecution cannot bridge

this foundational deficiency merely by describing the conduct of the

petitioners as "misappropriation" or by employing expressions such as

"dishonest intention" and "common intention". The substance of the

allegations, rather than the nomenclature employed in the FIR, has to

be examined.

50.So far as Section 3(5) of the BNS is concerned, the said provision

embodies the principle of vicarious liability based upon common

intention. The provision does not, by itself, constitute a substantive

offence. It becomes relevant only when there is a substantive offence

committed by several persons in furtherance of the common intention

of all. Therefore, once the foundational substantive offence itself is not

disclosed against the petitioners, the invocation of Section 3(5) cannot

independently sustain the prosecution. Even otherwise, common

intention cannot be inferred merely because several persons are

connected with the same commercial transaction or because they are

proprietors, representatives or agents of different business entities.

There must be some factual foundation indicating a meeting of minds

and participation in the commission of the substantive offence.

51.In the present case, the allegations regarding meetings allegedly

held on 23.12.2023 and thereafter, the alleged assurance of payment

34

within 7 to 10 days, and the subsequent non-payment have been relied

upon by the complainant to infer common intention. However, even

accepting those allegations in their entirety, they essentially establish

negotiations and commercial dealings followed by alleged default in

payment. There is no specific allegation in the FIR demonstrating the

precise act of each petitioner pursuant to a pre-existing criminal design

to commit criminal breach of trust. The mere assertion that the accused

persons acted with a "common intention" cannot substitute the factual

foundation required to establish such common intention.

52.We are conscious of the submission advanced by learned State

counsel and learned Senior Counsel appearing for respondent No.2

that investigation is still in progress, that statements of certain persons

have been recorded and that documentary material has been collected.

We are also conscious of the well-settled principle that ordinarily the

High Court should not interfere with investigation merely because the

accused puts forward a defence or disputes the factual allegations. The

decision of the Hon'ble Supreme Court in Neeharika Infrastructure

Pvt. Ltd. (supra), undoubtedly emphasizes that quashing of an FIR is

an exceptional power, that the police have a statutory right and duty to

investigate cognizable offences and that the High Court should

ordinarily refrain from conducting a mini-trial or assessing the reliability

of the allegations at the investigation stage.

53.However, Neeharika Infrastructure Pvt. Ltd. (supra) cannot be

read as laying down an absolute prohibition against quashing an FIR

35

during investigation. The same judgment expressly recognizes the

jurisdiction of the High Court to quash an FIR where the case falls

within the parameters laid down in R.P. Kapur (supra) and Bhajan Lal

(supra). The power is to be exercised sparingly, but sparingly does not

mean never. Where the allegations, even if accepted in their entirety,

fail to constitute the offence alleged, requiring the accused to undergo

the entire process of criminal investigation and trial would itself amount

to permitting abuse of the process of law. The Hon'ble Supreme Court

in Vineet Kumar (supra) has emphasized that the inherent jurisdiction

of the High Court exists to prevent abuse of process and to secure the

ends of justice. The Court reiterated that a criminal proceeding should

not be permitted to degenerate into a weapon of harassment or

persecution. The extraordinary jurisdiction is intended to ensure that the

criminal justice system is not itself converted into an instrument of

oppression.

54.We are also unable to accept the submission that the petitioners

must necessarily be relegated to the remedy of discharge before the

Trial Court. The availability of a remedy of discharge does not

constitute an absolute bar to the exercise of constitutional jurisdiction

under Article 226 where the very institution or continuation of criminal

proceedings is alleged to constitute abuse of process and the case falls

within the well-recognized parameters for quashing. The jurisdiction of

the High Court under Article 226 is not rendered otiose merely because

a statutory remedy may subsequently become available. The question

is whether, on the facts presented, interference is warranted in the

36

interests of justice. In the present case, we have found that the

allegations, taken at their face value, do not disclose the foundational

ingredients of the principal offence alleged.

55.The contention regarding the petitioners' alleged criminal

antecedents also does not persuade us to take a different view. The

existence of a previous FIR against one of the petitioners cannot be

treated as proof of guilt in the present case. Every criminal proceeding

must stand on its own allegations and material. A previous FIR, unless

it has culminated in a finding of guilt and is otherwise legally relevant,

cannot be used to fill the missing ingredients of the offence in the

present FIR. Likewise, the fact that certain co-accused persons have

been arrested or that the investigating agency considers their custodial

interrogation necessary cannot, by itself, determine the legality of the

prosecution against the present petitioners. The criminal liability of each

accused must be examined with reference to the allegations and

material concerning that particular accused. The arrest of one person

cannot furnish the missing ingredients of an offence against another.

Nor can the mere fact that investigation has continued for a

considerable period operate as a reason to sustain a prosecution which

otherwise fails the basic threshold test prescribed for exercise of the

High Court's jurisdiction.

56.We are also mindful of the submission that substantial

documentary and oral evidence has allegedly been collected during

investigation. However, the existence of evidence cannot cure the

37

absence of the foundational ingredients of the offence where the very

nature of the transaction disclosed in the FIR is one of sale and

purchase of goods and the alleged criminality consists essentially of

non-payment of the price. The question is not whether there is evidence

that the petitioners did not pay the entire amount claimed by the

complainant. There may well be such evidence. The question is

whether such evidence, even if accepted, establishes the statutory

ingredients of criminal breach of trust. In our considered view, it does

not.

57.The subsequent judgment of the Hon'ble Supreme Court in Mala

Choudhary & Another v. State of Telangana & Another, Criminal

Appeal No.3052 of 2025, arising out of SLP (Crl.) No.10748 of 2023,

decided on 18.07.2025, reported as 2025 INSC 870, is also

instructive. The Hon'ble Supreme Court, while examining criminal

proceedings arising from a dispute which essentially had a civil

complexion, reiterated the impermissibility of using criminal

proceedings to exert pressure in a civil dispute and quashed the FIR

and consequential proceedings where the criminal allegations were

found to be an abuse of the process of law.

58.The decisions relied upon by the respondents, namely, Bhajan

Lal (supra) and Neeharika Infrastructure Pvt. Ltd. (supra), therefore,

do not advance the respondents' case to the extent contended. In fact,

Bhajan Lal (supra) itself furnishes the parameters for interference. The

present case falls within the first category enumerated therein, namely,

38

where the allegations made in the FIR, even if taken at their face value

and accepted in their entirety, do not prima facie constitute the offence

alleged. The case also substantially attracts the seventh category

where the criminal proceeding is alleged to have been initiated with an

ulterior motive and where the criminal machinery is sought to be

employed for purposes other than legitimate prosecution of an offence.

The Court is not required to establish mala fides as an independent fact

where the substantive allegations themselves fail to disclose the

offence; however, the manner in which the criminal process has been

invoked, following a prolonged commercial dispute and demands for

payment, reinforces the conclusion that the criminal process cannot be

allowed to continue.

59.It is also significant that the complainant had itself issued legal

notices dated 15.03.2024 demanding payment of the alleged

outstanding amount, accompanied by bills and transaction details, and

the petitioners had responded to the same on 20.03.2024. These

circumstances demonstrate that the dispute regarding liability and

payment had already crystallized as a monetary/commercial dispute

between the parties. The complainant was not without remedy. It could

have instituted appropriate civil proceedings for recovery of the alleged

amount, rendition/settlement of accounts, interest or other

consequential reliefs in accordance with law. The existence of such civil

remedies is not, by itself, a ground for quashing a genuine criminal

case; but where the allegations themselves do not disclose the

ingredients of the criminal offence.

39

60.In M/s. Indian Oil Corporation (supra), the Hon'ble Supreme

Court cautioned that there is a growing tendency in business circles to

convert purely civil disputes into criminal cases because of an

impression that criminal law provides a quicker and more coercive

method of securing settlement. The Court made it clear that efforts to

settle civil disputes and claims which do not involve any criminal

offence by applying pressure through criminal prosecution must be

deprecated and discouraged. The principle applies with full force to the

present case, where the alleged loss is quantified precisely as the

value of steel products supplied and the central grievance is that the

corresponding consideration has not been paid.

61.We are not oblivious to the magnitude of the amount claimed by

respondent No.2, namely, approximately Rs.4,10,94,470/-. However,

the magnitude of the monetary claim cannot determine the existence of

a criminal offence. A large civil liability does not become a criminal

offence merely because the amount involved is substantial. Conversely,

the Court cannot ignore criminality merely because the dispute is

commercial. The correct approach is to examine the ingredients of the

offence. On that test, the present prosecution fails at the threshold.

62.The reliance placed by respondent No.2 upon K. Jagdish

(supra), for the proposition that availability of a civil remedy does not

bar criminal prosecution, is unexceptionable as a statement of law.

However, that principle does not mean that every commercial dispute is

liable to be tried criminally. The Hon'ble Supreme Court has

40

consistently maintained that the decisive consideration is whether the

allegations disclose the ingredients of a criminal offence. In the present

case, the difficulty faced by the respondents is not merely the existence

of an alternative civil remedy; it is the absence of the foundational

ingredients necessary to constitute the offence under Section 316 of

the BNS.

63.We therefore find considerable force in the submission of learned

counsel for the petitioners that the criminal proceedings have been

initiated in circumstances where the dispute is predominantly, if not

entirely, founded upon the alleged non-payment of the price of goods

supplied in commercial transactions. The allegations of "dishonest

intention", "misappropriation" and "common intention", without the

factual substratum necessary to establish entrustment, dishonest

conversion or a pre-existing meeting of minds to commit a criminal

offence, cannot sustain the prosecution merely by virtue of the labels

employed in the FIR.

64.We make it clear that this Court is not adjudicating upon the

accounts between the parties, nor is it recording any finding that the

amount claimed by respondent No.2 is not payable. We are also not

expressing any opinion upon any civil claim which respondent No.2

may otherwise be entitled to pursue in accordance with law. The parties

shall remain free to avail such civil remedies as may be available to

them, and any competent civil forum shall decide such claim

independently on the basis of the evidence produced before it. The

41

present order is confined to the question whether the criminal

prosecution launched against the petitioners on the allegations

contained in FIR No.464/2025 can legitimately be permitted to

continue.

65.Having regard to the entire conspectus of facts, the nature of the

transactions, the correspondence exchanged between the parties, the

legal notices preceding the FIR, the absence of the essential element

of entrustment, the absence of specific material demonstrating

dishonest intention at the inception of the commercial dealings, and the

absence of a sufficient factual foundation for fastening criminal liability

upon the petitioners with the aid of Section 3(5) of the BNS, we are of

the considered view that continuation of the impugned criminal

proceedings against the petitioners would amount to abuse of the

process of law. The extraordinary jurisdiction of this Court is not

intended to shield persons against legitimate investigation or

prosecution. Equally, it cannot be permitted to become a silent

spectator where the criminal process itself is being used in a manner

for which the law does not sanction it. The liberty of a citizen cannot be

subjected to the ordeal of a criminal prosecution merely because a

commercial creditor chooses to invoke the criminal machinery in place

of the ordinary remedies available for adjudication and recovery of a

monetary claim. The constitutional obligation of this Court under Article

21 is not exhausted merely by ensuring a fair trial; it also encompasses

protection against arbitrary and unwarranted deprivation of personal

liberty through proceedings which, on their face, do not disclose the

42

offence alleged. The principles laid down in Bhajan Lal (supra), Indian

Oil Corporation Ltd. (supra), Vinod Natesan (supra), Vineet Kumar

(supra), Rikhab Birani (supra), Mala Choudhary (supra) and Anukul

Singh (supra), read harmoniously with the caution administered in

Neeharika Infrastructure Pvt. Ltd. (supra), lead us to the conclusion

that the present is one of those exceptional cases where interference is

not only permissible but necessary to prevent abuse of the process of

law and to secure the ends of justice.

66.Consequently, all the writ petitions, namely, W.P.(Cr.) No.539 of

2025, W.P.(Cr.) No.552 of 2025, W.P.(Cr.) No.580 of 2025 and W.P.(Cr.)

No.616 of 2025, are allowed. FIR No.464/2025 dated 24.09.2025

registered at Police Station Civil Lines, Raipur, and all consequential

criminal proceedings arising therefrom, insofar as they relate to the

present petitioners, are hereby quashed. Since the FIR itself is being

quashed, any consequential proceedings, including investigation, arrest

proceedings, charge-sheet, if any, and orders passed pursuant thereto,

insofar as they concern the petitioners in these writ petitions, shall

stand quashed.

67.Needless to say, this Court has not adjudicated upon the civil

rights, accounts, monetary claims or counter-claims of the parties.

Respondent No.2 shall remain at liberty to avail such remedies as may

be available to it under civil law for recovery of any amount which it

claims to be lawfully due and payable. If any such proceedings are

instituted, the competent Court shall decide the same uninfluenced by

43

any observation contained in the present order, as the observations

herein are confined strictly to examining the sustainability of the

criminal prosecution.

68.In view of the aforesaid, any interim order passed in favour of the

petitioners during the pendency of these petitions shall stand merged

with the final order and shall no longer survive separately.

69.Any pending interlocutory application(s), if any, shall also stand

disposed of.

70.There shall be no order as to costs.

Sd/- Sd/-

(Ravindra Kumar Agrawal) (Ramesh Sinha)

Judge Chief Justice

Anu