Criminal Law – Cheating under Section 420 IPC – Mens rea at inception of transaction mandatory – Breach of contract not per se cheating
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To constitute an offence under Section 420 IPC, the complainant must establish fraudulent or dishonest intention at the time of making the promise or representation.
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Mere failure to keep a promise or deliver goods of desired quality, without proof of dishonest inducement at inception, does not amount to “cheating”.
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Allegations of supply of machinery with lesser weight/output and failure to replace the same, are at best breach of contract, not criminal cheating.
Delay in lodging FIR – Mala fides inferred
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FIR filed nearly 5 years after the transaction raises suspicion about complainant’s bona fides.
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Delay, coupled with vague allegations, militates against continuation of prosecution.
Civil vs. Criminal Remedies
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Where contractual obligations are allegedly breached, remedy lies in civil suit for damages, not in initiating criminal proceedings.
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Criminal law cannot be used as a tool for settling civil disputes or for vendetta.
Abuse of process – Bhajan Lal principles applied
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Case falls squarely within categories laid down in State of Haryana v. Bhajan Lal (1992 Supp (1) SCC 335), particularly clauses (1), (3), (5), and (7) of para 102.
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Allegations do not disclose ingredients of cognizable offence; proceedings appear mala fide and intended to harass.
Misuse of Criminal Process
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Courts must be vigilant against misuse of criminal justice system to settle personal scores (Inder Mohan Goswami v. State of Uttaranchal, (2007) 12 SCC 1; Vesa Holdings v. State of Kerala, (2015) 8 SCC 293; Vishal Noble Singh v. State of U.P., 2024 SCC OnLine SC 1680).
Held: FIR No.11/2023 dated 14.02.2023, charge-sheet dated 27.07.2023 and all consequential proceedings quashed. High Court order refusing to quash proceedings set aside. Appeal and writ petition allowed.2025 INSC 1118
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NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE/ORIGINAL JURISDICTION
CRIMINAL APPEAL NO. OF 2025
(Arising out of Special Leave Petition (Criminal) No.3415 of 2024)
PARAMJEET SINGH …APPELLANT
VERSUS
STATE OF HIMACHAL PRADESH
& OTHERS …RESPONDENTS
WITH
WRIT PETITION (CRIMINAL) NO. 217/2025
J U D G M E N T
NAGARATHNA, J.
Leave granted.
2. This appeal arises out of order dated 02.01.2024 passed by
the Himachal Pradesh High Court in Cr.MMO No.288/2023
dismissing the application filed under Section 482 of Code of
Criminal Procedure, 1973 (hereinafter ‘CrPC’ for short) preferred by
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the accused-appellant, Paramjeet Singh and refusing to quash the
proceedings arising out of FIR No.11/2023 dated 14.02.2023 that
was filed by Kushal K. Rana, the complainant/respondent No.3-
proprietor of M/s Soma Stone Crusher.
3. Writ Petition (Criminal) No.217/2025 has been preferred by
accused-petitioner, Sarabjit Singh, being aggrieved by the
chargesheet submitted on 27.07.2023 arising out of the very same
FIR No.11/2023 before the Court of Chief Judicial Magistrate,
Jaisinghpur, Kangra District, Himachal Pradesh wherein both
Paramjeet Singh and Sarabjit Singh were arraigned as accused and
charged under Section 420 read with Section 120B of the Indian
Penal Code, 1860 (hereinafter, “IPC’ for short). In the said Writ
Petition, the petitioner has prayed for quashing of FIR No.11/2023
and all the subsequent proceedings emanating from it.
4. Since both the appeal and writ petition arise from the same
facts and circumstances, they have been heard together and are
being disposed of by this common judgment. The appellant and the
writ petitioner shall henceforth be referred to as the ‘appellants’.
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5. Briefly stated, the facts of the case are that the appellants are
brothers running business firms dealing in stone crushing.
Appellant Paramjeet Singh runs a proprietorship M/s Sardara
Singh & Sons having GST No.:03AYQPS7151J3ZV. Petitioner
Sarabjit Singh runs a proprietorship M/s Saini Engineering Works
having GST No.:03BVHPS8462D1ZG.
6. On 12.12.2017, a sale and purchase agreement was entered
into by M/s Soma Stone Crusher with M/s Saini Engineering
Works for the purchase of a 20X40 ‘sand ruula machine’ and
conveyor and structures for a consideration of Rs.9,12,912/-. In
pursuance of the said agreement, a cheque bearing No.024210
dated 13.01.2018 for an amount of Rs.5,00,000/- was drawn by
M/s Soma Stone Crusher in favour of M/s Saini Engineering Works
at Punjab National Bank, Jalsinghpur, Kangra, Himachal Pradesh.
7. Upon presentation of the said cheque for encashment, the
same was returned by the bank with a remark: ‘Stop Payment’.
Aggrieved by the same, M/s Saini Engineering Works, through
Special Power of Attorney Paramjeet Singh (appellant herein), filed
a complaint in April, 2018 under Section 138 of Negotiable
Instruments Act, 1881, (“the Act”, for short) being NACT/306/2018
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against M/s Soma Stone Crusher and the
complainant/respondent No.3.
8. Thereafter, after five years from the sale-purchase agreement
dated 12.12.2017, an FIR No.11 dated 14.02.2023 was lodged at
Police Station Lambagaon under Section 420 IPC at the instance of
the complainant/respondent No.3 against the appellant. The
allegations in the said FIR can be crystallized as under:
i. Upon assurances of the appellant-accused Paramjeet Singh, a
ruula body 20X40 of approximate 14 tons was purchased from
M/s Saini Engineering Works and consequently an advance
payment of Rs.5,00,000/- was made through cheque bearing
No.024210.
ii. It was assured by the appellant that in case the said ruula set
fitting was not found as per the above said specification, the
same shall be replaced by him.
iii. It was also agreed by him that the said cheque of Rs.5,00,000/-
shall be presented only after complete satisfaction of the
complainant/respondent No.3 that the said ruula set fitting
was as per the specifications as agreed upon.
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iv. It was found that the weight of the said ruula set fitting was
only 12 tons instead of the promised 14 tons and the output of
the same was only 500 feet per hour instead of 1000 ft. to 1200
ft. per hour.
v. Due to the delivery of a product with wrong specifications and
failure to replace the same by the appellant, the
complainant/respondent No.3 has suffered a loss of Rs. 50
lakhs and hence liable for the offence of breach of trust.
9. Upon completion of the investigation with respect to the FIR,
a final police report was submitted before the court of Chief
Judicial Magistrate, Jaisinghpur charging the appellants of
offences under Section 420 read with Section 120B IPC. Thereafter,
Paramjeet Singh preferred a petition before the High Court under
Section 482 of CrPC as Cr. MMO No.288/2013 praying for the relief
of quashing of all the proceedings arising out of FIR No. 11/2023.
The High Court by the impugned order dated 02.01.2024
dismissed the said application.
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10. Hence, the present appeal and the writ petition.
11. Heard the learned counsel for the appellants and learned
counsel for the respondent-State as well as respondentcomplainants. We have perused the material on record.
12. We have given our thorough consideration to the arguments
advanced at the bar and the material on record.
13. The contents of the FIR as well as the chargesheet would have
to be read in light of the ingredients of Section 420 IPC and the law
settled by this Court through various judicial dicta. On perusal of
FIR No.11 dated 14.02.2023 and the subsequent proceedings
emanating from it, it is noted that the appellants are accused of
offences under Section 420 and Section 120B IPC. For ease of
reference, the aforesaid Sections are extracted as under:
“420. Cheating and dishonestly inducing delivery of
property.- Whoever cheats and thereby dishonestly
induces the person deceived to deliver any property to any
person, or to make, alter or destroy the whole or any part
of a valuable security, or anything which is signed or
sealed, and which is capable of being converted into a
valuable security, shall be punished with imprisonment of
either description for a term which may extend to seven
years, and shall also be liable to fine.
xxx
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120B. Punishment of criminal conspiracy.- (1) Whoever
is a party to a criminal conspiracy to commit an offence
punishable with death, imprisonment for life or rigorous
imprisonment for a term of two years or upwards, shall,
where no express provision is made in this Code for the
punishment of such a conspiracy, be punished in the same
manner as if he had abetted such offence.
(2) Whoever is a party to a criminal conspiracy other than
a criminal conspiracy to commit an offence punishable as
aforesaid shall be punished with imprisonment of either
description for a term not exceeding six months, or with
fine or with both.”
14. In Inder Mohan Goswami vs. State of Uttaranchal, (2007)
12 SCC 1, (“Inder Mohan Goswami”) while dealing with Section
420 IPC, this Court observed thus:
“42. On a reading of the aforesaid section, it is manifest
that in the definition there are two separate classes of acts
which the person deceived may be induced to do. In the
first class of acts he may be induced fraudulently or
dishonestly to deliver property to any person. The second
class of acts is the doing or omitting to do anything which
the person deceived would not do or omit to do if he were
not so deceived. In the first class of cases, the inducement
must be fraudulent or dishonest. In the second class of
acts, the inducing must be intentional but need not be
fraudulent or dishonest. Therefore, it is the intention
which is the gist of the offence. To hold a person guilty of
cheating it is necessary to show that he had a fraudulent
or dishonest intention at the time of making the promise.
From his mere failure to subsequently keep a promise, one
cannot presume that he all along had a culpable intention
to break the promise from the beginning.”
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15. In light of facts and circumstances of the present case, we
find that the complainant/respondent No.3 has failed to make out
a case that satisfies the basic ingredients of the offence under
Section 420 IPC. We fail to understand as to how the allegations
against the appellants herein could be brought within the scope
and ambit of the aforesaid Section 420 IPC. On a bare perusal of
the FIR as well as the charge-sheet, we do not find that the offence
of cheating as defined under Section 420 IPC is made out at all and
we do not find that there is any cheating and dishonest inducement
to deliver any property of a valuable security involved in the instant
case.
16. It is settled law that for establishing the offence of cheating,
the complainant/respondent No.3 was required to show that the
appellants had a fraudulent or dishonest intention at the time of
making a promise or representation of buying the said ‘ruula set
fitting’. Such a culpable intention when the promise was made
cannot be presumed but has to be supported with cogent facts. In
the facts of the present case, there is a clear absence of dishonest
and fraudulent intention on the part of the appellants as regards
the sale and purchase agreement. We must hasten to add that
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there is no allegation in the First Information Report or the
chargesheet indicating either expressly or impliedly any intentional
deception or fraudulent/dishonest intention on the part of the
appellants right from the time of making the promise or
misrepresentation. Nothing has been said on what the
misrepresentations were and how the appellants intentionally
deceived the complainant/ respondent No.3. Mere vague
allegations by the complainant/ respondent No.3 that the
appellants failed to provide a product of a particular specification
and failed to replace the faulty machines do not satisfy the test of
dishonest inducement to deliver a property or part with a valuable
security as enshrined under Section 420 IPC.
17. At this point, we must hasten to add that the impugned FIR
was filed after a delay of nearly five years. The learned counsel for
the complainant/respondent No.3 has not been able to state before
us the reason for the delay and this further raises suspicion about
the bona fides of the complainant. The delay in lodging of the FIR,
coupled with the vague allegations do not inspire the confidence of
this Court to allow the criminal proceedings to continue against
the appellants. The complainant had an alternative remedy of filing
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a civil suit claiming damages for the alleged violation of his
contractual rights but a route through criminal proceedings, when
no ingredient of offence is made out, cannot be permitted. Criminal
law ought not become a platform for initiation of vindictive
proceedings to settle personal scores and vendettas. The
appellants, in our view, could not be attributed any mens rea and
therefore, the allegations levelled by the prosecution against the
appellants are unsustainable.
18. This Court, in the case of Vesa Holdings P. Ltd. vs. State of
Kerala, (2015) 8 SCC 293, had observed and held that every
breach of contract would not give rise to an offence of cheating but
the cases of breach of contract would amount to cheating only
where there was any deception played at the very inception. It was
further observed that for the purpose of constituting an offence of
cheating, the complainant is required to show that the accused had
a fraudulent or dishonest intention at the time of making a promise
or representation. It was further observed that even in a case where
allegations are made in regard to failure on the part of the accused
to keep his promise, in the absence of a culpable intention at the
time of making initial promise being absent, no offence under
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Section 420 IPC can be said to have been made out and that the
real test is, whether, the allegations in the complaint disclose the
criminal offence of cheating.
19. Furthermore, in the case of Inder Mohan Goswami, it was
held by this Court that the Court must ensure that criminal
prosecution is not used as an instrument of harassment or for
seeking private vendetta or with an ulterior motive to pressurise
the accused. It was further held by this Court that it is neither
possible nor desirable to lay down an inflexible rule that would
govern the exercise of inherent jurisdiction. In view of the above
and for the reasons stated above, we are of the firm opinion that to
continue the criminal proceedings against the appellants herein
would cause undue harassment to them because, as observed
hereinabove, no prima facie case for the offence under Section 420
IPC is made out.
20. In this regard, it would be apposite to rely on the judgment in
the case of State of Haryana vs. Bhajan Lal, 1992 Suppl (1)
SCC 335 (“Bhajan Lal”) with particular reference to paragraph
102 therein, where this Court observed:
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“102. In the backdrop of the interpretation of the various
relevant provisions of the Code under Chapter XIV and of
the principles of law enunciated by this Court in a series
of decisions relating to the exercise of the extraordinary
power Under Article 226 or the inherent powers Under
Section 482 of the Code which we have extracted and
reproduced above, we give the following categories of cases
by way of illustration wherein such power could be
exercised either to prevent abuse of the process of any
court or otherwise to secure the ends of justice, though it
may not be possible to lay down any precise, clearly
defined and sufficiently channelised and inflexible
guidelines or rigid formulae and to give an exhaustive list
of myriad kinds of cases wherein such power should be
exercised.
(1) Where the allegations made in the first information
report or the complaint, even if they are taken at their face
value and accepted in their entirety do not prima facie
constitute any offence or make out a case against the
Accused.
(2) Where the allegations in the first information report and
other materials, if any, accompanying the FIR do not
disclose a cognizable offence, justifying an investigation by
police officers Under Section 156(1) of the Code except
under an order of a Magistrate within the purview of
Section 155(2) of the Code.
(3) Where the uncontroverted allegations made in the FIR
or complaint and the evidence collected in support of the
same do not disclose the commission of any offence and
make out a case against the Accused.
(4) Where, the allegations in the FIR do not constitute a
cognizable offence but constitute only a non-cognizable
offence, no investigation is permitted by a police officer
without an order of a Magistrate as contemplated Under
Section 155(2) of the Code.
(5) Where the allegations made in the FIR or complaint are
so absurd and inherently improbable on the basis of which
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no prudent person can ever reach a just conclusion that
there is sufficient ground for proceeding against the
Accused.
(6) Where there is an express legal bar engrafted in any of
the provisions of the Code or the concerned Act (under
which a criminal proceeding is instituted) to the institution
and continuance of the proceedings and/or where there is
a specific provision in the Code or the concerned Act,
providing efficacious redress for the grievance of the
aggrieved party.
(7) Where a criminal proceeding is manifestly attended
with mala fide and/or where the proceeding is maliciously
instituted with an ulterior motive for wreaking vengeance
on the Accused and with a view to spite him due to private
and personal grudge.”
21. On a careful consideration of the aforementioned judicial
dictum, we find that none of the offences alleged against the
appellants herein is made out. In fact, we find that the allegations
of criminal intent and other allegations against the appellants
herein have been made with a mala fide intent and therefore, the
judgment of this Court in the case of Bhajan Lal and particularly
sub-paragraphs 1, 3, 5 and 7 of paragraph 102, extracted above,
squarely apply to the facts of this case. It is neither expedient nor
in the interest of justice to permit the present prosecution to
continue.
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22. At this juncture, we find it apposite to mention the
observations of this Court in Vishal Noble Singh vs. State of
Uttar Pradesh, 2024 SCC OnLine SC 1680 wherein it was
observed that in recent years, the machinery of criminal justice is
being misused by certain persons for their vested interests and for
achieving their oblique motives and agenda. Courts have therefore
to be vigilant against such tendencies and ensure that acts of
omission and commission having an adverse impact on the fabric
of our society must be nipped in the bud. We say so for the reason
that while the complainant has made allegations against the
appellants herein and a charge-sheet has also been filed, he has
failed to justify the same before this Court. Such actions would
create significant divisions and distrust among people, while also
placing an unnecessary strain on the judicial system, particularly
the criminal courts.
23. In the aforementioned circumstances, the impugned order of
the High Court is set aside and consequently, the FIR No.11/2023
dated 14.02.2023 at Police Station Lambagaon, the chargesheet
dated 27.07.2023 and all consequent proceedings initiated
pursuant thereto stand quashed.
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24. The appeal and the writ petition are allowed in the aforesaid
terms.
…………………………………..J.
(B.V. NAGARATHNA)
…………………………………..J.
(R. MAHADEVAN)
NEW DELHI;
SEPTEMBER 15, 2025.