In criminal disputes involving business agreements, a fundamental distinction exists between contractual obligations and criminal misappropriation, which underpins the applicability of IPC Sections 406 and 420.

ORDER :

1. Both the above-mentioned writ petitions are taken up together for adjudication by a composite order as in both the writ petitions, the following reliefs have been prayed:

“i. For that appropriate writ or writs in the nature of certiorari for setting aside/quashing of the first information report in connection with Rupaspur P.S Case No. 549 of 2019 dated 28.12.2019 registered under section 420/406/34 of the IPC and all other consequential proceeding thereafter, registered against the petitioner and other co accused persons.

ii. For that any other relief or reliefs may be granted as Your Lordships may deem fit and proper in the facts and circumstances of this case.

2. That the issues of seminal importance in this case are as follows:-

i. Whether the respondent authorities have not acted illegally and arbitrarily by lodging the present FIR in civil dispute?

ii. Whether the informant has misused the criminal process by lodging FIR for recovery of money in partnership business?

iii. Whether FIR is fit to be quashed?

iv. Whether the dispute is of civil nature or having criminal intention?”

2. While in Cr. W.J.C. No. 261 of 2024, one Kumar Tushar Singh is the Private Respondent No. 5, in Cr. W.J.C. No. 313 of 2020, the brothers and father of the Avinash Gopal Gautam are the petitioners. All of them have prayed for issuance of a writ in the nature of Certiorari, quashing the FIR lodged by the informant / Respondent No. 5 against them.

3. Briefly stated, it is alleged by the informant by filing FIR on 28^th of December, 2019, stating, inter alia, that on being insisted by one Gopal Pandey, he issued a bank guarantee in favour of Trycon Company on 18^th of July, 2016. On the strength of the said bank guarantee, Tricon Company used to deliver goods for sale to Avinash Gopal Gautam, petitioner herein. Since Avinash Gopal Gautam failed to make payment of the consideration price to Tricon Company, the company released the said bank guarantee on 17^th of July, 2017. On being requested by Gopal Pandey, the informant again paid a sum of Rs. 5 Lakhs 80 Thousands through IMPS to the bank account of Avinash Gopal Gautam. However, Avinash Gopal Gautam and other accused persons failed to make payment of the aforesaid amount apart from a sum of Rs. 2 Lakhs 32 Thousands. When the informant asked Avinash Gopal Gautam that he would take legal action for non-payment of the said amount, he was abused and threatened by one Hareram Tiwari and employed goon of the petitioner with dire consequence. Thus, it is alleged that the petitioners have misappropriated the amount of bank guarantee and subsequent amount which was sent to Avinash Gopal Gautam by IMPS and committed cheating in respect of the said amount. It is further contended by the informant that the petitioner took money to start a business with which the informant had no connection.

4. The learned Advocate on behalf of the petitioners, at the outset, submits that there was an agreement between the informant and present petitioners that they would start a business jointly under partnership. It was decided that the informant would pay money adequate for the business while the petitioners would look after the business with infrastructure and logistic. With this understanding, the petitioners and the informant started a business under the name and style of Digital Voice Enterprise under partnership.

5. The learned Advocate on behalf of the informant has vehemently objected to such submission made on behalf of the petitioners. It is submitted by him that this