The court quashed criminal proceedings against the petitioner due to insufficient allegations to constitute offences under IPC Sections 406 and 420.

JUDGMENT :

ANIL KUMAR CHOUDHARY, J.

1. Heard the parties.

2. This Writ Petition has been filed invoking the jurisdiction of this Court under Article 226 and Article 227 of the Constitution of India with a prayer to quash the entire criminal proceeding in connection with Lower Bazar P.S. Case No. 286 of 2023 registered for the offence punishable under Sections 406 , 420 and 120B of Indian Penal Code .

3. The brief fact of the case is that the co-accused-Raj Kumar Choudhary cheated and thereby induced the informant to part with Rs. 6,85,94,073/- by enticing and alluring the informant and his associates by making them invest huge amount of money with Yash Alloys Private Limited and the only allegation against the petitioner is that the petitioner was the original owner of Yash Alloys Private Limited which has been taken over by the Punjab National Bank.

4. It is submitted by the learned counsel for the petitioner by relying upon the judgment of the Hon’ble Supreme Court of India in the case of Naresh Kumar & Ors. vs. The State of Karnataka & Ors. reported in MANU/SC/0193/2024 that High Court must not hesitate in quashing such criminal proceeding which are essentially of a civil nature. It is next submitted by the learned counsel for the petitioner that this is a case essentially of civil nature. Learned counsel for the petitioner next relied upon the judgment of Hon’ble Supreme Court of India in the case of Delhi Race Club (1940) Ltd. & Ors. vs. State of Uttar Pradesh & Anr. reported in 2024 SCC OnLine SC 2248, paragraph no.46 of which reads as under :-

“46. It has been held in State of Gujarat v. Jaswantlal Nathalal [State of Gujarat v. Jaswantlal Nathalal, 1967 SCC OnLine SC 58 : AIR 1968 SC 700 : (1968) 2 SCR 408] :(SCC OnLine SC para 8)

“8. The term “entrusted” found in Section 405IPC governs not only the words “with the property” immediately following it but also the words “or with any dominion over the property” occurring thereafter— see Velji Raghavji Patel v. State of Maharashtra [Velji Raghavji Patel v. State of Maharashtra, 1964 SCC OnLine SC 185 : AIR 1965 SC 1433 : (1965) 2 SCR 429] . Before there can be any entrustment there must be a trust meaning thereby an obligation annexed to the ownership of property and a confidence reposed in and accepted by the owner or declared and accepted by him for the benefit of another or of another and the owner. But that does not mean that such an entrustment need conform to all the technicalities of the law of trust — see Jaswantrai Manilal Akhaney v. State of Bombay [Jaswantrai Manilal Akhaney v. State of Bombay, 1956 SCC OnLine SC 46 : AIR 1956 SC 575 : 1956 SCR 483] . The expression “entrustment” carries with it the implication that the person handing over any property or on whose behalf that property is handed over to another, continues to be its owner. Further the person handing over the property must have confidence in the person taking the property so as to create a fiduciary relationship between them. A mere transaction of sale cannot amount to an “entrustment”.””

and submits that in the absence of entrustment of any property to the petitioner or in the absence of any allegation against the petitioner of dishonestly inducing anybody to part with any property or money etc., the offence punishable under Section 420 or 406 of Indian Penal Code is not made out against the petitioner.

5. Learned counsel for the petitioner next relied upon the judgment of Hon’ble Supreme Court of India in the case of Mahmood Ali & Ors. vs. State of U.P. & Ors. reported in 2023 INSC 684 paragraph no.13 of which reads as under :-

“13. In State of Andhra Pradesh v. Golconda Linga Swamy, (2004) 6 SCC 522, a two-Judge Bench of this Court elaborated on the types of materials the High Court can assess to quash an FIR. The Court drew a fine distinction between consideration of materials that were tendered as evidence and appreciation of such evidence. Only such material that manifestly fails to prove the accusation