A purely commercial dispute involving a breach of contract, without evidence of dishonest intention at the inception of the transaction, does not constitute the offence of cheating under Section 420 IPC and should be quashed to prevent abuse of legal process.

Order on Board

Per Ramesh Sinha, Chief Justice

VED PRAKASH DEWANGAN Digitally signed by VED PRAKASH DEWANGAN Date: 2026.05.04 20:45:16 +0530

1. The present petition has been preferred under Section 482 of the Code of Criminal Procedure seeking quashment of FIR No. 495/2023 dated 01.08.2023 registered at Police Station Ambikapur, District Sarguja for the offence punishable under Section 420 of the IPC and the consequential charge-sheet filed before the Court of Chief Judicial Magistrate, Ambikapur.

2. The present petition has been filed by the petitioner seeking for the following reliefs:-

“A) That this Hon’ble Court may kindly quash and set-a-side the F.I.R. No. 495/2023, Dated: 01/08/2023 (ANNEXURE-P1), registered with P.S. Ambikapur, District Ambikapur (Sarguja), Chhattisgarh for the offence punishable under section 420 of Indian Penal Code, in the interest of Justice.

B) That this Hon’ble Court may kindly quash and set-a-side the Charge-sheet filed before the Chief Judicial Magistrate, Ambikapur, District Sarguja, Chhattisgarh in FIR. No.495/2023, in the interest of Justice.

C) That any other relief Hon’ble Court deems feet may also be granted.”

3. The facts of the case, in brief, are that the petitioner, being the proprietor of Bolbam Company, entered into an oral agreement with respondent No.2 for sale of a PC450 excavator crane for a total consideration of Rs.32,00,000/-. It was agreed between the parties that the payment would be made in installments and the delivery of the crane would be effected upon payment of the entire consideration amount. In pursuance thereof, respondent No.2 paid a sum of Rs.10,01,000/- through bank transactions and also issued two cheques as security. It is the case of the petitioner that, at the instance of respondent No.2, the crane was kept unused and maintained by engaging staff, incurring monthly expenses, however, respondent No.2 failed to clear the remaining amount despite repeated requests.

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It is further the case of the petitioner that when respondent No.2 did not fulfill his part of the agreement and failed to make the balance payment, the petitioner proceeded to give the crane on rent, whereafter respondent No.2 lodged complaints before the authorities and subsequently the impugned FIR came to be registered alleging that the petitioner had cheated him by receiving money and not delivering the crane. Upon investigation, the police filed a charge-sheet for the offence under Section 420 IPC against the petitioner, which has been challenged in the present petition on the ground that the dispute is purely civil in nature arising out of a contractual transaction.

4. Learned counsel for the petitioner submits that the impugned FIR and consequential charge-sheet are nothing but an abuse of the process of law, as the entire dispute between the parties arises out of a purely commercial transaction pertaining to sale of an excavator crane and is civil in nature. It is contended that there was an oral agreement between the parties for sale of the crane for a total consideration of Rs.32,00,000/-, out of which only a part payment was made by respondent No.2, and the delivery was agreed to be effected only upon payment of the entire consideration amount. It is further submitted that there was no dishonest or fraudulent intention on the part of the petitioner from the very inception of the transaction, which is a sine qua non for constituting an offence under Section 420 of IPC, and at best, the allegations di