Table of Content
1. loan repayment dispute involving dishonoured cheques and subsequent fir. (Para 2 , 12)
2. arguments that breach of contract without initial dishonest intent is not a criminal offense. (Para 3 , 4 , 5 , 6 , 7 , 8 , 9)
3. state's contention that materials are sufficient to constitute offences under ipc. (Para 10)
4. distinction between mere breach of contract and criminal cheating based on mens rea. (Para 11)
5. quashing of fir due to absence of fraudulent intent at the inception of the transaction. (Para 13 , 14 , 15)

By the Court:- Heard the parties.

2. This criminal miscellaneous petition has been filed invoking the jurisdiction of this Court under Section 528 of BNSS 2023 with the prayer for quashing and setting aside the FIR being B.S. City P.S. case no. 37 of 2024 registered for the offence punishable under Section 406/420 of IPC, presently pending in the court of learned JMFC, Bokaro.

3. Learned counsel for the petitioner submits that the investigation of the case is still going on and the charge sheet has not yet been submitted.

4. The allegation against the petitioner is that the petitioner took a loan of Rs. 8,00,000/- from the informant and to repay the loan, issued cheques twice but the cheques were dishonoured. Relying upon the judgment of the Hon’ble Supreme Court of India in the case of Binod Kumar and Others v. State of Bihar and Another reported in (2014) 10 SCC 663, para 18 of which reads as under :-

“18. In the present case, looking at the allegations in the complaint on the face of it, we find that no allegations are made attracting the ingredients of Section 405 IPC. Likewise, there are no allegations as to cheating or the dishonest intention of the appellants in retaining the money in order to have wrongful gain to themselves or causing wrongful loss to the complainant. Excepting the bald allegations that the appellants did not make payment to the second respondent and that the appellants utilised the amounts either by themselves or for some other work, there is no iota of allegation as to the dishonest intention in misappropriating the property. To make out a case of criminal breach of trust, it is not sufficient to show that money has been retained by the appellants. It must also be shown that the appellants dishonestly disposed of the same in some way or dishonestly retained the same. The mere fact that the appellants did not pay the money to the complainant does not amount to criminal breach of trust.”(Emphasis supplied)

learned counsel for the petitioner submits that therein, it has categorically been reiterated by the Hon’ble Supreme Court of India that to make out a case of criminal breach of trust, it is not sufficient to show that money has been retained by the accused persons. It must also be shown that the accused persons dishonestly disposed of the same in some way or dishonestly retained the same. The mere fact that the accused persons did not repay the money to the complainant does not amount to criminal breach of trust.

It is next submitted that in this case, the only allegation is that though the petitioner attempted to pay back the money by way of cheques but the cheques were dishonoured. So, in this case the offence punishable under Section 406 of IPC will not be made out even if the entire allegations made against the petitioner are considered to be true in their entirety.

5. Learned counsel for the petitioner next relies upon the judgment of the Hon’ble Supreme Court of India in the case Uma Shankar Gopalika vs. State of Bihar & Another reported in (2005) 10 SCC 336 paragraph-6 of which reads as under:-

6. “Xxxx xxxx xxxx It is well settled that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. In the present case it has nowhe

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