# Sanjay Gulati v. State of U.P. & Anr

- **Citation:** (2022) 2 ILRA 550
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-11-11
- **Case number:** Application U/S 482 Cr.P.C. No.2742 of 2007
- **Bench:** Subhash Vidyarthi
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/sanjay-gulati-v-state-of-u-p-anr-47542
- **Pages:** 8

## Headnote

A.G.A.

(A) FIR alleges advancement of money to
Applicant accused but goods not received
in return-receipt of goods could not be
refuted by complainant -no mention of the
Applicant in the FIR-no disclosure of
prima facie commission of offence against
Applicant-such proceeding would result in
an abuse of the process of law-proceeding
quashed.

Held, In the entire complaint there is no
allegation of any threat 10 having been
extended by the applicant, or by the alleged
Sandeep, to the complainant and any injury to
his person, reputation or property, or to the
person or reputation of any one in whom that
person is interested, with intent to cause alarm
to that person, or to cause that person to do
any act which he is not legally bound to do, or
to omit to do any act which that person is
legally entitled to do. Therefore, this Court is of
the considered opinion that the essential
ingredients of the offence punishable under
Sections 420 and 506 IPC are not made out
from a bare perusal of the complaint, besides
the fact that the entire complaint does not make
any mention of the name of the complaint
namely viz. Sanjay Gulati. (para 22)

Application allowed. (E-9)

List of Cases cited:-

## Text

550 INDIAN LAW REPORTS ALLAHABAD SERIES

21. Accordingly, the application is
allowed.
----------
(2022)02ILR A550
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 11.11.2021

BEFORE

THE HON'BLE SUBHASH VIDYARTHI, J.

Application U/S 482 Cr.P.C. No.2742 of 2007

Sanjay Gulati ...Applicant
Versus
State of U.P. & Anr. ...Opposite Parties

Counsel for the Applicant:
Sri Krishna Kumar Singh

Counsel for the Opposite Parties:
A.G.A.

(A) FIR alleges advancement of money to
Applicant accused but goods not received
in return-receipt of goods could not be
refuted by complainant -no mention of the
Applicant in the FIR-no disclosure of
prima facie commission of offence against
Applicant-such proceeding would result in
an abuse of the process of law-proceeding
quashed.

Held, In the entire complaint there is no
allegation of any threat 10 having been
extended by the applicant, or by the alleged
Sandeep, to the complainant and any injury to
his person, reputation or property, or to the
person or reputation of any one in whom that
person is interested, with intent to cause alarm
to that person, or to cause that person to do
any act which he is not legally bound to do, or
to omit to do any act which that person is
legally entitled to do. Therefore, this Court is of
the considered opinion that the essential
ingredients of the offence punishable under
Sections 420 and 506 IPC are not made out
from a bare perusal of the complaint, besides
the fact that the entire complaint does not make
any mention of the name of the complaint
namely viz. Sanjay Gulati. (para 22)

Application allowed. (E-9)

List of Cases cited:-

1. Surya Pratap Singh Vs St. of U.P. & anr.
reported in 2015 8 ADJ 580

2. Lourence D" Souza Vs St. of U.P. & anr.
reported in 2017 (2) ALJ 156

3. Anil Mahajan Vs Bhor Industries Ltd. & anr.
(2005) 10 SCC 228

4. Geo Varghese Vs St. of Raj., 2021 SCC Online
SC 873

5. Rajiv Thapar Vs Madan Lal Kapoor, (2013) 3
SCC 330

(Delivered by Hon'ble Subhash Vidyarthi, J.)

1. Heard Shri Krishna Kumar Singh,
learned counsel for the applicant and
learned A.G.A. for the State-respondents
and perused the record.

2. By means of the instant application
under Section 482 of
the
Criminal
Procedure
Code
the
applicant-Sanjay
Gulati s/o Shri Mahendra Gulati has prayed
for quashing of the entire proceedings of
Complaint Case No. 419 of 2006 under
Section 420, 506 I.P.C. in Police Station
Civil Lines, District Moradabad pending in
the Court of Civil Judge (Junior Division),
Moradabad, Court No. 2.

3. The facts of the case as borne out
from the record are that the complainant
Kamal Singh, who has been arrayed as the
opposite party No. 2 in the application
under Section 482 Criminal Procedure
Code, filed a complaint dated 23-06-2005
under Section 156 (3) of the Criminal
Procedure Code alleging that he had taken
2 All. Sanjay Gulati Vs. State of U.P. & Anr.
551
a loan from Syndicate Bank for his
business of cycles and had submitted a
quotation of "Sandeep Traders, Jail Road,
Moradabad". On 30.05.2005 a cheque
number 757645 amounting to Rs. 30,000/-
was issued in the name of Sandeep Traders
but Sandeep did not give the goods to the
complainant and he said that he will give
the same as and when the same will be
available and he obtained signatures of the
complainant for obtaining payment from
the Bank. Thereafter, the second cheque
bearing number 054830 dated 09-06-2005
for Rs. 20,000/- was given by the Bank.
Sandeep kept on saying that he will give
the goods. On 20.6.2005, the complainant
went
to
Sandeep,
the
complainant
accompanied by his brothers Charan Singh,
Vipin Bishnoi and Mohit Bishnoi went to
Sandeep, when Sandeep said that the entire
arrears stood settled and he would not give
the goods and threatened the complainant,
He has complained that Sandeep wants to
usurp
the
complainant's
money
fraudulently.

4. The statement of complainant was
recorded under Section 200 Criminal
Procedure Code and the statements of
witnesses Charan Singh and Vipin Bishnoi
were recorded under Section 202 Criminal
Procedure Code and on 17-01-2007, the
Additional
Chief
Judicial
Magistrate,
Moradabad, Court No. 2 passed an order
summoning Sandeep Kumar for being tried
for offences under Sections 420, 506 Indian
Penal Code.

5 . Aggrieved by the complaint and the
summoning order, the applicant "Sanjay
Gulati s/o Shri Mahendra Gulati" who is the
proprietor of "Sandeep Traders" - with which
the complainant Kamal Singh was having
business relations, has approached this Court
by filing the instant application under Section
482 Cr.P.C.

6. In the affidavit filed in support of
application, the applicant has stated that he
owns a shop of cycles and cycle parts and he
is running his business in the name of
"Sandeep Traders". The allegations against
him are totally false and frivolous and are
designed only to harass him. He has already
delivered the goods in respect of which
cheque numbers 757645 and 054830 were
issued and the opposite party No. 2 has
received the goods and made endorsements
of receiving on the bills, a copy whereof has
been filed as Annexure No. 3 to the affidavit
filed in support of the application under
Section 482 Criminal Procedure Code. The
applicant
has
further
stated
that
the
complainant-opposite party No. 2 has taken a
commercial loan of Rs. 50,000/- from
Syndicate Bank, Moradabad and when he
failed to deposit the same, the Bank issued a
notice for recovery of the amount and in
order to take undue advantage and to delay
the recovery proceedings, the opposite party
No. 2 has filed the complaint. From a perusal
of the complaint no offence under Sections
420 and 506 I.P.C. is made out against the
applicant- Sanjay Gulati s/o Shri Mahendra
Gulati.

7. On 12-02-2007, this Court was pleased
to pass the following order in this case: -

"Issue notice to opposite party no.
2 to file counter affidavit within six weeks.

Learned A.G.A. may also file
counter affidavit within the same period.

Rejoinder affidavit may be filed
within two weeks thereafter. List after
expiry of the aforesaid period.
552 INDIAN LAW REPORTS ALLAHABAD SERIES

Till the next date of listing,
further proceedings in complaint case No.
419 of 2006, Kamal Singh Vs. Sanjay
Gulati, pending before Civil Judge (JD),
court no. 2, Moradabad against the
applicant shall remain stayed."

8. In compliance of the aforesaid
order, a notice was issued to the opposite
party No. 2, which has not been returned
unserved. Even otherwise, when the
proceeding of the complaint case is lying
stayed since 12-02-2007, it cannot be
accepted that the complainant-opposite
party No. 2 has no knowledge of the filing
of the present application under Section
482 Criminal Procedure Code in this Court.
Still none of the opposite parties has filed
counter affidavit or any application for
vacation of interim order dated 12-02-2007.

9. Shri Krishna Kumar Singh
Advocate, learned counsel for the applicant
has submitted that all the allegations in
complaint are against "Sandeep" whereas
the complainant had business relations with
"Sandeep
Traders",
of
which
the
applicant-Sanjay Gulati s/o Shri Mahendra
Gulati is the proprietor and there is absolute
no mention of Sanjay Gulati proprietor of
Sandeep Traders in the complaint and the
complaint does not disclose commission of
any offence by Sanjay Gulati. The
applicant-Sanjay Gulati s/o Shri Mahendra
Gulati cannot be tried for any offence on
the basis of aforesaid complaint.

10. The aforesaid submission of
learned counsel for the applicant appears to
be sound as in the entire complaint, there is
no mention of applicant-Sanjay Gulati s/o
Shri Mahendra Gulati, who is the proprietor
of "Sandeep Traders". Therefore, the
allegations levelled in the complaint, even
if the same are to be taken to be true, do not
disclose the commission of any offence by
Sanjay Gulati s/o Shri Mahendra Gulati,
the proprietor of "Sandeep Traders".

11. The learned counsel for the
applicant has further submitted that the
complainant has already received the goods
and he has made an endorsement of receiving
of goods on the bills - a copy whereof has
been filed as Annexure-3 to the affidavit filed
in support of the application under Section
482
Criminal
Procedure
Code.
The
complainant-opposite party No. 2 has not
filed any counter affidavit disputing the
correctness of the endorsement of receiving
of goods made on the bills and it should be
presumed that the complainant-opposite party
No. 2 does not dispute its correctness, rather,
he admits it by implication. Therefore, the
allegations of non delivery of the goods is
found to be false on the basis of undisputed
material available on the record of this Court.

12. In Rajiv Thapar v. Madan Lal
Kapoor, (2013) 3 SCC 330, the Hon'ble
Supreme Court has formulated certain steps
to determine the veracity of a prayer for
quashing under Section 482 Criminal
Procedure Code as follows:-

"30.
Based
on
the
factors
canvassed in the foregoing paragraphs, we
would delineate the following steps to
determine the veracity of a prayer for
quashment raised by an accused by
invoking the power vested in the High
Court under Section 482 CrPC:

30.1. Step one: whether the
material relied upon by the accused is sound,
reasonable, and indubitable i.e. the material
is of sterling and impeccable quality?

30.2. Step two: whether the
material relied upon by the accused would
2 All. Sanjay Gulati Vs. State of U.P. & Anr.
553
rule out the assertions contained in the
charges levelled against the accused i.e.
the material is sufficient to reject and
overrule the factual assertions contained in
the complaint i.e. the material is such as
would persuade a reasonable person to
dismiss and condemn the factual basis of
the accusations as false?

30.3 Step three: whether the
material relied upon by the accused has not
been
refuted
by
the
prosecution/complainant;
and/or
the
material is such that it cannot be justifiably
refuted by the prosecution/complainant?

30.4.Step
four:
whether
proceeding with the trial would result in an
abuse of process of the court, and would
not serve the ends of justice?

30.5. If the answer to all the steps
is in the affirmative, the judicial conscience
of the High Court should persuade it to
quash
such
criminal
proceedings
in
exercise of power vested in it under Section
482 CrPC. Such exercise of power, besides
doing justice to the accused, would save
precious court time, which would otherwise
be wasted in holding such a trial (as well
as proceedings arising therefrom) specially
when it is clear that the same would not
conclude in the conviction of the accused."
 (emphasis supplied by me)

13. In the case in hand, the material
relied upon by the accused particularly the
receipt of goods (annexure-3) has not been
refuted by the complainant and this Court
finds that the proceeding with the trial
would result in an abuse of the process of
law and would not serve the ends of justice.

14. The learned counsel for the
applicant has next submitted that even as
per
the
complaint-allegations,
the
complainant was in business relations with
"Sandeep Traders" and his grievance is
regarding non payment of certain amount
due in business transactions. He has
submitted that the dispute of non payment
of
any
amount
payable
towards
consideration of sale of goods is a dispute
of purely civil nature, for which the
appropriate remedy lies in the civil court,
namely filing a suit for recovery of money
as provided under Section 57 of Sale of
Goods Act, 1930. In this regard, he has
placed reliance on a judgement of this
Court in the case of Surya Pratap Singh
Vs. State of U.P. and another reported in
2015 8 ADJ 580. The relevant portion of
the aforesaid judgment is contained in
paragraph Nos. 62 and 63, which are being
reproduced below:-

"62. In the light of facts and
circumstances stated above and law settled
by Hon'ble Apex Court in the decisions of
Hridaya Ranjan Prasad Verma (supra),
Alpic Finance Ltd. (supra), S.W. Palanitkar
and
Others
(supra),
Uma
Shankar
Gopalika (aupra), Devendra Kumar Singla
(supra), Anil Mahajan (supra), Neelu
Chopra and Another (supra), Paramjeet
Batra (supra), Arun Bhandari (supra), G.
Sagar Suri and Another (supra) and by this
Court in M/s Rohit Stationary Centre (P)
Ltd. & Others (supra), this Court is of the
considered view that complaint does not
disclose any criminal offence at all, much
less, any offence either under Section 406
I.P.C. or Section 420 I.P.C. and present
case is purely a case of civil dispute
between the parties, based on various
commercial transactions during course of
business, for which remedy lies before the
Civil Court by filing of appropriate suit,
subject to permissibility of limitation for
filing the same.
554 INDIAN LAW REPORTS ALLAHABAD SERIES

63. In the circumstances, this
Court is of further view that by filing of
criminal complaint a dispute of purely civil
nature is given a cloak of criminality with
intention to pressurize the applicant and his
wife to bring them to his own terms and to
enforce obligations arising out of breach of
contract touching commercial transactions
instead of approaching Civil Court with a
view to realize money at the earliest, as
such by allowing continuance of complaint
and consequential proceedings relating to it
would amount to abuse of process of court
and to prevent the same it is just and
expedient in the interest of justice to quash
the same by exercising inherent power of
this Court under Section 482 Cr.P.C. "

15. Learned counsel for the applicant
has taken the Court through the entire
allegations in the complaint which indicate
that the complaint is regarding non delivery
of goods even after making payments and
on certain arguments having occurred when
he demanded the goods and he has alleged
that "Sandeep wants to usurp his money
fraudulently", which is purely a case of
civil dispute between the parties, based on
various commercial transactions during
course of business, for which remedy lies
before the Civil Court by filing of
appropriate suit. By filing a criminal
complaint, a dispute of purely civil nature
has been given a cloak of criminality and as
such by allowing continuance of complaint
and consequential proceedings relating to it
would amount to abuse of process of court
and to prevent the same it is just and
expedient in the interest of justice to quash
the same by exercising inherent power of
this Court under Section 482 Cr.P.C.

16. The learned Counsel for the
applicant has next submitted that besides
the fact that there is absolutely no
allegation against the applicant-Sanjay
Gulati s/o Shri Mahendra Gulati proprietor
of Sandeep Traders, the allegations do not
make out ingredients of offence of cheating
which is provided under Section 415 I.P.C.
as follows:-

"Whoever, by deceiving any
person, fraudulently or dishonestly induces
the person so deceived to deliver any
property to any person, or to consent that
any person shall retain any property, or
intentionally
induces
the
person
so
deceived to do or omit to do anything
which he would not do or omit if he were
not so deceived, and which act or omission
causes or is likely to cause damage or harm
to that person in body, mind, reputation or
property, is said to "cheat"."

Explanation,--A
dishonest
concealment of facts is a deception within
the meaning of this section."

17. The learned counsel for the applicant
has placed reliance on a judgement of this
Court in the case of Lourence D" Souza Vs.
State of U.P. and another reported in 2017
(2) ALJ 156 in which this Court has explained
the essential ingredients of the offence of
cheating in the following words:-

"The essential ingredients of the
offence of cheating are as follows: -

(I) Deceiving or making of false
representation.

(II)
dishonest
inducement
to
deliver property or to make, alter or destroy
any valuable security or anything which is
sealed or signed or is capable of being
converted into a valuable security and

(III) "mensrea" or fraudulent or
dishonest intention of the accused at the
2 All. Sanjay Gulati Vs. State of U.P. & Anr.
555
time of making the inducement or false
representation."

18. From a perusal of the record it is
evident that the opposite party no. 2 claims
that he was doing business with the
applicant since long and in a routine
manner the instant business transaction was
also made. 'Mens rea' or the guilty mind, at
the time of making inducement is a
necessary ingredient of the offence of
cheating. Therefore, it cannot be said that
there was any dishonest intention on the
part of accused/applicant at the time when
the parties entered into the transaction. On
the basis of allegations made in the
complaint, it cannot be said that Section
420 of I.P.C. is attracted in the present
case.

19. In the case of International
Advanced Research Centre for Powder
Metallurgy and New Materials (ARCI)
and Others Versus Nimra Cerglass
Technics (P) Ltd. and Others, (2016) 1
SCC 348, the Hon'ble Supreme Court has
explained the definition of cheating as
under: -

"The
making
of
a
false
representation is one of the essential
ingredients to constitute the offence of
cheating under Section 420 I.P.C.. In
order to bring a case for the offence of
cheating it is not merely sufficient to
prove that a false representation had been
made. It is further necessary to prove that
the representation was false to the
knowledge of the accused and was made
in order to deceive the complainant. If it
is established that the intention of the
accused was dishonest at the very time
when he made a promise and entered into
a transaction with the complainant to part
with his property or money, then the
liability is criminal and the accused is
guilty of the offence of cheating but
further
that
established
that
a
representation was made by the accused
has subsequently not been kept, criminal
liability cannot be foisted on the accused
and the only right which the complainant
acquires is the remedy for breach of
contract in a civil court. Mere breach of
contract cannot give rise to criminal
prosecution for cheating and criminal
liability should not be produced in
disobedience of civil nature."

20. In Anil Mahajan vs. Bhor
Industries Ltd. & Anr. (2005) 10 SCC
228, the Hon'ble Supreme Court has
drawn a distinction between a breach of
contract and cheating in the following
words:-

"6. ........A distinction has to be
kept in mind between mere breach of
contract and the offence of cheating. It
depends upon the intention of the accused
at the time of inducement. The subsequent
conduct is not the sole test. Mere breach of
contract cannot give rise to criminal
prosecution for cheating unless fraudulent,
dishonest intention is shown at the
beginning of the transaction."

According to the Hon'ble Apex
Court:-

8. The substance of the complaint
is to be seen. Mere use of the expression
"cheating" in the complaint is of no
consequence. Except mention of the words
"deceive" and "cheat" in the complaint filed
before the Magistrate and "cheating" in the
complaint filed before the police, there is
no averment about the deceit, cheating or
fraudulent intention of the accused at the
time of entering into MOU wherefrom it
556 INDIAN LAW REPORTS ALLAHABAD SERIES
can be inferred that the accused had the
intention to deceive the complainant to
pay."

21. In the entire complaint, there is no
allegation that the alleged Sandeep had
fraudulently or dishonestly induced the
complainant to deliver any property by
deceiving the complainant. Further the
complaint
does
not
make
out
the
commission
of
offence
of
criminal
intimidation, which is defined under
Section 503 I.P.C. as follows:-

"503.
Criminal
intimidation.--
Whoever threatens another with any injury
to his person, reputation or property, or to
the person or reputation of any one in
whom that person is interested, with intent
to cause alarm to that person, or to cause
that person to do any act which he is not
legally bound to do, or to omit to do any act
which that person is legally entitled to do,
as the means of avoiding the execution of
such
threat,
commits
criminal
intimidation."

22. In the entire complaint there is
no allegation of any threat having been
extended by the applicant, or by the
alleged Sandeep, to the complainant and
any injury to his person, reputation or
property, or to the person or reputation of
any one in whom that person is
interested, with intent to cause alarm to
that person, or to cause that person to do
any act which he is not legally bound to
do, or to omit to do any act which that
person is legally entitled to do. Therefore,
this Court is of the considered opinion
that the essential ingredients of the
offence punishable under Sections 420
and 506 IPC are not made out from a bare
perusal of the complaint, besides the fact
that the entire complaint does not make
any mention of the name of the complaint
namely viz. Sanjay Gulati.

23. In a recent pronouncement
reported in 2021 SCC Online SC 873,
Geo Varghese Vs. State of Rajasthan,
the Hon'ble Supreme Court held as
under:-

"35. The scope and ambit of
inherent powers of the Court under
Section 482 CrPC or the extra-ordinary
power
under
Article
226
of
the
Constitution of India, now stands well
defined
by
series
of
judicial
pronouncements.
Undoubtedly,
every
High Court has inherent power to act ex
debito justitiae i.e., to do real and
substantial justice, or to prevent abuse of
the process of the Court. The powers
being very wide in itself imposes a
solemn duty on the Courts, requiring
great caution in its exercise. The Court
must be careful to see that its decision in
exercise of this power is based on sound
principles. The inherent power vested in
the Court should not be exercised to stifle
a legitimate prosecution. However, the
inherent power or the extra-ordinary
power conferred upon the High Court,
entitles the said Court to quash a
proceeding, if it comes to the conclusion
that allowing the proceeding to continue
would be an abuse of the process of the
Court, or the ends of justice require that
the proceeding ought to be quashed."

36. The following observations
made by this Court in the case of State of
Karnataka v. L. Muniswamy7 may be
relevant to note at this stage:--

"The whole some power under
Section 482 CrPC entitles the High Court
to quash a proceeding when it comes to the
2 All. Basant Lal & Ors. Vs. State of U.P. & Anr.
557
conclusion that allowing the proceeding to
continue would be an abuse of the process
of the Court or that the ends of justice
require that the proceeding ought to be
quashed. The High Courts have been
invested with inherent power, both in civil
and criminal matters, to achieve a salutary
public purposes. A Court proceeding ought
not to be permitted to degenerate into a
weapon of harassment or persecution. The
Court observed in this case that ends of
justice are higher than the ends of mere
law though justice must be administered
according to laws made by the legislature."

24. In view of the aforesaid facts and
the legal position, this Court is satisfied that
allowing the proceedings to continue would
be an abuse of the process of the court and
the ends of justice require that the
proceedings ought to be quashed. In the light
of sub clause 30.3 and 30.4 of Rajiv Thapar
(supra), the application under Section 482
Criminal Procedure Code deserves to be
allowed. Accordingly, the present application
under Section 482 Criminal Procedure Code
is allowed. The entire proceedings of
Complaint Case No. 419 of 2006 under
Section 420, 506 IPC at Police Station Civil
Lines, District Moradabad pending in the
Court of Civil Judge (Junior Division),
Moradabad, Court No. 2 are hereby quashed.
----------
(2022)02ILR A557
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 10.11.2021

BEFORE

THE HON'BLE SUBHASH VIDYARTHI, J.

Application U/S 482 Cr.P.C. No.2998 of 2007

Basant Lal & Ors. ...Applicants
Versus
State of U.P. & Anr. ...Opposite Parties
Counsel for the Applicants:
Sri Dinesh Kumar Yadav, Sri Dharmendra
Singhal, Sri Madhukar Maurya

Counsel for the Opposite Parties:
A.G.A.

(A)
Criminal
Law-FIR
lodged-Police
enquired-no persons as to description of
the
complainant
could
be
find-no
appearance of complainant before the
High Court -neither any application for
stay vacation-complaint bogus-abuse of
process
of
law-complainant
has
no
interest in pursuing his complainantproceeding quashed.

Application allowed. (E-9)

List of Cases cited:-

1. Geo Varghese Vs St. of Raj., 2021 SCC Online
SC 873

2. St. of Karnataka Vs L. Muniswamy

3. Pankaj Kumar Vs St. of Mah., (2008) 16 SCC
117

4. Rajiv Thapar Vs Madan Lal Kapoor, (2013) 3
SCC 330

5. Haryana Vs Bhajan Lal 1992 Supp (1) SCC
335

(Delivered by Hon'ble Subhash Vidyarthi, J.)

1. Heard Sri Madhukar Maurya,
Advocate, holding brief of Sri Dinesh
Kumar Yadav, Advocate for the applicants
and Sri Pankaj Srivastava and Shri Rakesh
Chandra Srivastava, learned Additional
Government Advocates appearing for the
State and perused the record.

2. By means of the instant application
under Section 482 of Code of Criminal
Procedure the applicants have prayed for
quashing of the complaint lodged as