Preet Singh vs. State Of Haryana

Facts

The petitioner, Preet Singh, sought anticipatory bail in FIR No. 207, dated 08.07.2024, registered under Sections 406 and 420 of the Indian Penal Code at Police Station Sector 13/17, District Panipat. The FIR was filed by Happy Grover, who alleged that he had entered into a mutual agreement with the petitioner and others to run his factory, Guru Kripa Enterprises. As per the agreement, the petitioner was to pay bank installments for a loan of Rs. 50,00,000/- taken by Grover and share profits. However, the petitioner allegedly failed to pay installments and subsequently removed machinery worth Rs. 45,00,000/- and stock worth Rs. 25,80,000/- from the factory, threatening Grover. The petitioner contended that the dispute was contractual and civil in nature, citing a Supreme Court judgment. The State argued that the recovery of the machinery and goods was pending and custodial interrogation was necessary.

Held

The Court allowed the petition and made the interim order absolute. The Court observed that while the accused had allegedly breached the conditions of the agreement, not every deceitful act is unlawful, nor every unlawful act is deceitful. The Court noted that whether the breach of conditions of the agreement constituted the offence of cheating was a subject matter for trial before the Trial Court and was yet to be adjudicated. The Court also found that the parties had commercial transactions between them and concluded that custodial interrogation of the accused may not be required. Consequently, the petitioner was granted anticipatory bail, with the condition to join the investigation as and when called by the Investigating Officer and abide by the conditions under Section 482(2) of the B.N.S.S. The issue of whether the breach of contract amounted to criminal cheating was expressly left to be decided by the trial court.

Key Issues

1. Whether the allegations in the FIR, even as stated by the complainant, establish the ingredients of offences under Sections 406 (criminal breach of trust) and 420 (cheating) of the Indian Penal Code, particularly in light of the existence of a mutual agreement between the parties? (Section 406 IPC, Section 420 IPC) Petitioner's arguments: The petitioner argued that no case under Sections 406 and 420 IPC was made out. He contended that the parties had entered into a mutual agreement, and any breach thereof should be resolved through civil remedies. The petitioner also relied on the Supreme Court's decision in Deepak Gaba and others Vs. State of Uttar Pradesh and Anr., which emphasized distinguishing between civil and criminal wrongs and cautioned against invoking criminal jurisdiction for contractual disputes. The petitioner further suggested that the removal of stock was falsely alleged because the complainant was not filing GST returns for it. Respondent's (State's) arguments: The State, assisted by the complainant's counsel, opposed the petition. They argued that the petitioner and others had become partners in the complainant's firm, taken away machinery and goods, and failed to return them despite a settlement. They asserted that the recovery of these items was yet to be effected from the petitioner's possession and that custodial interrogation was required.