Monali Baghmare vs. State Of Chhattisgarh

Facts

The petitioners filed a petition seeking to quash an FIR, charge-sheet, and criminal proceedings. The FIR was lodged by Respondent No. 2 alleging that the petitioners, through their companies RIL India Marketing Private Limited/WEICONIC Private Limited, induced him and others to deposit Rs. 1,02,480/- for appointment as Salesmen/Agents with promised benefits. The complainant alleged that after depositing the amount for company products, the promised benefits were not provided, leading to an accusation of cheating. The police filed a charge-sheet, and cognizance was taken by the JMFC, Raipur. The petitioners argued that the FIR was arbitrary, as the same complaint was initially treated as non-cognizable under Section 155 Cr.P.C. before being registered as a cognizable offence. They also contended that the complainant voluntarily joined as an Independent Business Owner, executing Direct Seller Agreements that did not mention salary or accommodation, and that the company was duly incorporated with GST-compliant invoices.

Held

The Court held that the present case is essentially founded upon a contractual/business transaction, and continuing the criminal prosecution would amount to using the criminal process for enforcing civil rights. The Court found that the undisputed documents, including the Direct Seller Agreements, clearly indicated that the complainant and others voluntarily joined the business as Independent Business Owners. These agreements governed the parties' rights and obligations and did not contain stipulations for a monthly salary or provision of food and accommodation as alleged. The Court also noted that the company was duly incorporated, and transactions were supported by GST-compliant invoices. The Court further found that the allegations in the FIR arose out of a commercial and contractual relationship, and the material on record did not prima facie indicate any fraudulent or dishonest intention at the inception of the transaction, which is essential for the offence of cheating under Section 318(4) of the Bharatiya Nyaya Sanhita, 2023. The Court also considered the circumstance that the initial complaint was treated as non-cognizable under Section 155 Cr.P.C. before being registered as a cognizable offence within two days without fresh material, lending support to the petitioners' contention that the dispute was given a criminal colour. Applying principles from various Supreme Court judgments, the Court concluded that permitting the prosecution to continue would be an abuse of the process of the Court. Consequently, the FIR, charge-sheet, cognizance order, and all further proceedings were quashed.

Key Issues

1. Whether the FIR and consequential criminal proceedings are an abuse of process of law and liable to be quashed, considering the dispute arises from a contractual/commercial arrangement? (Section 318(4) and 3(5) of the Bharatiya Nyaya Sanhita, 2023). Petitioner's Arguments: The petitioners contended that the impugned FIR and proceedings are arbitrary and an abuse of process. They highlighted that the same complaint was initially treated as non-cognizable under Section 155 Cr.P.C. before being registered as a cognizable offence within two days without fresh material. They argued that the complainant voluntarily entered into Direct Seller Agreements which did not stipulate salary or accommodation, and the company was duly incorporated with GST-compliant transactions. They asserted that the allegations do not disclose the essential ingredients of cheating as there was no dishonest intention at inception, and the dispute is purely civil. They also noted that they have been granted bail. Revenue/State's Arguments: The State counsel opposed the petition, stating the FIR was registered based on a written complaint disclosing cognizable offences. They argued that investigation revealed sufficient prima facie evidence leading to the charge-sheet. They contended that the existence of a contractual relationship or company incorporation does not absolve petitioners of criminal liability if allegations disclose offences. They further submitted that the petitioners' contentions involve disputed questions of fact requiring evidence appreciation, not suitable for proceedings under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, and that a prima facie case is made out.