Chhannu Lal Seth vs. The State Of Madhya Pradesh

Held

The Court held that the FIR and consequential proceedings were liable to be quashed insofar as they related to petitioner No. 2, Ajay Seth. The Court found that the complainant had not supplied foodgrains to Ajay Seth, nor was there any document on record connecting him with the alleged transactions or the firm M/s Sai Enterprises. The Court noted that the case of petitioner No. 2 was entirely different from petitioner No. 1, against whom both oral and documentary evidence was available. Regarding petitioner No. 1, Chhannu Lal Seth, the Court held that there was sufficient material on record to connect him with the alleged offence. Citing precedents from the Supreme Court, the Court stated that there is limited scope for interference under Section 482 of the Cr.P.C. when sufficient material exists. The Court found that the grounds raised by petitioner No. 1 were matters of evidence to be established during trial and that the defence could not be looked into at this initial stage. Therefore, the Court concluded that no case was made out warranting interference with the criminal proceedings against petitioner No. 1. The petition was partly allowed, quashing the proceedings against Ajay Seth and allowing them to continue against Chhannu Lal Seth.

Facts

The petitioners, Chhannu Lal Seth and Ajay Seth, sought to quash an FIR registered against them for offences under Sections 420 and 34 of the IPC, and the subsequent charge-sheet filed before the CJM Katni. The petitioners contended that the dispute was purely commercial, involving the supply of foodgrains, and that payments had been made through RTGS and bank transfers. They argued that Ajay Seth had no connection to the alleged offence as his name was not on the GST registration certificate for M/s Sai Enterprises, of which Chhannu Lal Seth was a member. The petitioners claimed they had paid the suppliers and the complainant was only entitled to commission, which was paid. They also highlighted a counter-case filed by them against the complainant. The respondent argued that the complainant supplied foodgrains to the petitioners, and the proprietors of the concerned firms stated they had not received payment. The respondent further contended that the petitioners failed to produce documents showing payment during the investigation, and the genuineness of documents produced with the petition could only be examined during trial.

Key Issues

1. Whether the FIR and consequential proceedings are liable to be quashed in respect of petitioner No. 2, Ajay Seth, due to lack of evidence connecting him to the alleged offence? 2. Whether the FIR and consequential proceedings are liable to be quashed in respect of petitioner No. 1, Chhannu Lal Seth, as the dispute is purely commercial and has been given a criminal colour? Petitioner's arguments: The dispute is civil in nature and has been falsely criminalized. Payments for foodgrains were made through RTGS and bank transfers to the actual owners/suppliers. Petitioner No. 2, Ajay Seth, has no connection to the alleged offence as his name is not on the GST registration certificate. The complainant was only entitled to commission, which was paid. A counter-case filed against the complainant in Varanasi, where the dispute was admitted to be business-related, supports their contention. Revenue/State's arguments: The complainant supplied foodgrains to the petitioners, and the proprietors of the firms stated they had not received payment. The petitioners failed to produce documents proving payment during the investigation. The genuineness of documents relied upon by the petitioners cannot be examined at this stage and can only be adjudicated during trial. The delay in registering the FIR (2021 for transactions in 2019) and the nature of payments are matters of evidence.