Kushagra Singh vs. The State Of Madhya Pradesh

Held

The Court held that the allegations primarily pertained to a commercial dispute, and the earlier bail order correctly noted that the essential ingredients of cheating and criminal misappropriation were prima facie not made out, with civil remedies being available. The Court relied on the principle that mere breach of a commercial contract without fraudulent intent does not constitute a criminal offense, citing R. vs. P. Krishnamurthy and K.S. Jagannath v. State of Karnataka. The material on record did not establish that respondent No. 2 acted with fraudulent mens rea at the time of receiving money, nor was there any indication of him fleeing from justice. Allegations regarding dishonored cheques and GST entries, without further supporting evidence, did not prima facie disclose sufficient criminal intent to justify cancellation of bail, consistent with the principles in State of U.P. v. Rajesh Gautam. Therefore, no ground was made out for interference with the order granting bail. The application for cancellation of bail was dismissed. The Court clarified that it had not commented on the merits of the case, and investigation and trial would continue as per law.

Facts

The petitioner, Kushagra Singh, filed an application under Section 483(3) of BNSS (equivalent to Section 439(2) of Cr.P.C.) seeking cancellation of bail granted to respondent No. 2, Akash Bhilwar, by the High Court on September 1, 2025. The bail was granted in M.Cr.C. No. 38473 of 2025. The petitioner argued that respondent No. 2 had no intention to supply goods, deliberately created false GST entries, generated invoices without delivery, and issued dishonored cheques, demonstrating fraudulent intent. The earlier bail order had characterized the dispute as contractual/commercial, noting that civil remedies were available and essential ingredients of cheating and criminal misappropriation were not prima facie satisfied.

Key Issues

1. Whether the bail granted to respondent No. 2, Akash Bhilwar, by this Court on September 1, 2025, in M.Cr.C. No. 38473 of 2025, was erroneous and liable for cancellation, considering the allegations of fraudulent GST entries, non-delivery of goods, and dishonored cheques, which the petitioner contends satisfy the essential ingredients of cheating under Section 418 BNS (equivalent to Section 420 IPC)? Petitioner's arguments: The petitioner contended that respondent No. 2 deliberately created false GST entries and generated invoices without actual delivery, defrauding both the petitioner and the GST department. The dishonor of cheques further evidenced a deliberate fraudulent intent, distinguishing it from a mere civil default. The petitioner argued that the respondent's actions met the criteria for cheating under Section 418 BNS. Revenue/State's arguments: The State did not present specific arguments beyond those implied by the petitioner's application and the court's consideration of the case diary and material on record. The court's reasoning indicates it considered the State's position in the context of the bail cancellation application.