Mr. Ankit Kumar Singh vs. The State Of Madhya Pradesh

Held

The Court held that the allegations made against the petitioners established a prima facie case punishable under Section 406 of the Indian Penal Code. The Court noted that while Section 482 of the Cr.P.C. grants wide powers, it should be used sparingly to prevent abuse of process, not to encourage offences. The essential ingredients of criminal breach of trust, including entrustment and dishonest misappropriation or conversion, were considered. The Court found that the petitioners' contention of no evidence against them could not be accepted at this stage. It also addressed the jurisdictional argument, noting that the GST registration of Respondent No. 2 and an alleged meeting in Dewas indicated that the cause of action could arise there. The Court cited Apex Court judgments like Rajesh Bajaj, which state that if averments in a complaint prima facie make out a case for investigation, the High Court cannot quash it merely because some ingredients are not detailed. The Court concluded that it could not analyze the entire evidence to determine the possibility of conviction at this stage and that the facts could give rise to both a civil claim and a criminal offence. Therefore, the petition under Section 482 of Cr.P.C. was dismissed, with a clear direction that the trial court should proceed without being influenced by the observations made in the order.

Facts

The petitioners, directors of PKS Technobuild Pvt Ltd., are seeking to quash an FIR registered against them under Section 406 of the Indian Penal Code. The FIR was lodged by Respondent No. 2, who alleged criminal breach of trust. The complainant company had procured a limestone mining project and sub-contracted some work to PKS Technobuild. The complainant provided various machinery and vehicles worth Rs. 1.15 crore to PKS Technobuild for the project. Later, when the complainant inquired about the rent for these resources and the return of the machinery, the petitioners allegedly ignored the demands. The complainant also alleged that new equipment was replaced with old ones and valuable spare parts were removed. The petitioners contend that the dispute is civil in nature, that contracts were executed in Karnataka, and that the Dewas police station lacks jurisdiction. They also claim to have deposited a margin amount for the equipment.

Key Issues

1. Whether the allegations in the FIR, even if taken at face value, disclose cognizable offences under Section 406 of the Indian Penal Code, 1860, thereby warranting the quashing of the FIR under Section 482 of the Code of Criminal Procedure, 1973? Petitioner's arguments: The petitioners argued that the FIR does not disclose any cognizable offences. They contended that the dispute is purely civil in nature, arising from contractual obligations. They also asserted that the jurisdiction for the matter lies in Karnataka, as per the arbitration clause in the contracts, and not with the Dewas police station. They relied on judgments like A. Ayyasamy Vs. A. Paramasivam and Vijay Kumar Ghai Vs. The State of West Bengal. Respondent's arguments: The State and Respondent No. 2 opposed the petition. Respondent No. 2 argued that the petitioners, being in an entrusted position, committed misappropriation and breach of trust by illegally detaining valuable machinery and vehicles and failing to pay rent. They relied on judgments such as Trisuns Chemical Industry Vs. Rajesh Agarwal, State of Andhra Pradesh Vs. Golconda Linga Swamy, and Rajesh Bajaj Vs. State NCT of Delhi.