Ganesh Trimbak Saraf And Another vs. The State Of Maharashtra And Another

Held

The Court held that accepting the allegations in the FIR at their face value, no case is made out against the applicants for offences under Sections 316(2) and 318 of the Bharatiya Nyaya Sanhita, 2023. The transaction was commercial, involving supply and erection of a prefabricated building, and the FIR did not disclose any allegation of fraudulent or dishonest intention at the inception of the contract. The grievance of non-supply of remaining material and non-erection of the building, along with the applicants' contention of delayed payments and reminders, constitutes a civil dispute. For Section 316(2) (criminal breach of trust), the Court found no entrustment of property or dominion over property, but rather payments as price for a commercial contract. For applicant No. 2, no specific role was attributed, and her implication was solely by virtue of being a partner. The Court concluded that continuation of the investigation would be an abuse of process of law. The FIR was quashed and set aside as against the applicants. No issue was expressly left undecided.

Facts

The applicants, partners in a Limited Liability Partnership firm, entered into a contract with Respondent No. 2 for the fabrication, supply, and erection of a prefabricated steel building. The complainant alleged that he paid Rs. 5,27,94,892/-, but the applicants only supplied material worth Rs. 4,11,63,710/-, failed to deliver the remaining material, and did not erect the building, leading to allegations of cheating and breach of trust. The applicants contended that the complainant delayed payments, causing financial loss to their firm, and that the dispute was civil in nature. The FIR was registered on 09.10.2024. The applicants sought quashment of the FIR under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023.

Key Issues

1. Whether the allegations in the First Information Report (FIR), when taken at face value, disclose the commission of offences under Sections 316(2) and 318 of the Bharatiya Nyaya Sanhita, 2023, or if the dispute is essentially civil in nature to which criminal colour has been given? (Question of law and mixed fact and law, turning on Sections 316(2) and 318 of B.N.S.). Contentions: Petitioner/Applicants: Argued that no offence was committed, the transaction was purely civil, and the FIR was a reaction to their demand for outstanding payments. Relied on "Hridaya Ranjan Prasad Verma v. State of Bihar" and "State of Haryana v. Bhajan Lal" for quashing an FIR. Submitted that applicant No. 2 is a sleeping partner and not involved in day-to-day transactions. Argued that offences under Sections 316(2) and 318 of B.N.S. are not attracted. Revenue/State and Respondent No. 2: Contended that the FIR discloses cognizable offences, as a substantial amount was paid, but material was not fully supplied, and the building was not erected, indicating dishonest intention. Argued that disputed questions of fact cannot be decided in a quashment application and that the applicants failed to deliver as assured, showing dishonest intent.