Simplified Explanation of the Judgment
In a recent judgment delivered on December 6, 2024, the Patna High Court quashed an FIR registered against a group of petitioners in a financial dispute stemming from a mining partnership in Gaya district, Bihar. The case centered around an alleged cheating and criminal breach of trust claim filed by an informant who had invested over ₹4 crores into a mining auction project in 2015.
According to the FIR, the informant was promised partnership and company shares by the petitioners in exchange for financing the participation in a government auction for the Gere Stone Block. The complainant claimed that he transferred large sums of money and was even issued a power of attorney to act on behalf of the petitioners’ companies. The auction was successful, and the mining rights were secured under the name of the petitioners’ firm.
However, over the next few years, the promised share in the company was never granted, nor was the money refunded. The informant sent a legal notice in April 2023 and subsequently filed an FIR under Sections 406 and 420 of the IPC in October 2023. The petitioners responded by filing a writ seeking quashing of the FIR.
The petitioners argued that the amount received from the informant had been duly accounted for in their company books and that much of it had already been returned in kind through stone material supplied to the informant. They further submitted that the remaining balance, if any, was of a civil nature concerning unresolved accounts, and that the FIR was a misuse of criminal law to exert pressure.
The Court noted that the original transaction occurred in 2015–16, the mining tenure ended in 2021, and no formal complaint or recovery attempt was made until 2023. It found the delay unexplained and the dispute essentially civil. Relying on several Supreme Court precedents, the Court emphasized that misuse of criminal law for civil recovery was impermissible.
Consequently, the FIR and any consequential proceedings were quashed.
Significance or Implication of the Judgment
This judgment highlights a key principle in criminal jurisprudence: civil disputes involving contractual disagreements or financial accounting should not be cloaked in criminal allegations like cheating or breach of trust unless a clear element of fraudulent intent is present from the beginning. It serves as a cautionary tale for litigants not to weaponize criminal procedures to settle civil scores, especially after prolonged delays.
For the general public, this case underscores the importance of timely legal action and the distinction between civil and criminal remedies. For the government and investigating agencies, it reaffirms the judiciary’s stance against arbitrary and belated FIRs in financial disputes.
Legal Issue(s) Decided and the Court’s Decision
- Whether the FIR under Sections 406 and 420 IPC disclosed a prima facie criminal offence:
➤ Held: No. The allegations pointed to a civil dispute over partnership and investment. - Whether a delay of over 7 years in lodging the FIR affects its validity:
➤ Held: Yes. The unexplained delay indicated mala fide intent and misuse of process. - Whether the FIR amounted to abuse of legal process in light of existing civil remedies:
➤ Held: Yes. The case was purely civil in nature, and criminal prosecution was unwarranted.
Judgments Referred by Parties and Judgments Relied Upon or Cited by Court
- Hasmukhlal D Vora v. State of Tamil Nadu, (2022) 15 SCC 164
- Chanchalpati Das v. State of West Bengal, 2023 SCC Online SC 650
- Deepak Kumar Shrivas v. State of Chhattisgarh, 2024 SCC Online SC 158
- Prof R K Vijayasarathi v. Sudha Seetharam, (2019) 16 SCC 739
- Kunti v. State of Uttar Pradesh, (2023) SCC 109
- Paramjeet Batra v. State of Uttarakhand, (2013) 11 SCC 673
- Vinod Natesan v. State of Kerala, (2019) 2 SCC 401
Case Title
Anonymous v. State of Bihar & Ors.
Case Number
Criminal Writ Jurisdiction Case No. 1 of 2024
Citation(s)– 2025 (1) PLJR 156
Coram and Names of Judges
Hon’ble Mr. Justice Arvind Singh Chandel
Names of Advocates and Who They Appeared For
- For the Petitioners: M/s Suraj Samdarshi, Sanjay Jha, Simran Kumari, Advocates
- For the State: Mr. Deepak Kumar, AC to GP IV
- For the Informant (Respondent No. 6): M/s Anshul, Avinash Kr Singh, Advocates
Link to Judgment
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