In a significant ruling, the Rajasthan High Court, Jodhpur Bench, quashed an FIR filed under Sections 420 and 406 of the Indian Penal Code (IPC) against Rana Ram, a businessman from Jodhpur, and others, stating that the dispute was “purely civil in nature” and that the police had overstepped their powers by registering a criminal case without a preliminary inquiry. The decision was delivered by Justice Arun Monga, who underscored the misuse of police authority in cases that do not warrant criminal prosecution.
Background of the Case
The case revolves around a business dispute involving the sale of guar gum, a commodity used in food, paper, and textile industries. The complainant, Shiv Kumar Mandovra, a grain trader operating under the name Sanwariya Traders in Bhilwara, alleged that Ram Kishore Jhanwar and his son Narendra Jhanwar, acting as brokers, fraudulently induced him to deliver 47,815 kilograms of guar gum valued at approximately Rs. 25,54,807 but failed to pay for the goods.
According to the complaint, the goods were dispatched in two consignments to Jodhpur but were allegedly sold to a third party, the petitioner, Rana Ram, without settling the payment to the original seller, Mandovra. Subsequently, an FIR No. 319/2024 was registered on June 20, 2024, at the Subhash Nagar Police Station, Bhilwara, citing offenses under Sections 406 (criminal breach of trust) and 420 (cheating) of the IPC.
Legal Issues Involved
Justice Arun Monga’s judgment addressed several critical legal questions:
1. Nature of the Dispute: The court examined whether the matter was essentially civil or criminal. The judge observed that the transaction involved a straightforward sale of goods, with the complainant alleging non-payment, which is typical in a civil dispute rather than a criminal offense.
2. Misuse of Police Powers: The court criticized the police’s role in the case, noting, “This Court is inundated every other day with filing of petitions to seek quashing of frivolous FIRs before even the ink dries upon its registration.” Justice Monga emphasized that the police acted as a recovery agent for the complainant, which is beyond their jurisdiction.
3. Requirements for Preliminary Inquiry: Citing the Supreme Court’s judgment in Lalita Kumari vs. Government of Uttar Pradesh (2014), the court reiterated that police must conduct a preliminary inquiry before registering FIRs in cases of commercial disputes to determine if any cognizable offense is disclosed. The judgment noted, “Had the needful been done, obviously the result would have been different.”
4. Application of Sections 406 and 420 of the IPC: The court analyzed the elements required to constitute offenses under these sections. It found that both Sections 406 and 420 could not be applied concurrently, as they deal with different kinds of offenses — one relating to breach of trust and the other to cheating with intent at the outset.
Decision of the Court
Justice Monga, in his detailed judgment, quashed the FIR against Rana Ram, citing “abuse of the process of law.” The court observed that the complaint did not disclose any criminal offense and the FIR was registered in “complete abuse of police powers.” The judge stated:
“The FIR herein, taken at their face value, do not disclose the commission of the offence of criminal breach of trust defined in Section 405 of IPC punishable under Section 406 IPC… The present case being a simple sale of goods and its delivery by the complainant to Narendra Jhanwar, it cannot be said that the complainant was cheated and thereby dishonestly induced by the accused to deliver the goods.”
The court further directed the State police to ensure a mandatory preliminary inquiry in cases involving alleged offenses under Sections 406 and 420, particularly when the transactions are of a commercial nature, such as the sale or purchase of goods or property. It stated, “Before they register FIRs in matters of alleged offenses… where the transaction is purely commercial, such as sale-purchase of goods or even immovable property… a mandatory preliminary inquiry should be conducted.”
The petitioner, Rana Ram, was represented by Advocate Mr. Mahendra Singh Rajpurohit, while the State was represented by Public Prosecutor Mr. S.S. Rajpurohit. The complainant, Shiv Kumar Mandovra, was represented by Advocate Ms. Shobha Prabhakar. The judgment, delivered in S.B. Criminal Misc. Petition No. 4893/2024, marks a significant stance on the abuse of criminal law in commercial disputes.
