SACHIN GARGversusSTATE OF U.P & ANR.

                  [2024] 1 S.C.R. 1134 : 2024 INSC 72

                               Sachin Garg
                                     v.
                            State of U.P & Anr.
                     (Criminal Appeal No. 497 of 2024)
                               30 January 2024
             [Aniruddha Bose* and Sanjay Kumar, JJ.]

                            Issue for Consideration
       In a case wherein the dispute was commercial in nature having
       no element of criminality, whether the Magistrate was justified in
       issuing summons for trial u/ss.406, 504 and 506, Penal Code,
       1860 and the High Court in dismissing the application filed by the
       appellant for quashing said summons and the complaint case.

                                   Headnotes
       Code of Criminal Procedure, 1973 – Issuance of summons,
       duty of Magistrate – Penal Code, 1860 – ss.406, 504 and 506 –
       Commercial dispute given criminal colour – Dispute between
       the parties related to the rate at which the assigned work was
       to be done – Respondent no.2 filed complaint case – Summons
       issued by Magistrate for trial u/ss.406, 504 and 506, IPC –
       Application filed by the appellant for quashing the summons
       and the complaint case, dismissed by High Court – Propriety:
       Held: Past commercial relationship between the appellant’s
       employer and the respondent no.2 was admitted – Dispute between
       the parties centred around the rate at which the assigned work
       was to be done – Neither in the complaint petition nor in the initial
       deposition of the two witnesses (including the complainant), the
       ingredients of the offence u/s.405, IPC surfaced – Such commercial
       disputes over variation of rate cannot per se give rise to an offence
       u/s.405, IPC without presence of any aggravating factor leading
       to the substantiation of its ingredients – No material to come to a
       prima facie finding that there was dishonest misappropriation or
       conversion of any material for the personal use of the appellant in
       relation to gas supplying work done by the respondent no.2 – The
       said work was done in course of regular commercial transactions –
       There was no misappropriation or conversion of the subject property,

* Author
[2024] 1 S.C.R.                                                             1135

                    Sachin Garg v. State of U.P. and Anr.


     being Dissolved Acetylene Gas which was supplied to the factory
     for the purpose of battery manufacturing at EIL – No evidence
     for commission of offence u/s.405/406, IPC – Further, as regards
     criminal intimidation also there was a mere bald allegation, short
     of any particulars as regards to the manner in which threat was
     conveyed – While it is true that at the stage of issuing summons
     a magistrate only needs to be satisfied with a prima facie case for
     taking cognizance, the duty of the magistrate is also to be satisfied
     whether there is sufficient ground for proceeding – Magistrate’s
     order issuing summons reflects his satisfaction in a cryptic manner
     – At the stage of issue of summons, though detailed reasoning as
     to why a Magistrate is issuing summons is not necessary but in
     the present case, the allegations made by the complainant do not
     give rise to the offences for which the appellant was summoned for
     trial – A commercial dispute, which ought to have been resolved
     through the forum of Civil Court was given criminal colour by lifting
     certain words or phrases from the penal code and implanting
     them in a criminal complaint – Magistrate failed to apply his mind
     in issuing summons and the High Court failed to exercise its
     jurisdiction u/s.482, 1973 Code – Impugned judgment set aside,
     complaint and summoning order quashed. [Paras 14, 17 and 18]
     Code of Criminal Procedure, 1973 – s.482 – Jurisdiction –
     Discussed.
     Code of Criminal Procedure, 1973 – Summons issued by
     Magistrate for trial u/ss.406, 504 and 506, IPC in the complaint
     case filed by Respondent no.2 – Appellant sought dismissal
     of the complaint on the ground that the complaint should
     not have been entertained without arraigning the principal
     company as an accused:
     Held: The perceived wrongdoing was attributed to the appellant,
     though the complaint petition acknowledges that the job-work was
     being done for EIL (appellant’s employer) – Moreover, the allegation
     of criminal intimidation was against the appellant directly, whatever
     be the value or quality of such allegations – Thus, for that reason
     the complaint case cannot be rejected at the nascent stage on the
     sole ground of not implicating the company – However, the complaint
     and the summons quashed for the reasons given. [Para 20]
1136                                                           [2024] 1 S.C.R.

                     Digital Supreme Court Reports


                              Case Law Cited
         Sharad Kumar Sanghi vs Sangita Rane [2015] 2 SCR
         145 : (2015) 12 SCC 781 – held inapplicable.
         Jagdish Ram vs State of Rajasthan and Another [2004]
         2 SCR 846 : (2004) 4 SCC 432 – relied on.
         Neeharika Infrastructure Pvt. Ltd. vs State of Maharashtra
         and Ors., [2021] 4 SCR 1044 : (2021) 19 SCC 401;
         R.P. Kapur vs State of Punjab, [1960] 3 SCR 388 : AIR
         (1960) SC 866; State of Haryana and Ors. vs Bhajan
         Lal and Ors., [1992] Supp. (3) SCR 735 : (1992) SCC
         (Cr.) 426; State of Bihar and Anr. vs P. P. Sharma, IAS
         and Anr., [1991] 2 SCR 1 : (1992) SCC (Cr.) 192; Zandu
         Pharmaceutical Works Ltd. and Ors. vs Mohd. Sharaful
         Haque and Another [2004] Supp. (5) S.C.R. 790 : (2005)
         SCC (Cr.) 283; Deepak Gaba and Ors. vs State of Uttar
         Pradesh and Another (2023) 3 SCC 423; Prof. R.K.
         Vijayasarathy and Anr. vs Sudha Seetharam and Anr.
         [2019] 2 SCR 185 : (2019) 16 SCC 739; Vijay Kumar
         Ghai and Ors. vs State of West Bengal and Ors. [2022]
         1 SCR 884 : (2022) 7 SCC 124; Dalip Kaur and Ors. vs
         Jagnar Singh and Anr., [2009] 10 SCR 264 : (2009) 14
         SCC 696; Birla Corporation Ltd. vs Adventz Investments
         and Holdings Ltd. and Ors., [2019] 7 SCR 655 : (2019)
         16 SCC 610; Smt Nagawwa vs Veeranna Shivalingappa
         Konjalgi and Others [1976] 1 Suppl. SCR 123 : (1976) 3
         SCC 736; Fiona Shrikhande vs State of Maharashtra and
         Another, [2013] 9 SCR 240 : (2013) 14 SCC 44; Binod
         Kumar and Ors. vs State of Bihar and Another, [2014]
         11 SCR 85 : (2014) 10 SCC 663; Pepsi Foods Ltd. and
         Anr. vs Special Judicial Magistrate and Ors., [1997] 5
         Suppl. SCR 12 : (1998) 5 SCC 749 – referred to.

                                 List of Acts
    Code of Criminal Procedure, 1973; Penal Code, 1860.

                            List of Keywords
    Commercial dispute; Criminal colour; Stage of issuing summons;
    Duty of Magistrate; Quashing; Quashing of summons; Dishonest
    misappropriation/conversion of material for personal use; Criminal
    intimidation; Non-application of mind; Principal company not implicated.
[2024] 1 S.C.R.                                                        1137

                    Sachin Garg v. State of U.P. and Anr.



                            Case Arising From

     CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No.497
     of 2024.
     From the Judgment and Order dated 23.03.2023 of the High Court
     of Judicature at Allahabad in A482 No.18603 of 2021.
                          Appearances for Parties
     Mukul Rohatgi, Guru Krishna Kumar, Sr. Advs., Ms. Misha Rohatgi,
     Sushil Shukla, Nakul Mohta, Ms. Alina Merin Mathew, Muthu
     Thangathurai, Advs. for the Appellant.
     Sarvesh Singh Baghel, Aviral Saxena, Arun Pratap Singh Rajawat,
     Ms. Vanshaja Shukla, Ms. Divya Jyoti Singh, Ms. Ankeeta Appanna,
     Manish Gupta, Advs. for the Respondents.

                Judgment / Order of the Supreme Court

                                   Judgment
     Aniruddha Bose, J.
     Leave granted.
2.   The appellant, at the material point of time, stood posted as the
     Head of factory of Exide Industries Limited (“EIL”), a corporate entity,
     situated at Bawal, District Rewari, Haryana. The respondent no.2,
     ran a proprietary concern, Ambika Gases. He was the supplier of
     Dissolved Acetylene Gas (“DA Gas”), which is used for manufacturing
     battery in the said factory. So far as the present appeal is concerned,
     the dispute is over a purchase order issued for the supply of the said
     item. The original purchase order dated 01.04.2019 was amended
     twice on the basis of representations made by the respondent no.2.
     The first amendment was made on 18.07.2019 by which the rate was
     increased from Rs.1.55 per unit to Rs.1.65 per unit and the second
     amendment was made on 20.12.2019 through which the rate per unit
     was brought down to Rs.1.48 from Rs.1.65. An invoice was raised
     by the respondent no.2 with the aforesaid rates for a total sum of
     Rs.9,36,693.18/-. The dispute revolves around non-payment of the
     said sum. However, it has been contended by the appellant that EIL,
     after ascertaining the market price of DA Gas from other vendors,
     by a letter dated 29.06.2020, reconciled the accounts by informing
     respondent no.2 of what it claimed was foul play with respect to
1138                                                      [2024] 1 S.C.R.

                    Digital Supreme Court Reports


     revision of rates and appropriated the alleged illegal amounts claimed
     by the vendor (respondent no.2) from the invoice.
3.   The respondent no.2 instituted a complaint case in the Court of
     the Chief Judicial Magistrate, Ghaziabad and the substance of the
     complaint would be revealed from the following passages of the
     petition of complaint (registered as Misc. Application No.317/2020):-
          “….The Applicant through his aboenamed work do the job
          work of D.A. Gas. Opposite Party Sachin Garg is posted
          as Material Head of Exide Industries Ltd. situated at Plot
          No. 179, Sector-3, Bawal, District- Rewari, Haryana and
          Opposite Party Sachin Garg also used to issue Purchase
          Order to the Applicant’s company on behalf of the Exide
          Company and only the Opposite Party Sachin Garg used
          to make payment of Job Work to the Applicant. Previously,
          the Transaction of Opposite Party was normal with the
          Applicant’s company and no problem was ever persisted
          in the payment, due to which, the Applicant started trusting
          on the Opposite Party and Company. Sachin Garg through
          the aforesaid company in the capacity of Purchase Head,
          issued Purchase Order to the Applicant’s Company, in
          which, it was agreed between the Opposite Party and
          Applicant to do job work @ Rs.1.65/- per piece w.e.f.
          18.02.2019, which remained continued on the same rates
          till December, 2019 and the Opposite Party was regularly
          making the payment of job work to the Applicant on the
          same rates. In the month of December, in pursuance of the
          Purchase Order of Opposite Party, According to Purchase
          No. 4800253593 dated 01.04.2019, done the job work of
          Filled DA Gases HSN Code 290129910 quantity 3,07,114/-
          pieces @ Rs.165 to the tune of Rs.5,06,738.10/-, and Filled
          DA Gases H{SN Code 29012910 quantity 1,93,966/- pieces
          @ Rs.1.48 per piece to the tune of Rs. 2,87,069.68/- and
          18% GST to the tune of Rs.1,42,885.40/-0, in this manner
          did the job work of total amount Rs.9,36,693.18/-. The
          material Head of Opposite Company namely Sachin
          Garg by admitting the job work done by the Applicant
          vide Purchaser Order No. 4800253593 dated 01.04.2019,
          and got done the job work according to the piece rate
          quoted by the Applicant. On 03.07.2020, Applicant sent
[2024] 1 S.C.R.                                                          1139

                    Sachin Garg v. State of U.P. and Anr.


           Bill/Invoice No. AG.SR/20-21/01 dated 02.07.2020 of
           Rs.9,36,693.18/- to the Material Head of Opposite Party
           Company namely Sachin Garg through registered post
           and also sent the aforesaid invoice through email on
           14.07.2020, which were received by Opposite Party Sachin
           Garg. Applicant repeatedly requested the Opposite Party
           for payment through email, but, the Opposite Party did not
           make payment of Rs.9,36,693.18/- of job work done by the
           Applicant Company in the month of December, 2019 and
           he by keeping the Applicant in dark, kept giving assurances
           of making full payment. When, the Applicant put more
           pressure on the Opposite Party for payment, then, Opposite
           Party stopped to get done the job work from the Applicant
           Company, and on 29.06.2020, sent a letter with quotation
           to the Applicant Company, in which, the Opposite Party has
           fixed the rate of job work done by the Applicant company
           @ Rs.1.40/- per piece w.e.f. April, 2019, whereas, the job
           work of Opposite Party was completed by the Applicant
           Company in the month of December, 2019, in which,
           Opposite Party on 20.12.2019, requested to change the
           rate of job work at the rate of Rs.1.48/- per piece, which
           was accepted by the Applicant w.e.f. 20.12.2019. In this
           manner, after 20.12.2019, Rs.1.48/- per piece and prior
           to that the rate of Rs.1.65/- per piece was payable by the
           Opposite Party, but, the Opposite Party with intention to
           cheat the Applicant in deliberate manner, and with intention
           to cause financial loss to him and not to pay the money,
           has committed criminal breach of trust with the Applicant,
           which is a cognizable offence. On demanding money by
           the Applicant, the Opposite Party is abusing him with filthy
           language and threatening him to kill…..”
                            (quoted verbatim from the paperbook)
4.   The learned Magistrate upon recording initial deposition of Saurabh
     Sharma, the proprietor of the supplier firm and his father Padam
     Kant Sharma issued summons for trial under Sections 406, 504 and
     506 of the Indian Penal Code, 1860 (“1860 Code”) on 18.08.2021.
5.   The appellant had approached the High Court at Allahabad under
     Section 482 of Code of Criminal Procedure, 1973 (“the 1973 Code”)
1140                                                        [2024] 1 S.C.R.

                     Digital Supreme Court Reports


     by filing, Criminal Miscellaneous Application No.18603/2021, for
     quashing the said summons and also the complaint case itself. The
     judgment of the High Court was delivered dismissing the application
     filed by the appellant on 23.03.2023 and it is this judgment which
     is under appeal before us. The main reason for dismissal of the
     appellant’s quashing plea was that the subject-complaint involved
     adjudication of disputed questions of fact. Referring to the judgments
     of this Court in the cases of Neeharika Infrastructure Pvt. Ltd.
     -vs- State of Maharashtra and Ors. [(2021) 19 SCC 401], R.P.
     Kapur -vs- State of Punjab [AIR 1960 SC 866], State of Haryana
     and Ors. -vs- Bhajan Lal and Ors. [1992 SCC (Cr.) 426], State of
     Bihar and Anr. -vs- P. P. Sharma, IAS and Anr. [1992 SCC (Cr.)
     192] and lastly Zandu Pharmaceutical Works Ltd. and Ors. -vs-
     Mohd. Sharaful Haque and Another [2005 SCC (Cr.) 283], the
     High Court refrained from considering the defence of the accused.
6.   In the case of Neeharika Infrastructure Ltd (supra), a three-judge
     Bench of this Court examined the factors which were to be considered
     by the High Court for quashing an F.I.R. at the threshold, relating to
     factors which would apply to a proceeding which forms the subject-
     matter of the present case. Referring to the judgment in the case
     of R.P. Kapur (supra), principles for quashing were set down as:-
        “10.1 The first case on the point which is required to be noticed
        is the decision of this Court in the case ofc8R.P. Kapur (supra).
        While dealing with the inherent powers of the High Court under
        Section 561-A of the earlier Code (which is pari materia with
        Section 482 of the Code), it is observed and held that the inherent
        powers of the High Court under Section 561 of the earlier Code
        cannot be exercised in regard to the matters specifically covered
        by the other provisions of the Code; the inherent jurisdiction
        of the High Court can be exercised to quash proceedings in
        a proper case either to prevent the abuse of the process of
        any court or otherwise to secure the ends of justice; ordinarily
        criminal proceedings instituted against an accused person must
        be tried under the provisions of the Code, and the High Court
        would be reluctant to interfere with the said proceedings at an
        interlocutory stage. After observing this, thereafter this Court
        then carved out some exceptions to the above-stated rule,
        which are as under:
[2024] 1 S.C.R.                                                             1141

                    Sachin Garg v. State of U.P. and Anr.


           “(i)   Where it manifestly appears that there is a legal bar
                  against the institution or continuance of the criminal
                  proceeding in respect of the offence alleged. Absence
                  of the requisite sanction may, for instance, furnish
                  cases under this category.
           (ii)   Where the allegations in the first information report
                  or the complaint, even if they are taken at their face
                  value and accepted in their entirety, do not constitute
                  the offence alleged; in such cases no question of
                  appreciating evidence arises; it is a matter merely of
                  looking at the complaint or the first information report
                  to decide whether the offence alleged is disclosed
                  or not.
           (iii) Where the allegations made against the accused
                 person do constitute an offence alleged but there is
                 either no legal evidence adduced in support of the
                 case or the evidence adduced clearly or manifestly
                 fails to prove the charge. In dealing with this class of
                 cases it is important to bear in mind the distinction
                 between a case where there is no legal evidence
                 or where there is evidence which is manifestly and
                 clearly inconsistent with the accusation made and
                 cases where there is legal evidence which on its
                 appreciation may or may not support the accusation
                 in question. In exercising its jurisdiction under Section
                 561-A the High Court would not embark upon an
                 enquiry as to whether the evidence in question
                 is reliable or not. That is the function of the trial
                 Magistrate, and ordinarily it would not be open to any
                 party to invoke the High Court’s inherent jurisdiction
                 and contend that on a reasonable appreciation of the
                 evidence the accusation made against the accused
                 would not be sustained.””
7.   In the same decision (i.e. Neeharika Infrastructure Ltd.) (supra),
     the seven-point edict laid down in the case of Bhajan Lal (supra)
     was also referred to. These are:-
           “102.(1) Where the allegations made in the first information
           report or the complaint, even if they are taken at their
1142                                                     [2024] 1 S.C.R.

                  Digital Supreme Court Reports


        face value and accepted in their entirety do not prima
        facie constitute any offence or make out a case against
        the accused.
        (2) Where the allegations in the first information report
        and other materials, if any, accompanying the FIR do not
        disclose a cognizable offence, justifying an investigation
        by police officers under Section 156(1) of the Code except
        under an order of a Magistrate within the purview of Section
        155(2) of the Code.
        (3) Where the uncontroverted allegations made in the FIR
        or complaint and the evidence collected in support of the
        same do not disclose the commission of any offence and
        make out a case against the accused.
        (4) Where the allegations in the FIR do not constitute a
        cognizable offence but constitute only a non-cognizable
        offence, no investigation is permitted by a police officer
        without an order of a Magistrate as contemplated under
        Section 155(2) of the Code.
        (5) Where the allegations made in the FIR or complaint
        are so absurd and inherently improbable on the basis of
        which no prudent person can ever reach a just conclusion
        that there is sufficient ground for proceeding against the
        accused.
        (6) Where there is an express legal bar engrafted in any
        of the provisions of the Code or the Act concerned (under
        which a criminal proceeding is instituted) to the institution
        and continuance of the proceedings and/or where there
        is a specific provision in the Code or the Act concerned,
        providing efficacious redress for the grievance of the
        aggrieved party.
        (7) Where a criminal proceeding is manifestly attended
        with mala fide and/or where the proceeding is maliciously
        instituted with an ulterior motive for wreaking vengeance
        on the accused and with a view to spite him due to private
        and personal grudge.”
[2024] 1 S.C.R.                                                              1143

                    Sachin Garg v. State of U.P. and Anr.


8.   It was observed in the judgment under appeal that the applicant
     has got the right of discharge which could be freely taken up by him
     before the Trial Court. Mr. Mukul Rohatgi, learned senior counsel
     has appeared in this matter on behalf of the appellant along with Mr.
     Guru Krishna Kumar, while the case of respondent no.2 has been
     argued by Ms. Divya Jyoti Singh. State was represented before
     us by Mr. Sarvesh Singh Baghel. The main contentions urged by
     Mr. Rohatgi is that the complaint made against the appellant does
     not disclose any criminal offence and at best, it is a commercial
     dispute, which ought to be determined by a Civil Court. In so far as
     the allegations of commission of offence under Sections 405 and
     406 are concerned, he has relied on a judgment of this Court in the
     case of Deepak Gaba and Ors. -vs- State of Uttar Pradesh and
     Another [(2023) 3 SCC 423]. This decision deals with the basic
     ingredients of a complaint under Sections 405 and 406 of the 1860
     Code and it has been held in this judgment:-
           “15. For Section 405 IPC to be attracted, the following
           have to be established:
           (a)   the accused was entrusted with property, or entrusted
                 with dominion over property;
           (b)   the accused had dishonestly misappropriated
                 or converted to their own use that property, or
                 dishonestly used or disposed of that property or
                 wilfully suffer any other person to do so; and
           (c)   such misappropriation, conversion, use or disposal
                 should be in violation of any direction of law prescribing
                 the mode in which such trust is to be discharged, or
                 of any legal contract which the person has made,
                 touching the discharge of such trust.”
9.   The judgment in Deepak Gaba (supra) was delivered in a case
     in which there was subsisting commercial relationship between
     the parties and the complainant had made allegations of a forged
     demand, for a sum of around rupees six and a half lakhs. On that
     basis a summoning order was issued for trial under Section 406 of
     the 1860 Code. A coordinate Bench of this Court held:-
           “17. However, in the instant case, materials on record fail
           to satisfy the ingredients of Section 405 IPC. The complaint
           does not directly refer to the ingredients of Section 405IPC
1144                                                       [2024] 1 S.C.R.

                    Digital Supreme Court Reports


          and does not state how and in what manner, on facts, the
          requirements are satisfied. Pre-summoning evidence is
          also lacking and suffers on this account. On these aspects,
          the summoning order is equally quiet, albeit, it states that
          “a forged demand of Rs 6,37,252.16p had been raised by
          JIPL, which demand is not due in terms of statements by
          Shubhankar P. Tomar and Sakshi Tilak Chand”. A mere
          wrong demand or claim would not meet the conditions
          specified by Section 405IPC in the absence of evidence
          to establish entrustment, dishonest misappropriation,
          conversion, use or disposal, which action should be in
          violation of any direction of law, or legal contract touching
          the discharge of trust. Hence, even if Respondent 2
          complainant is of the opinion that the monetary demand
          or claim is incorrect and not payable, given the failure to
          prove the requirements of Section 405 IPC, an offence
          under the same section is not constituted. In the absence
          of factual allegations which satisfy the ingredients of the
          offence under Section 405IPC, a mere dispute on monetary
          demand of Rs 6,37,252.16p, does not attract criminal
          prosecution under Section 406IPC.”
10. The same view was expressed by this Court in the cases of Prof.
    R.K. Vijayasarathy and Anr. -vs- Sudha Seetharam and Anr.
    [(2019) 16 SCC 739] and Vijay Kumar Ghai and Ors. -vs- State
    of West Bengal and Ors. [(2022) 7 SCC 124]. The judgment of
    this Court in the case of Dalip Kaur and Ors. -vs- Jagnar Singh
    and Anr. [(2009) 14 SCC 696] has also been cited in support of the
    appellant’s case and in this decision it has been, inter-alia, held:-
          “10. The High Court, therefore, should have posed a
          question as to whether any act of inducement on the part
          of the appellant has been raised by the second respondent
          and whether the appellant had an intention to cheat him
          from the very inception. If the dispute between the parties
          was essentially a civil dispute resulting from a breach of
          contract on the part of the appellants by non-refunding
          the amount of advance the same would not constitute an
          offence of cheating. Similar is the legal position in respect
          of an offence of criminal breach of trust having regard to
          its definition contained in Section 405 of the Penal Code.”
[2024] 1 S.C.R.                                                            1145

                    Sachin Garg v. State of U.P. and Anr.


     This goes for allegations relating to Section 406 of the 1860 Code.
11. So far as the allegations of commission of offence under Sections 504
    and 506 of the 1860 Code are concerned, we have gone through the
    petition of complaint as well as the initial depositions. The allegations
    pertaining to the aforesaid provisions of the 1860 Code surfaces in
    the last portion of the petition of complaint. The complainant, in his
    initial deposition has not made any statement relatable to criminal
    intimidation. But his father made the following statement at that stage
    under Section 202 of the 1973 Code:-
           “…With effect from 18.07.2019, the Opposite Party
           had fixed rate of job work as Rs.1.65/- per piece with
           the company of my son, which remained continued till
           December, 2019 and Opposite Party used to make payment
           of job work to my son, also on this rate and an amount of
           Rs. 9,36,693.18/- of my son was due for payment on the
           Opposite Party, due to which, he demanded the Opposite
           Party to make payment, but, Opposite Party did not make
           payment and after doing calculation on less rates, he said
           that no amount is due for payment and on demanding
           money, the Opposite Party has abused my son with filthy
           language and has threatened him to kill. An amount of
           Rs. 9,36,693.18/- of my son is due for payment on the
           Opposite Party, which he clearly refused to pay the same.”
                                (quoted verbatim from paperbook)
12. On behalf of the complainant, it has been urged that a detailed
    description of the offending acts need not be disclosed at the stage
    at which the appellant wants invalidation of the complaint. He has
    drawn our attention to the judgment of this Court in the case of
    Jagdish Ram -vs- State of Rajasthan and Another [(2004) 4 SCC
    432]. In this judgment it has been, inter-alia, held:-
           “10…. It is well settled that notwithstanding the opinion of
           the police, a Magistrate is empowered to take cognizance
           if the material on record makes out a case for the said
           purpose. The investigation is the exclusive domain of the
           police. The taking of cognizance of the offence is an area
           exclusively within the domain of a Magistrate. At this stage,
           the Magistrate has to be satisfied whether there is sufficient
1146                                                         [2024] 1 S.C.R.

                      Digital Supreme Court Reports


           ground for proceeding and not whether there is sufficient
           ground for conviction. Whether the evidence is adequate
           for supporting the conviction, can be determined only at
           the trial and not at the stage of inquiry. At the stage of
           issuing the process to the accused, the Magistrate is not
           required to record reasons.”
     Similar views have been expressed by this Court in the case of Birla
     Corporation Ltd. -vs- Adventz Investments and Holdings Ltd.
     and Ors. [(2019) 16 SCC 610] as also Smt Nagawwa -vs-Veeranna
     Shivalingappa Konjalgi and Others [(1976) 3 SCC 736].
13. As far as the allegations of criminal intimidation are concerned, our
    attention has been drawn to the judgment of this Court in the case
    of Fiona Shrikhande -vs- State of Maharashtra and Another
    [(2013) 14 SCC 44]. It has been held in this case that the petition
    of complaint need not repeat the actual words or language of insult
    word by word and the complaint has to be read as a whole. If the
    Magistrate comes to a conclusion, prima facie, that there has been
    an intentional insult so as to provoke any person to break the public
    peace or to commit any other offence it should be sufficient to bring
    the complaint within the ambit of the aforesaid provision. It has also
    been argued on behalf of the respondent no.2 that the appellant in
    any event has got the right to apply for discharge and the petition
    of complaint does not suffer from the defect of not having made out
    any offence at all. This was the view taken by the High Court.
14. Past commercial relationship between the appellant’s employer and
    the respondent no.2 is admitted. It would also be evident from the
    petition of complaint the dispute between the parties centred around
    the rate at which the assigned work was to be done. Neither in the
    petition of complainant nor in the initial deposition of the two witnesses
    (that includes the complainant) the ingredients of the offence under
    Section 405 of the 1860 Code surfaced. Such commercial disputes
    over variation of rate cannot per se give rise to an offence under
    Section 405 of the 1860 Code without presence of any aggravating
    factor leading to the substantiation of its ingredients. We do not find
    any material to come to a prima facie finding that there was dishonest
    misappropriation or conversion of any material for the personal use of
    the appellant in relation to gas supplying work done by the respondent
    no.2. The said work was done in course of regular commercial
    transactions. It cannot be said that there was misappropriation
[2024] 1 S.C.R.                                                          1147

                    Sachin Garg v. State of U.P. and Anr.


     or conversion of the subject property, being dissolved acetylene
     gas which was supplied to the factory for the purpose of battery
     manufacturing at EIL. The dispute pertains to the revision of rate per
     unit in an ongoing commercial transaction. What has emerged from
     the petition of complaint and the initial deposition made in support
     thereof that the accused-appellant wanted a rate variation and the
     entire dispute arose out of such stand of the appellant. On the basis
     of these materials, it cannot be said that there was evidence for
     commission of offence under Section 405/406. The High Court also
     did not apply the test formulated in the case of Dalip Kaur (supra).
     We have narrated the relevant passage from that decision earlier.
15. In the case of Binod Kumar and Ors. -vs- State of Bihar and
    Another [(2014) 10 SCC 663], a coordinate Bench of this Court
    dealt with a criminal complaint arising out of retention of bill amount
    in course of commercial transaction. The Court found essential
    ingredients of criminal breach of trust or dishonest intention of
    inducement, which formed the foundation of the complaint were
    missing. The High Court’s judgment rejecting the plea for quashing
    the criminal proceeding was set aside by this Court. The reasoning for
    quashing the criminal proceeding would be revealed from paragraphs
    18 and 19 of the Report, which reads:-
           “18. In the present case, looking at the allegations in the
           complaint on the face of it, we find that no allegations
           are made attracting the ingredients of Section 405 IPC.
           Likewise, there are no allegations as to cheating or the
           dishonest intention of the appellants in retaining the
           money in order to have wrongful gain to themselves or
           causing wrongful loss to the complainant. Excepting the
           bald allegations that the appellants did not make payment
           to the second respondent and that the appellants utilised
           the amounts either by themselves or for some other work,
           there is no iota of allegation as to the dishonest intention
           in misappropriating the property. To make out a case of
           criminal breach of trust, it is not sufficient to show that
           money has been retained by the appellants. It must also
           be shown that the appellants dishonestly disposed of the
           same in some way or dishonestly retained the same. The
           mere fact that the appellants did not pay the money to the
           complainant does not amount to criminal breach of trust.
1148                                                        [2024] 1 S.C.R.

                     Digital Supreme Court Reports


          19. Even if all the allegations in the complaint taken at
          the face value are true, in our view, the basic essential
          ingredients of dishonest misappropriation and cheating
          are missing. Criminal proceedings are not a shortcut for
          other remedies. Since no case of criminal breach of trust
          or dishonest intention of inducement is made out and the
          essential ingredients of Sections 405/420 IPC are missing,
          the prosecution of the appellants under Sections 406/120-
          B IPC, is liable to be quashed.”
16. So far as the criminal complaint and the initial depositions with which
    we are concerned in this case, the factual basis is broadly similar.
    We have reproduced these materials earlier in this judgment. We do
    not find they carry the ingredients of offence as specified in Section
    405 of the 1860 Code.
17. The allegation of criminal intimidation against the accused is made
    in the complaint statements made by the appellant, no particulars
    thereof have been given. Both in the complaint petition and the
    initial deposition of one of the witnesses, there is only reproduction
    of part of the statutory provision giving rise to the offence of criminal
    intimidation. This would constitute a mere bald allegation, short of any
    particulars as regards to the manner in which threat was conveyed.
18. While it is true that at the stage of issuing summons a magistrate only
    needs to be satisfied with a prima facie case for taking cognizance,
    the duty of the magistrate is also to be satisfied whether there is
    sufficient ground for proceeding, as has been held in the case of
    Jagdish Ram (supra). The same proposition of law has been laid
    down in the case of Pepsi Foods Ltd. and Anr. -vs- Special Judicial
    Magistrate and Ors. [(1998) 5 SCC 749]. The learned Magistrate’s
    order issuing summons records the background of the case in rather
    longish detail but reflects his satisfaction in a cryptic manner. At the
    stage of issue of summons, detailed reasoning as to why a Magistrate
    is issuing summons, however, is not necessary. But in this case, we
    are satisfied that the allegations made by the complainant do not
    give rise to the offences for which the appellant has been summoned
    for trial. A commercial dispute, which ought to have been resolved
    through the forum of Civil Court has been given criminal colour by
    lifting from the penal code certain words or phrases and implanting
    them in a criminal complaint. The learned Magistrate here failed to
[2024] 1 S.C.R.                                                         1149

                    Sachin Garg v. State of U.P. and Anr.


     apply his mind in issuing summons and the High Court also failed
     to exercise its jurisdiction under Section 482 of the 1973 Code to
     prevent abuse of the power of the Criminal Court.
19. It is true that the appellant could seek discharge in course of the
    proceeding itself before the concerned Court, but here we find that
    no case at all has been made out that would justify invoking the
    machinery of the Criminal Courts. The dispute, per se, is commercial
    in nature having no element of criminality.
20. The appellant also wanted dismissal of the complaint and the orders
    passed in ensuing proceeding on another ground. The respondent
    no. 2’s allegations were against EIL, for whom he did the job-work.
    The appellant’s argument on this point is that the complaint should
    not have been entertained without arraigning the principal company
    as an accused. The judgment relied upon on this point is a decision
    of a Coordinate Bench in the case of Sharad Kumar Sanghi -vs-
    Sangita Rane [(2015) 12 SCC 781]. This was a case where complaint
    was made by a consumer for being sold a damaged vehicle under
    Section 420 of the 1860 Code. But arraigned as accused was the
    managing director of the dealer, the latter being a corporate entity.
    Cognizance was taken in that case and summons were issued. The
    accused failed to get relief after invoking the High Court’s jurisdiction,
    but two-judge Bench of this Court quashed the proceeding primarily
    on the ground that the company was not made an accused. The
    Coordinate Bench found that the allegations were made against
    the company, which was not made a party. Allegations against the
    accused (managing director of that company) were vague. So far the
    present case is concerned, the ratio of the decision in the case of
    Sharad Kumar Sanghi (supra) would not be applicable for ousting
    the complaint at the threshold on this ground alone. The perceived
    wrongdoing in this case has been attributed to the appellant, though
    the complaint petition acknowledges that the job-work was being
    done for EIL. Moreover, the allegation of criminal intimidation is
    against the appellant directly – whatever be the value or quality of
    such allegations. Thus, for that reason the complaint case cannot be
    rejected at the nascent stage on the sole ground of not implicating the
    company. But as otherwise we have given our reasons for quashing
    the complaint and the summons, we do not find any reason to dilate
    further on this point.
1150                                                       [2024] 1 S.C.R.

                     Digital Supreme Court Reports


21. We accordingly set aside the impugned judgment and quash the
    Criminal Complaint Case No.7990 of 2020 as also the summoning
    order issued on 18.08.2021. The appeal stands allowed in the above
    terms. All consequential steps in connection with the said proceeding
    shall stand quashed.


     Headnotes prepared by: Divya Pandey   Result of the case: Appeal allowed.