In Ranjeet Kumar Rai @ Bablu Rai vs. The State of Bihar & Anr. (2026), Justice Sunil Dutta Mishra delivered a 17-page long judgement dated July 31, 2026, wherein, it set aside the order dated March 5, 2018 passed by the Additional Chief Judicial Magistrate-III, Dalsinghsarai, Samastipur in G.R. No. 739 of 2016 which arose out of V. Nagar (Vidyapatinagar) P.S. Case No. 118 of 2016 and the subsequent order dated September 10, 2018 passed by the Additional Chief Judicial Magistrate-III, Dalsinghsarai, Samastipur in Trial No. 1019 of 2018/G.R. No. 739 of 2016. The judgement reads:"Consequently, the entire criminal proceeding arising therefrom, stands quashed. 21. Both the Criminal Miscellaneous Applications are, accordingly, allowed." Justice Mishra observed:"19. In the considered opinion of this Court, even if the allegations contained in the F.I.R are accepted in their entirety, they do not prima facie constitute the offences alleged against the petitioner. The dispute, at its core, is essentially contractual and civil in nature, which has been sought to be given the colour of a criminal prosecution."
Justice Mishra relied on the Supreme Court's decision in Delhi Race Club (1940) & Ors. v. State of Uttar Pradesh & Anr. reported in (2024) 10 SCC 690 wherein, it has distinguished between criminal breach of trust and cheating. “36. What can be discerned from the above is that the offences of criminal breach of trust (Section 406 IPC) and cheating (Section 420 IPC) have specific ingredients...."
The trial court had taken cognizance for the offences punishable under Sections 406, 420, 504 and 506 of the Indian Penal Code, 1860 and Section 138 of the Negotiable Instruments Act, 1881 against the petitioner, and the discharge application preferred by the petitioner was rejected.
Justice Mishra recorded that in this case, neither entrustment of property nor dishonest intention at the inception of the transaction was discernible from the allegations made in the F.I.R. The dispute, arose out of an alleged breach of contractual obligations relating to sale of a motor vehicle and does not disclose the commission of either offence. A plain reading of the First Information Report did not disclose the essential ingredients of Sections 503 and 504 Indian Penal Code. Except for a bald allegation of abuse and threat, there is no material to indicate intentional insult with intent to provoke breach of the peace as required under Section 504 Indian Penal Code, nor are the allegations sufficient to constitute criminal intimidation within the meaning of Section 503 Indian Penal Code punishable under Section 506 Indian Penal Code. The case fell squarely within the parameters laid down by the Supreme Court in State of Haryana & Ors. v. Bhajan Lal & Ors., reported in 1992 Supp (1) SCC 335, particularly the categories where the allegations, even if taken at their face value, do not constitute any offence and where the criminal proceeding is manifestly attended with mala fides and instituted with an ulterior motive for wreaking vengeance or exerting pressure."
Justice Mishra also concluded: "Continuation of the criminal proceeding, in the facts of the present case, would amount to an abuse of the process of the Court and would warrant interference in exercise of the inherent jurisdiction of this Court."
The prosecution case was that Anil Kumar Chaudhary, the opposite party No.2 (informant), being the registered owner of a Bolero Pick-up Van bearing Registration No. BR-09M-4666, alleged that on August 1, 2016 the petitioner had approached him with a proposal to purchase the said vehicle. The sale consideration was settled at Rs.4,21,000/-, whereupon the petitioner allegedly issued a cheque of Rs.2,50,000/- towards part payment and agreed to pay the remaining Rs.1,71,000/- within two weeks, whereafter possession of the vehicle was delivered to him. It is further alleged that when the cheque was presented for encashment on September 30, 2016, the same was dishonoured. Thereafter, on October 5, 2016, when O.P. No.2 approached the petitioner demanding either payment of the amount or return of the vehicle, the petitioner allegedly abused and threatened him with dire consequences and refused either to return the vehicle or to make payment, further stating that he would dispose of the vehicle as scrap. On the basis of the aforesaid allegations, a written report was submitted by O.P. No.2 before the SHO, Vidyapatinagar Police Station, Samastipur, pursuant to which F.I.R bearing V. Nagar (Vidyapatinagar) P.S. Case No. 118 of 2016 was registered against the petitioner for the offences punishable under Sections 406, 420, 504 and 506 of the Indian Penal Code and Section 138 of the Negotiable Instruments Act.
In Lalan Kumar v. The State of Bihar (Cr.Misc No. 37503 of 2023), the High Court has held that prosecution under section 138 of Negotiable Instrument Act can only be initiated by filing complaint. It was also submitted that no statutory demand notice, as mandated under Section 138 of the Negotiable Instruments Act, was ever issued and, therefore, the very institution of criminal proceedings under the said provision is legally unsustainable. He further submitted that the Magistrate mechanically took cognizance without due application of judicial mind and that the subsequent rejection of the discharge application also suffers from the same infirmity. It is, thus, submitted that both the impugned orders dated 05.03.2018 and 10.09.2018 be quashed along with the entire criminal proceeding.
