Justice Sunil Dutta Mishra sets aside orders by Additional Chief Judicial Magistrate-III, Dalsinghsarai, Samastipur, underlines criminal breach of trust and cheating have different ingredients

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.
 

Supreme Court sets aside order by Justice Prabhat Kumar Singh in a cheque bounce case

In Dhananjay Kumar @ Dhananjay Kumar Gupta vs. The State of Bihar & Anr. (2026), Supreme Court's Justices B.V. Nagarathna and Ujjal Bhuyan passed a 6-page long order dated May 4, 2026, wherein, it concluded:"Considering the circumstances on record, in our view, the appellant is entitled to the relief claimed under Section 482 of the BNSS. We, therefore, allow this appeal and set aside the order passed by the High Court dated 09.02.2026. We direct that in the event of arrest of the appellant, the Arresting Officer shall release the appellant on bail subject to furnishing cash security in the sum of Rs.25,000/- (Rupees Twenty-Five Thousand only) with two like sureties. It is directed that the appellant shall extend 3complete cooperation in the ensuing investigation/trial. The appellant shall not misuse his liberty and shall not in any way influence the witnesses or tamper with the material on record. With the aforesaid directions, the Criminal Appeal is allowed."

The appeal challenged rejection of anticipatory bail to the petitioner by Patna High Court's Justice Prabhat Kumar Singh's order dated February 9, 2026. The petitioner had approached the Court apprehending arrest in connection with crime registered pursuant to FIR of 2022 dated November 17, 2022 lodged with Police Station-Belsaganj, Sub-Division Sadar, District-Gaya in respect of the offences punishable under Sections 406 and 420 of the Indian Penal Code, 1860 and under Section 138 of the Negotiable Instruments Act, 1881, the appellant preferred an application before the High Court seeking anticipatory bail in terms of Section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023.

By order dated April 2, 2026, the Supreme Court had passed the order saying, "Till the next date of hearing, no coercive steps shall be taken as against the petitioner...." 

The senior counsel for the appellant submitted that the dispute between the parties was with regard to the bouncing of a cheque and filing of a complaint under Section 138 of the NI Act; that the main accused was granted the anticipatory bail by the High Court by order dated August 1, 2023 however such a relief was not granted to the appellant herein. This Court, by virtue of the interim order dated April 2, 2026, was granted protection. In the circumstances, by following the principle of parity, the appellant may also be granted the relief of anticipatory bail subject to the terms and conditions that may be imposed by making the interim order absolute. 

The counsel for the respondent-State submitted that the complaint was made under Section 200 of the Code of Criminal Procedure, 1973 and bearing in mind the facts of this case, the appropriate order may be made in the appeal.  

In Dhananjay Kumar @ Dhananjay Kumar Gupta vs. The State of Bihar & Anr. (2026), Patna High Court's Justice Prabhat Kumar Singh had passed a 3-page long order dated February 9, 2026. The petitioner had apprehended his arrest in a case registered for the offence. It was a case of cheque bounce. As per prosecution case, it was alleged that the petitioner, along with co-accused Ajit Kumar, took Rs. 70,00,000/ from the informant as consideration money in lieu of executing a land in his favour and later on, refused to execute the land. Thereafter, when the informant asked for his money back, the accused persons issued cheques in his favour which got bounced due to insufficiency of funds. Thus, the accused persons cheated the informant and extorted money from him. The respondent no. was Satyendra Yadav.   

Supreme Court reverses Justice Prabhat Kumar Singh's bail rejection order

In Sunil Dhanwat @ Atharva Sunil Dhanwat @Sunil Pandurang Dhanwat vs, The State of Bihar & Anr. (2025), Supreme Court's Division Bench of Justices Sudhanshu Dhulia and N.V. Anjaria passed a 2-page long order dated July 25, 2025 granting pre-arrest bail to the petitioner. The order reads: "Considering the nature of the case, we are of the view that custodial interrogation of the petitioner is not required in this case, however, this will be subject to the total cooperation of the petitioner in the ongoing investigations. Consequently, we allow the prayer for grant of anticipatory bail and make the order dated 09.05.2025 as absolute. Accordingly, in the event of arrest, the petitioner is directed to be released on bail forthwith on the usual terms and conditions to be decided by the concerned Court." 

The petition was disposed of. The arose out of a 3-page long order dated March 24, 2025 passed by Justice Prabhat Kumar Singh of the Patna High Court in Sunil Dhanwat @ Atharva Sunil Dhanwat @Sunil Pandurang Dhanwat vs, The State of Bihar & Anr. (2025). 

Justice Singh had dismissed the petition for pre-arrest bail of the petitioner because of the gravity of the facts and circumstances of the case.

The petitioner was an accused in a complaint case of 2024, for the offences punishable under Section 406 of the Indian Penal Code and Section 138 of the Negotiable Instrument Act. He apprehended his arrest and his anticipatory bail application was dismissed by the High Court under the order impugned. Being aggrieved, he had approached the Supreme Court and vide order dated May 9, 2025, the Court while issuing notice, granted interim protection to the petitioner subject to cooperation in the  investigation.  

The prosecution case was that petitioner being the Proprietor-cum-Director of Spekans EPC Pvt. Ltd., Pune engaged the complainant for a project related to structure fabrication at a site in Surat (Gujarat). The complainant alleged that he invested Rs. 50,85,656/- in the said project, whereas petitioner made a payment of Rs. 23,38,000/-via RTGS, leaving outstanding amount of Rs. 27,47,656/-. It was also alleged that the petitioner issued a cheque of Rs. 17,47,656/-, which bounced due to insufficiency of fund.

The complainant's counsel had opposed the prayer for anticipatory bail in the High Court. He had submitted that petitioner did not deny the allegation made in the complaint petition and the cheque issued by the petitioner bounced due to insufficiency of fund. In this case, petitioner neither appeared nor surrendered before the Court and as such, he was declared absconder and process of Section 82 of the Cr.P.C. was initiated against him to ensure his appearance in the Court. Therefore, the petitioner was not entitled to the relief of anticipatory bail. He relied on the following decisions in support of this submission: (i) Lavesh vs. State (NCT of Delhi), (2012) 8 SCC 730 (ii) State of MP vs. Pradeep Sharma (2014) 2 SCC 17 and (iii) Prem Shankar Prasad vs. State of Bihar 2021 SCC OnLine SC 955.

The counsel for the petitioner placed reliance on a decision of the Supreme Court in the case of Srikant Upadhyay & Ors. vs. State of Bihar & Anr., arising out of Special Leave Petition (Crl.) No. 7940 of 2023.

Justice Singh's order reads: "It is a case of ‘cheque bounce’. The cheque, issued by the petitioner, got bounced due to insufficiency of fund. In this case, process of Section 82 Cr.P.C. has already been initiated on 12.12.2024 and as such, petitioner is not entitled to relief of anticipatory bail. 8. Considering the aforesaid facts & circumstances of the case and gravity of the offence, the petition for pre-arrest bail of the petitioner is dismissed." Reversing, Justice Singh's order, the Supreme Court has granted anticipatory bail to the petitioner by making its order dated May 9, 2025 as absolute. By its earlier, the Court had granted interim protection to the petitioner.