ORDER : HASMUKH D. SUTHAR, J. [1.0] RULE. Learned APP waives service of notice of Rule for and on behalf of the respondent No.1 – State of Gujarat and learned advocate Mr. Nasir Saiyed waives service of notice of Rule for and on behalf of respondent No.2. [2.0] Pursuant to the order dated 07.02.2025 passed by the Hon’ble Supreme Court in Special Leave Petition (Cri.) Diary No.2399/2025 and with the consent of learned advocates appearing for the respective parties, present matter is taken up for final hearing today. [3.0] By way of present petition under Article 226 of the Constitution of India read with Section 482 of the Code of Criminal Procedure, 197 (for short “CrPC”)/ Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (for short “ BNSS ”), the petitioners have prayed to quash the FIR being CR No.11210047240179 of 2024 registered with Udhna Police Station, Surat City for the o punishable under Sections 409 , 420, 504, 120(B) and 506(2) of the INDIAN PENAL CODE , 1860 (for short “IPC”). [4.0] The brief facts of the case are as under: [4.1] The present petitioners and respondent No.2 had a business relationship wherein the present petitioners procured chemicals for the process of dyeing the fabrics and therefore the petitioners used to regularly purchase goods from the respondent company and made payments on regular basis for which the petitioner company even maintained ledger account. [4.2] That, on 26.03.2021, the petitioners purchased chemical from the respondent company vide invoice No.V/0992 and thereafter the petitioners have not even purchased any stock from respondent No.2. Further, petitioner company is currently undergoing a Corporate Insolvency Resolution Process (CIRP), which was initiated by an order dated 15.04.2024 under the Insolvency and Bankruptcy Code, 2016 (for short “IBC”). As per Section 14 of the IBC, a moratorium existed though the impugned complaint is filed for the offence punishable under Sections 409 , 420, 504, 120(B) and 506(2) of the IPC. [4.3] The petitioners preferred the present petition wherein vide order dated 18.09.2024, the coordinate Bench was pleased to grant interim relief in favor of the petitioners pursuant to which respondent No.2 preferred SLP before the Hon’ble Supreme Court and vide order dated 07.02.2025, the Hon’ble Supreme Court was pleased to disposed of the said SLP with direction to this Court to expeditiously adjudicate the present petition. [5.0] Learned advocate for the petitioners has submitted that impugned complaint is nothing but abuse of process of law inasmuch as there was no intention on the part of the petitioners since inception to cheat or commit criminal breach of trust against the respondent No.2 though impugned complaint is filed with ulterior motive. The nature of allegation is civil in nature and initiated only for the purpose of recovery of the amount. Further, the alleged incident took place in the year 2021 and impugned complaint is filed belatedly in the year 2024 and even the IBC proceedings came to be initiated and due to such inability and business failure petitioners failed to make the payment and as such there was no intention of cheating or criminal breach of trust. Even, in the ledger account amount is required to be paid to the complainant is mentioned. There is no manipulation or cheating. In support of his submissions, learned advocate for the petitioner has relied on the decision of Hon’ble Supreme Court of India in the case of Naresh Kumar & Anr. vs. The State of Karnataka & Anr. reported in 2024 INSC 196 and has requested to allow the present petition. [6.0] Learned APP as well as learned advocate for respondent No.2 have vehemently opposed the present petition. Respondent No.2 has filed a detailed affidavit in reply opposing the present petition wherein it is stated that the petitioners are having two criminal antecedents one is registered at South Delhi and another at Jaipur City and therefore, only on the ground of suppression of material facts, it is requested to dismiss the present petition. Further, the proceedings before the NCLT were initiated vide order dated 15.04.2024 whereas the impugned complaint is filed on 26.01.2024 and thus the impugned complaint is much prior in point of time. It is further submitted that the petitioners are habitual offenders by way of adopting modus operandi of purchasing huge quantity of material from different parts of country and thereafter refusing to make the payments to the creditors as also administering threats to the creditors. [6.1] The main grievance of the complainant is that present petitioners are involved in the offence. The investigation is still going on and is at nascent stage. After preliminary inquiry, police has registered the complaint and in present case huge amount of Rs.43,54,200/- is involved. [6.1] The main grievance of the complainant is that present petitioners are involved in the offence. The investigation is still going on and is at nascent stage. After preliminary inquiry, police has registered the complaint and in present case huge amount of Rs.43,54,200/- is involved. The petitioners after winning over the trust of suppliers used to purchase material/ goods and thereafter deny to make the payments and thereby dupe the suppliers. Further mini trial is not permissible at the stage of exercising powers under Article 226 of the Constitution read with Section 482 of the CrPC. Therefore, it is requested to dismiss the present petition. [7.0] Heard learned advocates appearing for the respective parties. [8.0] Going through the complaint, prima facie, it appears that it is a commercial dispute. Initially the complainant filed an application dated 14.09.2023 to the Udhna Police Station alleging that alleged transactions took place in the year 2021 and to recover the said amount, after three years the complaint is registered. It is the case of the complainant that initially the payment was made but thereafter payments were stopped and hence, no prima facie offence or allegation which reveals that since inception it was the intention of the petitioners to cheat the complainant or to commit criminal breach of trust. It is needless to say that offence of cheating punishable under Section 420 of the IPC and criminal breach of trust punishable under Section 409 of the IPC never goes together. In plethora of decisions, Hon’ble Supreme Court has decided that cloak of criminality to civil dispute and financial transaction is not permissible and is nothing but abuse of process of law and even merely because two offences are registered against the petitioners is not a ground to refuse exercise of jurisdiction under Article 226 of the Constitution of India read with Section 482 of the CrPC in the case on hand. The Court has to consider each case on its own merits. Herein, to decide the present petition, Court has considered the allegations leveled in the complaint. The Court has to consider each case on its own merits. Herein, to decide the present petition, Court has considered the allegations leveled in the complaint. [8.1] The Hon’ble Supreme Court in the case of Lalit Chaturvedi and Others vs. State of Uttar Pradesh and Another reported in 2024 SCC OnLine (SC) 171 and Mohammed Ibrahim and Others vs. State of Bihar and Another reported in (2009) 8 SCC 751 , has observed that in order to make out an offence under Section 420 of the IPC, following ingredients are required to be satisfied: “18. Let us now examine whether the ingredients of an offence of cheating are made out. The essential ingredients of the offence of “cheating” are as follows: (i) deception of a person either by making a false or misleading representation or by dishonest concealment or by any other act or omission; (ii) fraudulent or dishonest inducement of that person to either deliver any property or to consent to the retention thereof by any person or to intentionally induce that person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived; and (iii) such act or omission causing or is likely to cause damage or harm to that person in body, mind, reputation or property.” Even relying on the decisions of the Hon’ble Supreme Court in the case of V.Y. Jose and Another vs. State of Gujarat and Another reported in (2009) 3 SCC 78 and Kunti and Another vs. State of Uttar Pradesh and Another reported in (2023) 6 SCC 109 , the Hon’ble Supreme Court has reiterated the aforesaid principle. Even, in view of the decision of the Hon’ble Supreme Court in the case of Rikhab Birani & Anr. vs. State of Uttar Pradesh & Anr. reported in 2025 INSC 512 , present petition deserves consideration. [8.2] So far as offence under Sections 406 and 420 of the IPC is concerned, there is not an iota of evidence which suggests that there was any intention since inception of cheating and criminal breach of trust. Even, criminal breach of trust and cheating cannot go together. reported in 2025 INSC 512 , present petition deserves consideration. [8.2] So far as offence under Sections 406 and 420 of the IPC is concerned, there is not an iota of evidence which suggests that there was any intention since inception of cheating and criminal breach of trust. Even, criminal breach of trust and cheating cannot go together. In this regard, it is apposite to refer to the decision of the Hon’ble Supreme Court in the case of Delhi Race Club (1940) Limited and Others vs. State of Uttar Pradesh and Another reported in (2024) 10 SCC 690 ; [9.0] Now, coming back to the allegations of offence under Sections 504 and 506(2) of the IPC, the Hon’ble Apex Court in the case of Mohammad Wajid and Anr. v. State of U.P. and Ors. reported in 2023 LiveLaw (SC) 624 : 2023 INSC 683 , has held in paragraphs 15, 27 and 28 as follows: “ INDIAN PENAL CODE , 1860; Section 504 - Mere abuse, discourtesy, rudeness or insolence, may not amount to an intentional insult within the meaning of Section 504 , IPC if it does not have the necessary element of being likely to incite the person insulted to commit a breach of the peace of an offence and the other element of the accused intending to provoke the person insulted to commit a breach of the peace or knowing that the person insulted is likely to commit a breach of the peace. Each case of abusive language shall have to be decided in the light of the facts and circumstances of that case and there cannot be a general proposition that no one commits an offence under Section 504 , IPC if he merely uses abusive language against the complainant - In judging whether particular abusive language is attracted by Section 504 , IPC, the court has to find out what, in the ordinary circumstances, would be the effect of the abusive language used and not what the complainant actually did as a result of his peculiar idiosyncrasy or cool temperament or sense of discipline. It is the ordinary general nature of the abusive language that is the test for considering whether the abusive language is an intentional insult likely to provoke the person insulted to commit a breach of the peace and not the particular conduct or temperament of the complainant. It is the ordinary general nature of the abusive language that is the test for considering whether the abusive language is an intentional insult likely to provoke the person insulted to commit a breach of the peace and not the particular conduct or temperament of the complainant. (Para 25- 26) INDIAN PENAL CODE , 1860; Section 504 - One of the essential elements for constituting an offence under Section 504 of the IPC is that there should have been an act or conduct amounting to intentional insult. Where that act is the use of the abusive words, it is necessary to know what those words were in order to decide whether the use of those words amounted to intentional insult. In the absence of these words, it is not possible to decide whether the ingredient of intentional insult is present. (Para 28) INDIAN PENAL CODE , 1860; Section 506 - Before an offence of criminal intimidation is made out, it must be established that the accused had an intention to cause alarm to the complainant. (Para 27) 3 Interpretation of Statutes- All penal statutes are to be construed strictly - Court must see that the thing charged is an offence within the plain meaning of the words used and must not strain the words. (Para 19- 21)” Insofar as allegation of administering threat to the complainant is concerned, it is pertinent to note that petitioners are residents of Faridabad, Haryana and complainant is resident of Surat and therefore, question of threat perception and/or danger does not arise. [10.0] It is necessary to consider whether the power conferred by the High Court under Section 482 of the CrPC/ Section 528 of the BNSS is warranted or not. It is true that the powers under Section 482 of the CrPC/ Section 528 of the BNSS are very wide and the very plenitude of the power requires great caution in its exercise. The Court must be careful to see that its decision in exercise of this power is based on sound principles. The inherent power should not be exercised to stifle a legitimate prosecution. The Court must be careful to see that its decision in exercise of this power is based on sound principles. The inherent power should not be exercised to stifle a legitimate prosecution. The High Court being the highest court of a State should normally refrain from giving a prima facie decision in a case where the entire facts are incomplete and hazy, more so when the evidence has not been collected and produced before the Court and the issues involved, whether factual or legal, are of magnitude and cannot be seen in their true perspective without sufficient material. Of course, no hard-and-fast rule can be laid down in regard to cases in which the High Court will exercise its extraordinary jurisdiction of quashing the proceeding at any stage as the Hon’ble Supreme Court has decided in the case of Central Bureau of Investigation vs. Ravi Shankar Srivastava, IAS & Anr. , reported in AIR 2006 SC 2872 and State of Haryana and others vs. Bhajan Lal and others reported in [(1992) Supp (1) SCC 335] and in case of State of Haryana v. Bhajan Lal , reported in 1992 Supp (1) SCC 335 , the Apex Court has set out the categories of cases in which the inherent power under Section 482 CrPC can be exercised and held in para 102 as under: “102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Art. 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised : (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 concerned Act (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 concerned Act, 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.” [11.0] In wake of aforesaid facts, present petition is allowed. The impugned FIR being CR No.11210047240179 of 2024 registered with Udhna Police Station, Surat City as well as all consequential proceedings initiated in pursuance thereof are hereby quashed and set aside qua the petitioners herein. Rule is made absolute accordingly. Direct service is permitted.