(Prayer: Criminal Original Petition filed under Section 528 of BNSS, 2023, seeking to call for the records and quash the F.I.R in CCB, Crime No.154 of 2025 on the file of the 1st respondent police.)

1. The Criminal Original Petition filed under Section 528 of BNSS, 2023, seeking to call for the records and quash the F.I.R in CCB, Crime No.154 of 2025 on the file of the 1st respondent police.

2. The backdrop of the case is that the petitioner is A5 who is a pawn broker. A1 and A2 who are husband and wife, are the customers of the petitioner from the year 2000. A3 is the sister of A1. A4 is the advocate of A1. The complainant is the sole proprietor of M/s.Boya Gari Jewellers, a boutique involved in the sale of 916 K pure gold ornaments, diamond jewellery and premium sarees. In February 2022, A1 and her sister A3 were introduced to the complainant and A1 purchased gold jewellery from the complainant’s boutique for Rs.2,07,225/- on a credit basis, wherein it was mutually agreed that 50% of the sale consideration would be paid on the date of purchase and the balance 50% would be paid within 30 days from the date of purchase. Thereafter, A1 frequently purchased gold jewellery from the complainant from 2022 to 2023.

3. Learned counsel for the petitioner would also submit that there are only three allegations against the petitioner / A5. The first one is A1 introduced the petitioner / A5 to the complainant in 2024, with a proposal of investment and guaranteed substantial returns. Therefore, the complainant had transferred a sum of Rs.28 lakhs to the petitioner / A5 and the periodical investments increased to a total sum of Rs.1 crore. During February and March 2024, the accused paid a sum of Rs.18 lakhs and Rs.10 lakhs towards the aforesaid investment made by the complainant. Subsequently, since the remaining amount was not paid, the complainant stopped further investments. Thereafter, during March 2024, A1 came up with yet another business proposal for purchasing solid gold and diamond jewellery, believing the said representations, the complainant sold gold and diamond jewellery on a credit basis namely 50% at the time of purchase and the remaining 50% within one month from the date of purchase. Thereafter, the complainant came to know that A1 had purchased gold and diamonds jewellery worth Rs.1.3 crores from M/s.Cubic Gems on credit basis and failed to repay the amount within the stipulated period and at the same contemporaneous period, the dues payable by A1 to complainant exceeded Rs.1 crore and when it was pressurized by the complainant, A1 sought time for repayment claiming that she suffered huge loss in the investment business. Considering those facts, the complainant waited for A1 to settle the dues.

4. Again, A1 took the petitioner / A5 to the complainant’s boutique and the petitioner purchased antique jewellery worth Rs.1 crore, the petitioner paid a sum of Rs.55 lakhs on the date of purchase and assured that the balance amount of Rs.45 lakhs would be paid within a stipulated period. A1 voluntarily stood as a surety for A5 for the said purchase. When the petitioner / A5 failed to pay the balance amount, the complainant contacted him and at that time, the petitioner / A5 stated to have informed the complainant that he is not liable to pay the amount and also threatened the complainant. Once again, A1 had assured the complainant that she would clear the outstanding amount of the petitioner / A5 and also requested the complainant to part with all gold jewellery that was kept in her boutique and promised to pay for the same.

5. The third transaction alleged against the petitioner / A5 is that he made a proposal to the complainant to purchase her gold jewellery pledged with CSB Bank and complainant agreed for the said proposal. However, after redeeming the jewels from the bank, the petitioner / A5 failed to pay the consideration amount to the complainant within the stipulated period.

6. The other allegations in the complaint are in respect of the 1st accused. Thereafter, the defacto complainant lodged a complaint with the 1st respondent and they have registered a case against the petitioner / A5 and other accused for the offences punishable under Section 316(5), 318(4), 336(3), 338, 340(2), 351(2), 61(2) of BNS Act, 2023 and Section 4 of the Tamil Nadu Prohibition of Harassment of Women Act, 1998.

7. Learned counsel for the petitioner / A5 would submit that in order to prove the third allegation, there was no such records, since there was no such transaction. All the transactions were between the defacto complainant and A1. To make out a case against the petitioner / A5, the prosecution has not produced any records etc.

8. The contents of the counter is totally irrelevant to the allegations against the petitioner. There is no material to prima facie show the inducement by the petitioner, dishonest intention on the part of petitioner to cheat from the inception etc. In the circumstances, the criminal prosecution against the petitioner may be quashed and the criminal original petition is liable to be allowed.

9. Learned Additional Public Prosecutor would submit that the defacto complainant is running a boutique, wherein she was selling gold, diamond jewellery and premium sarees. A1 introduced the petitioner / A5 and the defacto complainant has transferred money to the account of the petitioner, which was not returned back. When it was questioned by the defacto complainant, the accused had threatened the defacto complainant and informed that he is not liable to pay the amount. The defacto complainant has delivered gold and diamond ornaments to the petitioner / A5 at his business establishment on numerous occasions during the relevant period. The petitioner / A5 has been arrested and his voluntarily statement was recorded. The evidentiary value and admissibility of statement are matters to be considered in accordance with law at the appropriate stage. The materials collected by the prosecution so far indicate that aggregate market value of the gold jewellery received and dealt with through the petitioner / A5 is substantial and it is presently being quantified by the investigating officer.

10. Learned Additional Public Prosecutor also submitted that during investigation, the bills and receipts issued under the trade name of the petitioner involving transactions aggregating to approximately Rs.5.43 crores and several bills do not contain complete particulars such as description of the ornaments, purity hall mark particulars, net weight and specific item wise details. In these circumstances, the criminal prosecution against the petitioner has to be proceeded with and the criminal original petition is liable to be dismissed.

11. Learned counsel appearing for the 2nd respondent would submit that the dishonest intention from the inception, breach of trust can be decided only after a full fledged trial and the petitioner is at liberty to challenge the charge sheet, if it is filed, and the criminal original petition deserves to be dismissed.

12. Heard the aforesaid contentions of the respective counsel and the records are perused.

13. It is an admitted fact that the defacto complainant is running a boutique in the name and style of M/s.Boya Gari Jewellers, wherein gold, diamond jewellery and premium sarees were sold. As per the complaint, the transactions are mainly between the defacto complainant and A1. A1 introduced the petitioner / A5 to the defacto complainant and he had purchased the jewellery on credit basis on several occasions. Now the complaint contains the three transactions in respect of the petitioner / A5. At the outset, it is necessary to examine the allegations against the petitioner / A5 independently. The fact is that A1 is alleged to have a substantial financial and business transactions with the complainant and there were allegedly a large outstanding amounts payable by A1, which cannot by themselves be a ground to fasten criminal liability on the petitioner / A5. Even according to the contents of the complaint attributed to the petitioner / A5 that he purchased jewellery from the complainant and paid Rs.55 lakhs and allegedly agreed to pay the balance of Rs.45 lakhs. The further allegation is that he subsequently failed to make payment. Thus, the basic allegation against petitioner / A5 arises out of a transaction involving payment of consideration for the jewellery purchased by the petitioner. Mere failure to pay the balance sale consideration in the absence of necessary ingredients, a criminal offence cannot automatically be converted into offence of cheating or criminal breach of trust, in particular, for an offence of cheating, there must be a material indicating dishonest and fraudulent intention at the inception of the transaction. A subsequent failure to honour the promise or an agreement by itself does not establish such an intention at the inception.

14. In the present case, there is no material placed before this Court to demonstrate that at the time of entering into the transaction, the petitioner / A5 had a dishonest intention of cheating the defacto complainant. There is also no contention in the complaint to show that the petitioner / A5 had induced the defacto complainant with any false representation with such dishonest intention equally. There is no material to establish that the petitioner was entrusted with any property in the manner contemplated for the offence of criminal breach of trust and thereafter dishonestly misappropriated or converted the same to his own use.

15. The allegations relating to the subsequent conduct of A1, including the alleged purchase of jewellery from the other shops, alleged loans obtained by A1, alleged misuse of the complainant’s name and also the alleged financial liability of A1 cannot automatically be attributed to petitioner / A5 merely because petitioner / A5 is acquainted with A1 or because A1 accompanied the petitioner / A5 to the complainant’s boutique. Importantly, there is no material or document available against petitioner / A5 to establish his participation in any conspiracy. Mere association with the other accused and acquaintance with them or participated in a particular commercial transaction is insufficient to constitute an offence of criminal conspiracy, unless there is material indicating an agreement to commit an illegal act or to commit a legal act by illegal means. Likewise, there is no material to indicate that the petitioner had fabricated any document, used any forged document, dishonestly induced the defacto complainant by means of any forged document or participated in any transaction involving forged documents. Therefore, the alleged forgery cannot be sustained against the petitioner in the absence of foundational facts necessary for those offences.

16. Learned counsel for the petitioner / A5 had placed reliance on the judgment of the Hon’ble Supreme Court in Manish V. State of Maharashtra and another (2025 SCC Online SC 707), in which it is held that there is no cavil that in some cases a commercial dispute may give rise to a criminal offence in addition to a civil cause of action. The test to determine whether a case would attract penal consequences is as follows:

               “Did the offending party make dishonest representation at the inception of the transaction and induce the other party to part with property, or act in a manner which but for such representation, the latter would not have done”.

17. It is also observed by the Hon’ble Supreme Court in the above said decision rendered in Manish V. State of Maharashtra and another (2025 SCC Online SC 707) as follows:

               “…..

               17. These materials support the appellant’s representation that he was a businessman of substance and as late as on 2018, his bankers reposed confidence in his financial liquidity to extend additional loans. Nothing is placed on record to disclose utter insolvency or bankruptcy of the appellant, which he had knowingly suppressed and persuaded the 2nd non-applicant to enter into the commercial arrangement. The High Court erred in not taking into consideration these relevant aspects, which shows the representation of the appellant that he was a creditworthy businessman cannot be labelled as ‘deception’ merely on the ground that the appellant had failed to honour the terms of the subsequent agreement. The High Court came to the conclusion that the appellant had intention to deceive from the inception of the transaction. This reasoning is wholly fallacious. Mere breach of promise to repay per se does not infer dishonest intention.

               18. In order to attract the penal provision, the uncontroverted allegations including material collected during investigation must disclose that pursuant to the assurance in the subsequent agreement, the 2nd non applicant had parted with property, that is to say made further supplies and suffered wrongful loss. It is nobody’s case after the subsequent agreement further supplies had been made or the 2nd non-applicant had been subjected to wrongful loss.

               19. On the contrary, appellant had clarified he had suffered continuous business setbacks. Due to losses, he was unable to pay the 2nd non-applicant. He had sold the coal to a brick manufacturer and suffered losses thereto. Vicissitudes in the commercial market are well known. Failure to pay due to unfortunate business losses cannot be clothed with culpability and the process of criminal law utilized to recovery outstanding dues.

18. As such, the observation of the Hon’ble Supreme Court in the above said judgment is squarely applicable to the case on hand, since the defacto complainant had never stated that the petitioner / A5 has acted with a dishonest intention from the inception of the transaction and he had induced her to part with any property and thereafter misappropriated or converted the same for his own use.

19. The Hon’ble Supreme Court in a decision rendered in Arshad Neyaz Khan V. State of Jharkhand and another (2025 SCC online SC 2058), held as follows:

               “……

               19. It is settled law that for establishing the offence of cheating, the complainant / respondent No.2 was required to show that the appellant had a fraudulent or dishonest intention at the time of making a promise or representation of not fulfilling the agreement for sale of the said property. Such a culpable intention right at the beginning when the promise was made cannot be presumed but has to be made out with cogent facts. In the facts of the present case, there is a clear absence of dishonest and fraudulent intention on the part of the appellant during the agreement for sale. We must hasten to add that there is no allegation in the FIR or the complaint indicating either expressly or impliedly any intentional deception or fraudulent / dishonest intention on the part of the appellant right from the time of making the promise or misrepresentation. Nothing has been said on what the misrepresentations were and how the appellant intentionally deceived the complainant / respondent No.2. Mere allegations by the complainant / respondent No.2 that the appellant failed to refund the money paid by the complainant / respondent No.2 does not satisfy the test of dishonest inducement to deliver a property or part with a valuable security as enshrined under Section 420 I.P.C.

20. As such, the observation of the Hon’ble Supreme Court in the above said decision is also squarely applicable to the case on hand since there is no material to show that the petitioner / A5 had intentionally deceived the defacto complainant and mere failure to repay the amount does not satisfy the test of dishonest inducement to deliver a property or part with a valuable security as required for the offence under Section 420 of I.P.C.

21. In the backdrop of guidelines given by the Hon’ble Supreme Court in State of Haryana V. Bajanlal (1992 supplementary 1 SCC 335), where the allegations made in the F.I.R. or the complaint even if they are taken at their face value and accepted in its entirety do not prima facie constitute any offence or any case against the accused, where the uncontroverted allegations made in the F.I.R or complaint and the evidence collected in support of the sale do not disclose the commission of any offence and make out a case against the accused.

22. On a careful consideration of the aforesaid judgments and in light of the facts of this case, the Court finds that none of the offences alleged against the petitioner / A5 is made out. The allegation that the petitioner threatened the defacto complainant even if it is taken at its face value, has to be examined in the context of specific penal provision invoked and the surrounding materials. However, in the present case, apart from the bald allegations, there is no independent material to demonstrate the commission of the offences alleged against the petitioner / A5 or his participation in the alleged larger transactions involving A1 and A2. It is also relevant to be noted that the quashing of F.I.R. or the complainant has brought out any material connecting petitioner / A5 with the alleged conspiracy or fraudulent transactions attributed mainly to A1 and A2. In these circumstances, the petitioner / A5 cannot be compelled to undergo the ordeal of the criminal trial merely on the basis of his association with the other accused and his participation in the commercial transactions, when the essential ingredients of the offences are not disclosed against him.

23. Conscious of the settled principle that while exercising inherent jurisdiction under 482 Cr.P.C. the Court ordinarily should not conduct a material or circumstances of the evidence or to conduct a mini trial, however, where the allegations even if accepted in their entirety do not constitute the offences alleged against the particular accused or where the continuation of criminal proceedings would amount to an abuse of process of law, the inherent jurisdiction of this Court can certainly be exercised. In the present case also, even accepting allegations in the complaint at its face value, the materials do not disclose the necessary ingredients of the offences alleged against the petitioner / A5. Non payment of the balance sale consideration without material showing fraudulent intention or dishonest intention at the inception cannot by itself construed as the offence of cheating. There is also no material to establish a criminal breach of trust, forgery or the use of a forged document or conspiracy on the part of the petitioner / A5. Therefore, this Court is of the considered view that continuation of the criminal proceedings against the petitioner / A5 in the absence of any other material connecting him with the alleged offences would certainly amount to an abuse of process of law.

24. From the foregoing discussions, this Court comes to a conclusion that the criminal prosecution against the petitioner / A5 is liable to be quashed and the criminal original petition deserves to be allowed. ``

25. In the result, this Criminal Original Petition stands allowed. The records in F.I.R. in CCB Crime No.154 of 2025, on the file of the 1st respondent police is hereby quashed. Consequently, connected miscellaneous petition is closed.