SACHIN GARG versus STATE OF U.P & ANR.
[2024] 1 S.C.R. 1134, Supreme Court of India, 2024
Outcome: Appeal(s) allowed (Granted)
Segment: Issues
* Author
[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,
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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]
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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.
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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
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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
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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”)
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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:
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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
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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.”
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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
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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.”
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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
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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
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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.
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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
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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.

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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.