Madhya Pradesh High Court
Chandraprakash Bhandari vs State Of M.P. on 12 February, 2026
Author: Sanjeev S Kalgaonkar
Bench: Sanjeev S Kalgaonkar
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NEUTRAL CITATION NO. 2026:MPHC-IND:4515
I N T H E H I G H C O U R T O F M A D H YA P R A D E S H
AT I N D O R E
BEFORE
HON'BLE SHRI JUSTICE SANJEEV S KALGAONKAR
ON THE 12th OF FEBRUARY, 2026
MISC. CRIMINAL CASE No.28998 of 2024
CHANDRAPRAKASH BHANDARI
Versus
THE STATE OF MADHYA PRADESH AND ANOTHER
Appearance:
Shri Sanjay Kumar Sharma, Advocate for the petitioner.
Shri Ayushyaman Choudhary, Govt. Advocate for the respondent No.1/State.
Shri Prakash Chandra Shrivas, Advocate for the respondent No.2.
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ORDER
1. This petition under Section 482 of the Code of Criminal Procedure is
filed for quashing of FIR registered at Crime No.341 of 2024 dated 20.03.2024
at Police Station Station Road, Ratlam, District Ratlam for the offence
punishable under Section 406 of Indian Penal Code and all other subsequent
proceedings.
2. The exposition of the facts giving rise to the present petition, in brief, is
as under :
(A) Narendra Kumar Dabariya filed a written complaint before the
Judicial Magistrate First Class, Ratlam inter alia stating that accused
Ashish Danial and his wife Nilima Danial, proprietor of M/s. A.D.
Enterprises are involved in development of colonies. Accused No.3 –
Chandraprakash Bhandari, accused No.4 – Yahya Khan Shairani and
accused No.5 – Arif Behlim work for M/s. A.L.A.S. Real Estate and
Signature Not Verified
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Developers Private Ltd. for construction of road, drainage, water line,
chamber, over head tank, sumpwell, garden electricity line, ACP, CC
gate, Paver Block etc. in the colony developed by M/s. A.D. Enterprises.
The complainant entered into a partnership and profit share agreement
with accused No.1 Ashish Danial for development of ‘Royal Residency
Colony’. M/s. A.L.A.S Real Estate and Developers Private Ltd. was
involved for development of the colony. Accused No.1 induced the
complainant to deposit Rs.30.00 Lacs as security deposit with M/s.
A.L.A.S. Real Estate and Developers Private Ltd. and assured that on
completion of the development of colony and handing over to the
Municipal Corporation, the security amount would be returned to the
complainant. The complainant paid the amount of Rs.30.00 Lacs on
29.02.2016 through the account of his wife Kavita Dabariya in Canara
Bank, Branch Ratlam(M.P.) into account of M/s. A.L.A.S. Real Estate
and Developers Private Ltd.. Accused No.1 – Ashish Danial and accused
No.2 – Nilima Danial had paid the amounts to M/s. A.L.A.S. Real Estate
and Developers Private Ltd. towards construction works under the
colony, but no payment was made to the complainant. In furtherance of
the agreement, on completition of the construction work of Royal
Residency Colony, it was handed over to the Municipal Corporation. The
accsued No.1 – Ashish Danial and accused No.2 – Nilima Danial did not
pay profit share in furtherance of partnership agreement. Rather, abused
the complainant in filthy language. M/s. A.L.A.S. Real Estate and
Developers Private Ltd. did not return the security deposit of Rs.30.00
Lacs to the complainant. Chandraprakash Bhandari, the present Director
of M/s. A.L.A.S. Real Estate and Developers Private Ltd. abused the
complainant in filthy language. Therefore, it is requested that cognizance
for offence punishable under Sections 406, 420, 120-B, 294 and 506 of
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NEUTRAL CITATION NO. 2026:MPHC-IND:4515
IPC be taken against proposed accused.
(B) The Judicial Magistrate First Class, Ratlam heard the complainant
on application under 156(3) of Cr.P.C. Learned Judicial Magistrate vide
order dated 02.03.2024 directed the SHO of Police Station – Station
Road, District Ratlam(M.P.) to register an FIR for offence punishable
under Section 406 of IPC and investigate the matter. In compliance with
the directions, P.S. Station Road, Ratlam registered FIR at Crime
No.341/2024 for offence punishable under Section 406 of IPC against
Ashish Danial, Nilma Danial, Chandraprakash Bhandari, Yahya Khan
and Arif Behlim.
3. The complaint, order dated 02.03.2024 and the consequent FIR
registered at Crime No.341/2024 is assailed in present petition on following
grounds :-
(i) It is a case of civil dispute between the complainant and co-
accused Ashish Danial and Nilima Danial. No agreement took place
between the petitioner or their company with the complainant assuring
them profit share or security amount. There was no transaction between
the petitioner and the complainant, thererfore, no question of breach of
trust or misappropriation of amount arises.
(ii) The petitioner was not Manager or Director of the firm at the
time of alleged deposit of Rs.30.00 Lacs through RTGS in the bank
account of the firm. In Para – 6 of the complainant, the complainant
averred that the petitioner was appointed as new Director.
(iii) As per Para – 7 of the complaint, the transaction between the
firms had completed. Petitioner is not under obligation to make any
payment to the complainant.
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NEUTRAL CITATION NO. 2026:MPHC-IND:4515
(iv) The learned Judicial Magistrate First Class committed an error in
directing registration of FIR against the petitioner.
On these grounds, it is prayed that the order dated 02.03.2024 and
consequent FIR with subsequent proceedings be quashed.
4. Learned counsel for the petitioner, in addition to the grounds mentioned
in the petition submits that an agreement was executed between M/s. A.D.
Enterprises through its partners Ashish Denial and M/s. A.L.A.S. Real Estate
and Developers Private Ltd. through its Director Yahya Khan Shairani and Arif
Behlim for development of a colony, construction of road, drainage, water line,
chamber over head tank, sumpwell, garden electricity line, ACP, CC gate,
Paver Block etc. Allegedly, Rs.30.00 Lacs were deposited by the first party i.e.
M/s A.D. Enterprises with the second party i.e. M/s. A.L.A.S. Real Estate and
Developers Private Ltd in furtherance of the agreement. The present dispute
merely relate to non-payment of security money on completion of the work. It
is essentially a civil dispute for recovery of money. Learned counsel further
submits that the present complaint is filed by Narendra Kumar Dabariya in
personal capacity whereas the alleged security money was deposited by and on
behalf of partnership firm M/s. A.D. Enterprises. Although, the complainant
has claimed to be a partner in M/s. A.D. Enterprises, but the complaint was not
filed on behalf of the partnership firm. It is alleged that the petitioner was
Director of M/s A.L.A.S. Real Estate and Developers Private Ltd., but the firm
M/s. A.D. Enterprises is not impleaded as an accused. The security money was
not deposited with the petitioner in personal capacity. Rather, it was allegedly
deposited with the firm, therefore, present prosectuion is not maintainable
without impleading the firm as an accused. Learned counsel further referring to
the agreement between the firms submits that Chandraprakash was not
signatory of the agreement. He was not even Director of M/s A.L.A.S. Real
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NEUTRAL CITATION NO. 2026:MPHC-IND:4515
Estate and Developers Private Ltd. at the time of execution of agreement dated
18.03.2016, therefore, he cannot be prosecuted for the act of M/s A.L.A.S. Real
Estate and Developmrs Private Ltd. Learned counsel referring to the judgment
of Supreme Court in the case of Priyanka Shrivastava Vs. State of U.P.
reported in 2015(6) SCC 287 contends that the complainant, instead of
approaching the police authority, has directly resorted the complaint before the
trial Courrt, which is not maintainable. The present complaint and the
prosecution instituted thereupon suffers from legal infirmity. Consequently, the
complaint and subsequent prosecution deserves to be quashed.
5. Per Contra, learned counsel for the respondent/complainant contends
that admittedly the complainant is partner in the firm M/s. A.D. Enterprises.
The statement of account and the material on record reveals that the security
money was transferred to the accused from the account of Kavita Dabariya
W/o complainant Narendra Dabariya. The petitioner did not return the security
deposit of Rs.30.00 Lacs on completion of contract between M/s. A.D.
Enterprises and M/s. A.L.A.S. Real Estate and Developers Private Ltd. When
the complainant demanded for return of security deposit, the petitioner abused
him and denied return of the money. Therefore, criminal misappropriation of
security deposit is clearly made out. Learned counsel referred to the affidavit-
cum-declaration(Annexure-O/9) dated 06.09.2018 to contend that petitioner
Chandraprakash Bhandari, Promoter of the proposed project was authorized to
carry out the project by M/s. A.L.A.S. Real Estate and Developmers Private
Ltd. Therefore, the petitioner cannot be exonerated of liability to repay the
security deposit. The petition is meritless.
6. Learned counsel for the State submits that the Judicial Magistrate
considered the averments of the complaint and committed no mistake in
forwarding the complaint with direction to investigate the FIR prima-facie
makes out the alleged offence. Therefore, the petition is meritless.
Signature Not Verified
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7. Heard rival contentions of both the parties and perused the record.
8. In the case of Om Prakash Ambadkar v. State of Maharashtra, 2025
SCC OnLine SC 238, it has been observed as under :
23. This Court in a plethora of its decisions, more particularly in the case of Ramdev Food
Products (P) Ltd. v. State of Gujarat, (2015) 6 SCC 439, has laid emphasis on the fact that
the directions under Section 156(3) should be issued only after application of mind by the
Magistrate. Paragraph 22 of the said decision reads thus:
“22. Thus, we answer the first question by holding that the direction Under Section
156(3) is to be issued, only after application of mind by the Magistrate. When the
Magistrate does not take cognizance and does not find it necessary to postpone
issuance of process and finds a case made out to proceed forthwith, direction under
the said provision is issued. In other words, where on account of credibility of
information available, or weighing the interest of justice it is considered appropriate
to straightaway direct investigation, such a direction is issued. Cases where
Magistrate takes cognizance and postpones issuance of process are cases where the
Magistrate has yet to determine “existence of sufficient ground to proceed”.
Category of cases falling under Para 120.6 in Lalita Kumari (supra) may fall Under
Section 202 Subject to these broad guidelines available from the scheme of the Code,
exercise of discretion by the Magistrate is guided by interest of justice from case to
case.”
24. Thus, there are prerequisites to be followed by the complainant before
approaching the Magistrate under Section 156(3) of the Cr. P.C. which is a
discretionary remedy as the provision proceeds with the word ‘may’. The Magistrate
is required to exercise his mind while doing so. He should pass orders only if he is
satisfied that the information reveals commission of cognizable offences and also
about the necessity of police investigation for digging out of evidence neither in
possession of the complainant nor can be procured without the assistance of the
police. It is, thus, not necessary that in every case where a complaint has been filed
under Section 200 of the Cr. P.C. the Magistrate should direct the Police to
investigate the crime merely because an application has also been filed under
Section 156(3) of the Cr. P.C. even though the evidence to be led by the complainant
is in his possession or can be produced by summoning witnesses, with the assistance
of the court or otherwise. The issue of jurisdiction also becomes important at that
stage and cannot be ignored.
25. In fact, the Magistrate ought to direct investigation by the police only where the
assistance of the Investigating Agency is necessary and the Court feels that the cause
of justice is likely to suffer in the absence of investigation by the police. The
Magistrate is not expected to mechanically direct investigation by the police without
first examining whether in the facts and circumstances of the case, investigation by
the State machinery is actually required or not. If the allegations made in the
complaint are simple, where the Court can straightaway proceed to conduct the trial,
the Magistrate is expected to record evidence and proceed further in the matter,
instead of passing the buck to the Police under Section 156(3) of the Cr.
P.C. Ofcourse, if the allegations made in the complaint require complex and
complicated investigation which cannot be undertaken without active assistance and
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NEUTRAL CITATION NO. 2026:MPHC-IND:4515
expertise of the State machinery, it would only be appropriate for the Magistrate to
direct investigation by the police authorities. The Magistrate is, therefore, not
supposed to act merely as a Post Office and needs to adopt a judicial approach while
considering an application seeking investigation by the Police.
9. In the case of Binod Kumar Vs. State of Bihar reported in (2014) 10
SCC 66, it has been observed as under :
14. At this stage, we are only concerned with the question whether the averments in
the complaint taken at their face value make out the ingredients of criminal offence
or not. Let us now examine whether the allegations made in the complaint when
taken on their face value, are true and constitute the offence as defined under Section
406.
15. Section 405 IPC deals with criminal breach of trust. A careful reading of Section
405 IPC shows that a criminal breach of trust involves the following ingredients:
(a) a person should have been entrusted with property, or entrusted with dominion
over property;
(b) that person should dishonestly misappropriate or convert to his own use that
property, or dishonestly use or dispose of that property or wilfully suffer any other
person to do so;
(c) that 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.
16. Section 406 IPC prescribes punishment for criminal breach of trust as defined in
Section 405 IPC. For the offence punishable under Section 406 IPC, prosecution
must prove:
(i) that the accused was entrusted with property or with dominion over it; and (ii) that
he (a) misappropriated it, or (b) converted it to his own use, or (c) used it, or (d)
disposed of it.
The gist of the offence is misappropriation done in a dishonest manner. There are two
distinct parts of the said offence. The first involves the fact of entrustment, wherein
an obligation arises in relation to the property over which dominion or control is
acquired. The second part deals with misappropriation which should be contrary to
the terms of the obligation which is created.
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
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that the appellants did not pay the money to the complainant does not amount to
criminal breach of trust.
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.
10. In the case of Anand Kumar Mohatta Vs State (NCT of Delhi), (2019)
11 SCC 706, it has been observed as under :
22. Two things are significant in the transaction between the parties. Firstly, that the
occasion for returning the amount i.e. the developer handing over the possession of
the area of the owner’s share to the owner in the group housing complex, has not
occurred. According to the appellants, the contract stands frustrated because no
group housing can be legally built on 20, Feroz Shah Road, New Delhi since it falls
in the Lutyens Bungalow Zone. Appellant 1 has therefore, terminated the contract.
Further, the amount has been retained by him as a security because not only is there
any handing over of constructed portion, the complainant has also got into part-
possession of the property and has not handed it back. Also, the complainant has
failed to get the property vacated from the tenant’s possession.
24. We do not see how it can be contended by any stretch of imagination that the
appellants have misappropriated the amount or dishonestly used the amount contrary
to any law or contract. In any case, we find that the dispute has the contours of a
dispute of civil nature and does not constitute a criminal offence.
25. Having given our anxious consideration, we are of the view that assuming that
there is a security deposit of rupees one crore and that he has misappropriated the
dispute between the two parties can only be a civil dispute.
26. In Indian Oil Corpn. v. NEPC (India) Ltd., (2006) 6 SCC 736, this Court
observed as follows:
“13. … Any effort to settle civil disputes and claims, which do not involve any
criminal offence, by applying pressure through criminal prosecution should be
deprecated and discouraged.”
The Court noticed a growing trend in business circles to convert purely civil dispute
into criminal cases.
27. We find it strange that the complainant has not made any attempt for the recovery
of the money of rupees one crore except by filing this criminal complaint. This action
appears to be mala fide and unsustainable.
29. We are of the opinion that the present case falls under the 1st, 3rd and 5th
category set out in para 102 of the judgment in Bhajan Lal [State of
Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] . In such a
situation, the High Court erred in dismissing the petition of the appellants filed under
Section 482 CrPC. This was a fit case for the High Court to exercise its inherent
power under Section 482 CrPC to quash the FIR.
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30. It is necessary here to remember the words of this Court in State of
Karnataka v. L. Muniswamy, (1977) 2 SCC 699, which read as follows:
“7. … In the exercise of this wholesome power, the High Court is entitled to
quash a proceeding if it comes to the conclusion that allowing the proceeding
to continue would be an abuse of the process of the Court or that the ends of
justice require that the proceeding ought to be quashed. The saving of the
High Court’s inherent powers, both in civil and criminal matters, is designed
to achieve a salutary public purpose which is that a court proceeding ought
not to be permitted to degenerate into a weapon of harassment or persecution.
In a criminal case, the veiled object behind a lame prosecution, the very
nature of the material on which the structure of the prosecution rests and the
like would justify the High Court in quashing the proceeding in the interest of
justice.”
11. Recently, in case of Sharif Ahmed v. State of U.P. reported in (2024) 14
SCC 122, it was observed that-
45. A reading thereof would indicate that it refers to the complaint made by
Respondent 2 — Iqbal on 23-5-2016 relating to the deal of a plot in respect of which
part-consideration was paid as earnest money. But thereafter, the appellants had sold
the plot and were not refunding the earnest money and by doing so have committed
breach of trust under Section 406IPC. It also refers to the alleged pretexts being
made by the appellants on money being demanded and a threat to kill being
extended. It is also recorded that an offence under Section 506 has been proved to
have been committed. At the same time, the charge-sheet states that no offence under
Section 420IPC is found to have been committed.
46. An offence under Section 406IPC requires entrustment, which carries the
implication that a person handing over any property or on whose behalf the property
is handed over, continues to be the owner of the said property. Further, the person
handing over the property must have confidence in the person taking the property to
create a fiduciary relationship between them. A normal transaction of sale or
exchange of money/consideration does not amount to entrustment. [See Section
405IPC and judgments of this Court in State of Gujarat v. Jaswantlal Nathalal, 1967
SCC OnLine SC 58 : AIR 1968 SC 700; Indian Oil Corpn. v. NEPC (India) & Ltd.,
(2006) 6 SCC 736 : (2006) 3 SCC (Cri) 188; CBI v. Duncans Agro Industries Ltd.,
(1996) 5 SCC 591 : 1996 SCC (Cri) 1045 : (1996) 87 Comp Cas 849.] Clearly, the
charge/offence of Section 406 IPC is not even remotely made out.
12. In case of Delhi Race Club (1940) Ltd. v. State of U.P., reported in
(2024) 10 SCC 690, it was observed that-
39. Every act of breach of trust may not result in a penal offence of criminal breach
of trust unless there is evidence of manipulating act of fraudulent misappropriation.
An act of breach of trust involves a civil wrong in respect of which the person may
seek his remedy for damages in civil courts but, any breach of trust with a mens rea,
gives rise to a criminal prosecution as well. It has been held in Hari Prasad
Chamaria v. Bishun Kumar Surekha [Hari Prasad Chamaria v. Bishun Kumar
Surekha, (1973) 2 SCC 823 : 1973 SCC (Cri) 1082] as under :
“4. We have heard Mr Maheshwari on behalf of the appellant and are of the opinion
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NEUTRAL CITATION NO. 2026:MPHC-IND:4515that no case has been made out against the respondents under Section 420 of the
Penal Code, 1860. For the purpose of the present appeal, we would assume that the
various allegations of fact which have been made in the complaint by the appellant
are correct. Even after making that allowance, we find that the complaint does not
disclose the commission of any offence on the part of the respondents under Section
420 of the Penal Code, 1860. There is nothing in the complaint to show that the
respondent had dishonest or fraudulent intention at the time the appellant parted with
Rs 35,000. There is also nothing to indicate that the respondents induced the
appellant to pay them Rs 35,000 by deceiving him. It is further not the case of the
appellant that a representation was made by the respondents to him at or before the
time he paid the money to them and that at the time the representation was made, the
respondents knew the same to be false. The fact that the respondents subsequently
did not abide by their commitment that they would show the appellant to be the
proprietor of Drang Transport Corporation and would also render accounts to him in
the month of December might create civil liability for them, but this fact would not
be sufficient to fasten criminal liability on the respondents for the offence of
cheating.”
40. To put it in other words, the case of cheating and dishonest intention starts with the
very inception of the transaction. But in the case of criminal breach of trust, a person
who comes into possession of the movable property and receives it legally, but illegally
retains it or converts it to his own use against the terms of the contract, then the question
is, in a case like this, whether the retention is with dishonest intention or not, whether the
retention involves criminal breach of trust or only a civil liability would depend upon the
facts of each case.
41. The distinction between mere breach of contract and the offence of criminal breach
of trust and cheating is a fine one. In case of cheating, the intention of the accused at the
time of inducement should be looked into which may be judged by a subsequent
conduct, but for this, the subsequent conduct is not the sole test. Mere breach of contract
cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest
intention is shown right from the beginning of the transaction i.e. the time when the
offence is said to have been committed. Therefore, it is this intention, which is the gist of
the offence.
42. Whereas, for the criminal breach of trust, the property must have been entrusted to
the accused or he must have dominion over it. The property in respect of which the
offence of breach of trust has been committed must be either the property of some person
other than the accused or the beneficial interest in or ownership of it must be of some
other person. The accused must hold that property on trust of such other person.
Although the offence i.e. the offence of breach of trust and cheating involve dishonest
intention, yet they are mutually exclusive and different in basic concept.
54. When dealing with a private complaint, the law enjoins upon the Magistrate a duty to
meticulously examine the contents of the complaint so as to determine whether the
offence of cheating or criminal breach of trust as the case may be is made out from the
averments made in the complaint. The Magistrate must carefully apply its mind to
ascertain whether the allegations, as stated, genuinely constitute these specific offences.
In contrast, when a case arises from an FIR, this responsibility is of the police — to
thoroughly ascertain whether the allegations levelled by the informant indeed fall under
the category of cheating or criminal breach of trust. Unfortunately, it has become a
common practice for the police officers to routinely and mechanically proceed to register
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an FIR for both the offences i.e. criminal breach of trust and cheating on a mere
allegation of some dishonesty or fraud, without any proper application of mind.
13. In matter of S.K. Alagh v. State of U.P. reported in (2008) 5 SCC 662, it
was held that-
19. As, admittedly, drafts were drawn in the name of the Company, even if the
appellant was its Managing Director, he cannot be said to have committed an offence
under Section 406 of the Penal Code. If and when a statute contemplates creation of
such a legal fiction, it provides specifically therefor. In absence of any provision laid
down under the statute, a Director of a Company or an employee cannot be held to be
vicariously liable for any offence committed by the Company itself. (See Sabitha
Ramamurthy v. R.B.S. Channabasavaradhya [(2006) 10 SCC 581 : (2007) 1 SCC
(Cri) 621] .)
20. We may, in this regard, notice that the provisions of the Essential Commodities
Act, the Negotiable Instruments Act, the Employees’ Provident Funds and
Miscellaneous Provisions Act, 1952, etc. have created such vicarious liability. It is
interesting to note that Section 14-A of the 1952 Act specifically creates an offence
of criminal breach of trust in respect of the amount deducted from the employees by
the company. In terms of the Explanations appended to Section 405 of the Penal
Code, a legal fiction has been created to the effect that the employer shall be deemed
to have committed an offence of criminal breach of trust. Whereas a person in charge
of the affairs of the company and in control thereof has been made vicariously liable
for the offence committed by the company along with the company but even in a
case falling under Section 406 of the Penal Code vicarious liability has been held to
be not extendable to the Directors or officers of the company. (See Maksud
Saiyed v. State of Gujarat [(2008) 5 SCC 668 : (2007) 11 Scale 318] .)
14. The factual scenario reflected by the material on record is examined in
the light of aforestated propositions of law.
15. Apprently, the dispute relates to non payment of security deposit which
is predominently civil in nature. Allegedly, the petitioner did not return an
amount of Rs.30.00 Lacs deposited by the complainant/respondent No.2 –
Narendra Kumar Dabariya through the account of his wife Kavita Dabariya in
the account of M/s. A.L.A.S. Real Estate and Developers Private Ltd. There is
no allegation that the petitioner induced the complainant or his wife to deposit
Rs.30.00 Lacs as security money. Therefore, there was no entrustment of
security deposit in favor of petitioner personally. The complaint does not reveal
any agreement between the petitioner and the complainant with regard to
deposit of Rs.30.00 Lacs as security money. Rather, as per averment in the
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complaint, the amount was deposited in the account of M/s. A.L.A.S. Real
Estate and Developers Private Ltd. in furtherance of an agreement between
M/s. A.D. Enterprises and M/s. A.L.A.S. Real Estate and Developers Private
Ltd. The petitioner cannot be fastened with liability to repay the amount in
personal capacity. M/s. A.L.A.S. Real Estate and Developers Private Ltd. is not
impleaded as an accused in the complaint. Therefore, the petitioner cannot be
made vicariously liable as Director or Promoter of M/s. A.L.A.S. Real Estate
and Developers Private Ltd. for alleged criminal misappropriation of the
security deposit without impleading the firm M/s. A.L.A.S. Real Estate and
Developers Private Ltd.
16. In view of above, this Court is of the considered opinion that the offence
punishable under Section 406 of IPC is not made out against the petitioner in
light of the law laid down in the cases of Binod Kumar, Anand Kumar
Mohatta, Sharif Ahmed, Delhi Race Club (1940) Ltd and S.K. Alagh(Supra).
17. Learned Magistrate committed manifest error in forwarding the
complaint under Section 156(3) of Cr.P.C. with direction to register an FIR for
offence punishable under Section 406 of IPC against the petitioner without due
application of mind. The continuation of prosecution against the petitioner in
aforestated scenario would be an abuse of process of Court. Therefore, the
inherent jurisdiction under Section 482 of Cr.P.C. is invoked for the ends of
justice and the FIR at Crime No.341/2024 and the subsequent proceedings are
quashed with reference to the petitioner.
With the aforesaid, the petition stands disposed off.
(SANJEEV S KALGAONKAR)
JUDGE
pn
Signature Not Verified
Signed by: PREETHA NAIR
Signing time: 12-02-2026
19:52:42
13
NEUTRAL CITATION NO. 2026:MPHC-IND:4515
Signature Not Verified
Signed by: PREETHA NAIR
Signing time: 12-02-2026
19:52:42
14
NEUTRAL CITATION NO. 2026:MPHC-IND:4515
Signature Not Verified
Signed by: PREETHA NAIR
Signing time: 12-02-2026
19:52:42