Madhya Pradesh High Court
Santosh vs The State Of Madhya Pradesh on 16 February, 2026
NEUTRAL CITATION NO. 2026:MPHC-IND: 4697
1 CRA. No. 6264/2025 & 13949/2024
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE GAJENDRA SINGH
ON THE 16th OF FEBRUARY, 2026
CRIMINAL APPEAL No. 6264 of 2025
MUKESH SHARMA
Versus
THE STATE OF MADHYA PRADESH
Appearance:
Shri Dharmendra Thakur - Advocate for the appellant.
Shri Jayesh Yadav - Govt. Advocate for the respondent/State.
WITH
CRIMINAL APPEAL No. 13949 of 2024
SANTOSH
Versus
THE STATE OF MADHYA PRADESH
Appearance:
Shri Brajendra Gupta - Advocate for the appellant.
Shri Jayesh Yadav - Govt. Advocate for the respondent/State.
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Reserved on : 27.11.2025
Pronounced on : 16.02.2026
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JUDGMENT
Regard being had to the similitude in the controversy involved
in both these criminal appeals, therefore, these criminal appeals were
analogously heard and are being disposed off by this common order.
2. Both the appeals have been preferred being aggrieved by the
judgment dated 29.08.2024 ST No.258/2019 by 7th Additional
Sessions Judge, Ujjain, whereby the appellants have been convicted
and sentenced as below:-
Signature Not Verified
Signed by: VATAN
SHRIVASTAVA
Signing time: 16-02-2026
19:55:51
NEUTRAL CITATION NO. 2026:MPHC-IND: 4697
2 CRA. No. 6264/2025 & 13949/2024Sr. No Conviction Sentence Fine Default
1. Section 420 7 Years R.I. Rs.1,00,000/- 6 Months S.I.
alternatively Section
420/34 of the IPC
2. Section 409 8 Years R.I. Rs.5,00,000/- 1 Year S.I.
alternatively Section
409/34 of the IPC
3. Section 6 of the 6 Years R.I. Rs.1,00,000/- 6 Months S.I.
Madhya Pradesh
Nikshepakon Ke Hiton
Ka Sanrakshan
Adhiniyam, 2000
3. The sentence of imprisonment have been ordered to run
concurrently and the sentence in default of payment of fine are
ordered to run consecutively and the amount of fine have been
ordered to be paid under Section 357(1) of the Cr.P.C., 1973. The
details of the victims as mentioned in para 83 of the judgment are
reproduced below:-
Sr. No. Name Compensation amount (PW)
1. Anokhilal s/o Bholaram Rs.60,000/- PW-1
2. Madhubala Karadia w/o Rs.90,000/- PW-3
Anokhilal
3. Ayush Karadia s/o Anokhilal Rs.90,000/- and PW-2
35,000/- total=
Rs.1,25,000/-
4. Suresh Verma s/o Lt. Ramdin Rs.50,000/- PW-4
Verma
5. Shila Rathore w/o Mahesh Rs.9000/- PW-5
Rathore
6. Shivnarayan s/o Ramlal Rs.50,000/- PW-6
7. Mokamlal Malviya s/o Gairaji Rs.10,000/- PW-7
8. Bhagwati Bai w/o Dinesh Rs.50,000/- -
Rathore
9. Krishna Kundal w/o Babulal Rs.1800/- PW-9
10. Sunita Jatav w/o Kanahiyalal Rs.15,000/- PW-10
11. Maya Barwe Rs.20,000/- -
12. Prabhulal s/o Munna Rs.3,00,000/- PW-16
13. Vijay Kumar Chouhan s/o Rs.45,000/- PW-23
Rajaram
14. Ladkunwar w/o Gangaram Rs.11,000/- PW-24
Signature Not Verified
Signed by: VATAN
SHRIVASTAVA
Signing time: 16-02-2026
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3 CRA. No. 6264/2025 & 13949/2024
15. Rukmabai w/o Dayaram Rs.10,000/- PW-26
16. Sajanbai w/o Premchand Rs.10,000/- PW-27
17. Ramesh Malviya s/o Rs.25,000/- PW-28
Jagannath
18. Sangeeta Malviya w/o Rs.11,000/- PW-29
Jitendra
19. Gordhan s/o Jagannath Rs.70,000/- PW-30
20. Pooja d/o Ramesh Rs.5,000/- PW-31
Total amount Rs.9,67,800/-
FACTS OF THE CASE
4. The BNP Real Estate and Allied Ltd. was incorporated to carry
on the business of sale and purchase of property, acquisition of the
land, buildings, civil and electric contract, construction of contract
for infrastructure development like roads, bridges, highways,
expressways, mega housing projects, commercial and residential
projects, contracts under built, operate and transfer, toll tax
collection projects, contracts, subcontracts of the same nature or
associated to the activities of infrastructure development at its own
or in collaboration, joint venture, construction and setting up of
hotel, airport projects, and give consultancy services and other allied
services, to acquire by purchase, lease, exchange, heir or otherwise
land and property of any nature or any interest in the same and work
of every description on any land or property and to pull down, re-
built, enlarge, alter and improve existing houses, buildings, roads,
bridges, any other infrastructure facilities and work thereon to
convert and appropriate and such lands into roads, streets, squares,
gardens and other conveniences and generally to deal with and
improve the property of the company or any other property. To
manufacturing and trading of various products like tea, rice and other
Signature Not Verified
Signed by: VATAN
SHRIVASTAVA
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4 CRA. No. 6264/2025 & 13949/2024
edible products and receive investment for products manufacturing
and carryout the business at its own or in joint venture or in to take
or otherwise acquire and hold shares, stocks, debentures or other
interests in any other company having objects altogether or in part
similar to those of this company or carrying on any business capable
of being conducted so as directly to benefit this company and got
registered under the Companies Act, 1956 on 01.07.2010. The
appellants were the directors of the company and solicited the
investors to invest on the allurement of returning the money with
huge profits in a short duration during the period of 2011 to 2017,
then closed down their office.
5. Investors made the complaint to Superintendent of Police,
Ujjain. The Asst. Sub-Inspector Anil Shukla posted at police station
Madhav Nagar, Ujjain conducted an enquiry and Crime No.750/2017
was registered under Section 409, 420 of the IPC and Section 6 of
the Madhya Pradesh Nikshepakon Ke Hiton Ka Sanrakshan
Adhiniyam, 2000 against the present appellants Santosh Sharma (in
CRA No.13949/2025), Devendra Sharma, Suresh Sharma and
Shailendra Sharma. On 07.12.2017, the matter was investigated. The
certificates and subscriptions issued by the appellants were seized
and it was found that Santosh Sharma, Mukesh Sharma, Devendra
Sharma and Shailendra Sharma are the directors of the company
namely BNP Real Estate and Allied Ltd. and the certificates were
issued with signature of Santosh and Mukesh. Santosh, Mukesh and
Devendra were apprehended but Shailendra could not be
apprehended. Final report was submitted against the present
appellants and keeping the investigations pending against
Shailendra.
Signature Not Verified
Signed by: VATAN
SHRIVASTAVA
Signing time: 16-02-2026
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5 CRA. No. 6264/2025 & 13949/2024
6. The present appellants’ alongwith Devendra Sharma were put
to trial for charges under Section 420 alternatively read with Section
34 and Section 409 alternatively 409 read with Section 34 of the IPC
and Section Section 6 of the Madhya Pradesh Nikshepakon Ke Hiton
Ka Sanrakshan Adhiniyam, 2000.
7. Appellants accused alongwith Devendra Sharma abjured the
guilt and to bring home the guilt, the prosecution examined as many
as 32 witnesses including the investors namely Anokhilal (PW-1),
Madhubala Karadia (PW-3), Ayush Karadia (PW-2), Suresh Verma
(PW-4), Sheela Rathore (PW-5), Shivnarayan (PW-6), Mokamlal
(PW-7), Krishna Kundal (PW-9), Sunita Jatav (PW-10), Prabhulal
(PW-16), Vijay Chouhan (PW-23), Ladkunwar (PW-24), Rukmabai
(PW-26), Sajanbai (PW-27), Ramesh Malviya (PW-28), Sangita
Malviya (PW-29), Gordhan (PW-30) and Pooja (PW-31) and
remaining witnesses namely Naresh Rathore (PW-8), Rajesh
Chouhan (PW-11), Babulal (PW-12), Rahul (PW-13), Ajay Kumar
Jain (PW-14), Punita Badwaya (PW-15), Ayush Jain (PW-17), R.I.
R.K. Rathore (PW-18), In-charge Asst. R.I. Madhav Singh Tomar
(PW-19), Branch Manager, HDFC Bank Pushpanjali Saket (PW-20),
Chief Manager, Union Bank of India, Branch L.I.G., Indore P.N. Rai
(PW-21), Branch Manager, Indian Bank Vijay Nagar Branch,
Pushpendra Singh Sengar (PW-22), Sanjay Verma (PW-25) and
Investigating Officer, Inspector Anil Kumar Shukla (PW-32) and
relied on the documents (Ex.P-1 to P-49) and Article (A-1 to A-90).
8. In examination under Section 313 of the Cr.P.C., 1973, all the
facts and circumstances appeared in the prosecution evidence were
either denied or ignorance was expressed and advanced the defence
of false implications. Appellant Mukesh Sharma submitted that he
Signature Not Verified
Signed by: VATAN
SHRIVASTAVA
Signing time: 16-02-2026
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6 CRA. No. 6264/2025 & 13949/2024
was not on any post in the company and his name has been shown
falsely. Devendra Sharma advanced the same defence. In defence,
Devendra Sharma examined Bhanwarlal Malviya as (DW-1) and
Anil Solanki as (DW-2). Present appellants did not examine any
witness in the defence.
9. Appreciating the evidence, the trial Court recorded the finding
in para 78 that appellant Santosh and Mukesh got incorporated the
company for purchase and sell of land, buildings, road and bridges
and solicited the investors to deposit the amount with allurement of
double, triple and quadruple within a period of 5, 6 and 11 years and
raised an amount of Rupees Fourteen Lacs and converted it for its
own use and did not return to the investors being directors of the
company. The trial Court convicted and sentenced the appellants as
mentioned in para 1of the judgment as their names reflected in the
Memorandum of Association of the company (Ex.P-37) as directors.
The trial Court further recorded the finding in para 66 that Devendra
Sharma is not proved to be the director of the company and no
certificate has been issued with his signature and, accordingly, he
was acquitted.
SUBMISSIONS OF APPELLANTS COUNSEL
10. Challenging the conviction as well as the sentence, CRA
No.13949/2024 has been preferred on the ground that the trial Court
has not taken into considerations the material contradictions in the
statement of witnesses and they have not supported the prosecution
version and the appellants are entitled for acquittal. CRA
No.6264/2025 is preferred on the ground that complainant Anokhilal
(PW-1) has never met accused Mukesh Sharma either in Ujjain or
Indore office. Accused Mukesh Sharma has never asked Anokhilal or
Signature Not Verified
Signed by: VATAN
SHRIVASTAVA
Signing time: 16-02-2026
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NEUTRAL CITATION NO. 2026:MPHC-IND: 4697
7 CRA. No. 6264/2025 & 13949/2024
his relatives to invest in the company. Mere alleging that accused
Mukesh Sharma sits in the office or having family relation with Co-
accused Suresh Sharma and Devendra Sharma does not ipso facto
shows that accused has any ill intention to usurp the money or
committed any offence. Also, Ayush Karadiya (PW2) has made very
contrary statement about knowing the accused person and his
statement cannot be relied upon. Learned Trail Court has wrongly
relied upon the material contradictory statements of the complainant
Anokhilal (PW-1) and his son Ayush (PW-2) which, however,
substantially affecting the roots of the case. The witness Sheela
Rathore (PW 5) in her examination admitted that she does not know
the accused person and she never met accused Mukesh Sharma.
Also, witness Shiv Narayan Malviya (PW-6) who being the agent of
the company, has not mentioned the name of accused Mukesh
Sharma for usurping the amount of the people.
11. Learned Trail Court has failed to appreciate a fact that no
documents consisting signature of the accused Mukesh Sharma were
recovered from any of the witness. Learned court failed to appreciate
a fact that credibility of the witness lies on the statement made by
him in court and if the statement of the agents of the company were
only considered by disregarding the statement of other independent
witnesses then that make the entire trial of learned trial court futile
and useless. The trial Court failed to appreciate the material
contradictions and omissions in a witness statement and referred to
the Apex Court judgment in the case of Tahsildar Singh vs. State of
U.P., reported in AIR 1959 SC 1012, T. Subramanian Vs. State of
Tamil Nadu reported in (2006) 1 SCC 401, Padam Singh vs. State
of Uttar Pradesh reported in AIR 2000 SC 361 and also referred to
Signature Not Verified
Signed by: VATAN
SHRIVASTAVA
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8 CRA. No. 6264/2025 & 13949/2024
judgment of High Court of Rajasthan in the case of Mahendra Singh
vs. State of Rajasthan (1997) Crimes 102 (Raj).
12. The appellant respectfully submits that he has been unable to
deposit the fine amount owing to his prolonged incarceration and the
substantial sum imposed, namely Rs. 7,00,000/- (Rupees Seven
Lakhs). The Appellant has been in judicial custody since the year
2017 in connection with another matter, and in the present case, he
has remained in custody continuously since the registration of the
First Information Report. The Appellant is a person of limited means
and does not possess any financial capacity or resources to arrange
for the payment of such a considerable amount. The appellant was
the sole earning member of his family. Due to his continued
incarceration, his family is undergoing severe financial hardship and
his children who are still pursuing their education, are left without
any means of support.
Heard.
13. Counsel for the State has opposed the criminal appeals and
submitted that neither the conviction nor the sentence require
interference.
Perused the record.
APPRECIATIONS AND CONCLUSION
14. Appreciating the evidence on record, the trial Court has
concluded in para 78 of the judgment that appellants Santosh Sharma
and Mukesh Sharma being the directors of the company BNP Real
Estate and Allied Ltd. solicited various peoples to invest the money
on the promise that the same will be returned double, triple and
quadruple in the period of 5, 6 and 11 years and accepted the
deposits to the tune of Rupees Fourteen Lacs dishonestly and the
Signature Not Verified
Signed by: VATAN
SHRIVASTAVA
Signing time: 16-02-2026
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NEUTRAL CITATION NO. 2026:MPHC-IND: 4697
9 CRA. No. 6264/2025 & 13949/2024
amount was not returned and that amount was converted to his own
use and convicted them under Section 420 alternatively Section
420/34 and Section 409 alternatively Section 409/34 of the IPC and
Section 6 of the Madhya Pradesh Nikshepakon Ke Hiton Ka
Sanrakshan Adhiniyam, 2000.
15. For arriving at the above conclusion, the trial Court has
appreciated the testimony of witness mentioned in para 6 of the
judgment and the certificates of deposits mentioned in para 53 and
61 of the judgment and marked as Article A-1 to A-3, A-5 to A-10,
A-11 to A-13, A-16, A-18, A-19, A-22, A-24, A-26 to A-30, A-30 to
A-43, A-45 to A-47, A-49, A-51, A-55, A-57, A-59, A-60, A-63, A-
65, A-67, A-69, A-71, A-73, A-74, A-77, A-80, A-81, A-82, A-86 and
A-87. The above certificates mentioned the investors as joint
ventures of consideration with reference from accepted sum payable.
The above certificates reflect that the deposits were accepted for
various plan as mentioned in Article A-4 ranging from 36 months (3
years to 8 years).
16. As per the statement of Anil Kumar Shukla (PW-32), the
amounts deposited in the accounts of BNP Real Estate Allied Ltd.
were continuously withdrawn by appellants and as per statement
(Ex.P-26 and 27) and the trial Court has appreciated the evidence in
this regard in para 45 and 46 of the judgment. When the funds are
utilized by the directors for their personal cause, the acts amount to
breach of trust.
17. The liability under Section 409 of the IPC is of banker
according to Section 5(b) of Banking Regulation Act, 1949, “the
banker is a person, who undertakes business of banking”. Banking
means accepting deposits from the public for the purpose of lending
Signature Not Verified
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SHRIVASTAVA
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10 CRA. No. 6264/2025 & 13949/2024
or investment, repayable on demand or otherwise, and withdrawable
by cheque, draft, order”. For deciding the question whether the
person is engaged in the business of banker, nomenclature is not
material, it is the activities that he is carrying on. In this case, the
appellants have not registered the BNP Real Estate Allied Ltd. with
the Reserve Bank of India for carrying on the business of banking or
non banking financial businesses but they accepted the investment
and issued certificates and thereafter, they utilized the funds in their
personal capacity, hence, their acts fall within the ambit of “banker”
as mentioned under Section 409 of the IPC.
18. There is a distinction between criminal breach of trust and
cheating. For cheating, criminal intention is necessary at the time of
making a false or misleading representation i.e. since inception. In
criminal breach of trust, mere proof of entrustment is sufficient.
Thus, in case of criminal breach of trust, the offender is lawfully
entrusted with the property, and they dishonestly misappropriated the
same. Whereas, in case of cheating, the offender fraudulently or
dishonestly induces a person by deceiving them to deliver any
property. In such a situation, both the offences cannot co-exist
simultaneously.
19. In this case, the appellants got registered the BNP Real Estate
and Allied Ltd. under the Companies Act, 1956 and floated the
scheme, solicited the investors to deposit the amount with allurement
of double, triple and quadruple and issued certificates of deposits but
utilized the funds for their personal causes by withdrawing the
amount, accordingly, the acts of the appellants fall within the
purview of “banker” and breach of trust. Being directors, they are
liable under Section 409 of the IPC but their acts does not fall under
Signature Not Verified
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SHRIVASTAVA
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11 CRA. No. 6264/2025 & 13949/2024
the purview of Section 420/34 of the IPC, hence, the conviction
under Section 420 alternatively Section 420/34 of the IPC cannot be
sustained and their conviction under Section 420 alternatively
Section 420/34 of the IPC is set aside and their conviction under
Section 409 alternatively section 409/34 of the IPC and Section 6 of
the Madhya Pradesh Nikshepakon Ke Hiton Ka Sanrakshan
Adhiniyam, 2000 is hereby affirmed.
Now come to the question of quantum of sentence under
Section 409/34 of the IPC and Section 6 of the Madhya Pradesh
Nikshepakon Ke Hiton Ka Sanrakshan Adhiniyam, 2000.
20. The appellant accused Mukesh Sharma had undergone a period
of 7 years 9 months and 10 days and deposited the total fine amount,
accordingly, his sentence of imprisonment is modified to the period
already undergone. His bail bonds are cancelled and sureties are
discharged.
21. Now come to Santosh Sharma. He has undergone substantive
sentence of imprisonment and he is undergoing the sentence in
default.
22. In the case of Shahejadkhan Mahebubkhan Pathan vs. State
of Gujrat reported in 2012 AIR SCW 5875, the Apex Court
considered the issue of inflicting the sentence in default of fine and
held in para 12, which is being reproduced as below:-
“12) It is clear and reiterated that the term of imprisonment in
default of payment of fine is not a sentence. To put it clear, it is a
penalty which a person incurs on account of non-payment of fine.
On the other hand, if sentence is imposed, undoubtedly, an offender
must undergo unless it is modified or varied in part or whole in the
judicial proceedings. However, the imprisonment ordered in default
of payment of fine stands on a different footing. When such default
sentence is imposed, a person is required to undergo imprisonment
either because he is unable to pay the amount of fine or refuses to
pay such amount. Accordingly, he can always avoid to undergo
Signature Not Verified
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SHRIVASTAVA
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imprisonment in default of payment of fine by paying such an
amount. In such circumstance, we are of the view that it is the duty
of the Court to keep in view the nature of offence, circumstances in
which it was committed, the position of the offender and other
relevant considerations such as pecuniary circumstances of the
accused person as to character and magnitude of the offence before
ordering the offender to suffer imprisonment in default of payment
of fine. The provisions of Sections 63 to 70 of IPC make it clear
that an amount of fine should not be harsh or excessive. We also
reiterate that where a substantial term of imprisonment is inflicted,
an excessive fine should not be imposed except in exceptional
cases.”
23. In Sharad Hiru Kolambe vs. State of Maharashtra and Ors.
(2018) 18 SCC 718, the Apex Court have held that the imposition of
term of imprisonment in default of payment of fine is not a sentence
and it is a penalty which a person incurs on account of non-payment
of fine.
24. The above pronouncement makes it clear that the imposition of
the term of imprisonment in default of payment of fine is not a
sentence and it is a penalty which a person incurs on account of non-
payment of fine. It is also made clear that if such default sentence is
imposed, undoubtedly, an offender must undergo unless it is
modified or varied in part or whole in the judicial proceedings.
25. In the case of O.M Cherian @ Thankachan vs State Of
Kerala & Ors reported in 2015 2 SCC 501, it has been held that any
sentence of imprisonment in default of fine has to be in excess of,
and not concurrent with, any other sentence of imprisonment to
which the convict may have been sentenced.
26. The High Court of Kerala in the case of Madappen Muhasin
vs. State of Kerala : 2016 Cr.L.J. 4792 has held as under:-
8. If a person has known sources of income or money in abundance
with him, even without a default sentence, the fine can be realised.
Evidently the said discretion to impose a default sentence for non-
payment of fine is vested with the Court, only for the purpose of
compelling the accused to pay the fine within a specified time.
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SHRIVASTAVA
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Apart from that, it has no importance at all. That is the reason why
the Legislature has imposed a condition that such default sentence
cannot be concurrent with the substantive term of imprisonment in
the case. Apart from that, any set off cannot be granted under S.
428 of the Code of Criminal Procedure as against such default
sentence.
9. The aforesaid aspects has been considered by the Apex Court in
Vijayan v. Sadanandan K. & Anr. MANU/SC/0737/2009 : (2009 (2)
KLT 618 (SC) : (2009) 6 SCC 652), wherein it was held in
paragraph 30 that S. 64 of the Indian Penal Code makes it clear
that while imposing a sentence of fine, the court would be
competent to include a default sentence to ensure payment of the
same.
27. It is not a case that appellant/accused has to suffer
imprisonment in default of payment of fine due to his poverty. Here
is the case in which he has to suffer imprisonment in default of
payment of fine for non-refunding the money to the appellant in the
capacity of Banker and thereafter committing the breach of trust by
misappropriating the amount and utilizing the funds for his own use.
27. In light of above, lesser sentence will encourage the others to
commit such type of offence. Otherwise also, the default sentence
automatically ends if he returns the amount kept by him. The
appellant/accused cannot be permitted to utilize the money
belonging to other for his or his family members use.
Simultaneously, the present appellant/accused cannot be kept in the
imprisonment for a too long period. Hence, these Criminal Appeals
filed under Section 415 of the BNSS, 2023 is partly allowed and the
sentence of imprisonment in default of fine is altered from six
months to three months. Thus, the appellant/accused Santosh Sharma
will undergo the sentence as under:
Sr. No Conviction Sentence Fine Default
1. Section 409 8 Years R.I. Rs.5,00,000/- 9 Months S.I.
alternatively Section
409/34 of the IPC
2. Section 6 of the 6 Years R.I. Rs.1,00,000/- 3 Months S.I.
Signature Not Verified
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SHRIVASTAVA
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Madhya Pradesh
Nikshepakon Ke Hiton
Ka Sanrakshan
Adhiniyam, 2000
29. In view of above, these criminal appeals are partly allowed.
30. Let a signed copy of this order be retained in CRA
No.6264/2025 and photocopy of the same be kept in the record of
CRA No.13949/2024.
(GAJENDRA SINGH)
JUDGE
Vatan
Signature Not Verified
Signed by: VATAN
SHRIVASTAVA
Signing time: 16-02-2026
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