DIL MOHAMMAD vs THE STATE OF JHARKHAND

( 2026:JHHC:14569 )


IN THE HIGH COURT OF JHARKHAND AT RANCHI
Cr.M.P. No. 536 of 2023


Dil Moahmmad, aged about 47 years, S/o Umar Mian, R/o Village –
Palamu Darjee Mohall, P.O. –Palamu, P.S. –Nawadih, District -Bokaro.
.... Petitioner
Versus
1. The State of Jharkhand
2. M/s Indusind Bank Ltd. Represented through its Legal Manager
and Power of Attorney Holder, Amit Kumar Dey, S/o Sri Ashok
Kumar Dey, Office Address –Sector –IV Branch, A-16, B.S. City,
P.O. and P.S. –Sector –IV, District –Bokaro, resident of Shasti Nagar,
Dhanbad, P.O., P.S. and District –Dhanbad, A/P represented
through its legal Manager-cum-Attorney Holder namely Jai
Prakash Prabhakar A-16, City Centre, Sector –IV, P.O. –Sector –IV,
P.S. –Sector –IV, District –Bokaro.
…. Opp. Parties

P R E S E N T
HON’BLE MR. JUSTICE ANIL KUMAR CHOUDHARY
…..
For the Petitioner : Mr. Lukesh Kumar Lal, Advocate

For the State : Mr. V.K. Vashistha, Spl. P.P.
For O.P. No.2 : Mr. Rahul Pandey, Advocate
…..
By the Court:-

1. Heard the parties.

2. This criminal miscellaneous petition has been filed invoking the
jurisdiction of this Court under Section 482 of Cr.P.C. with the
prayer to quash the order dated 07.08.2019, passed by the learned
Additional Chief Judicial Magistrate, Bermo at Tenughat in
connection with C.P. Case No. 101 of 2019 whereby and where
under the learned Additional Chief Judicial Magistrate, Bermo at
Tenughat has found prima facie case for the offence punishable
under Section 406 of the Indian Penal Code, including the entire
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criminal proceeding of Protest Petition bearing C.P. Case No.101
of 2019.
3. The learned counsel for the petitioner submits that the case is
fixed before the trial court to 16.06.2026 for appearance of the
petitioner and charge has not yet been framed in this case.
4. The brief fact of the case is that the petitioner took a loan from
the complainant-bank for purchasing a truck and while the said
truck was running illegally, the same was seized by the police.
The petitioner did not pay the outstanding loan amount of more
than Rs.17,00,000/-. The bank filed C.P. Case No. 472 of 2017
which upon being referred to police under Section 156(3) Cr.P.C.,
Penk Narayanpur P.S. Case No.52 of 2017 was registered. Police
submitted Final Repot and did not send up the petitioner for trial
mentioning therein that the dispute is civil in nature. The bank
filed protest petition. On the basis of the protest petition,
statement of the complainant under solemn affirmation and
statement of the inquiry witnesses, the learned Additional Chief
Judicial Magistrate, Bermo at Tenughat found prima facie case for
the offence punishable under Section 406 of the Indian Penal
Code.
5. It is submitted by the learned counsel for the petitioner relying
upon the Judgment of the Hon’ble Supreme Court of India in the
case of Satishchandra Ratanlal Shah Vs. State of Gujarat and
Anr. , reported in 2019 Supreme (SC) 337 para -14 of which reads
as under:-
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“14. Now coming to the charge under Section 415
punishable under Section 420 IPC. In the context of
contracts, the distinction between mere breach of contract
and cheating would depend upon the fraudulent
inducement and mens rea. (See Hridaya Ranjan Prasad
Verma v. State of Bihar [Hridaya Ranjan Prasad Verma v.
State of Bihar, (2000) 4 SCC 168 : 2000 SCC (Cri) 786] .)
In the case before us, admittedly the appellant was trapped
in economic crisis and therefore, he had approached
Respondent 2 to ameliorate the situation of crisis. Further,
in order to recover the aforesaid amount, Respondent 2 had
instituted a summary civil suit seeking recovery of the loan
amount which is still pending adjudication. The mere
inability of the appellant to return the loan amount cannot
give rise to a criminal prosecution for cheating unless
fraudulent or dishonest intention is shown right at the
beginning of the transaction, as it is this mens rea which is
the crux of the offence. Even if all the facts in the complaint
and material are taken on their face value, no such
dishonest representation or inducement could be found or
inferred.” (emphasis supplied).

that therein the Hon’ble Supreme Court of India has held that
mere inability of the accused person to return the loan amount
cannot give rise to a criminal prosecution for cheating. It is next
submitted that even if the entire allegations made against the
petitioner are considered to be true, still the offence punishable
under Section 406 of the Indian Penal Code is not made out.
Hence, it is submitted that the prayer as prayed for by the
petitioner in this criminal miscellaneous petition be allowed.
6. The learned Spl. P.P. appearing for the State and the learned
counsel for the opposite party no.2 on the other hand vehemently
oppose the prayer of the petitioner and submit that the materials
in the record are sufficient to constitute the offence punishable
under Section 406 of the Indian Penal Code. Hence, it is submitted
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that this criminal miscellaneous petition being without any merit
be dismissed.
7. Having heard the submissions made at the Bar and after going
through the materials available in the record, it is pertinent to
mention here that the essential ingredients to constitute the
offence punishable under Section 406 of the Indian Penal Code are
as under:-
(i) There must be an entrustment; and
(ii) There must be misappropriation or conversion to one’s
own use or use in violation of a legal direction or of any
legal contract, as has been held by the Hon’ble Supreme
Court of India in the case of Ram Narayan Popli vs. Central
Bureau of Investigation reported in (2003) 3 SCC 641 .

8. It is a settled principle of law that a loan taken by person from a
bank or a lender does not amount to “property entrusted”, as the
words “property entrusted” have been used in Section 405 of the
Indian Penal Code. Because when a bank disburses a loan, the
ownership of the money passes to the borrower to use it whereas
entrustment implied that person handing over the property
continues to be its owner. Moreover, the fundamental difference
between a simple lending/borrowing and entrustment of
property is that a loan creates civil obligation to repay the money
and not a fiduciary trust which is the sine qua non for an
entrustment.
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9. Now coming to the facts of the case, the only allegation against
the petitioner is that the petitioner has taken the loan and has not
repaid it. The same in the considered opinion of the Court, in the
absence of any allegation of dishonest misappropriation of the
entrusted property by the petitioner is not sufficient to constitute
the offence punishable under Section 406 of the Indian Penal
Code.
10. Under such circumstances, this Court is of the considered view
that even if the entire allegations made against the petitioner are
considered to be true in their entirety, still the offence punishable
under Section 406 of the Indian Penal Code is not made out.
Therefore, continuation of this criminal proceeding will amount to
abuse of process of law.
11. Hence, this is a fit case where the order dated 07.08.2019, passed
by the learned Additional Chief Judicial Magistrate, Bermo at
Tenughat in connection with C.P. Case No. 101 of 2019 whereby
and where under the learned Additional Chief Judicial Magistrate,
Bermo at Tenughat has found prima facie case for the offence
punishable under Section 406 of the Indian Penal Code, including
the entire criminal proceeding of Protest Petition bearing C.P.
Case No.101 of 2019, be quashed and set aside qua the petitioner.
12. Accordingly, the order dated 07.08.2019, passed by the learned
Additional Chief Judicial Magistrate, Bermo at Tenughat in
connection with C.P. Case No. 101 of 2019 whereby and where
under the learned Additional Chief Judicial Magistrate, Bermo at
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Tenughat has found prima facie case for the offence punishable
under Section 406 of the Indian Penal Code, including the entire
criminal proceeding of Protest Petition bearing C.P. Case No.101
of 2019, is quashed and set aside qua the petitioner.

13. In the result, this criminal miscellaneous petition stands allowed.

(Anil Kumar Choudhary, J.)

High Court of Jharkhand, Ranchi
th
Dated the 12 May, 2026
AFR/Sonu-

Uploaded on 18.05.2026

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