BIMAL KUMAR AGARWAL ALIAS VIMAL KUMAR AGRAWAL vs THE STATE OF JHARKHAND
- Court
- Jharkhand High Court
(2026:JHHC:15233)
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Cr.M.P. No.1490 of 2026
------
1. Bimal Kumar Agarwal @ Vimal Kumar Agarwal @ Vimal Kumar
Agawal, Aged about 65 years, Son of Shyam Sundar Agarwal
2. Pratik Agarwal @ Pratik Agrawal, Aged about 35 years, Son of
Bimal Kumar Agarwal
Both Residents of – Plot No.2, Rajni Gandha Street, Ashiana
Gardens, P.O. and P.S.- Sonari, District- Jamshedpur (East
Singhbhum) … Petitioners
Versus
…
The State of Jharkhand Opposite Party
------
For the Petitioners : Mr. Nilesh Kumar, Advocate
Ms. Sonal Sodhani, Advocate
For the State : Ms. Nehala Sharmin, Spl.P.P.
------
P R E S E N T
HON’BLE MR. JUSTICE ANIL KUMAR CHOUDHARY
By the Court:- Heard the parties.
2. This Criminal Miscellaneous Petition has been filed invoking the
jurisdiction of this Court under Section 528 of the Bharatiya Nagarik Suraksha
Sanhita, 2023 with the prayer to quash the entire criminal proceedings
including the order dated 16.07.2025 passed by the learned Judicial Magistrate-
st
1 Class, Jamshedpur in connection with Sonari P.S. Case No.45 of 2025
corresponding to G.R. Case No.966 of 2025 whereby and where under the
learned Magistrate has taken cognizance of the offences punishable under
Sections 406, 420 and 34 of the Indian Penal Code.
3. The allegation against the petitioners is that the petitioner took
Rs.1,91,00,000/- to invest in their business of tender work of Railways with the
1
Cr. M.P. No.1490 of 2026
(2026:JHHC:15233)
promise to return the money with alluring profits but did not return the
money.
4. On the basis of the written-report submitted by the informant, police
registered Sonari P.S. Case No.45 of 2025 and took up the investigation of the
case and after completion of the investigation submitted charge-sheet against
the petitioners basing upon which the cognizance has been taken.
5. Learned counsel for the petitioners relies upon the judgment of the
Hon’ble Supreme Court of India in the case of Uma Shankar Gopalika vs.
State of Bihar & Anr. reported in (2005) 10 SCC 336 , paragraph-6 of which
reads as under :-
“ 6 . Xxxx xxxx xxxx It is well settled that every breach of
contract would not give rise to an offence of cheating and only in
those cases breach of contract would amount to cheating where
there was any deception played at the very inception. If the
intention to cheat has developed later on, the same cannot amount
to cheating. In the present case it has nowhere been stated that at
the very inception there was any intention on behalf of the accused
persons to cheat which is a condition precedent for an offence
under Section 420 IPC.” (Emphasis supplied)
and submits that therein the Hon’ble Supreme Court of India has
reiterated the settled principle of law that that every breach of contract would
not give rise to an offence of cheating and in order to constitute the offence of
cheating, the accused must play deception since the beginning of the
transaction between the parties and if the intention to cheat has developed later
on, the same cannot amount to cheating.
6. Learned counsel for the petitioners submits that in this case, there is no
allegation against the petitioners of playing deception since the beginning of
the transaction between the parties. Hence, even if the entire allegations made
against the petitioners are considered to be true in their entirety still the offence
2
Cr. M.P. No.1490 of 2026
(2026:JHHC:15233)
punishable under Section 420 of the Indian Penal Code is not made out against
the petitioners.
7. Learned counsel for the petitioners next relies upon the judgment of this
Court in the case of Maya Rani vs. State of Jharkhand & Another reported in
2025 SCC OnLine Jhar 2950 and submits that in that case, this Court relied
upon the judgment of the Hon’ble Supreme Court of India in the case of
Satishchandra Ratanlal Shah vs. State of Gujarat & Another reported in
(2019) 9 SCC 148 paragraph-11 and 13 of which reads as under:-
“11. Having observed the background principles applicable herein,
we need to consider the individual charges against the appellant.
Turning to Section 405 read with Section 406 IPC, we observe that
the dispute arises out of a loan transaction between the parties. It
falls from the record that Respondent 2 knew the appellant and the
attendant circumstances before lending the loan. Further it is an
admitted fact that in order to recover the aforesaid amount,
Respondent 2 had instituted a summary civil suit which is still
pending adjudication. The law clearly recognises a difference
between simple payment/investment of money and entrustment of
money or property. A mere breach of a promise, agreement or
contract does not, ipso facto, constitute the offence of the criminal
breach of trust contained in Section 405 IPC without there being a
clear case of entrustment.
13. 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)
3
Cr. M.P. No.1490 of 2026
(2026:JHHC:15233)
wherein the Hon’ble Supreme Court of India has held that a mere breach
of a promise, agreement or contract does not, ipso facto , constitute the offence of
the criminal breach of trust contained and inability to pay the loan amount
taken cannot give rise to criminal prosecution of cheating.
8. Learned counsel for the petitioners next submits that the amount of
money allegedly taken by the petitioners cannot be termed as property
entrusted as has been used under Section 405 of the Indian Penal Code as the
ownership of the money given to the petitioners was transferred to the
petitioners, of course with the liability to repay the same. So, the offence
punishable under Section 406 of the Indian Penal Code is also not made out
against the petitioners. Hence, it is submitted that the prayer, as prayed for in
the instant Cr.M.P., be allowed.
9. Learned Spl. P. P. appearing for the State on the other hand vehemently
opposes the prayer of the petitioners made in the instant Cr.M.P. and submits
that even if the entire allegations made against the petitioners are considered to
be true in their entirety; then both the offences punishable, of which the learned
Magistrate has taken cognizance, is made out against the petitioners. Hence, it
is submitted that this Cr.M.P., being without any merit, be dismissed.
10. Having heard the rival submissions made at the Bar and after carefully
going through the materials available in the record, it is pertinent to mention
here that as has been discussed above, it is a settled principle of law that unless
the accused person plays deception since the beginning of the transaction
between the parties, the offence of cheating will not be made out.
11. Now, coming to the facts of the case, there is absolutely no allegation
against the petitioners of having played deception since the beginning of the
4
Cr. M.P. No.1490 of 2026
(2026:JHHC:15233)
transaction between the parties. Hence, this Court is of the considered view
that even if the entire allegations made against the petitioners are considered to
be true in their entirety, still the offence punishable under Section 420 of the
Indian Penal Code is not made out against the petitioner.
12. So far as the offence punishable under Section 406 of the Indian Penal
Code is concerned, the essential ingredients to constitute the said offence is that
there must be entrustment and there must be misappropriation or conversion
to one’s own use or use in violation of a legal direction or obtaining legal
possession; 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.
13. Now, coming to the facts of the case; the word ‘entrusted’ as used in
Section 405 of the Indian Penal Code envisages that the ownership of the
property entrusted still remains with the person who entrusts the property. The
same is not in the case of money given to someone by way of loan. If a person
takes a loan certainly a liability is created upon such person to pay back the
amount taken but the same strictly does not constitute entrusted property as
the word has been used in Section 405 of the Indian Penal Code. Because when
a loan is disbursed, the beneficial ownership of the money passes from the
lender to the borrower. The borrower is entitled to use it as he thinks it fit. In
contrast, an entrustment implies that the property is handed over while the
ownership and beneficial interest remain with the person who gave it. A loan
transaction certainly creates a civil debtor-creditor relationship but not a
fiduciary relationship of trust. The borrower is only legally obligated to repay
the amount with interest, not to hold the money borrowed as a separate fund.
5
Cr. M.P. No.1490 of 2026
(2026:JHHC:15233)
In the absence of the trappings of ‘entrustment’ as discussed above this court
has no hesitation in holding that the informant has failed to establish any
property being entrusted to the petitioners as they word ‘entrusted’ has been
used in section 405 of the IPC.
2. Now, coming to the facts of the case, there is no allegation of dishonest
misappropriation of any entrusted property against the petitioners. Hence, in
the considered opinion of this Court even if the entire allegations made against
the petitioners are considered to be true in their entirety, still the offence
punishable under Section 406 of the Indian Penal Code is not made out against
the petitioners. At best, this is a civil dispute between the parties to which a
cloak of criminal case has been given for the purpose of wrecking vengeance.
Hence, this Court is of the considered view that this is a fit case where the
entire criminal proceedings including the order dated 16.07.2025 passed by the
st
learned Judicial Magistrate-1 Class, Jamshedpur in connection with Sonari P.S.
Case No.45 of 2025 corresponding to G.R. Case No.966 of 2025, be quashed and
set aside qua the petitioners named above.
3. Accordingly, the entire criminal proceedings including the order dated
st
16.07.2025 passed by the learned Judicial Magistrate-1 Class, Jamshedpur in
connection with Sonari P.S. Case No.45 of 2025 corresponding to G.R. Case
No.966 of 2025, is quashed and set aside qua the petitioners named above.
4. In the result, this Cr.M.P. stands allowed.
(Anil Kumar Choudhary, J . )
High Court of Jharkhand, Ranchi
th
Dated the 15 of May, 2026
AFR/ Animesh
Uploaded on- 18/05/2026
6
Cr. M.P. No.1490 of 2026