YOUNG BENGAL COOPERATIVE LABOUR CONTRACT SOCIETY LTD, THRU ITS AUTHO. REPRESENTATIVE, DIPANKAR DAS vs THE STATE OF JHARKHAND

(2026:JHHC:31012)



IN THE HIGH COURT OF JHARKHAND AT RANCHI
Cr.M.P. No. 2954 of 2025


1. Young Bengal Cooperative Labour Contract Society Limited, a
society registered under West Bengal Cooperatives Societies
Registration Act 2006, having its registered office at 14/1,
Nirode Behari Mullick Road, P.O.-Beadon Street, P.S.-
Manicktola, Dist.-Kolkata-700006 (West Bengal), through its
authorized representative, Dipankar Das, aged about 40 years,
s/o Shri Dipak Das, r/o 20P, Harish Niyogi Road, Ultadanga,
P.O.-Ultadanga, Main Road, P.S.Ultadanga, Dist.-Kolkata-
700067 (West Bengal)

2. Rajendra Agarwal @ Rajendra Kumar Agarwal @ Raju
Agarwal, aged about 55 years, s/o late Mayaram Agarwal,
r/o 74/1, Narkeldanga Main Road, P.O.-Kankurgachi, P.S.-
Phoolbagan, Dist.-Kolkata-700054 (West Bengal)
.... Petitioners
Versus
1. The State of Jharkhand

2. Kanhaiya Lal Gupta, s/o Sri Nandlal Prasad Gupta, r/o D.S.
Colony More, Hirapur, P.O. & P.S.-Dhanbad, Dist.-Dhanbad-
826001 (Jharkhand)
…. Opp. Parties

P R E S E N T
HON’BLE MR. JUSTICE ANIL KUMAR CHOUDHARY
…..
For the Petitioners : Mr. Shubham Kataruka, Advocate
: Ms. Kumari Ruchika, Advocate
: Ms. Khushboo Kataruka, Advocate
For the State : Ms. Nehala Sharmin, Spl. P.P.
For O.P. No.2 : Mrs. Jasvindar Mazumdar, Advocate
…..
By the Court:-
I.A. No.14916 of 2026
1. Heard the parties.
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2. This interlocutory application has been filed with the
prayer for early hearing of this criminal miscellaneous
petition.
3. Since, hearing of this criminal miscellaneous petition
is taken up today, hence, this interlocutory application is
disposed of being infructuous.
(Anil Kumar Choudhary, J . )
Cr.M.P. No. 2954 of 2025
1. Heard the parties.
2. This Criminal Miscellaneous Petition has been filed
invoking the jurisdiction of this Court under Section 528
of B.N.S.S., 2023 with the prayer to quash the entire
criminal proceeding including the order dated 23.06.2025
st
passed by the learned Judicial Magistrate 1 Class,
Dhanbad in connection with Complaint Case No. 10242 of
2024, whereby and where under, the learned Judicial
st
Magistrate 1 Class, Dhanbad has found prima facie case of
the offences punishable under Sections 406 and 417 of the
Indian Penal Code and passed the summoning order
against the petitioners.
3. The allegation against the petitioners is that the
petitioner no.2 being the Secretary of petitioner no.1; in
2011 came to the office of the complainant to enter into a
partnership with the complainant. The complainant
entered into a partnership having 25% share to carry out
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the work of mechanised coach cleaning of Indian Railways
for Dhanbad Railway site. The complainant invested
Rs.19,50,000/- towards labour payment, Rs.13,50,000/-
towards materials and Rs.3,76,000/- as security deposit
but the petitioners did not pay back the said amount.

4. Relying upon the judgment of this Court in the case
of Bimal Kumar Agarwal @ Vimal Kumar Agarwal @
Vimal Kumar Agawal & Anr. vs. The State of Jharkhand
reported in (2026:JHHC:15233) , it is submitted by the
learned counsel for the petitioners that this Court relying
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 no. 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)
wherein the Hon’ble Supreme Court of India has
reiterated the settled principle of law that every breach of
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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.

5. It is next submitted by the learned counsel for the
petitioners that in that case, this Court also relied upon the
judgment of the Hon’ble Supreme Court of India in the
case of Satishchandra Ratanlal Shah vs. State of Gujarat
& Anr. reported in (2019) 9 SCC 148 , paragraph nos.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
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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)

wherein the Hon’ble Supreme Court of India has
reiterated the settled principle of law that a mere breach of
a promise, agreement or contract does not, ipso facto ,
constitute the offence of the criminal breach of trust and
the ineligibility to pay the loan amount taken cannot give
rise to criminal prosecution of cheating.

6. Learned counsel for the petitioners next relied upon
the judgment of this Court in the case of Ruchika Kakar
vs. The State of Jharkhand & Anr. reported in
(2024:JHHC:18770) wherein, this Court relied upon the
judgment of the Hon’ble Supreme Court of India in the
case of Binod Kumar & Others vs. State of Bihar &
Another (2014) 10 SCC 663
reported in , paragraph-18 of
which reads as under :-
“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
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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.” Emphasis supplied).”
Emphasis supplied)

wherein, the Hon’ble Supreme Court of India has
held that to make out a case of criminal breach of trust, it
is not sufficient to show that money has been retained by
the accused persons. It must also be shown that the
accused persons dishonestly disposed of the same in some
way or dishonestly retained the same.
7. It is next submitted by the learned counsel for the
petitioners that as 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 its entirety, still, the offence
punishable under Section 417 of the Indian Penal Code is
not made out.
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8. So far as the offence punishable under Section 406 of
the Indian Penal Code is concerned, it is submitted by the
learned counsel for the petitioners that as has been
observed by this Court in the case of Ruchika Kakar vs.
The State of Jharkhand & Anr (supra), the essential
ingredients to constitute the offence punishable under
Section 406 of the Indian Penal Code is that there must be
entrustment and there must be dishonest
misappropriation of the entrusted property or conversion
of the entrusted property to one’s own use, or use in
violation of a legal direction. It is next submitted by the
learned counsel for the petitioners that since admittedly
the money was invested by the petitioners in a
partnership business, it cannot be said that the petitioners
being the other partners were entrusted with any money
and in the absence of any entrustment, the question of
dishonest misappropriation of the entrusted property
does not arise and in the absence of the same, the offence
punishable under Section 406 of the Indian Penal Code is
also not made out. Hence, it is submitted that the prayer
as prayed for by the petitioners in this criminal
miscellaneous petition be allowed.

9. Learned Special Public Prosecutor and the learned
counsel for the opposite party no.2 on the other hand
vehemently opposes the prayer of the petitioners and
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submits that if the allegations made against the petitioners
are considered to be true in its entirety, then all the
offences in respect of which the learned Judicial
st
Magistrate 1 Class, Dhanbad has found prima facie case is
in fact, being made out against them. Hence, it is
submitted that this criminal miscellaneous petition 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 it is a
settled principle of law as has been held by the Hon’ble
Supreme Court of India in the case of Velji Raghavji Patel
vs. State of Maharashtra reported in 1964 SCC OnLine
SC 185 wherein, in para-07, it has been reiterated by the
Hon’ble Supreme Court of India that every partner has
dominion over property by reason of the fact that he is a
partner. This is a kind of dominion which every owner of
property has over his property, but it is not dominion of
this kind which satisfies the requirements of Section 405 of
the Indian Penal Code and it was also held that in order to
establish “entrustment of dominion” over property to an
accused, the mere existence of that person’s dominion
over the property is not enough. It must be further shown
that his dominion was the result of entrustment.
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11. Now coming to the facts of the case, it is the
admitted case of the complainant that the petitioner
invested money in partnership business with 25% share. It
is also the admitted case of the complainant that the
partnership entity still exists. So, under such
circumstances, this Court is of the considered view that
even if the entire allegations made against the petitioners
are considered to be true, in its entirety, still, the
investment of the money in the partnership by the
complainant will not amount to entrusted property as the
word ‘entrusted’ has been used under Section 405 of the
Indian Penal Code, the punishment of which has been
provided for under Section 406 of the Indian Penal Code.
Hence, this Court is of the considered view that even if the
entire allegations made against the petitioners are
considered to be true, in its entirety, still, the offence
punishable under Section 406 of the Indian Penal Code is
not made out against the petitioners.

12. So far as the offence punishable under Section 417 of
the Indian Penal Code is concerned, as has been reiterated
by the Hon’ble Supreme Court of India in the case Uma
Shankar Gopalika vs. State of Bihar & Anr. (supra), in
order to constitute the offence of cheating the accused
playing deception since the beginning of the transaction is
a sine-qua-non .
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13. Now coming to the facts of the case, there is no
allegation against the petitioners of having playing any
deception since the beginning of the transaction between
the parties.

14. Under such circumstances, this Court is of the
considered view that even if the entire allegations made
against the petitioners are considered to be true, in its
entirety, still, the same is insufficient to constitute the
offence punishable under Section 417 of the Indian Penal
Code.

15. In view of the discussions made above, as neither the
offence in respect of which prima facie case has been found
st
by the learned Judicial Magistrate 1 Class, Dhanbad is in
fact, being made out even if the entire allegations made
against the petitioners are considered to be true, in its
entirety; therefore, continuation of the criminal
proceeding against the petitioners will amount to abuse of
process of law and this is a fit case where the entire
criminal proceeding including the order dated 23.06.2025
st
passed by the learned Judicial Magistrate 1 Class,
Dhanbad in connection with Complaint Case No. 10242 of
2024 be quashed and set aside qua the petitioners.

16. Accordingly, the entire criminal proceeding
including the order dated 23.06.2025 passed by the
st
learned Judicial Magistrate 1 Class, Dhanbad in
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connection with Complaint Case No. 10242 of 2024 is
quashed and set aside qua the petitioners.
17. In the result, this criminal miscellaneous petition is
allowed.

18. In view of the disposal of this criminal miscellaneous
petition interlocutory applications, if any, is disposed of
being infructuous.
(Anil Kumar Choudhary, J.)
High Court of Jharkhand, Ranchi
th
Dated the 15 October, 2026
AFR/Gunjan/-

Uploaded on 16/10/2026
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