MOHD ASHRAF BEIGH vs UT OF J AND K TH S.S.P ECONOMIC OFFENCES WING CRIME BRANCH JAMMU AND OTHERS
- Court
- Jammu and Kashmir High Court
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT JAMMU
…
Case No: CRM(M) No. 198/2025
CrlM No.392/2025
c/w
CRM(M) No. 1129/2025
CrlM No. 2095/2025
Reserved on : 21.10.2026
Pronounced on :05.11.2026
Uploaded on: 06.11.2026
Mohd. Ashraf Beigh c/w
Imran Beigh and another
….Petitioner(s)….
Through: Mr. P.N.Raina, Sr. Advocate with
Ms. Deeksha Handoo, Advocate,
Mr. Sandeep Gupta, Advocate,
Mr. Zulker Nain Sheikh,
Advocate.
v/s
UT of J&K and others …..Respondent(s)
Through: Ms. Monika Kohli, Sr. AAG
Mr. Malvika Gupta, Advocate
Mr. Farhan Mirza, Advocate
Mr. Vastav Sharma, Advocate.
CORAM: HON’BLE MR. JUSTICE SANJAY DHAR, JUDGE
JUDGMENT
1. Through the medium of the present judgment, the afore-
titled two petitions under Section 528 of the BNSS,
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challenging FIR No. 51/2022 for offences punishable under
Sections 379, 419, 420, 465, 467, 468, 471 and 120-B of the
IPC, registered with Police Station, Crime Branch,
Economic Offences Wing, Jammu, and the charge sheet
arising therefrom, are proposed to be disposed of.
2. CRM(M) No.1129/2025 has been filed by petitioners Imran
Beigh and Abid Beigh whereas CRM(M) No.198/2025 has
been filed by petitioner Mohd. Ashraf Beigh. The impugned
FIR has been lodged at the behest of respondent-Waseem
Wani. It is pertinent to mention here that initially, the
petitioners challenged the aforesaid FIR, but during the
pendency of these petitions, respondent-Investigating
Agency completed investigation of the FIR and filed the
challan against the petitioners before the concerned court.
3. As per the prosecution case, a written complaint was lodged
by complainant-Waseem Wani with the Investigating
Agency. After conducting preliminary verification of the
allegations made in the complaint, the impugned FIR came
to be registered against the petitioners. A Special
Investigating Team (SIT) was constituted, and the
investigation of the case was entrusted to an officer of the
rank of Deputy Superintendent of Police (Dy. SP). During
the course of investigation of the case, the relevant
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documents were seized and the statements of the witnesses
were recorded.
4. The facts that came to the fore after the investigation of the
case are that, in May 2020, petitioner Imran Beigh, who
happens to be the Managing Director of M/s Beigh
Construction Company Pvt. Ltd., (for short, “M/s BCC Pvt.
Ltd.”) approached Ghulam Rasool Wani, father of the
complainant, and offered to sublet the railway contract for
the construction of an underground railway excavation
tunnel (T-77D) using a roadheader at Banihal on certain
terms and conditions. The said work was allotted to M/s
BCC Pvt. Ltd. by M/s IRCON International Pvt. Ltd. It is
alleged that M/s IRCON International Pvt. Ltd. had not
authorized M/s BCC Pvt. Ltd. to sublet the said contract
without obtaining prior written consent from the principal.
However, despite this condition, petitioner Imran Beigh
issued a work order in the name of Ghulam Rasool Wani for
the execution of the said project on 20.08.2020. An
agreement dated 20.12.2020 was executed between Ghulam
Rasool Wani and petitioner Imran Beigh, with retrospective
effect from 27.09.2020, for execution of the project. In terms
of the said agreement, a bank guarantee for an amount of
rupees one crore was obtained by petitioner Imran Beigh
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from Ghulam Rasool Wani. In this regard, the amount was
transferred from the account of Ghulam Rasool Wani to the
account of M/s BCC Pvt. Ltd., and a certain portion of the
bank guarantee amount was paid in cash.
5. It is further case of the prosecution that execution of the
work allotted commenced on 27.09.2020 and continued up
to 05.03.2021, during which period, Ghulam Rasool Wani
executed works amounting to Rs. 3.78 crores, and the bills
were submitted to M/s IRCON International Pvt. Ltd.
through Project Manager of M/s BCC Pvt. Ltd. However,
the entire amount of the bills released by M/s IRCON
International Pvt. Ltd. against the work executed was
credited to the account of M/s BCC Pvt. Ltd. instead of the
designated ESCROW account opened with HDFC Bank,
Narwal Branch. It is alleged that petitioner Imran Beigh
deliberately withheld the due share of 76% of the released
amount, which was to be paid to Ghulam Rasool Wani in
terms of the agreement.
6. On 13.03.2021, petitioner Imran Beigh issued a termination
order of the contract against Ghulam Rasool Wani without
prior notice or intimation and without clearing the
outstanding liability, with the intention to evade his financial
responsibility. After the termination of the contract, the
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petitioner, with a premeditated intention to cheat,
approached the complainant with a new proposal under
which he assured the complainant that 70% of the bank
guarantee amount (Rs. 70.00 lakhs) would be repaid, and in
lieu of the remaining 30%, Ghulam Rasool Wani would be
granted 30% partnership in the ongoing project. On the basis
of these assurances, Ghulam Rasool Wani again engaged
himself in the execution of the project and invested an
amount of Rs. 31.00 lakhs. A bill exceeding Rs. one crore
was submitted to M/s IRCON International Pvt. Ltd., and the
payment was credited to the account of petitioner Imran
Beigh without releasing the share of Ghulam Rasool Wani.
However, the accused persons released only 57.50% of the
bank guarantee amount while withholding the remaining
amount.
7. It is further alleged that Ghulam Rasool Wani opted out of
the contract and demanded the outstanding dues from the
accused persons. However, the petitioners again approached
the complainant with yet another proposal and executed an
agreement dated 16.10.2021 on behalf of M/s BCC Pvt. Ltd.
This agreement was executed by petitioner Ashraf Beigh,
who had no authority to execute the said agreement on
behalf of the company, and as such, the said agreement is a
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fabricated document. By virtue of the said agreement, M/s
BCC Pvt. Ltd. agreed to pay Rs. 42.00 lakhs either directly
to Ghulam Rasool Wani or to the vendors from whom he
had procured the material/equipment on credit for execution
of the work. This agreement was executed by the petitioners
deliberately with the intention of deceitfully taking
possession of the machinery earlier provided by M/s BCC
Pvt. Ltd., which was in the custody of Ghulam Rasool Wani
for execution of the project. Despite execution of the
agreement, the petitioners obtained an interim injunction
dated 18.10.2021 from the Court of the Sub-Judge, Ramban,
and, on the strength of the said interim injunction,
unlawfully removed and misappropriated material and
equipment worth lakhs of rupees, which had been procured
by Ghulam Rasool Wani for execution of the project.
8. It has been alleged that during the course of investigation,
M/s BCC Pvt. Ltd. produced falsified records claiming that
Ghulam Rasool Wani was liable to pay an amount of Rs.
1.24 crores to M/s BCC Pvt. Ltd. However, on 05.05.2022,
the company admitted its liability and expressed its
willingness to pay Rs. 1.10 crores to Ghulam Rasool Wani.
As per the Investigating Agency, the records submitted by
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the accused reveal that the actual liability was approximately
Rs. 82 lakhs in favour of Ghulam Rasool Wani.
9. It has been submitted that during the course of investigation,
petitioners Imran Beigh and Ashraf Beig approached the
complainant and executed two settlement agreements dated
17.09.2022 in favour of Ghulam Rasool Wani. As per these
settlement agreements, petitioner Imran Beigh agreed to pay
Rs. 1.50 crores out of the total liability of Rs. 2.25 crores to
the complainant in instalments within four months. With
respect to the remaining amount, he undertook to settle the
same within 15 days through mutual understanding, pending
finalization of the liability. Petitioner Imran Beigh also
agreed to hand over possession of the house falling under
Khasra No. 225, situated at Bhatindi, Jammu, to the
complainant. The said property stands in the name of
petitioner Mohd. Ashraf Beig, who is the father of Imran
Beigh, with whom a separate agreement dated 17.09.2020
was executed.
10. It is further stated in the charge sheet that on 18.09.2020,
possession of the aforesaid house was handed over to the
complainant and a written document evidencing the handing
over and taking over was prepared. It was agreed by
petitioners Imran Beig and Ashraf Beig that the complainant
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would be at liberty to alienate the said house if they failed to
discharge their liability. The accused persons issued cheques
amounting to Rs. 1.50 crores in favour of the complainant.
However, only Rs. 50 lakhs were realized, whereas cheques
amounting to Rs. one crore were dishonoured. It has been
stated that both petitioners Imran Beigh and Ashraf Beig
agreed to resolve the remaining dispute within 15 days, as
stipulated, but they adopted dilatory tactics under one
pretext or another.
11. According to the prosecution, all the settlement agreements
dated 05.05.2022, 17.09.2022 and 16.10.2021 between the
complainant and the accused were, in fact, further acts of
cheating committed by the accused persons with the
intention to deprive the complainant of his hard-earned
money. It has been submitted that the conduct of the accused
persons in repeatedly entering into compromises with the
complainant party without fulfilling their promises clearly
reflects their criminal intent. Thus, according to the
prosecution, offences under Sections 379, 419, 420, 465,
467, 468, 471 and 120-B of the IPC are fully established
against all these petitioners.
12. The petitioners have challenged the impugned FIR and the
proceedings emanating therefrom on the ground that the
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same are an abuse of the process of law, as the complainant
has converted a purely civil dispute into a criminal case. It
has been contended that, on a plain reading of the allegations
made in the FIR, it becomes clear that the dispute between
the parties is purely commercial in nature which has arisen
on account of the substandard execution of work by the
complainant party. According to the petitioners, the
omission on the part of the complainant to adhere to the
terms of the sub-contract ultimately led to the termination of
said contract. It has been contended that one of the sons of
Ghulam Rasool Wani, who happens to be the brother of the
complainant, is posted as an Inspector in the Crime Branch,
Jammu, and that, at his behest, the impugned FIR has been
lodged in order to pressurize the petitioners to enter into a
settlement favourable to the complainant. It has been
submitted that the petitioners have also filed a civil suit for
permanent prohibitory injunction in respect of the house
situated at Bhatindi against respondent No. 2, which is
pending disposal before the Court.
13. The respondent-complainant, in his reply to the petition, has
reiterated the allegations made in the charge sheet against
the petitioners. It has been submitted that the petitioners are
habitual offenders and have a criminal background.
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According to the private respondents, petitioner Imran Beigh
was found involved in FIR No. 196/2009, registered at
Police Station, Banihal, for offences under Sections
452/354/148/302 RPC. Another FIR bearing No. 21/2021,
for offences under Sections 420, 467, 468, 471 and 120-B
RPC, is registered at Police Station, Crime Branch, Jammu,
against petitioner Imran Beigh. Yet another FIR bearing, No.
168/2019, for offences under Sections 406, 420, 468, 471
and 120-B IPC, is registered against the petitioner at Police
Station, Economic Offences Wing, Delhi. It has been
submitted that FIR No. 181/2024, for offences under
Sections 288 and 125 of the BNS, stands registered against
petitioner Imran Beigh at Police Station, Banihal. Thus, the
private respondents have contended that the petitioners are
repeat offenders.
14. On merits, the private respondents have reiterated and
reaffirmed the allegations made in the charge sheet against
the petitioners and have contended that the offences alleged
are clearly made out against the petitioners. It has been
contended that merely because the genesis of the dispute
between the parties is a commercial transaction, the
proceedings cannot be quashed once, upon investigation of
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the case, it has come to the fore that the petitioners are
involved in the commission of criminal offences.
15. I have heard learned counsel for the parties and perused
record of the case, including the charge sheet.
16. At the very outset, a preliminary objection regarding
maintainability of the instant petitions has been raised by
learned counsel appearing for the respondents on the ground
that once the charge sheet stands filed against the petitioners
after investigation into the impugned FIR, the petitions are
rendered infructuous. It has been contended that, if the
petitioners have any case, they are at liberty to raise the
contentions that are being urged in the petitions before the
trial court at the time of framing of charges.
17. In the above context, it is to be noted that the law is well
settled that even if charge sheet has been filed during the
pendency of a petition under Section 528 of the BNSS, the
Court is still vested with the power to examine whether the
offences alleged to have been committed by the accused
persons are prima facie made out from the complainant's
FIR, charge sheet, documents, etc. There is nothing in
Section 528 of the BNSS that restricts the exercise of the
Court's power to prevent abuse of the process of the Court or
miscarriage of justice only to the stage of the FIR. Reference
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in this regard is being made to the ratio laid down by the
Supreme Court in the case of Anand Kumar Mohatta and
Another v. State (Govt. of NCT of Delhi), (2019) 11 SCC
706 .
18. That takes us to merits of the case. The main contention
raised by the petitioners for challenging the impugned FIR
and charge sheet is that the allegations made in the charge
sheet owe their origin to a commercial dispute that has
arisen between the petitioners and the complainant and that
there is no element of criminality attached to the underlying
dispute.
19. It is a settled law that merely because the underlying dispute
between the complainant and the accused pertains to a
commercial transaction would not, by itself, be a ground to
quash the criminal proceedings. It is true that a commercial
transaction, apart from giving rise to a cause of action for
seeking a remedy under civil law, may also involve a
criminal offence. Legal position in this regard has been
enunciated by the Supreme Court in the case of M/s Indian
Oil Corporation v. NEPC India Ltd. and Others, (2006)
6 SCC 736 . The Supreme Court, in the said case, after
considering its earlier precedents, summarized the principles
relating to the exercise of jurisdiction under Section 482
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Cr.P.C. to quash complaints and criminal proceedings in the
following manner:-
“12. The principles relating to exercise of jurisdiction
under Section 482 of the Code of Criminal Procedure to
quash complaints and criminal proceedings have been
stated and reiterated by this Court in several decisions.
To mention a few - Madhavrao Jiwaji Rao Scindia v.
Sambhajirao Chandrojirao Angre , State of Haryana vs.
Bhajanlal , Rupan Deol Bajaj vs. Kanwar Pal Singh
Gill Vs. , Central Bureau of Investigation v. Duncans
Agro Industries Ltd. , , State of Bihar vs. Rajendra
Agrawalla , Rajesh Bajaj v. State NCT of Delhi, ,
Medchl Chemicals & Pharma (P) Ltd. v. Biological E.
Ltd. , Hridaya Ranjan Prasad Verma v. State of Bihar
M. Krishnan vs Vijay Kumar [2001 , and Zandu
Phamaceutical Works Ltd. v. Mohd. Sharaful Haque ..
The principles, relevant to our purpose are :
( i) A complaint can be quashed where the
allegations made in the complaint, even if they are
taken at their face value and accepted in their entirety,
do not prima facie constitute any offence or make out
the case alleged against the accused.
For this purpose, the complaint has to be
examined as a whole, but without examining the merits
of the allegations. Neither a detailed inquiry nor a
meticulous analysis of the material nor an assessment
of the reliability or genuineness of the allegations in the
complaint, is warranted while examining prayer for
quashing of a complaint.
(ii) A complaint may also be quashed where it is a
clear abuse of the process of the court, as when the
criminal proceeding is found to have been initiated with
malafides/malice for wreaking vengeance or to cause
harm, or where the allegations are absurd and
inherently improbable.
(iii) The power to quash shall not, however, be
used to stifle or scuttle a legitimate prosecution. The
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power should be used sparingly and with abundant
caution.
(iv) The complaint is not required to verbatim
reproduce the legal ingredients of the offence alleged. If
the necessary factual foundation is laid in the
complaint, merely on the ground that a few ingredients
have not been stated in detail, the proceedings should
not be quashed. Quashing of the complaint is warranted
only where the complaint is so bereft of even the basic
facts which are absolutely necessary for making out the
offence.
(v) A given set of facts may make out : (a) purely a
civil wrong; or (b) purely a criminal offence; or (c) a
civil wrong as also a criminal offence. A commercial
transaction or a contractual dispute, apart from
furnishing a cause of action for seeking remedy in civil
law, may also involve a criminal offence. As the nature
and scope of a civil proceedings are different from a
criminal proceeding, the mere fact that the complaint
relates to a commercial transaction or breach of
contract, for which a civil remedy is available or has
been availed, is not by itself a ground to quash the
criminal proceedings. The test is whether the
allegations in the complaint disclose a criminal offence
or not.”
20. From the foregoing analysis of the legal position, it is clear
that the scope of civil proceedings is different from that of
criminal proceedings, and merely because the allegations
made in the complaint or the charge sheet relate to a
commercial transaction or breach of trust, for which a civil
remedy is available, the criminal proceedings cannot be
quashed. The Court has to ascertain whether the allegations
made in the FIR/charge sheet disclose the commission of a
criminal offence and if no such offence (s) is disclosed the
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court would be well within its jurisdiction to quash the
proceedings.
21. With the afore-stated legal position in mind, let us now
advert to the facts of the present case. In the instant case, the
Investigating Agency, after conducting the investigation, has
found that offences under Sections 379, 419, 420, 465, 467,
468, 471 and 120-B of the IPC are established against the
petitioners.
22. The offence under Section 379 of IPC has been invoked by
the Investigating Agency on the basis of the allegations that
the accused persons, in collusion with the employees of M/s
BCC Pvt. Ltd., unlawfully removed and misappropriated the
material and equipment worth lakhs of rupees that were
lying at the site and had been procured by Ghulam Rasool
Wani for the execution of the said project.
23. In the above context, if we have a look at the initial
agreement executed between petitioner Imran Beigh and
Ghulam Rasool Wani, whereby the work of execution of the
underground railway excavation tunnel (T-77D) was
subcontracted to Ghulam Rasool Wani with effect from
27.09.2020, it is revealed that M/s BCC Pvt. Ltd. was
responsible for providing the machinery then available at the
site for the execution of the work without any rental charges
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to Ghulam Rasool Wani. It has come to the fore from the
documents placed on record along with the charge sheet, as
well as by the private respondents along with their reply,
that a judicial order came to be passed by the learned Sub-
Judge, Ramban, on 18.10.2021, whereby Ghulam Rasool
Wani and his son Waseem Wani were restrained from
causing any interference with the execution of the work in
question by M/s BCC Pvt. Ltd. There is another judicial
order passed by the learned Munsiff, Banihal, on
01.02.2022, in a suit filed by Ghulam Rasool Wani against
petitioner Imran Beigh, whereby the defendant was
restrained from forcibly taking the machinery provided to
the plaintiff therein by the defendant without following due
process of law.
24. From these documents, it appears that the machinery and
equipment that were available at the site belonged to M/s
BCC Pvt. Ltd. If the petitioners have removed the said
machinery and equipment from the spot, that would amount
to violation of order dated 01.02.2022 passed by the learned
Munsiff, Banihal, but it cannot take the shape of an offence
of theft. Since, as per the terms of the agreement executed
between the parties and as per complainant party's own
showing in the suit filed before the learned Munsiff,
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Banihal, the machinery and equipment belonged to M/s
BCC Pvt. Ltd., which intended to remove the same, it cannot
be stated that an offence of theft has been committed by M/s
BCC Pvt. Ltd. or its functionaries, including the petitioners.
A person cannot be prosecuted for having committed theft of
his own property. As per the terms of the agreement, the
complainant party had no right of lien over the machinery
and equipment, which is apparent from the initial agreement
executed between the parties. Even if there was violation of
any terms of the agreement on the part of M/s BCC Pvt. Ltd.
in removing the machinery and equipment from the site, it
cannot constitute an offence of theft.
25. That takes us to the offence of impersonation, which, as per
the Investigating Agency, has been established against the
petitioners. The allegation of impersonation is based upon
the finding of the Investigating Agency that petitioner
Mohd. Ashraf Beigh, while executing agreement dated
16.10.2021, represented that he was authorized by M/s BCC
Pvt. Ltd. to execute the said agreement, though it turned out
that he was not holding any authority on behalf of M/s BCC
Pvt. Ltd. Therefore, he resorted to impersonation.
26. In the above context, the provision contained in Section 416
of the IPC which defines the offence of cheating by
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personation is required to be noticed. The same is
reproduced as under:-
“ 416. Cheating by personation.—
A person is said to “cheat by personation” if he
cheats by pretending to be some other person, or
by knowingly substituting one person for another,
or representing that he or any other person is a
person other than he or such other person really
is.”
27. From a perusal of the aforesaid provision, it is clear that
if a person pretends to be some other person or knowingly
substitutes one person for another, such person is said to have
cheated by impersonation.
28. In the present case, petitioner Mohd. Ashraf Beigh has
simply represented M/s BCC Pvt. Ltd., while executing
agreement with the complainant. It is clearly mentioned in the
agreement that he has done so as father of petitioner Imran
Beigh, Managing Director of M/s BCC Pvt. Ltd. It is
nowhere represented in the agreement that petitioner Mohd.
Ashraf Beigh was holding any authority, written or otherwise,
on behalf of M/s BCC Pvt. Ltd. Thus, no false representation
or misrepresentation was made by Mohd. Ashraf Beigh at the
time of execution of the said agreement. The covenants of the
agreement are very clear to the effect that Mohd. Ashraf
Beigh was simply representing M/s BCC Pvt. Ltd., of which
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his son, Imran Beigh, is the Managing Director. The
ingredients of the offence under Section 419 of the IPC are,
therefore, not attracted to the facts of the present case.
29. There is another curious fact that needs to be noticed. The
aforesaid agreement has been executed by complainant
Waseem Wani on behalf of his father, Ghulam Rasool Wani.
Learned counsel for the private respondents has submitted
that Waseem Wani was holding a special power of attorney
on behalf of his father. However, a perusal of the record
would show that the said special power of attorney was
executed by Ghulam Rasool Wani in favour of his son,
Waseem Wani, on 17.09.2022, whereas the agreement was
executed by him on 16.10.2021, meaning thereby that he
was not holding any written authority from his father to
execute the said agreement. If the logic projected by the
Investigating Agency in implicating petitioner Mohd. Ashraf
Beigh in the offence under Section 419 of the IPC is
accepted, then respondent Waseem Wani is equally liable.
30. The other offence invoked against the petitioners is one
under Section 420 of IPC. The allegations regarding
cheating are based upon the findings of the Investigating
Agency that, right from the inception, the petitioners
intended to defraud respondent Ghulam Rasool Wani. In the
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first instance, it is alleged that M/s IRCON International Pvt.
Ltd. had not authorized M/s BCC Pvt. Ltd. to execute the
subcontract and in violation of the said stipulation, they
entered into a subcontract with Ghulam Rasool Wani. The
second contention is that respondent Ghulam Rasool Wani
was made to furnish a bank guarantee for Rs. one crore with
a view to cheat him. It has also been alleged that, as per the
initial agreement executed between M/s BCC Pvt. Ltd. and
Ghulam Rasool Wani, an ESCROW account was to be
opened and all payments were to be routed through the said
account so that Ghulam Rasool Wani would receive his
share of 76% of the bill amount in terms of the initial
agreement executed between the parties. However, despite
the opening of the ESCROW account, the bills were directly
credited to the account of M/s BCC Pvt. Ltd. Another
instance of cheating relied upon by the Investigating Agency
is the execution of subsequent agreements by the petitioners
with the complainant party without adhering to the terms
and conditions of the said agreements.
31. Before ascertaining whether the aforesaid allegations
constitute the offence of cheating, it would be necessary to
understand as to what are the ingredients of offence of
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cheating. Section 415 of the IPC defines the offence of
cheating. It reads as under:-
“ 415. Cheating.—
Whoever, by deceiving any person, fraudulently or
dishonestly induces the person so deceived to
deliver any property to any person, or to consent
that any person shall retain any property, or
intentionally induces the person so deceived to do
or omit to do anything which he would not do or
omit if he were not so deceived, and which act or
omission causes or is likely to cause damage or
harm to that person in body, mind, reputation or
property, is said to “cheat.”
32. The Supreme Court in the case of R.K.Vijayasarathy and
another Vs. Sudha Setharam and another, 2019(16) SCC
739 has after noticing the aforesaid provision, held that the
ingredients of an offence of cheating are as follows:-
“16.1. There should be fraudulent or dishonest
inducement of a person by deceiving him;
16.1.1. The person so induced should be
intentionally induced to deliver any property to
any person or to consent that any person shall
retain any property, or
16.1.2. The person so induced should be
intentionally induced to do or to omit to do
anything which he would not do or omit if he were
not so deceived; and
16.2. In cases covered by 16.1.2. above, the act or
omission should be one which caused or is likely
to cause damage or harm to the person induced in
body, mind, reputation or property.
17. A fraudulent or dishonest inducement is an
essential ingredient of the offence. A person who
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dishonestly induces another person to deliver any
property is liable for the offence of cheating.
18. Section 420 of the Penal Code reads thus:
“420. Cheating and dishonestly
inducing delivery of property.—
Whoever cheats and thereby
dishonestly induces the person deceived to
deliver any property to any person, or to
make, alter or destroy the whole or any part
of a valuable security, or anything which is
signed or sealed, and which is capable of
being converted into a valuable security,
shall be punished with imprisonment of
either description for a term which may
extend to seven years, and shall also be
liable to fine.”
19. The ingredients to constitute an offence under
Section 420 are as follows:
19.1. A person must commit the offence of
cheating under Section 415; and
19.2. The person cheated must be dishonestly
induced to
(a) deliver property to any person; or
(b) make, alter or destroy valuable security
or anything signed or sealed and capable of
being converted into valuable security.
20. Cheating is an essential ingredient for an act
to constitute an offence under Section 420.”
33. Again the Supreme Court in the case of A.M.Mohan Vs.
State represented by SHO and another, 2024(12) SCC
181 after noticing the provisions of Sections 415 and 420 of
IPC explained the offence of cheating in the following
manner:-
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“22. It could thus be seen that for attracting the
provision of Section 420 of IPC, the FIR/complaint must
show that the ingredients of Section 415 of IPC are
made out and the person cheated must have been
dishonestly induced to deliver the property to any
person; or to make, alter or destroy valuable security or
anything signed or sealed and capable of being
converted into valuable security. In other words, for
attracting the provisions of Section 420 of IPC, it must
be shown that the FIR/complaint discloses:
(i) the deception of any person;
(ii) fraudulently or dishonestly inducing that person to
deliver any property to any person; and
(iii) dishonest intention of the accused at the time of
making the inducement.”
34. It is to be noted that dishonest intention on the part of the
accused must exist from the very inception of the
transaction. Merely because the accused has failed to adhere
to the terms of a contract, when there was no dishonest or
fraudulent intention at the inception of the transaction,
would not constitute an offence of cheating.
35. With the aforesaid legal position in mind, let us now
consider whether the afore-noted allegations constitute the
offence of cheating. The first allegation, as noted above, is
that the agreement executed between M/s IRCON
International Pvt. Ltd. and M/s BCC Pvt. Ltd. did not
provide for subletting of the contract, but M/s BCC Pvt. Ltd.
still entered into a subcontract with the private respondents;
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therefore, the offence of cheating is made out against the
petitioners. In this regard, it is to be noted that, as per the
material collected by the Investigating Agency, there was no
covenant in the agreement executed between petitioner
Imran Beigh and M/s IRCON International Pvt. Ltd.
authorizing him to sublet the contract without obtaining
prior written permission. It is mentioned in the charge sheet
that violation of the said condition gave M/s IRCON
International Pvt. Ltd. the right to terminate the contract
with M/s BCC Pvt. Ltd.
36. Whatever the terms and conditions of the contract between
M/s IRCON International Pvt. Ltd. and M/s BCC Pvt. Ltd.
were there, the same do not have any bearing upon the terms
of the contract between M/s BCC Pvt. Ltd. and Ghulam
Rasool Wani in the facts and circumstances of the instant
case. Had it been a case where subcontractor Ghulam Rasool
Wani would have suffered loss on account of the termination
of the contract of M/s BCC Pvt. Ltd. by M/s IRCON
International Pvt. Ltd. on the ground of subletting of the
contract by M/s BCC Pvt. Ltd., perhaps it could have been
said that the petitioners had defrauded the subcontractor.
However, in this case, the material on record shows that
even after the termination of the subcontract of Ghulam
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Rasool Wani, M/s BCC Pvt. Ltd. continued to execute the
works under the subsisting contract with M/s IRCON
International Ltd. This shows that the lack of authority of
M/s BCC Pvt. Ltd. to enter into a subcontract did not have
any effect on the transaction between M/s BCC Pvt. Ltd. and
Ghulam Rasool Wani.
37. If at all M/s BCC Pvt. Ltd. violated any terms of contract
with M/s IRCON International Ltd, the same would not give
rise to a cause of action in favour of the complainant unless
it is shown that he has suffered any loss on account of
violation of the terms of the principal contract by M/s BCC
Pvt. Ltd. A violation of terms of principal contract would
give a right to M/S IRCON International Ltd to terminate the
contract with M/S BCC Ltd. The same would not offer a
cause of action to the complainant to proceed against M/S
BCC Ltd. In the present case, there is no material on record
to show that sub-contract between the parties has been
affected by the relationship between M/s IRCON
International Ltd. and M/s BCC Pvt. Ltd. In these
circumstances the violation of terms of principal contract by
M/S BCC Ltd would not give rise to offence of cheating qua
the complainant.
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38. The second allegation pertains to the opening of an
ESCROW account. Although it appears from the material
collected by the Investigating Agency that an ESCROW
account was opened, yet it seems that the bills were not
credited through the ESCROW account and instead the same
were being directly credited to the account of M/s BCC Pvt.
Ltd.
39. In the above context, if we have a look at the terms of the
agreement executed between the parties at the time of
subletting of the contract, it is recorded that M/s BCC Pvt.
Ltd. was obliged to make an endeavour to open an
ESCROW account, from which the proceeds were to be
distributed between the two parties in accordance with
Clause (v) of the agreement. The expression used in the
agreement is “endeavour”, which means that an effort was to
be made by M/s BCC Pvt. Ltd. to open an ESCROW
account, but there was no binding obligation upon M/s BCC
Pvt. Ltd. to open an ESCROW account and route the bills
through the said account. Merely because the payments were
not routed through the ESCROW account, it cannot be stated
that the petitioners resorted to cheating, particularly when
there is material on record to show that, after the bills were
released and credited to the account of M/s BCC Pvt. Ltd., a
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substantial amount was released in favour of Ghulam Rasool
Wani.
40. In this regard, it is to be noted that the Investigating Agency
has found that an amount of Rs. 60 lakhs was paid to
Ghulam Rasool Wani against the first running account bill
dated 10.12.2020, though his actual share was Rs.
1,12,18,476/-. It has also been found that, against the second
bill dated 22.02.2021, a payment of Rs. 80 lakhs was made
in favour of Ghulam Rasool Wani in May 2021, leaving a
balance amount of Rs. 81,51,322/-. There is material on
record to show that, pursuant to the subsequent agreement,
M/s BCC Pvt. Ltd. returned 57% of the bank guarantee
amount, though it had undertaken to return 70% of the bank
guarantee amount. There is also material on record to show
that, in terms of the subsequent agreement, petitioners Imran
Beigh and Ashraf Beig handed over possession of their
house at Bathindi to the complainant as a guarantee for
repayment of the balance amount.
41. From the aforesaid established facts on record, it is
discernible that the petitioners had no fraudulent intention to
cheat the complainant party at the inception of the
transaction. It is improbable that a person intending to cheat
would pay more than Rs.1.50 crores and hand over
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possession of his house situated in a prime location in
Jammu as guarantee for repayment of outstanding amount to
the person intended to be cheated. The fact that the
petitioners, during the course of the transaction with the
complainant, made substantial payments and even furnished
security for payment of the balance amount by handing over
possession of their house shows that there was no intention
on their part to deceive the complainant party. It appears that
it was only because of subsequent disputes that arose
between the parties that the balance payments were withheld
and the contract was terminated. Thus, the offence of
cheating is not made out against the petitioners.
42. Another allegation established during the investigation of
the case is that the complainant Ghulam Rasool Wani was
compelled to furnish a bank guarantee of Rs. one crore. In
this regard, it is to be noted that one of the terms of the
initial agreement executed between the parties was that the
subcontractor would furnish a bank guarantee of Rs. one
crore. It was in pursuance of the said term of the agreement
that Ghulam Rasool Wani furnished the requisite bank
guarantee. It is not the case of the complainant that the initial
agreement was executed by Ghulam Rasool Wani under any
coercion or undue influence; therefore, it is not open to the
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complainant to allege that he was forced to furnish the bank
guarantee.
43. The fact that the petitioners have entered into repeated
settlements with the complainant party shows that they
intended to settle the dispute, which appears to be purely
commercial in nature. Merely because they could not adhere
to the terms of the settlement, even though, under the terms
of the settlement, they did release 57% of the amount of the
bank guarantee, it cannot be stated that the petitioners have
resorted to cheating.
44. That takes us to the allegations with regard to the offence of
forgery. The investigating agency has invoked the offence of
forgery on the basis of the allegation that the petitioner
Mohd. Ashraf Beigh was not authorised to execute the
agreement dated 16.10.2021; therefore, it is a forged
document.
45. The essential ingredient of forgery under Section 463 of the
IPC is the making of a false document within the meaning of
Section 464 of the IPC. As per Section 464 IPC, a person is
said to make a false document if he dishonestly or
fraudulently makes, signs, seals or executes a document or
part of a document or if he makes any mark denoting the
execution of a document with the intention of causing it to
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be believed that such document or part of a document was
made, signed, sealed and executed, transmitted or affixed by
or by the authority of a person by whom or by whose
authority he knows that it was not made, signed, sealed,
executed or affixed. A false document can also be said to
have been made if a person, without lawful authority,
dishonestly or fraudulently, by cancellation or otherwise,
alters a document in any material part thereof after it has
been made or executed either by himself or by any other
person. Again, when a person is made to sign, seal, execute
or alter a document dishonestly or fraudulently, knowing
that such person, by reason of unsoundness of mind or
intoxication, cannot, or by reason of deception practised
upon him, does not know the contents of the document or
the nature of the alteration, a false document can be said to
have been made.
46. The Supreme Court in the case of Mohd Ibrahim Vs. State
of Bihar, 2009 (8) SCC 751 has held that when a person
executes a document claiming property as his own , there is
no making of a false document merely because the claim is
ultimately found to be incorrect. The relevant para reads as
under:-
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“12. The sale deeds executed by first appellant,
clearly and obviously do not fall under the second
and third categories of `false documents'. It
therefore remains to be seen whether the claim of
the complainant that the execution of sale deeds
by the first accused, who was in no way connected
with the land, amounted to committing forgery of
the documents with the intention of taking
possession of complainant's land (and that
accused 2 to 5 as the purchaser, witness, scribe
and stamp vendor colluded with first accused in
execution and registration of the said sale deeds)
would bring the case under the first category.
There is a fundamental difference between a
person executing a sale deed claiming that the
property conveyed is his property, and a person
executing a sale deed by impersonating the owner
or falsely claiming to be authorised or empowered
by the owner, to execute the deed on owner's
behalf. When a person executes a document
conveying a property describing it as his, there
are two possibilities. The first is that he bonafide
believes that the property actually belongs to him.
The second is that he may be dishonestly or
fraudulently claiming it to be his even though he
knows that it is not his property. But to fall under
first category of `false documents', it is not
sufficient that a document has been made or
executed dishonestly or fraudulently. There is a
further requirement that it should have been made
with the intention of causing it to be believed that
such document was made or executed by, or by the
authority of a person, by whom or by whose
authority he knows that it was not made or
executed. When a document is executed by a
person claiming a property which is not his, he is
not claiming that he is someone else nor is he
claiming that he is authorised by someone else.
Therefore, execution of such document
(purporting to convey some property of which he
is not the owner) is not execution of a false
document as defined under section 464 of the
Code. If what is executed is not a false document,
there is no forgery. If there is no forgery, then
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neither section 467 nor section 471 of the Code
are attracted.
47. From the aforesaid analysis of the legal position, it is clear
that when a person executes a document in his own capacity
and does not claim that he is authorized by someone else, it
cannot be stated that he has made a false document.
48. Turning to the facts of the case, the petitioner Ashraf Beigh,
while executing agreement dated 16.10.2021, has not
executed it by claiming that he is someone else or that he has
been authorised by some other person to execute the said
document without actually holding any such authority. It is
clearly stated in the agreement that he is representing M/s
BCC Pvt. Ltd., being the father of its Managing Director,
petitioner Imran Beigh. Therefore, the document in question
cannot be termed as forged. Thus, the investigating agency
has grossly erred in invoking the offences defined under
Sections 465, 467, 468 and 471 of the IPC.
49. From what has been discussed hereinbefore, it is clear that
the subject matter of the dispute between the petitioners and
the complainant party is purely commercial in nature. While
the complainant party claims that their contract has been
wrongly terminated and their payment has been withheld,
the petitioners claim that the complainant party has not
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executed the works in accordance with the terms of the
contract. In fact, the private respondents, along with their
reply, have placed on record copies of various
communications issued by M/s BCC Pvt. Ltd. to Ghulam
Rasool Wani, voicing its concern about material breaches of
the work order. By virtue of these communications,
respondent Ghulam Rasool Wani has been called upon to
take curative steps and he has been threatened with
termination of the contract. In these communications, it has
been highlighted that the complainant has not shown any
progress in the work and that the work executed by the
subcontractor is of substandard quality. Particulars of these
aspects have been detailed by M/s BCC Pvt. Ltd. in its
communications addressed to Ghulam Rasool Wani, who, in
turn, has submitted his responses to all these
communications, highlighting the fact that the entire amount
due to him had not been paid thereby justifying his actions.
50. On the basis of aforesaid admitted facts, it is clear that the
dispute between the complainant and the petitioners is
purely commercial in nature, having no element of
criminality attached to it. The dispute to be determined is as
to which of the parties is at fault. The determination of the
said dispute would give rise to monetary claims against the
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defaulting party. A criminal investigation cannot be resorted
to for determination of such dispute. However, the
investigating agency, it seems, has converted this purely
commercial dispute into a criminal case by assuming the
role of a recovery agent on behalf of the complainant. In
fact, a bare perusal of the contents of the charge sheet would
reveal that it appears be claim petition on behalf of the
complainant in the guise of a charge sheet.
51. The Supreme Court has time and again deprecated the
tendency of litigants to convert a purely commercial or civil
dispute into a criminal prosecution. In Indian Oil
Corporation’s case (supra), the Supreme Court has noted
with concern the growing tendency in business circles to
convert purely civil disputes into criminal cases. The Court
has observed that it is on account of the prevalent impression
that civil law remedies are time-consuming and do not
adequately protect the interests of lenders/creditors that
people are resorting to criminal proceedings, as there is a
likelihood of an imminent settlement. The Court further held
that 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 said legal position has been reiterated and
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reaffirmed by the Supreme Court in the cases of
Bhikhubhai Govindbhai Patel and another Vs. State of
Gujarat and another, 2026 LiveLaw (SC) 593, and A.M.
Mohan Vs. State, 2024 (12) SCC 181 .
52. For what has been discussed hereinbefore, it is clear that the
respondents have given a criminal colour to a purely
commercial dispute between them and the petitioners.
Therefore, the continuance of criminal proceedings against
the petitioners would amount to an abuse of the process of
law. Thus it is a fit case where this Court should exercise its
inherent powers under Section 528 of the BNSS to prevent
the abuse of the process of law and to secure the ends of
justice.
53. Accordingly, the petitions are allowed, and the impugned
FIR No. 0051/2022 dated 23.08.2022, including the charge
sheet arising therefrom, is quashed.
(Sanjay Dhar)
Judge
Jammu
05.11.2026
Madan Verma-Secy
Whether order is speaking? Yes/No
Whether order is reportable? Yes/No
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