NIRMALCHAND KOTHARI vs STATE OF CHHATTISGARH

1

CGHC010331422026 2026:CGHC:38368
NAFR
HIGH COURT OF CHHATTISGARH AT BILASPUR
MCRC No. 8019 of 2026
1. Nirmalchand Kothari S/o Late Shri Umedchand Kothari, Aged About 58
Years R/o Kamthi Line Tehsil And District Rajnandgaon, (C.G.)
2. Nalin Kothari S/o Late Shri Umedchand Kothari Aged About 52 Years
R/o Kamthi Line, Tehsil And District Rajnandgaon (C.G.)
.. Applicants
versus
State of Chhattisgarh Through - Station House Officer, Police Station
Kotwali, Rajnandgaon, (C.G.)
... Non-applicant
For Applicants : Mr. Maneesh Sharma, Advocate.
Digitally
signed by
ABHISHEK
SHRIVAS
Date:
2026.09.01
11:12:23
+0530
For Non-applicant/State : Mr. Jitendra Shrivastava, Govt. Advocate.
ABHISHEK
SHRIVAS
For Objector : Mr. Rakesh Thakur, Advocate.
Hon'ble Mr. Ramesh Sinha, Chief Justice
Order on Board
31.08.2026
1. This is the first bail application filed under Section 483 of the Bhartiya
Nagarik Suraksha Sanhita, 2023 for grant of regular bail to the
applicants who have been arrested in connection with Crime No.
398/2026 registered at Police Station – Kotwali, District – Rajnandgaon
(C.G.), for the offences punishable under Sections 34, 386, 420, of the
Indian Penal Code and Section 4 of the Chhattisgarh Protection of
Debtors Act.

2
2. As per the prosecution case arising out of Crime No. 398/2026 registered
at Police Station City Kotwali, Rajnandgaon, for offences punishable
under Sections 386, 420, and 34 of the Indian Penal Code and Section 4
of the Chhattisgarh Protection of Debtors Act, it is alleged that on
25.11.2021, the complainant, Rohit Kumar Sahu, and his late father
approached Applicant No. 1 for a loan of Rs. 5,11,000/- at an agreed rate
of interest of 2% per month. As security for the said loan, the
complainant’s father executed a registered sale deed in favour of
Applicant No. 1 in respect of 40 decimals of land bearing Khasra No.
138/6, upon which their ancestral house was situated. It is further alleged
that the complainant and his father handed over blank signed stamp
papers along with 12 blank cheques, out of which 5 belonged to the
father, 5 belonged to the complainant, and 2 belonged to his brother. It is
alleged that the applicants, by deceitfully getting the land mutated in their
favour, coerced the complainant’s family into paying interest at the rate of
6% per month and unlawfully extracted an amount of Rs. 30,000/- per
month for five months, totalling Rs. 1,50,000/-, along with further
instalments amounting to Rs. 3,50,000/-. Subsequently, a settlement was
arrived at, pursuant to which the complainant arranged a sum of Rs.
25,00,000/-, comprising a bank draft of Rs. 20,00,000/- financed through
one Mohammad Shad and Rs. 5,00,000/- in cash, for the purpose of
purchasing back the entire 40 decimals of land. However, despite
allegedly receiving the entire payment on 10.03.2023, the applicants are
alleged to have executed and registered a sale deed in respect of only 12
decimals of land in favour of the complainant and deceitfully retained the
remaining 28 decimals. The prosecution further alleges that the
applicants subsequently extorted an additional amount of Rs.
10,75,000/- from the complainant by issuing death threats and

3
threatening to institute false cheque-bounce cases by misusing the
security cheques.
3. Learned counsel for the applicants submits that the applicants are
innocent and have been falsely implicated in the aforesaid case. He
further submits that the entire dispute arises out of an admitted loan
transaction, execution of registered sale deeds, and property-related
arrangements, and is essentially civil in nature. The complainant has
given a criminal colour to a purely civil and financial dispute. The parties
have amicably settled their disputes by executing a voluntary Settlement
Agreement dated 01.08.2026, wherein the complainant has expressly
recorded his “No Objection” to the grant of bail to the applicants. The
settlement was also communicated to the concerned Police Station and
the Superintendent of Police. He further submits that, in view of the
subsequent settlement, the applicants filed their second bail application
on 14.08.2026; however, the learned trial Court rejected the same on
17.08.2026, primarily on the conjecture that the applicants had exerted
pressure upon the complainant while in judicial custody, despite there
being no material or complaint alleging any such intimidation. He also
submits that the learned trial Court erred in disbelieving the settlement
merely on the ground that Mudit Kothari, a close relative of the
applicants, had signed the settlement on their behalf without a separate
authorization letter. The absence of such formal authorization is, at best,
a curable procedural defect and cannot, by itself, discredit a voluntary
settlement. He submits that the allegations under Section 420 IPC arise
out of a longstanding financial transaction, in connection with which the
registered sale deed and security cheques were admittedly executed.
The essential ingredient of dishonest intention from the inception is a
matter requiring strict proof during trial. He further submits that the

4
allegation under Section 386 IPC is also doubtful, as the FIR itself
discloses continuing financial and property transactions between the
parties over a considerable period, including registration of 12 decimals
of land in March 2023, which prima facie militates against the allegation
of extortion by immediate threat of death. He further submits that the
alleged initial transaction took place on 25.11.2021, whereas the
complaint was lodged only on 12.01.2026, after an unexplained delay of
nearly five years, which casts serious doubt upon the prosecution version
and indicates that the criminal proceedings have been initiated as a
pressure tactic. The complainant voluntarily entered into the Settlement
Agreement dated 01.08.2026 and subsequently chose not to press his
objection to the bail application before the learned trial Court. The
inference of coercion or intimidation drawn merely from the withdrawal of
the objection is wholly conjectural and unsupported by any material. He
submits that the allegation regarding misuse of blank cheques is
misconceived. Initiation of proceedings for dishonour of cheques under
the Negotiable Instruments Act, in accordance with law, cannot, by itself,
constitute extortion or criminal intimidation. The dispute concerning the
alleged rent agreements and recovery of rent is also essentially civil/rent-
control in nature. Applicant Nirmalchand Kothari had already approached
the competent Rent Control Authority for recovery of unpaid rent relating
to the disputed premises. He further submits that the applicants are not
illegal money lenders and that the transaction was supported by
registered documents. The allegation regarding charging interest at 6%
per month instead of the agreed 2% is primarily based on the
complainant’s allegation and is a matter for trial. The prosecution case is
substantially based upon documentary evidence, including registered
sale deeds, bank drafts, and cheques, which are already available on

5
record. Therefore, no further custodial interrogation or recovery from the
applicants is required. He further submits that the applicants have two
criminal antecedents, however, in one case, they has already been
acquitted, while the other is pending trial, both of which have been
explained in Part D of the present bail application. He submits that the
applicants have been in custody since 26.07.2026 and that the
conclusion of the trial may take some time. Therefore, he prays for grant
of regular bail to the applicant.
4. On the other hand, learned State counsel opposes the bail application of
the present applicants and submits that the charge-sheet has not yet
been filed before the competent Court. He further submits that the
applicants have two criminal antecedents and, therefore, they are not
entitled to the grant of regular bail in the present case.
5. Mr. Rakesh Thakur, learned counsel, appearing for the objector opposes
the bail application of the applicant.
6. I have heard learned counsel for the parties and perused the case diary.
7. Considering the nature of the allegations, the fact that the dispute arises
out of a financial and property transaction, and that although the charge-
sheet has not yet been filed before the competent Court, the parties have
subsequently entered into a voluntary settlement, wherein the
complainant has expressed his “No Objection” to the grant of bail, further
the fact that the applicants have been in jail since 26.07.2026, conclusion
of the trial may take some time, therefore, this Court is of the view that
the present applicants are entitled to be released on bail in this case.
8. Let the Applicants – Nirmalchand Kothari and Nalin Kothari , involved
in Crime No. 398/2026 registered at Police Station – Kotwali, District –
Rajnandgaon (C.G.), for the offences punishable under Sections 34, 386,

6
420, of the Indian Penal Code and Section 4 of the Chhattisgarh
Protection of Debtors Act, be released on bail on their furnishing
personal bond with two sureties each in the like sum to the
satisfaction of the Court concerned with the following conditions:-
(i) The applicants shall file an undertaking to the effect
that they shall not seek any adjournment on the dates
fixed for evidence when the witnesses are present in
Court. In case of default of this condition, it shall be open
for the trial court to treat it as abuse of liberty of bail and
pass orders in accordance with law.
(ii) The applicants shall remain present before the trial
court on each date fixed, either personally or through their
counsel. In case of their absence, without sufficient cause,
the trial court may proceed against them under Section
269 of Bharatiya Nyaya Sanhita.
(iii) In case, the applicants misuse the liberty of bail during
trial and in order to secure their presence, proclamation
under Section 84 of BNSS. is issued and the applicants
fail to appear before the court on the date fixed in such
proclamation, then, the trial court shall initiate
proceedings against them, in accordance with law, under
Section 209 of the Bharatiya Nyaya Sanhita.
(iv) The applicants shall remain present, in person, before
the trial court on the dates fixed for (i) opening of the case,
(ii) framing of charge and (iii) recording of statement
under Section 351 of BNSS. If in the opinion of the trial
court absence of the applicants are deliberate or without
sufficient cause, then it shall be open for the trial court to

7
treat such default as abuse of liberty of bail and proceed
against them in accordance with law.
9. Office is directed to send a certified copy of this order to the trial Court
concerned for necessary information and compliance forthwith.
- Sd/-
(Ramesh Sinha)
Chief Justice
Abhishek