Gujarat HC Quashes FIR Against Anil Limited Director Over ₹30.78-Lakh Maize Bills, Finding No Specific Role or Dishonest Intent at Inception

The complainant alleged that Ganesh Trading supplied maize worth ₹30,78,437 to Anil Limited between 6 July and 7 August 2016.

Seven cheques were issued, but the complainant was allegedly asked not to present them; they later became invalid.

An FIR was registered at Mansa Police Station on 16 April 2018 against 12 persons, including the applicant, for offences under Sections 406, 420 and 114 of the IPC.

The applicant sought quashing under Section 482 CrPC, arguing that the FIR attributed no specific act to him and that the dispute concerned unpaid commercial invoices.

He relied on company records showing his appointment on 31 January 2017 and resignation on 5 March 2017; the complainant disputed the resignation account and opposed quashing.

Section 406 IPC requires entrustment of property and its dishonest misappropriation; a sale of goods ordinarily transfers ownership and creates a debtor-creditor relationship, not an entrustment.

Section 420 IPC requires fraudulent or dishonest intention when the representation or promise is made; subsequent failure to perform, by itself, does not establish cheating.

The judgment applied the principle that the IPC does not impose vicarious criminal liability on a director merely because of corporate office, absent specific allegations of individual involvement.

It also applied the quashing principles in State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335, including where allegations do not disclose an offence or proceedings are manifestly mala fide.

Section 482 CrPC empowers the High Court to prevent abuse of process and secure the ends of justice.

The Court treated the allegations as concerning a straightforward sale of maize on credit: the goods were supplied against invoices, and the unpaid price did not establish entrustment for Section 406 IPC.

The FIR’s account of a pre-existing business relationship and subsequent requests to defer cheque presentation did not, in the Court’s view, establish dishonest intent at the inception of the transactions; later non-payment or financial distress could not alone prove cheating.

The FIR also did not allege a specific act by the applicant, who had not negotiated the transaction or signed the cheques.

His corporate association and proceedings in unrelated matters could not supply the missing allegations of individual culpability.

The Court therefore considered the prosecution against him unsustainable under the Bhajan Lal principles.

It allowed the application under Section 482 CrPC and quashed FIR C.R. No. I-57 of 2018, together with consequential proceedings, qua the applicant; the Rule was made absolute accordingly.