High Courts must not quash FIRs disclosing prima facie cognizable offences while investigation remains pending.

The applicants—Applicant No. 1 and his two sons, Applicants Nos. 2 and 3—worked for Suvarna Shilpi Jewellers, a firm engaged in manufacturing gold ornaments.

Between 1 March and 31 May 2025, approximately 2,532 grams of gold was allegedly entrusted to them for job work.

After the finished ornaments and balance gold were returned, the complainant allegedly detected a shortfall of 1,626.120 grams of 20-carat gold, valued at approximately ₹1.45 crore.

The complainant relied on ledger accounts and gold-issue and receipt vouchers allegedly signed by the applicants.

It was further alleged that the applicants stopped attending work, disposed of property in Gujarat, and went to West Bengal, where they were unavailable for investigation.

The applicants sought quashing of FIR No. 11191036250226/2025 registered at Navrangpura Police Station, Ahmedabad, for offences under Sections 316(2), 316(4), 318(4) and 54 of the Bharatiya Nyaya Sanhita, 2023.

They contended that the dispute was civil and commercial, that dishonest intention from inception was not established, that there was delay in registration of the FIR, and that Sections 316 and 318 of the BNS could not simultaneously apply.

The complainant and the State opposed quashing, asserting that the materials disclosed entrustment, dishonest retention of gold, and the applicants’ evasion of investigation.

1. Whether the FIR and accompanying investigation material disclosed a prima facie case of criminal breach of trust, cheating, or other cognizable offences under the BNS warranting continuation of the investigation.

2. Whether the alleged commercial or employment-related dispute was predominantly civil in nature and therefore liable to be quashed under the High Court’s inherent jurisdiction.

3. Whether the FIR was liable to be quashed on the grounds that dishonest intention from inception was not specifically pleaded, that the FIR was delayed, or that cheating and criminal breach of trust were mutually incompatible.

The Court applied the principles governing quashing of criminal proceedings under the High Court’s inherent jurisdiction under Section 482 of the Code of Criminal Procedure, namely that quashing is an exceptional remedy to be exercised sparingly where the allegations, taken at face value, do not disclose any offence.

Relying on State of Haryana v. Bhajan Lal, the Court held that it should not conduct an inquiry into the reliability or genuineness of FIR allegations at the threshold.

Under Rajesh Bajaj v. State (NCT of Delhi), a complaint need not reproduce every statutory ingredient verbatim if its factual foundation prima facie discloses the offence; a commercial transaction may also involve cheating.

Dinesh Sharma v. Emgee Cables and Communication Ltd. was relied upon for the principle that the existence of a commercial or contractual relationship does not bar criminal proceedings where cheating, criminal breach of trust, or conspiracy is prima facie disclosed.

The Court further relied on M/s Neeharika Infrastructure Pvt. Ltd. v. State of Maharashtra, State v. M. Maridoss, Somjeet Mallick v. State of Jharkhand, and Rocky v. State of Telangana for the propositions that courts should not routinely obstruct investigation, conduct a mini-trial, or grant protection where the FIR discloses a cognizable offence.

Although the applicants relied on Arshad Neyaz Khan v. State of Jharkhand to contend that cheating and criminal breach of trust are mutually incompatible, the Court held that this contention could not justify stalling an ongoing investigation at that stage.

The Court found that the allegations were not inherently improbable and were supported prima facie by the ledger accounts and vouchers showing entrustment and receipt of gold by the applicants.

The alleged failure to return 1,626.120 grams of gold after completion of the job work was capable of constituting dishonest misappropriation following entrustment and therefore disclosed the ingredients of criminal breach of trust.

The applicants’ alleged disappearance, disposal of property, and non-availability at their West Bengal address reinforced the need for investigation rather than quashing.

The Court rejected reliance on the bank transfers made before the alleged shortfall was discovered, holding that those transfers did not negate the alleged offence because the complainant allegedly became aware of the deficiency only on 31 May 2025.

It also held that the absence of an express statement of dishonest intention from inception was not decisive at the investigation stage, since the factual allegations could prima facie support the offence.

The commercial nature of the relationship and the alleged delay in FIR registration likewise did not warrant quashing, particularly because the complainant claimed to have approached the police on 3 June 2025 and the FIR was subsequently registered on 20 November 2025.

The application for quashing was therefore rejected, the Rule was discharged, and no relief was granted to the applicants.