This case before the Bombay High Court concerned an application under Section 482 of the Code of Criminal Procedure, 1973 (CrPC) (Section 528 in Bharatiya Nagarik Suraksha Sanhita, 2023), seeking quashing of an FIR and charge-sheet lodged against Prajakta Mahendra Agrawal (wife) and Giridharilal Shivdas Agrawal (father) of deceased Mahendra Agrawal. The FIR alleged cheating (Section 420 IPC), criminal breach of trust (Section 406 IPC), and common intention (Section 34 IPC), relating to a failed real estate investment venture.
The dispute presented a recurring question in Indian criminal jurisprudence: whether a civil dispute, particularly involving breach of contract or financial dealings, can be clothed as a criminal offence. The High Court examined whether the FIR disclosed the essential ingredients of cheating or criminal breach of trust, or whether it was primarily a civil dispute better addressed through civil remedies.
Title of the Case: Prajakta Mahendra Agrawal & Anr. v. State of Maharashtra & Anr.
Citation: 2025:BHC-AUG:25472-DB
Court: High Court of Judicature at Bombay, Bench at Aurangabad
Bench: Justice Sandipkumar C. More and Justice Mehroz K. Pathan
Judgment Date: 20 September 2025
Facts of the Case
The Parties
Applicants:
- Prajakta Mahendra Agrawal, wife of the late Mahendra Girdharilal Agrawal.
- Giridharilal Shivdas Agrawal, father of the late Mahendra.
Respondents:
- State of Maharashtra.
- Jawahar Shankarlal Dembda, complainant and businessman from Jalna.
Background of the Relationship
The complainant, Jawahar Dembda, was acquainted with Mahendra Agrawal and his family. He frequently visited their residence, knew Prajakta and Giridharilal, and was aware of their business “Mahendra Tyres”.
Alleged Business Proposal
- In 2019, Mahendra, Prajakta, and Giridharilal allegedly proposed that Jawahar join a new real estate venture.
- They assured him that real estate would be profitable, persuading him to invest despite his initial reluctance.
- On Vijayadashami 2019, they met and decided to purchase 10 acres of land, demarcate plots, and sell them, sharing profits equally.
First Investment
- Following this meeting, Jawahar invested ₹25 lakhs along with the other partners for purchasing land.
Second Investment and Agreement
- Later, the accused persons claimed that land prices had risen, and an additional ₹25 lakhs was needed.
- Jawahar initially refused but was allegedly pressured, with threats that he would lose his stake unless he invested more.
- He paid an additional ₹25 lakhs but this time had an agreement prepared on ₹100 stamp paper dated 08 January 2020, signed only by Mahendra.
- The agreement promised execution of a sale deed by March 2020 and included a cheque for ₹50 lakhs from Mahendra as security.
Failure to Execute Sale Deed
- Due to the COVID-19 lockdown in March 2020, execution was delayed.
- On 11 July 2020, Mahendra died of COVID-19.
- Thereafter, when Jawahar approached Prajakta and Giridharilal for execution of the sale deed or refund, they allegedly refused, claiming the landowner had retained the money but refused to disclose details.
Complainant’s Grievance
- Jawahar alleged he had been cheated of ₹50 lakhs.
- His financial need was aggravated by his wife’s cancer treatment, costing around ₹70–80 lakhs.
- He lodged an FIR in 2022 at Sadar Bazar Police Station, Jalna.
Civil Suit
- Independently, Jawahar filed a Special Civil Suit No. 324/2023 before the Civil Court, Jalna, for recovery of ₹50 lakhs against Prajakta and Giridharilal.
Issues Before the Court
- Whether the FIR and charge-sheet disclosed the essential ingredients of cheating (Section 420 IPC) or criminal breach of trust (Section 406 IPC) against the Applicants.
- Whether mere non-return of money and failure to execute a real estate agreement constituted criminal offences, or whether the dispute was essentially civil.
- Whether the existence of a civil suit barred simultaneous criminal proceedings.
- Whether the Applicants, not being signatories to the 08 January 2020 agreement, could be fastened with criminal liability.
- Whether the continuation of proceedings amounted to abuse of process, attracting the Court’s inherent powers under Section 482 CrPC.
Arguments
Applicants’ Submissions
- Civil Dispute Camouflaged as Criminal:Counsel argued the case was a commercial transaction, failure of which at best gave rise to civil liability.
- Absence of Signatures: The crucial agreement of 08 January 2020 bore only Mahendra’s signature. Neither Prajakta nor Giridharilal were parties.
- Cheque Not Presented: The complainant never deposited the ₹50 lakh cheque, undermining the allegation of cheating.
- No Proof of Cash Transaction: No ITRs or banking records proved the complainant’s claim of paying such amounts in cash.
- Civil Suit Pending: A recovery suit was already filed by the complainant; criminal prosecution was an abuse of law.
Reliance on Precedents:
Delhi Race Club (1940) Ltd. v. State of U.P. (2024) 10 SCC 690 – cheating and breach of trust are distinct and cannot co-exist.
Rama Devi v. State of Bihar (2011 Cri LJ 652) – absence of intent to cheat reduces matter to civil damages.
Anand Kumar Mohatta v. State (NCT of Delhi) (2019) 11 SCC 706 – mere non-payment of money is a civil dispute.
Prof. R.K. Vijayasarathy v. Sudha Seetharam (2019) 16 SCC 739 – High Courts must prevent civil disputes from being criminalised.
Respondent No.2 (Complainant) Submissions
- Applicants’ Active Role: Two witnesses, Kishor Bharuka and Sunil Agrawal, confirmed Prajakta and Giridharilal’s role in inducing complainant to invest.
- Knowledge and Presence: Witnesses and notary evidence showed they were aware of the 2019 and 2020 transactions.
- No Bar on Criminal Proceedings: Cited Kathyayini v. Sidharth P.S. Reddy (2025 INSC 818) and Punit Beriwala v. State of NCT of Delhi (2025 INSC 582), stressing civil and criminal remedies can co-exist.
- Prima Facie Offence Made Out: At this stage, Court should only see if FIR discloses cognizable offence, not weigh merits.
State’s Submissions
The APP supported the complainant, contending sufficient evidence existed to prosecute; quashing would be premature.
Judgment and Reasoning
The Court carefully weighed the rival submissions and applied settled principles of law.
1. Absence of Mens Rea
- The agreement and cheque showed Mahendra’s intent to secure complainant’s money.
- No evidence indicated fraudulent intent from inception.
- Applicants were not signatories; attributing mens rea to them was unsustainable.
2. Cheating v. Criminal Breach of Trust
- Citing Delhi Race Club (1940) Ltd. (2024), the Court reiterated that both offences are distinct and cannot coexist on same facts.
- Cheating requires dishonest intention at inception, absent here.
- Breach of trust requires entrustment and dishonest misappropriation, also not established.
3. Civil Nature of Dispute
- The complainant already sought recovery through a civil suit.
- Following Vijayasarathy (2019) and Indian Oil Corp. v. NEPC India (2006), the Court emphasised that criminal prosecution cannot be used as a shortcut for civil remedies.
4. Application of Bhajan Lal Exceptions
Referring to State of Haryana v. Bhajan Lal (1992 AIR SC 604), the Court held the case fell within exceptions (1) and (3):
- Allegations, even if true, did not constitute a cognizable offence.
- Uncontroverted materials failed to disclose the ingredients of cheating or breach of trust.
5. Distinguishing Respondent’s Authorities
Kathyayini and Punit Beriwala were involved accused actively participating or misrepresenting; unlike here, the Applicants were not signatories or witnesses.
6. Abuse of Process
- Continuing prosecution would harass the Applicants and convert a civil wrong into criminal liability.
- Following L. Muniswamy v. State of Karnataka (1977) 2 SCC 699, High Courts must prevent such misuse.
Conclusion
- The FIR and charge-sheet failed to disclose essential ingredients of cheating (Section 420 IPC) or breach of trust (Section 406 IPC).
- The case was essentially civil in nature, involving the recovery of money through contractual obligations.
- The Applicants, not being signatories to the agreement, could not be implicated.
Order:
- Criminal Application allowed.
- FIR No. 051/2022, charge-sheet, and RCC No. 1058/2022 pending before JMFC Jalna quashed and set aside.
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