Manish v. State of Maharashtra

2025 INSC 430

Court: Supreme Court of India (Criminal Appellate Jurisdiction)
Case: Criminal Appeal arising out of SLP (Criminal) No. 10931 of 2022
Decided: 2 April 2025
Bench: Pamidighantam Sri Narasimha, Joymalya Bagchi (judgment by Joymalya Bagchi, J.)
Citation: 2025 INSC 430
Provisions: Indian Penal Code, 1860, s. 415 (cheating), s. 417 and s. 420 (cheating and dishonestly inducing delivery of property) (now Bharatiya Nyaya Sanhita, 2023, s. 318(1), s. 318(2) and s. 318(4))

Headnote

Cheating · IPC s. 420 (BNS s. 318(4)) · Unpaid price of goods supplied on credit · Dishonest representation at inception · Quashing of charge-sheet

The case, in the Court's words

between 20th November, 2015 and 02nd June, 2017, the 2nd non-applicant sold coal to the appellant and raised invoices, which carried a credit period of 15 days. [para 3]

Held

There is no cavil that in some cases a commercial dispute may give rise to a criminal offence in addition to a civil cause of action. The test to determine whether a case would attract penal consequences is as follows:- [...] Did the offending party make dishonest representation at the inception of the transaction and induce the other [...] party to part with property, or act in a manner which but for such representation, the latter would not have [para 14]
the representation of the appellant that he was a creditworthy businessman cannot be labelled as 'deception' merely on the ground that the appellant had failed to honour the terms of the subsequent agreement. [para 17]
This reasoning is wholly fallacious. Mere breach of promise to repay per se does not infer dishonest intention [para 17]
In order to attract the penal provision, the uncontroverted allegations including material collected during investigation must disclose that pursuant to the assurance in the subsequent agreement, the 2nd non applicant had parted with property, that is to say made further supplies and suffered [para 18]
Failure to pay due to unfortunate business losses cannot be clothed with culpability and the process of criminal law utilized to recover outstanding dues [para 19]

Result

For the aforesaid reasons, the impugned order is set aside and the proceeding arising out of FIR No. 80/2022 [para 23]

Editorial note: subsequent treatment

Applies the inception test stated in Hridaya Ranjan Prasad Verma (2000), Satishchandra Ratanlal Shah (2019) and Delhi Race Club (2024), all cited in footnote 2 of the judgment. This is a non-reportable judgment of a two-judge bench.

The headnote consists of extracts from the Court's judgment, selected by The Daily Bench for convenience. The selection is not part of the judgment, is not a law report and should not be cited. It may contain errors; rely on the official judgment. Library reference TDB-LL BNS-318/05 is our own cataloguing label and is not a citation.