You are currently viewing The Bombay High Court dismissed the steel trader’s FIR, stating that “there was no initial intent to defraud.

The Bombay High Court dismissed the steel trader’s FIR, stating that “there was no initial intent to defraud.

The Nagpur bench of the Bombay High Court ruled that a first information report (FIR) against steel trader Pankaj Mehadia and two other people must include an “intention of deceit at the very inception to constitute an offense” in order to be upheld.

Sections 420, 406, 409, and 120-B of the Indian Penal Code (IPC) and Section 3 of the Maharashtra Protection of Interest of Depositors Act (MPIDA) were used to register the FIR on November 2, 2021.

The panel ruled that there must be malicious intent in order for cheating and breach of trust to be crimes.

The Nagpur bench of the Bombay High Court cited the Supreme Court decision in the Vijay Kumar Ghai v. State of West Bengal case when it stated that “even if the intention to deceive develops later, it does not amount to an offense under the Act.”

The Bench stated, “The core of the aforementioned criminal clauses is the dishonest intention from inception, which is fundamentally absent in the case.

The high court further stated that criminal prosecution should not be used as a tool for vengeance.

The applicant’s attorney informed us that the transactions between the applicant and the complainant were of a civil character.

There has been no disagreement over the applicants’ assurance payments from 2004 to 2017. Every time they have failed to keep their word, no criminal charges have been brought against them because their initial goal was not to defraud.

Both parties had also engaged in a deed of settlement, and the applicants had presented post-dated checks and a demand draft totaling Rs 50 lakh to demonstrate their legitimacy.

“In the case at hand, applicants took a step forward by entering into a Deed of Settlement,” the court stated in the aforementioned instance. By no means is it possible to say that the applicants had ulterior motives for the entire transaction from the beginning, that is, starting in the year 2004 . The fact that applicants will pay guaranteed interest for 12 years demonstrates their desire to keep their word. The aforementioned aspect alone shows that candidates had no intention to conduct dishonestly or fraudulently.

In addition, the HC emphasized that the prosecution had not established a strong enough case to move on at this stage. The HC has approved and dismissed this criminal application in light of the foregoing.


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