Offence Being Part Of Commercial Transaction Alone Not Enough To Avoid Trial: J&K High Court

Rejecting the petition Justice Vinod Chatterji Koul observed,

“It cannot be said that a complaint does not disclose commission of offence. Merely because offence was committed during the course of a commercial transaction, would not be sufficient to hold that the complaint does not warrant a trial. Whether or not allegations in complaint are true is to be decided on the basis of evidence to be led at the trial in the complaint case. It certainly is not a case in which criminal trial should be cut short inasmuch as quashing of complaint would result in grave miscarriage of justice”.

The petition was filed by Nagraj V., a member of the Bhartiya Janta Party and an entrepreneur, seeking quashment of FIR registered under Section 420 of the Indian Penal Code (IPC) at Police Station Anantnag and the subsequent charge sheet pending before the Chief Judicial Magistrate (CJM), Anantnag.

The dispute arose out of a failed business transaction between the petitioner and respondent No. 2, a serving Major in the Indian Army. The petitioner alleged that the respondent initially proposed a business collaboration in the Pahalgam area of Kashmir and later invested ₹76 lakh in the petitioner's film production venture in Chennai. Following a fallout over profit-sharing and return of investment, the respondent accused the petitioner of cheating and lodged a complaint, leading to the impugned FIR.

Assailing the FIR and the other associated proceedings the petitioner argued that the FIR was a misuse of official power by the respondent, aimed at extorting money by leveraging his influence in the Anantnag district. He alleged custodial torture and coercion by the police at the behest of the respondent, including threats of false implication in terrorist activities.

The petitioner further submitted that the business transaction was purely commercial, and the dispute was civil in nature, unfit for criminal prosecution under Section 420 IPC.

Representing the UT Sr AAG Mohsin Qadri contended that the petitioner had fraudulently obtained ₹1.06 crore under the pretense of a property deal and later defaulted on repayment through bounced cheques. The complainant accused the petitioner of being a habitual offender with a history of similar offences in Tamil Nadu and other states, arguing that the petitioner's conduct demonstrated a clear intention to cheat.

After a thorough scrutiny of the available record Justice Koul reiterated that the scope of Section 482 Cr.P.C should be exercised sparingly and only to prevent an abuse of the process of law or to secure the ends of justice.

Observing that commercial transactions cannot be treated as a Shield the Court rejected the argument that since the alleged offence occurred during a commercial transaction, it should be treated as a civil dispute. It emphasized that the truthfulness of allegations must be tested during the trial based on the evidence presented.

Citing landmark judgments including R.P. Kapur v. State of Punjab and State of Haryana v. Bhajan Lal, the Court underscored that quashing of criminal proceedings at the threshold is only justified when the allegations do not constitute an offence or if the proceedings are manifestly malicious. In this case, the material on record necessitated a full trial, the court maintained.

“The Court cannot be justified in embarking upon an enquiry about reliability or genuineness or otherwise of allegations made in the F.I.R./Complaint, unless the allegations are so patently absurd and inherently improbable so that no prudent person can ever reach such a conclusion”, it underscored.

Rejecting the abuse of process argument the Court observed that the petition did not present any compelling ground to show that continuing the proceedings would result in an abuse of the process of law.

“Needless to say that, petitioner shall be free to approach the Trial Court for grant of bail in accordance with law”, the court concluded and dismissed the petition.

Mr Aatir Kawoosa, Advocate & Mr. Daya Reddy, Advocate appeared for the petitioner, Mr Mohsin Qadri, Sr.AAG Mr Syed Musaib, Dy.AG represented the UT

Case Title: Nagraj V Vs UT Of J&K

Citation: 2025 LiveLaw (JKL) 46

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