Bombay High Court
VINOD JUTHALAL VISARIAversusSTATE OF MAHARASHTRA
- Decided
- Disposal
- Disposed Off
- Bench
- ASHWIN D BHOBE
Holding
The court held that the allegations constitute a civil contract dispute without criminal intent, and therefore granted anticipatory bail to the applicant.
Summary
Vinod Juthalal Visaria applied for anticipatory bail fearing arrest under FIR No. 88 of 2026 for alleged offences under Sections 316(2), 318(4) and 3(5) of the Bharatiya Nyaya Sanhita. The complaint stemmed from a disputed flat sale where the respondent alleged the applicant failed to clear a loan and execute a conveyance deed, a matter the applicant claimed was civil in nature with no written agreement. The State and the complainant sought custody to investigate the alleged misuse of the consideration received. The court examined precedents distinguishing civil breach of contract from criminal cheating, noting that fraudulent intent must be present at the contract's inception. Finding the dispute predominantly civil and no prima facie criminal intent, the court held that custodial interrogation was unnecessary and granted anticipatory bail with conditions. The bail order required a personal bond, cooperation with the investigating officer, and prohibitions against tampering with evidence or influencing witnesses.
Issues considered
- Whether the FIR discloses a cognizable offence of cheating or is merely a civil dispute over a contract.
- Whether anticipatory bail should be granted in the absence of a prima facie criminal case.
- Whether custodial interrogation of the applicant is necessary for the investigation.
Legislation cited
- Code of Criminal Procedure, 1973 — s. 482
- Indian Penal Code, 1860 — s. 406, 415, 420
Subjects
- anticipatory bail
- civil vs criminal dispute
- breach of contract
- cheating under IPC
- Section 482 CrPC
- misuse of criminal process
- pre‑arrest bail
Judgment
Digitally signed
by LAXMIKANT
GOPAL
LAXMIKANT CHANDAN
GOPAL Date:
CHANDAN 2026.05.01
14:30:02
+0530 (902) ABA-1036.2026.doc
lgc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
ANTICIPATORY BAIL APPLICATION NO. 1036 OF 2026
Vinod Juthalal Visaria : Applicant
Versus.
State Of Maharashtra & Anr. : Respondents
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Mr. Priyal G Sarda a/w Adv. Shubham Sane and Anup Lahoti i/by
Jaipal Tare-Patil for the Applicant.
Mr. Sukanta Karmakar, APP for the Respondent/State.
Mr. Aditya Sharma for Respondent No.2.
PSI Kishor Desai, Dindoshi Police Station present.
-------
CORAM : ASHWIN D. BHOBE, J.
DATE : 30th April, 2026.
P.C. :
1. When this matter was called out, Advocate Mr. Aditya
Sharma appears and states that he has instructions to appear on
behalf of the Informant, who was heard in Anticipatory Bail
Application No. 329 of 2026 before the Court of Sessions at
Dindoshi (Borivali Division), Goregaon, Mumbai. He submits that
the Applicant has conveniently avoided joining the Informant as a
party Respondent to this Application.
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2. Faced with the said objection, Mr. Priyal Sarda learned
Advocate for the Applicant, submits that the Informant remained
to be joined due to an inadvertent mistake on his part. He seeks
leave to add the Informant as party Respondent No. 2 in the
present Application. Mr. Sukanta Karmakar, learned APP for the
Respondent/State, submits that the presence of the Informant is
required.
3. In view of the above, leave granted to add the Informant as
party Respondent No.2 to the present Application. Mr. Priyal
Sarda, learned Advocate for the Applicant, states that the
amendment would be carried out forthwith. Permission granted.
4. Issue notice to the Respondents.
5. Mr. Sukanta Karmakar, learned APP appears and waives
service of notice on behalf of the Respondent No.1/State.
6. Mr. Aditya Sharma, learned Advocate, appears and waives
service of notice on behalf of the Respondent No.2.
7. Heard Mr. Priyal Sarda learned Advocate for the Applicant,
Mr. Sukanta Karmakar learned APP for the Respondent/State and
Mr. Aditya Sharma learned Advocate for the Respondent No.2.
8. By the present Application, the Applicant seeks pre-arrest
bail on the apprehension of arrest in FIR No. 88 of 2026 registered
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with the Dindoshi Police Station, Mumbai (FIR), for the offence
punishable under Sections 316(2), 318(4) r/w 3(5) of the
Bharatiya Nyaya Sanhita, 2024.
9. Respondent No. 2 lodged a complaint with Respondent No.
1, alleging that a transaction between Respondent No. 2 and the
Applicant for the sale/purchase of a flat did not materialise. It is
alleged that, although Respondent No. 2 paid part consideration to
the Applicant, the Applicant neither cleared the loan amount
payable to Aarka Fincap Limited Finance Institute in respect of the
said flat nor executed the conveyance deed. Dissatisfied with the
Applicant, Respondent No. 2 filed a complaint, which was
registered as an FIR.
10. Mr. Priyal Sarda learned Advocate for the Applicant, submits
that the transaction alleged by Respondent No.2 is not
substantiated by any document. To clarify, he submits that no
agreement was executed between the Applicant and Respondent
No.2. He, however submits that upon payment of some amount,
the Applicant has transferred possession of the said flat to
Respondent No.2. He submits that there is no criminality involved
in the offence and that Respondent No.2 has clothed a dispute that
is essentially civil in nature with a criminal garb. He submits that
the Applicant is ready and willing to cooperate with the
Investigating Officer.
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11. Mr. Sukanta Karmakar, learned APP for the
Respondent/State, submits that upon receipt of the complaint,
Respondent No.1 lodged the FIR. He, in all fairness, submits that
the Applicant should be directed to cooperate with the
investigation as and when required by the Investigating Officer.
12. Mr. Aditya Sharma, learned Advocate for the Respondent
No.2, vehemently opposes the bail application. He submits that the
Applicant has failed to perform the agreement between the
Respondent No.2 and the Applicant. To clarify, he submits that the
Applicant was required to execute a conveyance deed in respect of
the unencumbered flat within a specified time. He submits that the
Respondent No.2 has paid part of the consideration, which the
Applicant has apparently utilised for his benefit without clearing
the loan. He submits that the Applicant's custodial interrogation
would be required to ascertain how the Applicant has spent the
amount received from the Respondent No. 2. He, however, does
not dispute that the said flat is in the possession of the Respondent
No.2 and that it continues to be so as of the date.
13. Prima facie, the nature of the dispute at issue in the FIR is
predominantly civil. Apparently, the agreement claimed to exist
between the Applicant and Respondent No.2, as submitted by Mr
Aditya Sharma, learned Advocate for Respondent No.2, is oral. On
a query to Mr Aditya Sharma as to whether any civil proceedings
have been filed in respect of the subject dispute, he replied in the
negative.
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14. Indisputably, the Respondent No.2 is put in possession of the
said flat, which is the subject matter of controversy. Mr Priyal
Sarda, learned Advocate for the Applicant, states that the market
value of the said flat is much more than the amount paid by the
Respondent No. 2, a fact that is not denied by Mr Aditya Sharma,
learned Advocate for Respondent No. 2.
15. The Hon’ble Supreme Court in the case of Rikhab Birani v.
State of U.P.1, in paragraphs 12 to 20, has observed as follows :-
“12. Thereupon, the appellants, Rikhab Birani and Sadhna Birani,
preferred a petition under Section 482 of the Cr.P.C. before the
High Court,6 which was dismissed by the High Court, vide the
impugned order dated 09.05.2024, notwithstanding the aforesaid
facts, stating that at that stage, only a prima facie case was to be
seen in the light of the law laid down by this Court.
13. We are constrained to pass this detailed speaking order, as it
is noticed that, notwithstanding the law clearly laid down by this
Court on the difference between a breach of contract and the
criminal offence of cheating, we are continuously flooded with
cases where the police register an FIR, conduct investigation and
even file chargesheet(s) in undeserving cases.
14. During the last couple of months, a number of
judgments/orders have been pronounced by this Court, especially
in cases arising from the State of Uttar Pradesh, deprecating the
stance of the police as well as the courts in failing to distinguish
between a civil wrong in the form of a breach of contract, non-
payment of money or disregard to and violation of contractual
terms; and a criminal offence under Sections 420 and 406 of the
IPC, the ingredients of which are quite different and requires
mens rea at the time when the contract is entered into itself to
not abide by the terms thereof.
1 2025 SCC OnLine SC 823
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15. In Lalit Chaturvedi v. State of Uttar Pradesh7, this Court
quoted an earlier decision in Mohammed Ibrahim v. State of
Bihar8, wherein, referring to Section 420 of the IPC, it was
observed that the offence under the said Section requires the
following ingredients to be satisfied:
“18. Let us now examine whether the ingredients of an
offence of cheating are made out. The essential ingredients
of the offence of “cheating” are as follows:
(i) deception of a person either by making a false or
misleading representation or by dishonest concealment or
by any other act or omission;
(ii) fraudulent or dishonest inducement of that person to
either deliver any property or to consent to the retention
thereof by any person or to intentionally induce that person
so deceived to do or omit to do anything which he would
not do or omit if he were not so deceived; and
(iii) such act or omission causing or is likely to cause
damage or harm to that person in body, mind, reputation or
property.”
16. Reference was also made to the decision in V.Y. Jose v. State
of Gujarat9 and it was observed:
“7. Similar elucidation by this Court in “V.Y. Jose v. State of
Gujarat”, explicitly states that a contractual dispute or
breach of contract per se should not lead to initiation of a
criminal proceeding. The ingredient of ‘cheating’, as
defined under Section 415 of the IPC, is existence of a
fraudulent or dishonest intention of making initial promise
or representation thereof, from the very beginning of the
formation of contract. Further, in the absence of the
averments made in the complaint petition wherefrom the
ingredients of the offence can be found out, the High Court
should not hesitate to exercise its jurisdiction under Section
482 of the Cr.P.C. Section 482 of the Cr.P.C. saves the
inherent power of the High Court, as it serves a salutary
purpose viz. a person should not undergo harassment of
litigation for a number of years, when no criminal offence
is made out. It is one thing to say that a case has been
made out for trial and criminal proceedings should not be
quashed, but another thing to say that a person must
undergo a criminal trial despite the fact that no offence has
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been made out in the complaint. This Court in V.Y. Jose
(supra) placed reliance on several earlier decisions in “Hira
Lal Hari Lal Bhagwati v. CBI”, “Indian Oil Corporation v.
NEPC India Ltd.”, “Vir Prakash Sharma v. Anil Kumar
Agarwal” and “All Cargo Movers (I) (P) Ltd. v. Dhanesh
Badarmal Jain”.”
17. This Court, in Delhi Race Club (1940) Limited v. State of
Uttar Pradesh,10 highlighted the fine distinction between the
offences of criminal breach of trust and cheating, observing that
the two are antithetical in nature and cannot coexist
simultaneously. Police officers and courts must carefully apply
their minds to determine whether the allegations genuinely
constitute the specific offence alleged.
18. In Kunti v. State of Uttar Pradesh11, this Court referred to
Sarabjit Kaur v. State of Punjab12 wherein it was observed that a
breach of contract does not give rise to criminal prosecution for
cheating unless fraudulent or dishonest intention is shown right
at the beginning of the transaction. Merely on the allegation of
failure to keep a promise will not be enough to initiate criminal
proceedings. Thus, the dishonest intention on the part of the
party who is alleged to have committed the offence of cheating
should be established at the time of entering into the transaction
with the complainant, otherwise the offence of cheating is not
established or made out.
19. It is the duty and obligation of the court to exercise a great
deal of caution in issuing process, particularly when the matter is
essentially of civil nature.13 The prevalent impression that civil
remedies, being time-consuming, do not adequately protect the
interests of creditors or lenders should be discouraged and
rejected as criminal procedure cannot be used to apply
pressure.14 Failure to do so results in the breakdown of the rule
of law and amounts to misuse and abuse of the legal process.
20. In yet another case, again arising from criminal proceedings
initiated in the State of Uttar Pradesh,15 this Court was
constrained to note recurring cases being encountered wherein
parties repeatedly attempted to invoke the jurisdiction of criminal
courts by filing vexatious complaints, camouflaging allegations
that are ex facie outrageous or are pure civil claims. These
attempts must not be entertained and should be dismissed at the
threshold. Reference was made to a judgment of this Court in
Thermax Limited v. K.M. Johny16, which held that courts should
be watchful of the difference between civil and criminal wrongs,
though there can be situations where the allegation may
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constitute both civil and criminal wrongs. Further, there has to be
a conscious application of mind on these aspects by the
Magistrate, as a summoning order has grave consequences of
setting criminal proceedings in motion. Though the Magistrate is
not required to record detailed reasons, there should be adequate
evidence on record to set criminal proceedings into motion. The
Magistrate should carefully scrutinize the evidence on record and
may even put questions to the complainant/investigating officer
etc. to elicit answers to find out the truth about the allegations.
The summoning order has to be passed when the complaint or
chargesheet discloses an offence and when there is material that
supports and constitutes essential ingredients of the offence. The
summoning order should not be passed lightly or as a matter of
course.”
16. Considering the nature of the allegations and the dispute, as
apparent from the FIR and the fact that Respondent No. 2
continues to be in possession of the said flat, the custodial
interrogation of the Applicant is not required. The Applicant is
therefore entitled to pre-arrest bail.
17. In view of the above, this is a fit case for allowing the present
Application on the following terms :-
(a) In the event of arrest of the Applicant inFIR bearing
No.88 of 2026 registered with Dindoshi Police Station
Mumbai, the Applicant shall be released on bail on
furnishing a PR bond in the sum of Rs. 50,000/- (Rupees
Fifty Thousand only) with one or two local sureties in the
like amount.
(b) Applicant shall report to the Investigation Officer, of
Dindoshi Police Station, Mumbai, as and when the
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presence of the Applicant is required by the Investigating
Officer.
(c) Applicant shall not directly or indirectly make any
inducement, threat or promise to any person/s
acquainted with the facts of the case to dissuade such
person/s from disclosing the facts to the Court or any
police officer.
(d) Applicant shall not tamper with evidence in any manner.
(e) Applicant shall provide the Investigation Officer with his
residential address along with proof, his contact number,
email and must inform the Investigating Officer of any
changes to this information from time to time.
(f) Applicant shall cooperate with the Investigating Officer in
the process of investigation of the present Crime.
20. Anticipatory Bail Application No.1036 of 2026 is disposed of.
(ASHWIN D. BHOBE, J.)
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