The Bombay High Court at Nagpur quashed a criminal case alleging a ₹4.31 crore gold fraud, ruling that the dispute was “purely civil in nature” and should not have been turned into a criminal prosecution.
The Division Bench of Justice Nandesh S. Deshpande and Justice Urmila Joshi-Phalke observed that the complaint filed after a delay of nearly four years lacked credibility and appeared to be “an abuse of the process of law.”
Background
The case stemmed from a 2016 business transaction between Ashutosh Natwar Mundada, a Nagpur-based jeweller, and the Banka family, directors of “Banka Bullions” and “G.K. Trexim” in Kolkata.
Mundada alleged that he transferred ₹4.31 crore to the Bankas between November and December 2016 for purchasing gold. However, he claimed that he received only one kilogram of gold worth ₹30 lakh, and the rest of the promised quantity never arrived.
After several years, in 2020, Mundada approached the police and subsequently filed a private complaint in 2022, which led to the registration of an FIR by the Bajaj Nagar Police under Sections 420, 403, 406, 409, 417, 120-B read with 34 of the Indian Penal Code.
The Bankas, represented by senior advocate Sunil V. Manohar, approached the High Court seeking to quash the FIR, arguing that the entire dispute was commercial in nature and not criminal.
Court’s Observations
Justice Deshpande, writing for the Bench, noted that there was a delay of more than three and a half years in filing the complaint, which was not satisfactorily explained by the complainant.
“The delay in setting the criminal machinery in motion and the omission to explain it satisfactorily is a pointer to the fact that the complaint lacks truthfulness,” the Bench remarked.
It also pointed out that an earlier police inquiry in 2020 had already found the issue to be a commercial dispute and not a criminal offence — a fact that the complainant had conveniently suppressed while moving the Magistrate for registration of the FIR.
Quoting from the Supreme Court’s ruling in Delhi Race Club Ltd. vs State of UP (2024), the judges reiterated:
“Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right from the beginning.”
The court further explained that cheating and criminal breach of trust cannot co-exist. In cases of sale or commercial exchange, if no “entrustment” of property exists, the charge of breach of trust simply doesn’t hold.
The Bench expressed concern over what it called a “growing tendency in business circles to convert civil disputes into criminal cases” in hopes of coercing settlements. It cited the Supreme Court’s caution in A.M. Mohan vs State (2024) that such misuse of criminal law must be “deprecated and discouraged.”
After reviewing the charge-sheet and the record, the High Court concluded that even if the allegations were taken at face value, no offence was made out.
“A businessman like the complainant cannot and will not sit quiet for a long period of three and half years if he has not been delivered the gold bars as promised,” the Bench noted sharply.
Citing the landmark Bhajan Lal principles, the judges found that the case fell squarely under categories where quashing is justified — namely, when the allegations do not constitute an offence, when the material does not disclose a case, and when proceedings appear “manifestly attended with mala fide intentions.”
Accordingly, the court quashed the FIR (Crime No. 0016/2023) registered by Bajaj Nagar Police and the charge-sheet No. 78/2023 pending before the Judicial Magistrate, First Class, Nagpur.
Case Title:- Gopal Krishna Banka & Ors. vs State of Maharashtra & Anr.
Case Number:- Criminal Application (APL) No. 633 of 2024
