In a significant ruling, the Supreme Court on Monday set aside criminal proceedings against two Himachal Pradesh businessmen accused of cheating in a machinery supply dispute. The case, which dragged on for nearly five years before culminating in an FIR, was dismissed after the bench found no evidence of dishonest intention on the part of the accused.
Background
The case revolved around Paramjeet Singh and his brother Sarabjit Singh, both engaged in stone-crushing businesses in Punjab and Himachal. Back in December 2017, Soma Stone Crusher, owned by Kushal K. Rana, entered into a purchase agreement with Sarabjit Singh’s firm, Saini Engineering Works, for a heavy sand “ruula” machine and related structures worth over ₹9 lakh.
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A cheque of ₹5 lakh was issued as part payment, but when presented, it bounced with the bank marking it as “Stop Payment.” The supplier, represented by Paramjeet Singh, initiated proceedings under the Negotiable Instruments Act in 2018.
Surprisingly, five years later, in February 2023, Soma Stone Crusher filed an FIR accusing the brothers of fraud and criminal conspiracy. The complaint alleged that the machine supplied was lighter than promised and underperformed, causing a financial loss of nearly ₹50 lakh.
Court’s Observations
The bench of Justice B.V. Nagarathna and Justice R. Mahadevan heard the matter together, since both Paramjeet and Sarabjit had challenged the FIR and subsequent chargesheet.
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The judges carefully reviewed the allegations. “Mere vague claims that the product was faulty or failed to meet specifications do not satisfy the test of dishonest inducement under Section 420 IPC,” the bench observed. They stressed that to prove cheating, fraudulent intent must exist at the very beginning of a transaction, not simply because a contract went wrong later.
The Court also pointed out the unusual delay. “The FIR was filed after a gap of nearly five years. No explanation has been offered for such delay, which further raises doubts about the complainant’s bona fides,” the order stated.
Quoting past precedents, the judges reminded that not every breach of contract amounts to cheating, and criminal law cannot be misused as a tool for harassment or settling personal scores.
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Decision
In its final ruling, the Supreme Court quashed FIR No. 11/2023 lodged at Police Station Lambagaon, the chargesheet filed in July 2023, and all related proceedings. The Court declared that the allegations were unsustainable and that continuing prosecution would cause “undue harassment” to the accused.
With this, both the criminal appeal and the writ petition filed by the Singh brothers were allowed.
Case Title: Paramjeet Singh vs. State of Himachal Pradesh & Others
Case Numbers: Criminal Appeal (arising out of SLP (Criminal) No. 3415 of 2024) with Writ Petition (Criminal) No. 217 of 2025
Appellants: Paramjeet Singh & Sarabjit Singh (brothers, stone crushing business owners)
Respondents: State of Himachal Pradesh & Kushal K. Rana (proprietor of Soma Stone Crusher)
