Paramjeet Singh vs State of Himachal Pradesh 2025 INSC 1118 - S.420 IPC - Cheating

1. What was the central legal issue in the "Paramjeet Singh vs State of Himachal Pradesh" case?

The central legal issue revolved around whether the actions of the appellants, Paramjeet Singh and Sarabjit Singh, constituted the offense of cheating under Section 420 of the Indian Penal Code (IPC), read with Section 120B (criminal conspiracy). The Supreme Court examined if the allegations in the FIR and charge sheet satisfied the necessary ingredients for these criminal offenses, particularly the requirement of a fraudulent or dishonest intention at the inception of the agreement.

2. Who were the main parties involved in the dispute and what were their roles?

The main parties were:

• Appellants/Accused: Paramjeet Singh (proprietor of M/s Sardara Singh & Sons and Special Power of Attorney for M/s Saini Engineering Works) and Sarabjit Singh (proprietor of M/s Saini Engineering Works). They are brothers.
• Complainant/Respondent No. 3: Kushal K. Rana, proprietor of M/s Soma Stone Crusher.
• Respondent-State: State of Himachal Pradesh.

Paramjeet Singh and Sarabjit Singh were accused of cheating and criminal conspiracy by Kushal K. Rana, who alleged that a purchased machine did not meet specifications and caused significant loss.

3. What were the specific allegations made by the complainant against the appellants?

The complainant, Kushal K. Rana, alleged that:

• He purchased a 20X40 'sand ruula machine' and conveyor structures from M/s Saini Engineering Works based on assurances from Paramjeet Singh.
• An advance payment of Rs. 5,00,000/- was made by cheque.
• Paramjeet Singh assured that if the machine fitting was not as per specification, it would be replaced, and the cheque would only be presented after the complainant's complete satisfaction.
• The delivered machine had a weight of 12 tons instead of the promised 14 tons and an output of 500 feet per hour instead of 1000-1200 feet per hour.
• Due to the wrong specifications and failure to replace the product, the complainant suffered a loss of Rs. 50 lakhs, amounting to a breach of trust.

4. What is the definition of "cheating" under Section 420 IPC, and why was it crucial in this case?

Section 420 IPC defines cheating as dishonestly inducing a person to deliver property or to perform/omit an act they wouldn't have otherwise, due to deception. It was crucial in this case because the Supreme Court clarified that for an offense of cheating to be established, there must be a fraudulent or dishonest intention at the time of making the promise or representation, not merely a subsequent failure to keep a promise. The intention is the gist of the offense. The absence of such an initial culpable intention was a key factor in the Court's decision.

5. Why did the Supreme Court ultimately quash the criminal proceedings against the appellants?

The Supreme Court quashed the criminal proceedings for several reasons:

• Lack of dishonest/fraudulent intention at inception: The Court found no evidence in the FIR or charge sheet indicating that the appellants had a fraudulent or dishonest intention at the time of the sale and purchase agreement.
• Vague allegations: The allegations of wrong specifications and failure to replace the machine were deemed vague and insufficient to establish dishonest inducement under Section 420 IPC.
• Delay in lodging FIR: The FIR was filed nearly five years after the agreement, and the complainant failed to provide a reason for this significant delay, which raised suspicion about the bona fides of the complaint.
• Alternative remedy: The Court noted that the complainant had an alternative remedy of filing a civil suit for damages for breach of contract, implying that criminal proceedings were inappropriate when no criminal offense was clearly made out.
• Misuse of criminal justice machinery: The Court highlighted concerns about the misuse of criminal proceedings to settle personal scores or for vindictive purposes, referencing previous judgments that caution against such practices.

6. What distinction did the Supreme Court draw between a mere breach of contract and the offense of cheating?

The Supreme Court emphasized that every breach of contract does not automatically amount to an offense of cheating. A breach of contract constitutes cheating only when there was deception played at the very inception of the agreement. For cheating, the complainant must demonstrate that the accused had a fraudulent or dishonest intention at the time of making the promise or representation. A subsequent failure to fulfill a promise, without initial culpable intent, does not suffice for a Section 420 IPC charge.

7. What was the significance of the "Bhajan Lal" judgment referenced by the Supreme Court?

The "Bhajan Lal" judgment (State of Haryana vs. Bhajan Lal, 1992 Suppl (1) SCC 335) outlines categories of cases where the High Courts or Supreme Court can exercise their extraordinary or inherent powers (under Article 226 or Section 482 CrPC) to quash criminal proceedings. The Supreme Court in "Paramjeet Singh" relied on specific sub-paragraphs of "Bhajan Lal" (1, 3, 5, and 7 of paragraph 102) to justify quashing the FIR, charge sheet, and subsequent proceedings, finding that:

1. The allegations did not prima facie constitute any offense.
2. The allegations and evidence did not disclose the commission of any offense.
3. The allegations were absurd and inherently improbable.
4. The criminal proceeding was manifestly attended with mala fide intent and instituted with an ulterior motive to harass the accused.

8. What broader message did the Supreme Court convey regarding the use of criminal proceedings in disputes?

The Supreme Court conveyed a strong message against the misuse of criminal justice machinery. It observed that in recent years, the criminal justice system is being exploited by individuals for vested interests and oblique motives. The Court stressed that courts must be vigilant against such tendencies to prevent harassment, private vendettas, and the unnecessary strain on the judicial system. It reiterated that criminal law should not become a platform for settling civil disputes, especially when the essential ingredients of a criminal offense are not genuinely made out.

Case Name and Neutral Citation

• Case Name: Paramjeet Singh v. State of Himachal Pradesh & Others
• Neutral Citation: 2025 INSC 1118 NON-REPORTABLE

Coram (Judges)

• Coram: Hon’ble Justice B.V. Nagarathna and Hon’ble Justice R. Mahadevan

Judgment Date

• Date of Judgment: September 15, 2025

Caselaws and Citations Referred

• Inder Mohan Goswami v. State of Uttaranchal, (2007) 12 SCC 1
• Vesa Holdings P. Ltd. v. State of Kerala, (2015) 8 SCC 293
• State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335
• Vishal Noble Singh v. State of Uttar Pradesh, 2024 SCC OnLine SC 1680

Statutes/Laws Referred

• Indian Penal Code, 1860
• • Section 420 (Cheating and dishonestly inducing delivery of property)
  • Section 120B (Punishment of criminal conspiracy)
• Code of Criminal Procedure, 1973
• • Section 482 (Inherent powers of High Court)
• Negotiable Instruments Act, 1881
• • Section 138 (Dishonour of cheque for insufficiency, etc., of funds in the account)