High Court Cannot Conduct Mini Trial While Deciding Petition for Quashing FIR under Section 482 CrPC | Commercial Dispute Defence Requires Trial

Case Name: Nanda Works and Solution through its Proprietor, Sh. Roshan Lal v. State of Haryana and Others

Date of Judgment: 15 July 2026

Citation: CRM-M-31977-2026

Bench: Hon’ble Mrs. Justice Shalini Singh Nagpal

Held: The Punjab and Haryana High Court held that while exercising jurisdiction under Section 482 CrPC, the High Court cannot evaluate the defence of the accused, scrutinise contractual documents, or conduct a mini trial. Where the FIR, on its face, discloses the ingredients of a cognizable offence, disputed questions relating to commercial transactions or contractual liability must be investigated and adjudicated during trial. The inherent power to quash criminal proceedings is to be exercised sparingly and only in exceptional cases falling within the principles laid down in State of Haryana v. Bhajan Lal.

Summary: The petitioner sought quashing of an FIR registered under Section 318(4) of the Bharatiya Nyaya Sanhita, 2023, alleging that an amount of ₹2.02 crore had been inadvertently transferred by the complainant company into the petitioner’s bank account and was dishonestly retained despite repeated demands for its return. According to the complainant, the petitioner initially acknowledged receipt of the amount and assured repayment but subsequently avoided all communications, leading to registration of the criminal case.

The petitioner contended that the transaction did not arise from any accidental transfer but formed part of an ongoing commercial relationship between the parties under a service agreement for advertising, affiliate marketing and brand promotion services. It was argued that substantial business transactions worth nearly ₹8 crore had already taken place between the parties, that invoices had been duly raised, and that the disputed payment represented consideration for services rendered. The petitioner further asserted that the dispute was purely civil in nature and had been given an unwarranted criminal colour, besides pointing to an alleged delay of approximately three months in registration of the FIR.

The High Court declined to examine these contentions at the stage of investigation. Relying upon the principles laid down by the Supreme Court in Neeharika Infrastructure Pvt. Ltd. v. State of Maharashtra, Sumit Bansal v. M/s MGI Developers and Promoters and Hira Lal v. State (Govt. of NCT of Delhi), the Court reiterated that while considering a petition for quashing under Section 482 CrPC, the Court is confined to examining whether the allegations contained in the FIR prima facie disclose the commission of a cognizable offence. The Court cannot assess the genuineness of contractual documents, determine whether payments were legitimately due under a commercial arrangement, appreciate evidence, or undertake a comparative evaluation of rival versions, as doing so would amount to conducting a prohibited mini trial.

Since the allegations in the FIR prima facie disclosed dishonest retention of funds and the petitioner’s defence required examination of disputed questions of fact and documentary evidence, the Court held that the matter was required to proceed through investigation. The case did not satisfy the exceptional parameters for quashing recognised in State of Haryana v. Bhajan Lal.

Decision: The High Court dismissed the petition seeking quashing of the FIR, holding that the allegations disclosed the commission of cognizable offences and that disputed questions arising from the alleged commercial relationship could not be adjudicated in proceedings under Section 482 CrPC. The investigation was permitted to continue in accordance with law.