Deepak Gaba v. State of Uttar Pradesh (2023)

This case warns against turning civil business disputes into criminal cases. The Supreme Court explains why the basic elements of IPC 406 (criminal breach of trust), IPC 420 (cheating), and IPC 471 (using forged document) were not met on the facts.

• Court: Supreme Court of India (2-Judge Bench: Sanjiv Khanna & J.K. Maheshwari)
• Core Holding: Allegations were largely civil; criminal process should not be used.
• Procedure: Allahabad High Court had refused to quash under Section 482 CrPC; the Supreme Court set the approach right.

1. Do the facts disclose offences under IPC 406, 420, 471, 120B?
2. Should criminal proceedings continue when the dispute is essentially civil in nature?

• IPC 406 / Section 405 (Criminal Breach of Trust): (a) Entrustment/dominion over property; (b) dishonest use/disposal; (c) in violation of law or contract.
• IPC 420 / Section 415 (Cheating): Fraudulent or dishonest intention at the time of inducement, causing delivery/retention of property.
• IPC 471 (Using Forged Document): Use of a forged document with knowledge or reason to believe it is forged.
• Section 482 CrPC: High Courts must prevent abuse of process and quash where allegations do not make out the basic ingredients of the offences.

Mere breach of contract or business quarrel does not, by itself, create criminal liability.

• Finding on IPC 406: No clear entrustment/dominion + dishonest misappropriation in violation of law/contract was shown.
• Finding on IPC 420: No material of fraudulent intent at the time of inducement; a later dispute over business terms ≠ cheating.
• Finding on IPC 471: Use of a forged document with knowledge was not made out on the record.
• Principle: Criminal process must not be used to arm-twist in civil/commercial quarrels.
• 482 CrPC: High Courts should step in to prevent abuse where the complaint does not disclose the necessary ingredients.

Ingredients first, process later. Unless the complaint and materials clearly show each legal element of IPC 406/420/471, criminal prosecution should not proceed, especially where the dispute is civil in nature.

• Stops misuse of criminal law in business fights.
• Protects the line between civil breach and criminal offence.
• Guides High Courts on Section 482 CrPC to curb abuse and save judicial time.

Mnemonic: “CIVIL? CHECK INGREDIENTS FIRST.”

1. Name the Offence: 406 / 420 / 471—what exactly is alleged?
2. Match the Elements: Entrustment, fraudulent inducement, forged-document use with knowledge.
3. If Missing: Use 482 CrPC—do not criminalise a civil quarrel.

Issue: Whether IPC 406/420/471/120B are made out on these facts.

Rule: Each offence has clear ingredients; allegations must show them on the face of the record.

Application: Dealer-company dispute shows a commercial disagreement; intent/entrustment/forgery elements not established.

Conclusion: Criminal process should not continue; High Courts must prevent abuse under 482 CrPC.

Criminal Breach of Trust (IPC 405/406)

Dishonest misuse of entrusted property against law/contract.

Cheating (IPC 415/420)

Fraudulent/dishonest inducement causing delivery/retention of property.

Using Forged Document (IPC 471)

Using a forged document knowing it is forged.

Section 482 CrPC

Inherent power of High Court to prevent abuse of process.