Authority: High Court of Punjab and Haryana at Chandigarh

Order Date: 17 July 2026

Case Overview

  • Parties: Petitioner – Mukesh Kumar, son of Sh. Prithve Raj Doomra, proprietor of M/s P.M. Industries (Rice Miller), Jalalabad; Respondent – State of Punjab; Complainant – Markfed (Punjab State Cooperative Supply and Marketing Federation Ltd.).
  • FIR Details: FIR No.60 dated 07.06.2018 registered at Police Station City Jalalabad, District Fazilka under IPC Sections 420 (cheating), 406 (criminal breach of trust) and 120‑B (criminal conspiracy). The FIR stemmed from a complaint by the District Manager of Markfed alleging embezzlement of 6,187.625 quintals of paddy supplied for custom milling for the 2017‑18 season.
  • Physical Verification Findings: On 31‑05‑2018 a committee (Technical Officer Ramesh Kumar, Clerk Vinod Kumar, Accountant Sahil Verma) verified stocks at M/s P.M. Industries and reported a shortage of 15,155 bags of paddy and 2,000 bags of sub‑standard rice, resulting in a loss claim of Rs 1,01,84,223 payable to Markfed.
  • Arbitration Proceedings: An arbitration award dated 29‑09‑2019 (Sole Arbitrator) ordered the petitioner to pay Rs 1,15,60,718. The award was passed ex‑parte.
  • Petitioner’s Contentions: Argued that the matter is a civil dispute already settled by arbitration and that the FIR should be quashed under Section 528 of the BNSS, 2023, citing Kailash Verma v. Punjab State Civil Supplies Corporation.
  • State/Complainant’s Contentions: Asserted that civil arbitration does not preclude criminal prosecution where the facts constitute an offence, distinguishing the Kailash Verma precedent and relying on State of Punjab v. Pritam Chand (2014).
  • Judicial Reasoning: The Court examined the FIR, challan, and arbitration award, finding prima facie evidence of embezzlement exceeding Rs 1 crore. It referenced several precedents, emphasizing that:

1. A prima facie case under Sections 405, 406, 415 IPC warrants continuation of criminal proceedings despite an arbitration award.

2. The High Court’s inherent power under Section 482 Cr.P.C. and Article 226 is to be exercised sparingly and only when the material fails to disclose a prima facie offence.

3. The cited cases (Kailash Verma, State v. Pritam Chand, Mohan Lal, etc.) do not create a blanket bar to criminal prosecution when a civil contract with an arbitration clause exists.

  • Conclusion: The offences are prima facie established; therefore, the petition to quash the FIR, the final report, and all consequential proceedings is dismissed.

Final Outcome

  • The petition is dismissed; the FIR No.60 and related criminal proceedings remain in force.
  • Any pending applications, if any, are disposed of accordingly.

Topics: Legal Dispute, Criminal Proceedings, Arbitration