Authority: High Court of Uttarakhand at Nainital

Order Date: 05.08.2025

Case Overview

  • Applicant: Rakesh Mehra, owner of M/s Shivaji Global Exports and Shiva Mahadev Overseas.
  • Respondent No.3: Patanjali Ayurveda Ltd.
  • Connected matters: Criminal Misc. Application No.135 of 2024 (U/s 482 Cr.P.C.) and Writ Petition (Criminal) No.159 of 2023.
  • FIR No.177 of 2022 was registered at P.S. Kankhal, District Haridwar under Sections 420, 506, 120‑B IPC, alleging that the applicant owed money to Patanjali and threatened to kill the respondent if payment was demanded; also alleged transfer of advance amount to the applicant’s daughters to evade recovery.
  • Cognizance order dated 19.12.2023 was passed by Judicial Magistrate‑II, Haridwar in Criminal Case No.3419 of 2023 on the same sections.
  • Business background: The applicant’s firms engaged in import‑export of edible goods with Patanjali from 2008 to 2018, delivering multiple products. In 2017 Patanjali asked for crude sunflower oil; the applicant imported it but Patanjali did not purchase, causing a loss of Rs.4 crore to the applicant.
  • In 2022 the applicant requested “C” forms from Patanjali to claim tax exemptions; Patanjali failed to provide them despite repeated reminders. Consequently, a tax department notice dated 29.08.2022 threatened the applicant with tax liability of Rs.7,75,96,555 and possible blacklisting.
  • The applicant wrote to Patanjali on 05.05.2022 stating that failure to issue the “C” form would force him to expose Patanjali’s practice of selling imported goods as Swadeshi products.
  • The FIR was lodged immediately after this email, according to the applicant, as Patanjali feared exposure of its alleged malpractices.
  • The applicant contended that the dispute is civil, that an arbitration agreement exists, and that no elements of Sections 415 or 420 IPC are proved. He submitted numerous documents showing long‑standing business relations and lack of criminal intent.
  • Respondent No.3 argued that factual disputes require trial, cited Supreme Court precedent on sparing use of quashing powers, and claimed the applicant is a proclaimed offender.
  • State counsel emphasized that the charge‑sheet was filed after detailed investigation, collection of documentary evidence, bank statements, chartered accountant report, and witness statements under Section 161 Cr.P.C.; a notice under Section 41A Cr.P.C. was issued, the applicant did not cooperate, leading to a non‑bailable warrant and proclamation as an offender.
  • The applicant’s rejoinder reiterated the civil nature of the transaction, absence of any complaint from Patanjali regarding supply issues, and reliance on the Apex Court judgment in Naresh Kumar vs. State of Karnataka, 2024 SCC OnLine 268.
  • The Court, after reviewing the material, observed a long series of business transactions with no prior allegation of short supply or siphoning of money, and noted multiple emails from Patanjali proposing reconciliation, some sent days before the FIR and even after its lodging.
  • The Court held that the essential ingredient of mens rea for Section 420 IPC was absent; the FIR was filed to pressure Patanjali for the “C” form, constituting an ulterior motive.
  • Citing Paramjeet Batra v. State (2013) 11 SCC 673, the Court reiterated that inherent powers under Section 482 Cr.P.C. may be exercised to quash criminal proceedings that are essentially civil disputes.
  • The Court concluded that the dispute is civil, given a civil remedy is available, and that criminal proceedings are being used as a weapon of harassment.

Final Outcome

  • The cognizance order dated 19.12.2023 passed by Judicial Magistrate‑II, Haridwar in Criminal Case No.3419 of 2023 (Sections 420, 506, 120‑B IPC) is hereby quashed.
  • FIR No.177 of 2022 registered at P.S. Kankhal, District Haridwar is also quashed.
  • All proceedings arising out of the FIR stand quashed.

Topics: Criminal Procedure, Business Dispute, Section 482