Mere Possession Of PDS Rice Not Cheating: Telangana High Court Quashes Case U/S 420 IPC & Essential Commodities Act Against Two Accused

The Telangana High Court has quashed criminal proceedings against two accused persons charged with cheating and violation of the Essential Commodities Act, holding that, in the absence of any allegation that beneficiaries were deceptively induced to part with Public Distribution System (PDS) rice, the continuation of prosecution would amount to abuse of process of law.

Reiterating the above observation, Justice J. Sreenivas Rao allowed a criminal petition seeking quashing of proceedings pending before the Principal Junior Civil Judge-cum-Judicial Magistrate of First Class, Hanumakonda, insofar as it concerned the accused Nos. 3 and 6.

The petitioners were arrayed as accused Nos.3 and 6 in a case registered for offences punishable under Section 420 of the Indian Penal Code, 1860 and Section 7 of the Essential Commodities Act, 1955. The allegation against them was that they had procured PDS rice from beneficiaries at a cheaper rate with the intention of selling the same for profit.

According to the prosecution, on 08.01.2023 at about 12:30 hours, the petitioners were found in possession of 20 bags of PDS rice weighing about five quintals.

The petitioners contended that there was no complaint from any beneficiary alleging that the rice was procured deceptively or with any criminal intent. It was submitted that even if the allegations in the charge sheet were taken at face value, the essential ingredients of the offence of cheating were not made out.

Reliance was placed on an earlier decision of the High Court, where, on identical facts, the proceedings were quashed on the ground that, in the absence of allegations of deception or entrustment, the continuation of the prosecution would be unsustainable. The petitioners sought similar relief.

The learned Additional Public Prosecutor submitted that the petitioners had committed the offence of cheating and had violated Section 7 of the Essential Commodities Act by procuring PDS rice after it was supplied to beneficiaries, and sought dismissal of the criminal petition.

The High Court noted that Section 7 of the Essential Commodities Act contemplates punishment for contravention relating to production, supply, distribution and trade of essential commodities. As per the prosecution's case, the allegation was that the petitioners procured PDS rice from beneficiaries after its supply by the dealer.

The Court referred to an earlier judgment of a Coordinate Bench rendered on identical facts, wherein it was observed that there was no averment indicating that the accused had deceptively induced beneficiaries to part with the supplied PDS rice, or that the beneficiaries had entrusted the rice to the accused and that it was dishonestly misappropriated or converted for their own use. In the absence of such essential factors, the Coordinate Bench had held that continuation of proceedings would amount to abuse of the process of law.

Applying the same analogy, the Court held that the facts and circumstances of the present case were similar and found it to be a fit case to exercise jurisdiction under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, to quash the proceedings.

Consequently, holding that the allegations did not disclose the essential ingredients of the offences alleged, the Telangana High Court quashed the criminal proceedings against the petitioners. All pending miscellaneous applications were closed.

Case Name: Sirigiri Shanker v The State of Telangana

Case No. : Criminal Petition No. 1299 of 2026

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