Supreme Court Clarifies Scope of Section 387 in M/S Balaji Traders V. State of UP 

Introduction

A dispute over a trade name turned into a matter that went before the highest court in the land. In M/s Balaji Traders v. State of U.P.¹, a business owner faced threats meant to force him out of his work. He had little choice but to seek legal relief when local authorities would not act. At issue was how to treat a threat made “in order to commit extortion” when the demand did not lead to any payment. The Supreme Court’s ruling clarified that law must protect a person the moment a threat is made, not wait for harm to be carried out in full. 

Facts of the Case

Prof. Manoj Kumar Agrawal ran a betel-nut leaf business under the name M/s Balaji Traders. He found success in serving customers with care. Sanjay Gupta opened another firm that used the same name. Prof. Agrawal filed trademark and copyright claims to keep his work from being confused with Gupta’s. 

On 22 May 2022, Prof. Agrawal walked home after closing his shop. Gupta and three men carrying rifles stepped in his path. They told him to stop his work or pay five lakh rupees every month. When Prof. Agrawal said he would not pay, they struck him and tried to force him into a vehicle. He feared for his life as they pressed their demand. 

Prof. Agrawal went to the local police station. Officers declined to record his account as a formal case. He then used the right of private prosecution to file a complaint under Section 387 of the Indian Penal Code. That section punishes anyone who “in order to commit extortion, puts or attempts to put any person in fear of death or grievous hurt.” Prof. Agrawal saw in that law a way to hold Gupta and the others to account for their conduct even if no payment ever occurred. 

Judgement

The trial court examined witness statements and medical records. It found that Prof. Agrawal had been placed in fear of death or serious harm and that this was done to force him to pay money. The court issued summons to Gupta and his accomplices, finding a prima facie case under Section 387 IPC. 

Gupta and the others asked the Allahabad High Court to quash the summons under Section 482 of the Criminal Procedure Code. The High Court agreed that Prof. Agrawal had been threatened  at gunpoint. It then focused on the fact that no rupee had changed hands. Relying on Section 383 IPC—which defines extortion as causing fear in order to induce delivery of property—the High Court held that an essential element of extortion was missing. It treated Section 387 as dependent on Section 383 and quashed the complaint. 

Prof. Agrawal took the matter to the Supreme Court. A bench of Justices Sanjay Karol and Manoj Misra heard his appeal. They began by noting that extortion law is divided into two parts: one punishes the act of extortion itself, the other punishes steps taken toward extortion. Sections 385, 387, and 389 IPC cover those steps. Section 383 covers only the completed act when property is taken. 

The Supreme Court read Section 387 in its own terms. It said that the law punishes putting a person in fear for the purpose of extortion. It does not say that the person must hand over property. The court refused to import a requirement of “delivery” from Section 383 into Section 387. It set aside the High Court’s order and restored the trial court’s summons. 

Analysis

This ruling makes clear that law must act when a person faces a threat meant to force money or property from them. It is enough that fear was created with intent to extort. No court may dismiss a case under Section 387 just because the victim did not pay. 

The Supreme Court drew on earlier decisions to reach this view. In Radha Ballabh v. State of U.P.(1983), kidnappers demanded ransom but received none. The court upheld convictions under Section 387. In Gursharan Singh v. State of Punjab (1977), courts convicted under Section 387 when money was demanded but not paid. In Somasundaram v. State (2006), a demand that ended in a death drew conviction under Section 387 despite no payment. These cases show a consistent approach: threats for the purpose of extortion form an offence even if the victim resists payment. 

For prosecutors, the ruling offers a clear path. When a victim says that someone threatened them with harm to force payment, they may charge Section 387 without waiting for evidence of payment. For defense counsel, this means focusing on whether the accused truly formed the intent to extort and whether the threat took place as pleaded. Arguments about lack of payment will no longer block a case at the start. 

High Courts must also take care when asked to quash proceedings. Quashing is a narrow remedy, meant for cases where no offence is made out even if all facts are true. Here, the facts as stated amounted to an offence under Section 387. A court may not remove the case just because the demand went unmet. 

The decision also illustrates respect for how statute writers set out offences. The Legislature chose different words for Sections 383 and 387. Section 383 speaks of fear used to cause delivery of property. Section 387 speaks only of fear used to commit extortion. The Supreme Court held that judges must not erase that distinction or add words that do not appear in the law. 

Finally, the case highlights the purpose of inchoate offences. These laws intervene before a crime reaches its final point. They protect people from the process that leads to harm. Here, the threat itself is harm enough. Law must step in at that moment to prevent further injury. 

Conclusion

M/s Balaji Traders v. State of U.P. settles that a threat made to extort money is a complete offence under Section 387 IPC, even if no payment takes place. A victim need not wait for a demand to be met to seek relief. The decision honors the language of the statute and ensures that courts punish those who would terrorize another for financial gain. For all who work in criminal law, it offers a clear rule: when fear of harm is used as a tool of extortion, law must act without delay.

1. Arising out of SLP(Crl.) No.3159/2025 ↩︎