The High Court · 2025

This Petition coming on for hearing, upon perusing the lvlemorandum of Grounds of Criminal Petition and upon hearing the arg uments of Sri N BHUJANGA RAO. Advocate for the Petitioners anC SRI RUDRESH DESHPANDEY, the Assistant Public Prosecutor for the Respondent No.1 and none appeared for the Respondent No. 2. The Court made the following: ORDER THE HONOURABLE SMT. JUSTICE JUWADI SRIDEVI CRIMINAL PETITION No.12187 OF 2023 ORDER This Criminal Petition is filed by the petitioners-accused Nos.1 and 4 seeking to quash the proceedings against them in C.C.No.934 of 2021 on the file of learned lV Additional Metropolitan Magistrate-cum-Junror Civil Judge at L.B Nagar, Rachakonda present V Additional Metropolitan Magistrate-cum-l Additional Junior Civil Judge, Medchal-Malkajgiri District, Uppal at L.B.Nagar, registered for the offences under Sections 406, 420, 120-B of the lndian Penal Code (for short 'lPC').

02. Heard Sri N.Bhujanga Rao, learned counsel for the petitioners-accused Nos.1 and 4 and Sri Rudresh Deshpandey, learned Assistant Public Prosecutor for the State-respondent No.1. None appeared on behalf of the respondent No.2. Perused the record 03(a). ln brief, the case of the complainanUrespondent No.2 is that accused Nos.'l ,2,5, and 7 were engaged in real estate business for several years and incurred heavy losses. To recover their losses, accused Nos.1 to 9 allegedly entered into a criminal 2 conspiracy to cheat the innocent public by luring il- em to register plots on easy installment schemes. ln 1990, thr_.y established a partnership frrm under the name and styre of sus,;a rrh Buitders at Secunderabad, in the names of accused Nos.lJ, 4, 6, and B. Subsequently, accused Nos.1. 2, 5, and 7 :rpproached Sri Ramulu and Shabbir Khan, who had an agreemi)nt of sale with the Kommidi family concerning land admeasurirrg Acs.50_00 in Sy.Nos.'120 121 , and 122 of Ghatkesar. An oral ar;reement was made with them, wherein the accused assured lh tt they would develop the said land and sell plots to customers on installment basis. 03(b). ln 1991, the accused Nos..l to 9 alleg:rily developed the land into 880 plots and promoted the scheme try distributing pamphlets and informing real estate agents unde,r .he banner of Sushanth Brritders. ln June 1gg2, accused Nos.1 and 2 approached respondent No.2, introduced ft emserves as representatives and the Managing Dlrector of Sus,ranfh Buitders, and offered to sell a 200 square yard plot at S,,s1anth Nagar, Ghatkesar Viilage and tVtandar, for a totar amount of Rs..l 7,800/- (Rs.'15,0001 in 36 monthly installments and Rs.2,800/_ as registration charges). Attracted by the offer, respcndent No.2 ?#1. . ./. 3 joined the scheme in August 1992 and opted for Plot No.541, paying the entire installment amount of Rs.'l 5,000/-, for which receipts were issued by the accused in the name of Sushanlh Builders 03(c) Additionally, the accused collected the amounts from other individuals for various plots. Despite receiving the full consideration amounts, the accused failed to execute sale deeds in favor of the buyers and continued to delay on one pretext or another. lt is alleged that accused Nos.1 to t had no lawful right or title over the land in Sy.Nos 120,121 , and 122 at Ghatkesar, and that they acted in furtherance of a criminal conspiracy to cheat the public Learned counsel for the petitioners submits that the 04(a) petitioners/Accused Nos.1 and 4 have no involvement whatsoever in the alleged offences. lt is contended that the lnvestigating Officer failed to properly investigate the matter and ovedooked the fact that there is no partnership firm in existence under the name and style of M/s. Sushanth Builders. lt is further contended that the allegations made in the complaint, even if taken at face value, do not prima facie constitute the alleged offences. The learned counsel for petitioners also submits that 4 the contents of the complaint are purely civil in na ure, and the respondent No.2 is attempting to give a criminar c,rcur to the civir dispute. lt is further contended that the aileged s; are transaction took place in the year 19g2. while the complaint vre:; filed only in the year 2018, after an inordlnate and unexplainec delay of 26 years. The delay itself raises serious doubls about the genuineness of the complaint, and it is all-.g:d that the respondent No.2, in collusion with the police. l- as filed the complaint solely with an intention to extract mor ey from the petitioners. 04(b) lt is further contended that the respond_.nt No.2 had earlier issued a legal notice dated 16.02.2011 , c:rlling upon the petitioners herein and other accused to execute tlre , sale deeds. However, instead of approaching the competent r:ivil court by filing a suit for specific performance, the respon,krnt No.2 has chosen to initiate criminal proceedings, which clearly amounts to abuse of process of the law. Further, it is subrn tted that the offence of cheating and criminal breach of trLrst cannot go together, on same selof-facts, lt is thus submitte(l flrat in case of any breach of agreement, the appropriate remec,/ lies before a 5 civil court, and the contrnuation of criminal proceedings in this matter would amount to an abuse of the process of law. 0a(c) While praying for quashment of proceedings, learned counsel for the petitioners relied upon a decision in Nageshwar Prasad Singh Atias Sinha vs Narayan Singh and Anothel , wherein the Hon'ble Supreme Court of lndia at Paragraph No.3 held that

3. The latter pati thereof illustrates that at the time when agreement for sale was executed, it could have no event been termed dlshonesl so as to hold that the contplainants were cheated of the earnest money, which they passed to the appellant as pafi-consideration, when possession of the total land involved in the bargain was passed over to the complainant- respondents, and which remains in their possesslon. Now, it is left to imagine who would be interested in delaying the matter in completing the bargatn when admittedly the complainants have not performed their paft in making full payment. The matter is therefore before the civil courl in this respect. The liability, if any arising by the breach thereof is civil in nature and not criminal. We therefore allow this appeal, and set aslde not only the impugned orders of the High Court, but quash the proceedings too which are pending before the Magistrate. The complainant-respondents shall pay compensatory cosfs Io the appellant for these vexatious proceedings which we assess at Rs.10,000/- which the respondents are directed to pay to the appellant with six weeks from today. 1 (1998) 5 Supreme Court Cascs 694 6 E i

05. Further, the learned counsel for petitioner irl:;e rslisd 66 6 decision in Delhi Race Ctub (1940) Limited znd Others ys Sfate of lJttar Pradesh and Anothel , wher,:ir the Hon,ble Supreme Court of lndia at paragraph No.43 held llrat

13. There is a distinction between c:,irtinal breach of trust and cheating. For ctce tinq, cnminal intentiort is necessary at the ,,r e of making a false or misleading representa,,c>,t t e. since inception. ln criminal breach at trust. nere proof of entrustment is sufficient. l.hus in case of criminal breach of trust, the of ,encler is lawfully entrusted with the propefty. .. n 1 he dishones y mtsappropriated the si?/ne Wereas, rir case of cheating, the of .ender fraudulen y or dishonestty induces a pet::cn by deceiving him to deliver any property. l, .;Ltch a situation, both the offences cannol co_)xtst simultaneously.

06. On the other hand, learned Assistant pr-rlrl c prosecutor appearing for the State-respondent No.i contenderJ that there are triable issues and factual aspects to be examinecl b y the learned trial Court and it is not a fit case to quash the proc€)edings against the petitioners at this juncture and the matter is, tr be decided after conducting trial by the learned trial Court ald prayed to dismiss this Criminal petition. , (2U21) lO Suprcnre Court Cases (r90

07. A perusal of the record discloses that the alleged transaction was occurred in June, 1992, whereas the alleged complaint was lodged on 27.09.2018 with a delay of more than 26 years. The said abnormal delay is unreasonable and remained unexplained. lt is pertinent to note that the respondent No.2 has got civil remedY.

08. The offences that are registered against the petitioners- accused No.l and 4 are under Sections 420, 406 of IPC' Section 406 of IPC Criminal Breach of Trust, deals with dishonestly misusing property entrusted to someone' where the person is in a position of trust. lt is about violating a duty or obligation associated with the property. Section 420 of IPC deals with cheating and focuses on deceiving someone to induce them to deliver property or consent to the retention of property, typically involving fraud or dishonest inducement lt is about making a false representation or inducing someone to believe in something false. Cheating requires the element of deception, while criminal breach of trust requires a trust relationship and dishonestly using property entrusted.

09. ln case of cheating, the intention of the accused at the time of inducement should be looked into which may be judged by a \ r t: rl:i 1 8 subsequent conduct, but for this, the subsequent r;onduct is not the sole test. IVlere breach of contract cannot give rise to a criminal prosecution for cheating unless fraudule rl or dishonest intention is shown right from the beginning of the, tr ansaction i e. the time when the offence is said to have b€ en committed. Therefore, it is this intention, which is the gist rj lhe offence. Whereas, for the criminal breach of trust, the pro tely must have been entrusted to the accused or he must have ci trnrnron over it. The property in respect of which the offence of brer rr;h of trust has been committed must be either the property of sonre person other than the accused, or the beneficiar interest in or o rrunership of it must be of some other person. The accused nust hold that property on trust of such other person. Arthough [- e offence i.e. the offence of breach of trust and cheating in ",o ve dishonest intention, yet they are mutuaily excrusive and d lferrent in basic concept. ln such a situation, both the offences r;znnot co_exist simultaneously. in the same set-of_facts.

10. Now coming to the offence of alleged crimi r;rl conspiracy, on a careful scrutiny of the contents of the chargr: sheet, there rs no substantive piece of evidence on record to est;rb ish that there is conspiracy between the accused persons in conrrnission of the I above offences. However, to establish the basic allegations against the petitioners for the alleged offences, there is no single independent witness examined by the Police. Out of nine list of witnesses examined, there are three official witnesses, one de- facto complainant and three victims, who are interested witnesses and two panch witnesses. However, the entire allegations revolves around the non-registration of plots by the accused even after collection of certain payments. lt appears that all the allegations levelled against the petitioners-accused are of purely civil in nature. Therefore, initiation of criminal proceedings against the petitioners-accused is not tenable.

11. ln Sfate of Haryana and others v. Ch.Bhaian Lal and others3 the Hon'ble Supreme Court of lndia held that: "ln the exercise of the extra-ordinary power under Adicle 226 or the inherenl powers wrder Secflon 482 of the Code of Criminal Procedure, the foltowing categories of cases are given by way of illustration wherein such power could be exercised either to prevent abuse of the process of any Courl or otherwise to secure the ends of justice, though it may not be possib/e to lay down any precise, clearly defined and sufficiently channelised and t r 992 scc (suPP) 1 335 10 inflexible guide myriad kinds of cases t;l erein sLtch power should be exercisecl. (l) where the atlegations made in trtt First lnformation Report or the complaint. cven if they are taken at their face value and a.cepted in their entirety do not prima facie c()t)s titute any offence or make out a case agatitst the accused; @ where the allegations in lhe First lnformation Report and other materials it any, accornpanying the F.l.R. do not disc ose a cognizable offence. justifying an inveslqatiotl l:y police officers under Section 156(1, cf the Code except under an order of a Mac,i: trate rvilhitt the purview of Seclion 1 S5(2) o- the Code; B) where the uncontroverted alleg alions made in the FIR or ,complaint and the evidence collected in support of the same do not disc/ose the commiss ion of any offence and make out a case again.;t the accused; (A whete the atlegatrcns in the FIR cto rtot r:onstitttte a cognizable offence but co,-tstitute only a non-cognizable offence, no invesit:tiltion is permitted by a police officer without a,., c rder of a Magistrate as contemplated under ljer;llon 1 55(2) of the Code: (!) where the altegations made in .te f:lR or complaint are so absurd and inhe ren y improbable on the basis of which no 5.,, u lent person can ever reach a jusl conclusi<t,] that there is sufficient ground for proce _^ Ting against the accused: 11 (6) where there is an express legal bar engrafted in any of the provisions of the Code or the concemed Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved pafty; (!) where a ciminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge."

12. ln the present case, as discussed hereinabove, it is evident from the material on record that there is no element of cheating or fraudulent intention attributable to the petitioners-accused Nos.1 and 4. Even if the allegations in the charge sheet are taken at their face value and accepted in their entirety, they do not prima facie disclose the commission of any offence against the petitioners-accused Nos.'l and 4. Therefore, the present case falls within the parameters of point No.3 of Ch.Bhajan LaI's case crted supra

13. ln view of the aforementioned facts and circumstances and having regard to the well-settled principle of law formulated by the Honourable Supreme Court in the decision referred supra, this Court is of the considered view that the essential ingredients t I 12 necessary to constitute the offences under Sec.ions 406, 420, 120-8 of IPC are not made out against the peli r()ners_accused Nos.1 and 4. Hence, the continuation of the crim ral proceedings against the petitioners-accused Nos.1 and 4 amoLrr^ts to abuse of process of law and the same are liable to be quaslred

14. Accordingly, this Criminal petition is allrrved and the criminal proceedings against the petitioners_accu,je,l Nos..l and 4 in C C.No.934 of 2021 on the file of learnec lV Additional Metropolitan l\'/lagistrate-cum-Junior Civil Judger rtt L.B.Nagar, Rachakonda present V Additional tt/letropolitan l/ agistrate_cum-l Additional Junior Civil Judge, tr/edchal_tMalkajgiri L is;trict, Uppal at L.B.Nagar, are hereby quashed. As a sequel, pending miscellaneous apprirations, if any, shall stand closed //TRUE COPYII , Sd/- V. KAVITHA QEPUTY REGISTRAR SECTION OFFICER To, Nagar, Rachakonda.

1. The lVAdditional Metropolitan Magistrate cum Junior {_ivil Judge at L.B. 2 The V Additionar Metronolitan Magistrate cum I Additicrral Junior civil Judge, *' Medchat-Matkalsiri oistrict, Upi;%iL.B- N;;;,:

3. The Station House Officer, Ghatkesar police Station, Fl r(,hakonda. 4. One CC to SRI N BHUJANGA RAO Advocate tOpUCj 5. Two CCs to SRt PUBLTC PROSECUTOR, High Court r;r the State of Telangana, Hyderabad. [OUT] 6 Two CD Copies GUgh lf,J,l:ffir-_---:lffiT* =EY8'M&mai..'@.ar,*rk- . -:{-r:r.e*,? i. - i.,d!-.r{a. j -?".{e*g;id HIGH COURT DATED:221O712025 ORDER CRLP.No.12187 of 2023 ._.i\ \J^ \ ,-\ r 3 .L'i' 2025 :_ |

1..,-.1 .). 'i.. ':\. ALLOWING THE CRIMINAL PETITION / 1z- /5 ,//o ,/1-r-