The gist of thcsc complaints is thi I two persons, Mr. C. Parthasarathy and v. Mahesh

Petition under Section 528 of BNSS praying that in the circumstances stated in the Memorandum of Grounds of Criminal petition t re High Court may be pleased pleased to vacate the interim order dated 1303.2)ZS granted in crlp 15187 of .2024 and pass I.A. NO: 2OF 2024 Petition under Section 528 of BNSS prayrng that rrr the circumstances stated in the Memorandum of Grounds of Criminal petition, t te High Court may be pleased to stay all further proceedings against the petitiorrr r in Crime/FlR 234 of 2022 dated 2611012022 registered by the Central Crime i;tation, Hyderabad and to pass This Petition coming on for hearing, upon perusing fl- _. tvlemorandum of Grounds of Criminal Petition and upon hearing the argume tts of Sri Avinash Desai, learned Senior Counsel representing Mr. TpS HARSll. r, Advocate for the Petitioner and Mr. Surepalli Prashanth, the learned Asst. pL clic prosecutor on behalf of the Respondent No. 1 and of Sri B. Aravind Redcl,, Advocate for the Respondent Nos.2, 3,4 and 5. The Court made the following: ORDER * THE HON'BLE SHRI JUSTICE ANIL KUMAR JUKANTI CRIMINAL PETITIoN No.15187 oF 2024 ORDER: This Crirninal Pctition is filed under Section 528 ol the Bharatilra Nagarik Surraksha Sanhita (for short 'BNSSJ by petitioner/ accused No.3 to quash the proceedings against him in F.l.R.No.234 of 2022 dated 26.10.2022 and consequently set aside all consequential proceedings taken pursuant to F.l.R.No.234 of 2022 registered by the Central Crirne Station, Hyderabad. The offences alleged against petitioner are under Sections 406 and 42O of Indian Penal Code (for short 'lPC').

2. Heard Mr. Avinash Desai, learned Senior Counsel representing Mr. TPS. Harsha, learned counsel for petitioner, Mr. Surepalli Prashanth, learned Assistant Public Prosecutor for respondent No.1/State and Mr. B.Aravind Reddy, learned counsel for respondent Nos.2, 3, 4 and 5. Perused the materia-l on record.

3. Three complaints - by different persons i. e respondent Nos.2, 3, 4 and 5 are lodged. The contents of I JAK, J at{t_P I-5 t8r 2021 ali the complaints are similar in natr_t r t. Copies of conrplaints arc placed on record at page I.J r s. 1 6 , 25 , 32 and 44 ividc U.S.R.No.27059 of 2O2i;,, a common complaint is placed on record (by a Memo in lri.p.No.2705 of 2025). The gist of thcsc complaints is thi I two persons, Mr. C. Parthasarathy and V. Mahesh, ,: retitioner/43) cheated and committed criminal breach ol rust with an intention to cituse loss to the complainatr., (arrayed as respondenL Nos.2 to S). F.l.Rs., are repi ,tereci under Sections 406 and 42O of lpC.

4. F.l.R.No.2.l4 of 2022 came to be rcgrstered on the basis of a complaint lodged by one Mr .rijay Kumar Bachalakuri (respondent No.2). In the said c: rrplaint, it is stated that lr4r. C. Parthasarath_y and pcl i r oner/A3 are Directors ol Kafl,y Realty (India) Limitc j, lured the complainant(s) and three other pcrsons sec,l.- rg to extend an amount of Rs.85,OO,00O/- by causing rrrestments in the compant,. That they cheated, defraudr:rl and caused loss to them. Hence, the complaint. n 3 JAK, J CRLP 15l E7 2024

5. Learned Senior Counsel appearing on behalf of petitioner/43 submitted herein that petitioner ceased to be a Director of Karvy Realty (lndia) Limited from 31.03.2015 (due to registration under Section 168) of FORM DIR-12 (annexed at Page No.62 of the materia-l papers). A copy issued by the Registrar of Companies, which refers to appointment and qualihcation of Directors and other aspects is placed on record (Page No.62).

6. It is submitted that from a perusal of copy (Page No.64), it is apparent that one Mr. Mahesh Vijayagopal (petitioner/A3), who was a Director, ceased to be a Director w.e.f. 31.03.2015. The term reflected at page No.64 is "cessation" and the Director Identification Number (DIN) is reflected as 008OO219 and the resiSnation was under Section 168 of the Companies Act. It is contended that once petitioner/A,3 ceased to be a Director, question of petitioner/A3 inviting or inducing for investment in the Company cannot be sustained and the complaint is baseless and is made only to implicate the petitioner which is not tenable under law. It is further 1 4 JAK, J CRLP 15 t87 2024 submitted that on a perusal of all the compla nts. nc overt acts are spccifically alleged against petitioner', A3 7 . Learned Senior Counsel submitted tha. Lo charge the petltioner//43, specific allegation or ao, usations of inducement are to be made out from t:: complaint But, no specihc allegation or accusation is ri lde in any of the complaints. In the absence of such spe< i ic ailegation, petitioner/A3 cannot be mulched under Sect ons 406 and 420 of IPC. B. Learned Senior Counsel placed re1.z nce on the Honble Apex Court judgment rn Maksud Sa ged u. State of Gujarat and Othersl

9. Learned Senior Counsel invited atte r tion of this Court to . complaints of respondent Nos.2 , 3 , 4 ald 5 On the basis of the contents of complaints, rt is submitted that no ingredients of the Sections are madc rut to attract the offences under Sections 406 and 420 '> lPC against petitioner/accused No.3. In fact, it is r: terated that petitioner/accused No.3 had demitted tl e office as ' 1:oc8y s scc sos , i,) 5 JA]<, J CRLP 15 r87 2024 Director way back in the year 2015 itseif. Learned Senior Counsel further reiterated that petitioner/accused No.3 ceased to discharge his lunctions as Director of Karvy Realty (lndia) Limited lrom 31.03.2015. Learned Senior Counsel invited attention of this Court that in all the complaints, it is reflected that cheques were issued by the complainants in the year 2Ol9 and in turn receipts were received by them. That basing on these facts of the record, the allegations lcvelled against petitioner/ accused No.3 are without any basis

10. Learned Senior Courrsel pointed out that the amounts paid through cheques, as alleged, were for the purpose of civil transactions, however, a criminal coiour is being given by bringing the sale transactions under the umbrella of criminal proceedings. Therefore, the same cannot be sustained.

11. On the other hand, learned Assistant Public Prosecutor appearing on behalf of respondent No.1-State submitted that on a perusal of the complaints, it is evident that petitioner/A3 inducerl-respondents/complainants to a 6 J,\K, J cRI_r t5187 202,1 invest in tlre company. It is lurther s.-r tmitted that petitioner/ a<:cused No.3 was part of a lerr n that lured gu1lib1e in,.,cstors and multiple emails u'r'r < received by complainattts promising them thcre woulrl I ) a refund cf money deposited by them

12. It is submitted that it is the guliible ar.r: middle class families who rnvested their hard carned mon( y in thc hope of increasir-rg their sources of revenue by in r esting in the company. Hcnce it would amount to brci,r: I of trust of complainants as they were under the imprc s r ion that they \ /ou1d get plots in the said venture.

13. Learncd Assistant Public Prosecutor in., ted attcntion ol this Court to email annexed at page 15 r' the counter afficlavit ancl also invited attcntion of this - ourt to page nurnbers 3. 5 and 9 of the counter affidavit ir rd submitted that it is a fit case for investigation and inr estigation be pcrrnitted to go on. Hence, no interference is r ercessitated.

14. Heard learned counsels, perused th: record and considered rival submissions l JAK. J CRIP t5187 2024

15. Three complaints are annexed and one common complaint by way of Memo. The gist ol all the complaints is one and the same. Two persons, Mr. C. Parthasarathy and V. Mahesh -petitioner/A3 herein, are named in the complaints and both in the capacity ol Directors of Karvlr Realty (lndia) Limited. Registrar of Companies issued FORM DIR-12 by virtue of which Mr. Mahesh Vijayagopal petitioner/.A3 ceased to be a Drrector of the Company from

31.03.2015 (having resigned) and the samc is reflected from the contents at Page No.64 i6. On a perusa-l of the contents of the complaint(s), it is reflected as follows: "l humbly request your good offices to take cognizance of this complarnt and initiate appropnate procecding against alorementioned persons, that is Kany Realty (lndia) Ltd and its dircctor Mr. C. Parthasarathy & V. Mahesh who had cheated and committed criminally breach of trust wrth an intent to defraud and cause tremendous and irretrievable losses to me, for the offences punishable under sections ..."

17. No cheques have been issued to Mr. Mahesh Vijayagopal (petitioner/A3), or on his name or on his request, there is no specific allegation against petitioner/A3 that he has received any cheques nor were issued in his name. Thesey'etails were submitted to the 7 I I l i I i I 8 JAI, J CRLP 15187 202{ Court by the learned Senior Counsel : ppearing for petitioner/A3 when this Court queried the cr,, Lnsr:l

18. Tl-re Hon'blc Apex Court in Maksud Sotqed (L suprai at paragrapl'r No.13 held as follows: " 13. Whcrc a junsdiction is exerciscd on a ,ri )l pctition filed in terms of Section 156(3) or Sectrr,r the Code ol Crrminzrl Procedure, the Magis t required to apply his mind. hr.dian Penal Codc i contain any provision for attaching vicarious liirl the par-t ol tlre Managing Director or the Drrec:tl r Comparv u hen thc accused is the Compa r learnecl Magistratc failed to posc unto hir! s correct question viz. as to whether the ,:,r: pctition, cverr if given face va-lue and taken to r r in its entirctv, r,r'ould Iead to the conclusiou : rospondents herern u,ere personally liablc I offcr-rce. Tht: Bank is a body corporate. Vicarior-Ls of the Managing Director and Director wou l, providcd any provision cxists in that bchall statutc. Statutes indisputably must contain ll fixing srLch vicarious liabilities. Even for 1l I)urpose, it is obligatory on the part of the cornl- to make |cciuisite allegations which would attr provisions r:onstituting vicarious liability." 'rplainr 2OC ot ate is )cs no[ lity on of thc .. l'hc :lf i.hc rplaint -rorrect at ihc r anv inbilitv ir-r 1l.rc rvisron : said ain:rnt l(rL 1.he L9. Rclyir-rg on the contents of pa-ragraph No.13 of the Apex Court's judgment (supra), it rvas contcr ded that it is obligatory on the part of the complainant(s) Ir )rein to make requisite allcgations, but no such allegations; are made out in the complaint to attract the provisions of ll C.

20. On perusa-i of the complajnts, it is apu rrent that no specitrc allegations are forthcoming against :etitioner/A3 9 JAK, J CRLP 15187 2024 to attract the provisions of IPC. The contents of the complaint, being devoid of requisite allegations, oflences are made out 21 . It is observed from complaints at page Nos.16, 25, 32 and 45, all of them speak in the same tone and tenor (r,,erbatim) that the employees of Karrry Realty (lndia) Limited approached the complainants and lured with higher returns if amounts were invested in Kavry Realty (lndia) Limited (real estate business). Believing the words of employees, complainants issued cheques. A11 complainants issued cheques in the year 2019.

22. No specific details a-re forthcoming whether petitioner/ accused No.3 was one of the employees who approached the complainants and lured them, in the absence of such details in the complaints, the allegation that petitioner/accused No.3 has cheated is based on sandy foundations.

23. It is trite to take note that petitioner/ accused No.3 ceased to be Director of Karly Realty (lndia) Limited (real estate business) and cheques issued by the complainants I 10 J\l',1 ( RI l' IslIl7 zr,l.J are of the year 2019, much after petitioner / rccuseci No.3 resiqnr:d as Dircctor and tl-re said facts arr: . eflecte d from the contents of documents placed ort record (the: documents placed on record pertains t,r Minrstry of Corporate Aliairs).

24. ln all the complaints, it is reflec L d rhat one Mr. C. PalI'rasarathy promised the complairr rnts bv email that their amounts u,ould be refunded imnr,: liately. There 15 nO rvhisper about petitioner/ accused No 3 atlributing overt acts to him. 2r Lcarncd Assistart Public Prosecutor tri .d to inrpress upon the Court by inviting the attention t r entail dated

14.O2.2020, in u,hicl'r the name of one of thr :omplainalts i.e., Vijay I(umar- (respondent No.2) is reflect rd. Tl.rc email originates lrom emaii ID of Mr. C. Parthas:,r athy and not that of petit ioner / accused No.3. Therefore, t re said emarl cannot be relied upon to mulch the petiti rner/accused No.3 for the ollences alleged. /-, JAK, J CRLP 151E7 2024

26. Section 406 of IPC is as follows: "4O6. Punishment for criminal breach of trust.- Whoever commits cnminal breach of trust shall be punished wlttr imprisonment of either description for a Lerm which may extend to three years, or with fine, or with both."

27. Section 420 of IPC is as follows: '42O. Cheating and dishonestly inducing delivery of property.-Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or arry part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine."

28. It is pertinent to extract the relevant portions of the judgments of the Hon'bie Apex Court in Delhi Race Club (1940) Limited and. Others a. Stdte o.f Utta.r Pradesh and Another2. The Honble Apex Court while dealing rvith Sections 406 arrd 42O of IPC i.e., the offence of criminal breach of trust and cheating made the distinction between the offences and held as follows: "34. In Sunil Bharti Mittal, this Court interpreted the expression " sufftcient grounds for proceeding" and held that there should be sufhciency of materials against the accused No.1 concerned before proceeding under Section 2O4 CrPC. It was held thus: (SCC pp. 644-45, para 53) "53. Houteuer, the tuords "sufftctent ground for proceeding" appeartng in Section 2O4 are of immense importance. It is these utords wltich ampLg suggest that an opinion ts to be formed onlg after due application of '1zoza; to scc oeo -: ..$ I t2 JAK, J CRLP 15187 2024 nrlnd that there ts sufJicient basis for proceeding the said ctccused No.1 and formation of such or', is to be staLed in the order itself- The order [s ltttL .sel aside rf no reason ls giuen therein while cortti't conclusion that there is pima focie case aq<'l acat.seri No.l , tlnugh the order n.eed not contain t. re.rson.-s. A fortioi, the order tuould be bad in. kt reuson giuen tums out to be ex facie incorrect.'' Difference betueen crirninal breach oJ tnt;t and cheating tgainst tpinion 7 to the tst the etailed t if tl'te

35. This Court in its decision in S. I'tl. P,r u. State of Bihar cxpoundeci the diffcrence ingrcciicnts required for constituting of an olf criminai brcach of trust {Section 406 IPC) vis-ri offence o[ cheaLrng (Section 420). The t observatrons read as under: (SCC p. 246, paras 9 "9. The ingredients in order to const criminal breach of trust are: (i) entrustrng a person rvith property or r dominron o\ cr property; (ii) that pcrson entru s dishonestly misappropnating or convertir 1 propert]' to his own use; or (b) dishonestiy -t disposing of that property or wtlfully suffering ar person so to do in violation (i) of arry direction prescribing lhe rnode in w'hich such tr-ust ]s dischargcd, (ii) of any legal contract made, touct dischargc of such trust.

10. Tlrc ingredients of an offence of cheat (i) there should be fraudulent or dishonest ind.t of a person by decel,ing him, (ii)(a) the ptr deceived should be induced to deliver any prcl any person, or to consent that arly person shzJ any property; or (b) the person so deceived sh, intentionalll induced to do or omit to do anythin hc would not do or omit if hc were not so deceir (iir) in cascs covcrcd by (ii)(b), the act of omission be one '"vhich causes or is tikely to cause dan heLrm to the person induced in body, mind, rep or property. " tnitkar in the nce of vis the llevant 10) lute a th any ed: (a) ring or / otier of law to be .ng the :rg ar-e: )ement ion so erty to retain uld be d; and should age or rtaLion

36. What cal be discerned from the abu e is that thc offenccs of crimrnal brcach of trust (Secti,n 406 IPC) and cheating (Scction 42O IPC) havc ipecific ingredients: In order to constitute a crlminal bre r'ch o;f trust (Section 406 IPC) (1 ) There must be entrustment with pcr ron for propert)' or clominion over the property, ald (2) The person entrusted: 13 JAK, J CRLP I5I8? 2024 (a) Dishonestly misappropriated or converted property to his own use. or (b) Dishonestly used or disposed of the property or u'ilfully su[Iers any other person so to do in violation of: (i) Any dircction of law prcscribing thc mcthod in which the trust is discharged; or (ii) t ega.l contract touching the dischargc of trust (see: S. [7. Patonitkall. Similarlg, in respect of an olJence under Sectton 42O IPC, the essential ingred.lents are: (1) Deception of any person, either by making a false or misleading representation or by other action or by omission; (2) FraudulcntJy or dishonestly ir-rducing ar-ry pcrson to deliver any propcrty, or (3) The consent that any person shall retain arry property and hnally intentionally inducing that person to do or omit to do anything which he would not do or omit (see: Hannanpreet Singh Ahluu-talia u. State of tunjab). I I

37. Further, in both the aforesa-rd sections, mens rca i.e. intention to defraud or the dishonest intentiorr must be prcscnt, and in the case of cheating it must bc there from the very beginning or inception.

38. In our vicw, the plain reading of *re complaint fails to spell out aly of the aforesard ingredients noted above. We may only say, wilh a view to clear a serious misconception of law in the mind of the police as well as the courts below, that if it is a case of the complainant that offence of criminal breach ol trust as defined undcr Section 405 IPC, punishable undcr Section 406 IPC, is committed by the accuscd No.l, then in thc same breath it cannot be sard that the accused No.1 has also committed the offence of cheatrng as dehned arrd explained in Section 4 15 IPC, punishable under Section 42O lPC.

39. Evcry act of breach of trust may not result in a penal offence of criminal breach of trust unless there is cvidence of manipulating act of fraudulent misapproplation. An act of breach of trust involves a civil wrong in respect ol u,hich the person may seek his remedy for damages rn civil courts but, anv breach of trust wlth a mens rea, gives rise to a criminal prosecution as well. lt has been held in Hai Prosad Chamaria u. Bislun Kumar Surekha as under: (SCC p. 824, pera 4l "4. We have heard Mr Maheshwa-ri on behalf of the appellant and are of the opinion that no case has been made out against the respondents under Section -'t /' .| l l4 ii. JAJq J cRLt, l5l8 7 2024 420 of the Penal Code, 1860. For the purpo:i present appeal, u'e rvould assume *rat the allegations cf fact u'hich have been madc complilinr b1' the :rppellant are correct El: making thal allou'ance, u'e hnd that the complrLr not disclose the commission of any offence oll 1 of the rcspondcnts unclcr Sectron 420 of the Petri 1860- Therc is nothing in the complaint to sll the respondent hacl dishonest or fraudulent int: thc time the arppellart parted with Rs 35,000. ' also nothing to indicate that the respondents the appellart to pa,v them Rs 35,000 by decei' i It is further not the case of the appellal' representation was made by the respondents to or beforc thc time hc paid the money to them a at the t ime thc rrpresentation was m: ( respondents kne"v the sarne to be false. The lr the respondents subsequently did not abide I cornmilmenl that rhey would sl-row the appellLLr the propri.etor ol Drang Transport Corporati rvould also rcnder accounts to him in the rr December might crcate civil Liability for thern, fact would not be sufhcient to fastcn crimina I on the respondents for the r.rffence of cheating.

40. To pul it in olher rvords, the case t [ ' and dishonest intention staJts with the very rrLct the transaction- But in the case of criminal lrr lrust, J pcrson uho comes lntu possessi" r movable property and receives rt legally, but relains it or converts rt to his own use against 1l of the contract, then the question is, in a case I rvhether the retenttou is with dishonest intenti.l lvhether the retcntion invoh'es criminal breacl. or only a civil liabitity rvould depend upon th1) each case.

41. The distinction between mere br contract ald the offence ol criminal breach o1' r cheating is a Frne one. In case of cheating, the r of the accused No.l at the time of inducemclLt be looked into which may be judged by a suL conduct, but for thts, the subsequent conducl r sole test. Mere breach of cor-rtract cannot give : criminal prosecution for cheating unless frau,l dishor-rest intention is shown right from the be1,i the trarsaction i.e. the time when the offence r have been committed. Therefore, it is this ir which is the gist of the offence. :f 'l-re ':Lrious in the r after' lt does re pzrrt 1Code, w that iiion at here is -rduced Lg him. that a him at .rd that e, the ct that y their ,11 and rnth of ut t.his iiability neating rtion of :ach of of the .llegally 3 terms <c thi.s, or not, ) f trust facts of ach of rst artd teI1tion should iequent not tl-e ise to a rlent or rning of said to tention,

42. Whereas, for the criminal breach of I lst, the property musl have bcen entrusted to the acclrl cd No.1 or he must have dominion over it. The pr ; )erty in \ \ 15 JAK, J CRLP t5t87 2024 respect of which the offence of breach of trust has been committed must be either the property of some person other thart the accused No.1 or the benehcial interest in or orvnership of it must be of some other person. The accused No- 1 must hold that property on trust of such other person. Although thc offence i.e. the offcnce of brcach of trust ald cheating involve dishonest intention, yet thcy are mutually exclusive and differcnt in basic concept.

43. There is a distinction between crimina.l breach of trust and cheating. For cheating, criminal intention is necessar5r at the time of making a false or misleading representation i.e. since inception. In crimina,l brcach of trust, mere proof of entrustment is sufficicnt. Thus, in case of criminal breach of trust, the offender is laufully entrusted with the property, and he dishonestly misappropriated the same. Whereas, in case of cheating, the offender fraudulently or dishonestly induces a person by deceiving him to deliver aly property. In such a situation, both the offences cannot co exist simultaneously.

54. When dealing u"ith a private complaint, the law enjoins upon the Magistrate a duty to me ticulously examine the contents of the complaint so as to determine whether the offence of cheating or criminal breach of trust as the case may be is made out from the averments made in the complaint. The Magistrate must carefully apply its mind to ascertain whether the allegations, as stated, genuinely constitute these specifrc offenccs/ln contrast, when a case arises from an FIR, this responsibility is of the police to thoroughly ascertain whether the allegations leveled by the informant indeed fall under the category of cheating or criminal breach of trust. Unfortunately, it has become a common practice for the police officers to routinely and mechanica-lly proceed to register an FIR for both the offences i.e. criminal breach of trust and cheating on a mere a-llegation of somc dishonesty or fraud, without arry proper application of mind.

55. It is high time that the police offrcers across the country are imparted proper training in 1aw so as to understand the fine distinction between the offence of cheating vis-a-vis criminal breach of trust. Both offences are independent ald distinct. The two offences cannot coexist simultarreously in the same set of facts. They are antithetical to each other. The two provisions of IPC (now BNS, 2023) are not twins that they cannot survive without each other." T i ) l l I l I I I i I I I I l I I 16 J,1L, J CRLF !i I ri7 2024

29. The Hon'ble Apex Court while dealing n'ith Sections 12O and 406 of IPC in the case of Rad.hcyshgam and Others a. State of Rajasthan and Anot rer3 held as follows: "7. Scction 420, IPC provides that: "Whoeuer cheats and therebg dishonestlg tduces the person deceiued to deliuer onA propei! .o anA person, or to make, alter or destroA th.e Luhole or anA part of a ualuable sec'Ltrita, or angthing u-thich ts signed or sealed, and uhlch [s capable of being cont,er o ualuable searitg, shoLl be punisheL tuitl'L impisonment of either desciptLon for a terrn ut)'t h mag ertend to seuen Aears, and shctLl ctlso be liable tt Tte." =d. For al offence under Sectton 420, IF following ingredients must bc prcscnt: i. Cheatrng as dehned under Sectir iPC, that is, there should be a fr-:. t or dishonest indr"rcement of a perscr ri. An intention to deceive; and rii. The person chezrted must be dis'i induced to a. Dclivcr property to ar1y person; Lr b. Makc, alter or destroy valuablc s or anything signed or sealed and capable c converted into valuable securitv.

8. Thus, cheating forms an ( s ingredient to constitute and oflence under Sectrc IPC. Further, to constitute cheating as define,l Section 415, IPC, it is necessafy that a fraudrr dishonest inducement is donc and the deceive,c is made to deliver any property owing to thir Section 415, IPC, defrnes 'cheating', as: "Wltoeuer, by deceiuing arl! ) fraudulently or dishonestly induces the pet deceiued to deliuer anA propertA to anA p( t to consent that anA person shall rettu propertlJ, or intentioncLLly induces the pt27 deceiued to do or omit to do angthing ul tlouLd not do or omit tf he uere not so de and uhich act or omission causes or is 'i r Criminal Appeal No.3020 ol202,l l, thc r 415, dulent ; ,11eSt1y icunly ' being ;r:ntial 'r 42O, 3nt or )erson iraud. erson, iorz so ;on, or t ana ron.so tch he :e.iued, :e[g to 17 J,^-k. J CRLP t5t87 2024 cause damage or horTn to that person in bodg, mind, reputation or properlA, is said to "cheat'.'

9. From the bare perusal of thc FIR, it is evident that there u,as no act of cheating, that is, the complainant n,as noq,hcre fraudulently ir.rduced or dishoncstly dcccived by thc appcllants. A commercial transaction took place bctu,een the parties during which the partres consensually agreed for the sale of the property of the appellants and respondent no- 2 paid the part consideration- The default in payment of their loan dues on part of the appellants is not reflective of their deceitful intention towards the complainant. Mere non-registration of the sale or its refusal cannot amount to cheating. The dehvcry of thc advancc payment towards consideration was made in furtherance of an Agreement to Sell and it is not the case of the respondent that he was in an5zway deceived or duped to make such payments to the appellants. [t is a civil disputc ald givcs rise to the complainant's right to resort to the rcmedie s provided undcr civil law by frling a suit for specihc performance. I0. Addrtionally, the appellzrnts have also been accused No.l of committing the offence ol criminal breach of trust under Section 406, IPC. This offence is defined under Section 405, IPC as follows: "Whoeuer, being tn anA manne r entrusted uith properl!1, or with any dom[nion ouer propertg, dishonestly misappropiates or conuerts to his ou)n use that propeftg, or d.ishonestly uses or disposes off that property tn uiolation of any direction of lau prescibing tLrc mode in uhich such trust is to be discharged, or of any legal contract, express or tmplied, uhich he has made touching the discharge of such trust, or uilfullg suffers anA other person so to clo, commits "ciminat breach of trust"." 1 1. For an offence punishable under SecLion 406, IPC, the following ingredients must exist: r. ii. iii. The accused No.1 was cntrusLed with property, or entrustcd with dominion over property; The accused No.I had dishonestly misappropriated or converted to their own use that property, or dishonestly used or disposed of that pr€perty or wilfully suffer anY other Person to do so; ald Such misappropriation, conversion, use or disposal should be in violation of any 1 t8 JAI!. J CRLP l! rs7 2021

12. drrectron of lau, prescribrng the r ode in u'hich such trust is to be dischzrrg: i. or of any legal contract which thc per s ,n has rnacle, torrching thc disclrirrgt: I srrt:lr I ru st. in the prcsent case, the appellarL ; .,vcre not entrusted with any property by responrllll t n0.2 compl:rinant. The only delivery made was r I part pavmcnt torvards aI] Agreemcnt to Sell betu i ':t thc partics. The amount paid torvatds considcratiotL :"rnrrot be said to have been cntrusted with the appr:ili r.rts by respondent no. 2. Additionall_v, merelv becar;e the appellzrnts are refusing to reglster the sale, it,1 (s not amount to m isappropriation ol the advance I: ,,ment. Since there was no entrustment of property, thr: rffence of misappropriation of such property ar-rd hcrcb-v criminal breach of trust cannot be said to be lnzl out I3. Thcrefore, the ingredients o[ nonr offences alleged in the FIR are rnade out agai appellzrnts and thus, no offence can be sarri t been committed by them. The act of thc a1tu,: best constitutes a civil wrong and does not cal criminal action against them. A civil wrong r:: r givcn a criminal colour merely to coercc thc al 1 into regrstering the sale. The jucltcial proccss Ciu used as a tool to enforce specihc perforrnalr rt agreement. Rcspondent No.2 has ample rcrnedi, r the civil law and he has already resorted to the s filing a civil suit for specihc performance r, pending adjudication bcfore the relevant forunr such a criminal proceeding .".^o, O. ,rt,,, continue." oi the st lhe r hzrve a.n t at or anv not be : IIar r ts not be of an L r ntler Lrne l;v rch rs 1'hus, 1'd to

30. As per the law laid down by the Hont,l I Apex Court in Delhi Race Club's case (2 supra) & t adhegshgam (3 supra), the contents of the complaint dc eot spell out the ingredients of the offences to attract thc Sections under IPC charged/levelled against petitione . A3, t9 JAT! J a-RLI' I5t87 2024

31. It is urged by lear iecl Assistant pubiic prosecutor that the investigation may continu e f go cn to elicit the true facts in the said case.

32. The ingredients of both the Sections 406 and 42O of IPC are not made out, even if allegations are taken on face value qua petitioner/A3.

33. On a perusal of the entire factual. matrix of the case and the contents of the documents on record and the law laid down by the Hon'ble Apex Court, this Court is of the opinion that continuation of proceedings against petitioner/accused No.3 in FIR.No.234 of 2022, d,ated,

26.IO.2O22, of Central Crirne Station, Hyderabad, would be ar abuse of process of Court and hence proceedings are liable to be quashed and are accordingly quashed.

34. Needless to state that the State is permitted to proceed with further investigation in the case. It is made clea-r that the proceedings are quashed 'Qua', the petitioner/43 'Only'. 20 JAl\. ] |Rl.r t5ls7 2tr24 .af: -): For reasons aforesaid, Criminal petitior s; allowed Miscellaneous applications nending, r a1]r, shall stand closed //TRUE COPY// SD/- A.JAYASREE ASS]I TANT REGISTRAR .-.-- -// ;ECTION OFFICER \ \ I ) To,

1. The Xll Addl Chief Metropolitan Magistrate at Nampally lvderabad. 2 The Station House Offtcer, Central Crime Police Station ( ;CS). Hyderabad 3 One CC to SRI TPS HARSHA Advocate IOPUC] 4 One CC to Sri B ARAVIND REDDY Advocate IOPUC 5 Two CCs to the PUBLIC PROSECUTOR High Court for t e State of Telangana [OUT]

6. Two CD Copies ARM/ABK YL- HIGH COURT DATED: 1410812025 ORDER CRLP.No.15187 of 2024 -1':a a=a -:. -- -- -_ rHF ..: '. \ \ ALLOWING THE CRLP (^ La\C' YY-x. 41 '