The High Court · 2025

Order

- THE HON'BLE SHRI JUSTICE L KUMAR JUKANTI CRIMINAL PETITION No 15395 0F 2024 ORDER: This Criminal Petition is filed under Section 528 of the Bharatiya Nagarik Suraksha San ta (for short 'BNSS') by petitioner/accused No. 1 to quash th proceedings against him in Crime No.27O of 2024 of Adibatla Po ice Station, Rachakonda for offences under Sections 406 and 42O of IPC

2. This Court on 17.O3.2O25, pass d the following ordcr "This Criminal Petiti n is filed under Section 528 o[ the B ratiya Nagarik Suraksha Sanhita (for s ort 'BNSSJ by 1 to quash the petitioner/ accused No.1 N n Cr.No.270 of proceedings against him 2024 of Adibatla Police Sta on, Rachakonda District. tation on behalf There was no represe of petitioner on 23.12.2024 and 11.03.2025. On 12.03.2025, when the atter was called, there was no representati n on behalf of petitioner and the matter as posted under the caption "for dismissal" Today, when the matt r is called, there

is no representation on beh It is observed from Mr.N.Ravi Kumar, learn petitioner, hled this petition not appeared before the four occasions. lf of petitioner. the record that d counsel for however, he has urt on the last This Court is not in lined to dismiss -prosecution and an opportunity the criminal petition for no deems it appropriate to gi 2 cRr.P lilgi 2024 to one of the youngsters in the Bar to present the case. Therefore, this Court deems it appropriate to appoint Mr. Mohammad Nabeel Ali (phone.No.g07 4Z2g3SBl as amicus curiae to assist rhe Court by rnaking submissions on the facts and also on larv. Registr y is directed to inform petitioner through a letter along with notice that Mr.N.Ravi Kumar, Iearned counsel for pctitioner has not appeared before the Court to presenl- the case ald for non-appearance, this Court appointcd Mr. Mohammad Nabeel Ali (Phone.No .aO7472g31g) as amicus curiae and petitioner shall pass instructions to Mr. Mr:hammad Ali (Phone. No.8O7 47 29358). Nabeel Post the matter on OT .O4.2025."

3. Lleerrd Mr. Mohammad Nabeel Ali, learned amicus cuiae for petitroner al-rd Mr. Surepali prashanth, learned Assistant public Prosecutor for rcspondent No.1 _ State. perusecl the material on record. Notice issued to respondent No.2, no representatlon.

4. An FIR.No.2ZO of 2024, dated IO.OS.2O24, 1S lodged 1n Adibatla Police Statiorr, on the basis of a complaint hled bv respondent No.2_ It is averred in the complaint that respondent No.2 carne into contact u,ith petitioner/accused No.l ard petitioner hacl informed resporrdent No.2 that he entered into an agreement u,ith one Mr.Antonl, rvith regard to plot bearing No.10g admeasuring 4OO sq. yards in Sy.Nos.536, S3T,657 and 65g at Manneguda. It is averred that the cost of one sq. yard is to be soid 3 JAK, J CRLP 15195 2024 at a price of Rs. 11,500/-. On 24.07 agreement, respondent No.2 tr 2023, tlrrat a daY before the sferred an amount of Rs.5,00,000/- to accused No.1 d on 25.07.2023, daY of agreement Rs.7,0O,OOO/- was give to petitioner. It is further averred that petitioner prornised to r gister the said Parcel of land in the name of resPondent No within 45 days. That on

06.08.2023, when accused No 1 requested resPondent No.2 transferred an amount of Rs'2,10,0 0/- from his bank account to accused No. 1's bank account, art ount of Rs.90,0OO/- was Paid through PhonePe, an amount of Rs 1,00,000/- cash was given to petitioner. That a total amount o Rs.16,OO,000/- is given to petitioner. That on O5.O9.2O23, ac usbd No.1 called resPondent No.2 and stated that owner AntonY is coming to sPeak that after speaking to AntonY, resPondent N .2 transferred art amount of Rs.9,20,000/- from his bank acco nt to account of AntonY. That rvhen respondent No.2 asked abo t registration, accused No 1 informed resPondent No.2 to Pre afe DD's for registration tor amount of Rs.5,0O,OOO/-, Rs.50, oo/- and Rs.5,30,O00/-. The rest of the amount Ya-s agreed to b given in the cash. That later respondent No.2 called petitioner, owever, there was no resPonse from accused No.l and it was in rmed to respondent No.2 that he would register the said Plot n so and so dates but never (i r I 4 JA]\, CRLP 15395 2024 registered. It is averred that an amount of Rs.25,20,00O/_ has been given till date, hou'ever no registration has taken place and that both of them (accused No.1 and Antony) have cheated. Hence, the complaint.

5. Learned annicus for petitioner submitted that there is no inducement of respondent No.2 from inception. It is further submitted that respondent No.2 being aware has entered into an agreement on 25.07.2023 and paid the amount. It is also submitted that rcspondent No.2 has a remedy of filing a suit for specific performance and that there is no element of inducement from the inception. Hence, the ingredients of Section 420 of IpC are not made out. It is pointed out that the offence of crimina-l breach of trust is not attracted in view of the law, laid down by the Hon'ble Apex Court in Delhi Race Club (lg4o) Limited. and, Others a. State of llttar Prq.desh and Anothert.

6. Learned amicus further placed reliance upon the judgment of the Hon'ble Apex Court in Radhegshgam and Others a. Storte of Rajasthan and Anotherz for the proposition that the act of petitioner/ accused No.1 at best constitutes a civil u,rong and does not call for any criminal actions. It is pointed out that the Hon'ble '1zoza; to scc olo 2 Criminal Appeal No.3020 ot'2024 ---a:F 5 JAK, J CRLP 15195 2024 Apex Court in Radhegshgam and Others (supra 2) was dealing with similar Sections as in the pres nt case. Hence, the judgment is applicable in the facts of present ase.

7. On the other hand, learne Assistant Public Prosecutor submitted that it is a clear case of heating as petitioner induced respondent No.2. That responde t No.2 paid an amount of Rs.25,20,000/- to petitioner good faith ald trusting petitioner/ accused No. 1 and anot er person by name Antony. Hence, the ingredients of the Se tions are attracted and the proceedings be permitted to con inue and no interference is necessitated B. Heard learned counsels, per ed the record and considered the rival submissions. 9" From the complaint/FlR, it is observed that respondent No.2 entered into an agreement f purchase of a parcel of land admeasuring 400 sq yards at Man eguda, Rs.1i,50O/- was hxed per sq. yard. A total amount of Rs.25,20,000/- was paid by respondent No.2 to petitioner/ac sed No.1 and another person narne Antoriy on differen dates. Initial amount of Rs.5,OO,00O/- was paid on 24.0 2023, to petitioner/accused 6 JAK, J CRI_P r5395 2024 No.1. An agreement was entered on 25.07.2023, on 06.08.2023, Rs.2,10,000/- was deposited in the bank account of petitioner/ accused No.1 , an amount of Rs.90 ,OOO /- was paid through 'Phonepe', an amount ol Rs. 1,00,0007- cash was given. On 05.09.2O23, another sum of Rs.9,20,OOO/- was paid. A total sum of Rs.25,20,000/- \[,as paid by respondent No.2 to petitioner/ accu sed No.1 and Antony.

10. It is observed that series of financial trarsactions have taken place bctq,een respondent No.2 and petitioner/ accused No.1 and Antony. Last of such transaction as per thc complaint is on O5.O9.2023. Complaint is dated 1O.O5.2O24. There is a delay of 1O months in filing the complaint from the date of last transaction. Entire controversy revolves around transaction(s) regarding a sale and purchase of parcel of land. Offences are registered under Sections 406 and 42O of IPC

11. The Hon'ble Apex Court in Delhi Race Club (1940) Linited and Others (supra 1), u,hile dealing with Sections 406 and 42O of IPC i.e., the offence of criminal breach of trust and cheating made distinction betrveen the offences and held as follou,s J+. interpreted proceeding" In Sunit Bharti Mittal, this Court the expression " suffi-cient grounds for and held that there should be 7 JAK, J CRLP 15195 2024 sufficiency of materials against concerned before Proceeding CrPC. tt was held thus: (SCC PP. e accused No. I der Section 204 44-45, para 53) "53. Houteuer, the uLords proceeding" oppeanng tn immense importonce. It is these suggest that an oPinion is to b due applicotion of mind that ttLe for proceeding against the said forrnation of such an oPinion k order itself. The order is liable t is giuen therein uh reason conclusion that there is Pima fa accused No.1, though the orde detailed reasons. A fortiori, the in law if the reason giuen tu incorect." cient ground for Sec on 204 are of rds tuhich amPlg formed only after is sufftcient basis accused No.l and o be stated in tte be set aside if no coming to the e case against the need not contain rder would be bad out to be ex facie DiJference bettaeen criminal and cheating brecch of trust

35. This Court in rts Polanitkar u. State of Bi the ingredie difference constituting of an cffence of tlu st (Section 406 IPC) vis-ir cheating (Section 420). The re rcad as under: (SCC P- 246, Par "9. The ingredients rn o criminal breach of trust are: (i) entrusting a Person w any dominion over ProPert entrusted: (a) dishonestlY converting that Property to dishonestly using or disPosing wilfully suffering anY other violation (i) of arrY direction of mode in which such trust is to arty legai contract made, tou such trust. deCision in S. expounded the "/,/' ts required for riminal breach of vis the offence of evant observations s 9-i0) er to constitute a th property or with (ii) lhat Person isappropriating or s own use; or (b) of that property or rson so to do in law prescribing the e discharged, (ii) of ing the discharge of 8 JAI(, CRLP 15395 2024

10. The ingredients of an offence of cheaLing are: (i) there should be fraudulent or dishonest inducement of a person by deceiving him, (ii)(a) the person so deceived should be induced to deliver any property to any person, or to consent that any person shall retain any property; or (b) the person so deceived should be intentionally induced to do or omit to do anything which he would not do or omit if he u,ere not so deceived; and (iii) in cases covered bV (ii)(b), the act of omission should be one which causes or is likely to cause damage or harm to the person induced in body, mind, reputation or property. "

36. What can bc disccrned from the abovc is that thc offences of criminal brcach of trust (Section 406 IPC) and chcating (Section 420 IPC) have specrfir' ingredicnl s: In order to constitute a crimlnal breach o;f tt'ust (Section 406 IPC) (l) Thcre must be entrustment with person for propertv or dominion over the proirerty, and (2) Thc person entru sted: (a) Dishonestly miserppropriatcd or converted property to his own use, or (b) Dishonestly used or disposed of the property or wilfully suffers any other person so to do in violation of: (i) Any direction of law prescribing the method in rvhich the trust is discharged; or (ii) Legal contract touching the discharge of trust (see: S.W. Palonitkafl. Slmilarlg, in respect of an offence under Section 42O IPC, the essential ingred.ients are: (1) Dcception of any person, cithcr by making a false or mislcading represcntation or bv othcr action or by omission; (2) Fraudulently or dishonestly inducing any person to deliver any propcrty, or (3) The consent that any person shall retain any property arrd finally intentionally inducing that 9 JAK, J CRLP 15395 2024 person to do or omit to do anyth not do or omit (see: Hannanp u. State of Punjabl. ng which he would t Singh Ahluualia

37. Further, in both the mens rea i.e. intention to defra intention must be prcsent, cheating it must be there from or inception. aforesaid sections, d or thc dishonest d in the case of the very beginning

38. In our view, the p complaint fails to spell out ingredients noted above. We m vicw to clear a serious misconc mind of thc police as well as th if it is a case of the compla criminal breach of trust as de 405 IPC, punishablc undcr S committed by the accused No. brcath it cannot be said that t also committed the offence of and explained in Scction 41 under Section 42O lPC. n reading of the y of the aforesaid y only say, with a tion of law in the courts below, that nt that offence of ed under Scction ction 4O6 IPC, is , tl-ren in thc same accused No. I has e ating as delined IPC, punishable

39. Every act of brea result in a penal offence of cri unless there is evidence of fraudulent misappropriation. trust involves a civil wrong in person may seek his remcdy courts but, any breach of tru gives rise to a criminal prosec been held in Hai Prasad Kumar Surekha as under: (SCC "4. We have heard Mr M of the appellant and are of the has been made out against th Section 42O of the Penal C purpose of the present appeal that the various allegations of made in the complaint by the of trust may not inal breach of tmst anipulating act of act of breach of spect of which the r damages in civil t with a mens rea, tion as weil. It has mona u Bishun p. 824, para 4l eshwari on behalf pinion that no case respondents under e, 1860. For the we would assume ct which have been peilant are correct. l0 JAK. CRLP 15395 2024 Even after making that allowance, we find thar the complaint does not disclose the commission oI any offence on the part ol' the respondents under Section 42O of the Penal Code, 1860. There is nothing in the complaint to show that the respondent had dishonest or fraudulent intention at the time the appellant parted with Rs 35,000. There is also nothing to indicate that the respondents induced the appellant to pay them Rs 35,000 by deceiving him. It is fur[her not the case of the appellant that a representation was made by the respondents to him at or before the time he paid the money to them and that at the time the representation was made, the respondents knew the same to be false. The fact that the respondents subsequently did not abide by their commitment that they would show Lhe appellant Lo be the proprietor o[ Drang Transport Corporation and would also render accounts to him in the month of December might create civil liability for them, but this fact would not be sufficient to fasten criminal liability on the respondents for tire offence of cheating. "

40. To put it in other words, the casc of cheatrng and dishonest intention starts with rhe very inception of the transaction. But in the casc of crimin:ri breach of trust, a person who comes into possession of the movable property arnd receivcs it legally, but illegally retains it or converts it to his own use against the terms of the contract, then the question is, in a case like this, whether the retention is with dishonest intention or not, whether the retention involves criminal breach of trust or only a civil liability would depend upon the facts of each case. 4 I . The distinction between mere breach of contract and the offence of criminal breach of trust and cheating is a fine one. In case of cheating, thc intcntion of the accused No.1 at the timr: of _j'{.-. l1 JAtq J CRLP 15395 2024 inducement should be looked judged by a subsequent condu not l- subsequent conduct is breach of contract cannot give prosecution for cheating unl dishonest intention is show beginning of the transaction i.e. offence is said to have been co it is this intention, which is the to which may be t, but for this, the e sole test. Mere rise to a criminal ss fraudulent or right from the the time when the mitted. Therefore, st of the offence

42. Whereas, for the cri the property must have bec accused No. I or he must hav The property in respcct of w breach of trust has bcen conr the property of some person oth No. I or I hc beneficial intcrcst i must be of some other pet son must hold that property on person. Although the offence breach of trust and cheatin intention, yet they arc mut diffcrent in basic concepl . al breach of trust, entrusted to the dominion over it. ich the offence of tcd must bc either r than the accused or ownership of it The accused No. I ust of such other i.c. thc offence of involve dishonest ly' exclusive and

43. Therc is a distinctir.r breach of trust and cheat criminal intention 15 necess making a false or misleading since inception. In criminal br proof of entrustment is sulficie crimina.l breach of trust, thc entrusted with the property, misappropriated the samc. cheating, the offender fraudul induces a person by deceiving property. In such a situation cannot co-exist simultaneously be tween criminal g. For cheating, at the time of representation i.e. ach of trust, mere t. Thus, in case of ffcnder is lawfully nd he dishonestly ereas, rn casc of tly or dishonestly him to deliver any both the offences

54. When dealing with the law enjoins upon the M meticulou sly examine the cont private complaint, strate a duty to ts of the complaint 12 JNK.J CRLI' r5395 2024 so as to determine u,hether the offence of cheatir-rg or criminal breach of trust as the case may bc is made out from the averments made in the complaint. The Magistrate must carefuily apph, its mind to ascertain whether the allegations, its stated, genuinely constitute these sper-'ific offences/ln contrast, when a case arises from al FIR, this responsibility is of the policc to thoroughly ascertain whether the allegations leveled b1, the informant indeed fall under rhe category of cheating or criminal breach of trust. Unfortunately, it has become a common practice for the police officers to routinely and mechanically proceed to register an FIR lor both the offences i.e. criminal breach of trust and cheating on a more allegation ol some dishonesly or fraud, without iu'ry proper application of mind.

55. It is high time that the policc officers across the country arc imparted proper training in law so as to understand the fine distinction betr.veen thc offence of cheating vis-h-vis crimir-ral breach of trust. Both offences are independent arrd distinct. The two offences cannot cocxist simultaneously in the same set of facts. They:rre antithetical to each other. The trvo provisions of IPC (now BNS, 20231 arc not twins that they czlnnot survive without each other.

56. In view of the a{oresaid, the appt:ai succecds ar-rd is hereby allowed."

12. The Hon'blc Apex Court while dealing with Sections 420 and 406 of IPC in the case of Rad.hegshgam and Others (supra 2) held as follows: "7. Section 42O, LPC provides that: "Wltoeuer cheots and thereby dishon.estlg induces the person deceiued to --:r." l3 JA( J CRLP t5395 2024 deliuer anA propettA to make, alter or destrog the a ualuable seanitg, or signed or sealed, and being conuerted into a ual be punbhed with imp description for a tenn w seuen Aears, and shalL al any person, or to hole or any part of angthing u-,hich is hich is capable of able seanity, shall onment of either ich mag extend to be liable to fine." For an offence under S following ingredients must be p tion 42O, IPC, the esent: under Section 415, re should be a nest inducement of ive; and eatcd must be o any person; or ciestroy valuable ed or sealed and conv rted into valuable SI I u. lu. Cheating as defin IPC, that is, th fraudulent or dish a person; An intention to dec person c The dishonestly induce a. Deliver property b. Make, alter o security or anything capable of being security.

8. Thus, cheating ingredient to constitute arrd o 42O,lPC. Further, to constitut under Section 415, IPC, it i fraudulent or dishonest indu the dcceived person is made to owing to the fraud. Section 'cheating', as: "Whoeuer, by de fraudulently or disLanest so deceiued to deliuer person, or to consent t retain ang prapertA, or the person so deceiued angthirq which he woul were not so deceiued, omlsslon couses or ls rms an essential ence under Section cheating as defined necessary that a ement is done and delive r any property 4 15, IPC, dehnes tutng ana person, g induces the person nA propertA to onA t ang person shall ntentionallg irtduces to do or omit to do not do or omit if Le and tthich act or lg to cause damage 7 i I I t4 J^I( J cRt-P i5195 2021 -1:' , or harTn to that person in bodg, m td, reputotion or propertA, is soid to "cheat"."

9. From the bare perusal of the FIR, it .is evident that there was no act of cheating, that is, the complarnant was nowhere fraudulently induc:ed or dishonestly deceived by the appellants. A commercial transaction took place between the parties during which the parties consensually agreed for the sale of the ltroperty of the appellants and respondent no.2 paid the part consideration. The default ir-r payment of their loan dues on parl. of the appcllants is not rellective of their deceitl'ul intention towards the complainant. Mere non- registration o[ the sale or iLs refusal cannot amorrnt ro cheating. 'lhe delivery of the advance paymcnt towards consideratior-r was made in furtherance of an Agreement to Sell and it is not the case of ihe respondent that he was in anylvay deceived or dupecl to make such payments to the appellants. lt is a crvil dispute and gives rise to the complainant's right to resort to the remedies provid6d under civil law b1- f-rling a suit for specihc performance.

10. Additionally, the appellarts have also been accused No.1 of cornmitting the offence of criminal brcach of trust Lrnder Section 406, IPC. This offence is dcfincd under Scction 405, IPC as follorvs: "Wtoeue1 being in anA menner entntsted utith propertg, or with onA dominion ouer propertA, disLnnestlg misappropriates or conuerts to his own use that property, or dishonestly uses or disposes off that propertg in uiolation of any direction of law prescribirtg the mode in uthich such trust is to be discharged, or of any legal contract, express or implied, uhich he has made touching tlrc dischorge of such ttust, or uilfullg suffers anpl other person so to do, commits ,,cnminal breocLt of trust"." I 5 JAK, J CRLP 15395 2024

11. For an offence Punish 406, IPC, the following ingredien ble under Section s must exist: 1l The accused No. I property, or entrus over property; The accused No.1 misappropriated or own use that ProP used or disposed wilfully suffer any so; and Such misappropri use or disposal sh of any direction of mode in which s discharged, or of which the person the discharge cf su as entrusted with ed with dominion had dishonestlY converted to their ty, or dishonestlY f that property or ther person to do tion, conversion, uld be in violation w prescribing the ch trust is to be y legal contract as made, touching h trust

12. In the Present were not entrusted with respondent no.2 comPlainant. made was of part Paymcnt to to Sell between the Parties towards consideration cannot entrusted with the aPPellants Additionally, merelY bccause refusing to register the salc, it misappropriation of the adv there was no entrustment of of misappropriation of such P criminal breach of trust canno out. e, ' the appellants any property bY The only delivery ards al Agreemcnt The amount paid e said to have been respondent no. 2 the appellants are oe s not amount to ce payment. Since roperty, the offence perty and therebY be said to be made

13. Therefore, the ingre offences alleged in the FIR the appellalts and thus, no o have been committed bY th appellant at best constitutes a ients of none of the e made out against ence can be said to m. The act of the civil wrong and does l6 JAI( CRLP 15395 2024 not call for any criminal action against them. A civil wrong cannot be given a crimina,l colour merely to coerce the appellants into registering the sale. The judicial process cannot be used as a tool to enfcrrce specific perlormance of al agreement. Respondent No.2 has ample remedies under the civil law and he has already resorted to Lhe same by liling a civil suit for specific performance r,r.hich is pending adjudication before the relevant forum. Thus, such a criminal proceeding cannot be allowed to continue.

14. Accordingly, the appeal is allowed. The impugned judgment and order is set aside. The impugned FIR rs quashed."

13. Perused the record, it is observed that the rransactions are civil in nature. There was an agreement for purchase of property. Amounts were transferred by respondent No.2 to accused No. 1 . Pursuant to agreement, accused No. 1 receive d amounts to register the property. First of the transaction was on 24.02.2023, Iast transaction on 05.O9.2023, complaint is lodged on lO .O5.2O24, what transpired after the last transaction for 6 months is not forthcoming, nothing is stated. Apparently, it appears to be a transaction for sale arld purchase of a parcel of land, it is after 10 months the complaint is lodged. There is a delay in lodging the complaint, no explalation is forthcoming for the delay of 6 months after the last transaction and the date of complaint. In the absence of any explanation for delay, it appears l7 JAK, J CRLP lil95 2024 the complaint is filed to cocrce cused No.l and Antony to get the parcel of land registered.

14. As per the law declared by onble Apex Court in both the a-foresaid sections, mens rea t.e intention to defraud or the dishonest intention must be Pres t, arld in the case of cheating it must be there from the verY be ing or incepticn. In the facts and circumstances of the case, th act(s) of accused No.1 at best constitute a civil '.vrong artd cioes civil wrong cannot be given a c not call for criminal action. A iminal flavor/colour to cocrce petitioner/accused No. 1 into regis ering the property. Respondent No.2 has ample civil remedies.

15. For reasons aforesaid, the roceedings in Crime No.270 of 2024 of Adibatla Police Station, Rachakonda District, against accused No.1 are liable to be quas ed and are hereby quashed.

16. Accordingly, the criminal pe tion is allowed Miscellaneous applications pending, if any, shall stand closed. I To, //TRUE C PYII sd- M LLIKARJUNA RAO TANT REGISTRAR SECTION OFFICER

1. The XV Metropolitan N/agistrate, Cybe 2. The Station House Officer, Adibafla p. bad at lbrahimpatnam. , Rachakonda Commissionerate -^&,.H-^ ,-- --.d;l

3. Two CCs to the Public Prosecutor, High Court for the State of Telangana, Hyderabad [OUT]. I 4 One CC to Sri Mohammad Nabeel Ali, Advocate [OPUC] s. Two CD CoPies I VC/gh Pn^c.,, HIGH COURT DATED:1710412025 \ ORDER CRLP.No.15395 of 2024 - _:::,- -\ ..,i, irr- ',,4 16- r l.t i, () J0ilEm )., oc, r% rcHELl \f' ,+ d 1 I srq" q\+u{ ALLOWING THE CRLP