Gaurav Kumar @ Gaurav Singh v. The State of Jharkhand

well as the First Information Report in connection with Sadar P.S. case no. 420 of 2018 registered for the offences punishable under Section 406/420 of IPC including the order taking cognizance dated 05.07.2024 passed by learned J.M., IV, Ranchi whereby and where under the learned J.M., IV., Ranchi found prima facie case against the petitioner for the offences punishable under Section 406 and 420 of IPC.

3. The allegation against the petitioner is that the petitioner, entered into an agreement with the informant to sell a plot of land and took a total advance amount of Rs. 39,16,000/-. It is the admitted case of both the parties that the agreement was entered into 1 Cr.M.P. No. 1539 of 2019 [ 2025:JHHC:25349] between the parties on 29.08. 2015 and as per clause 11 of the said agreement, the execution and the registration of the sale deed was to be done within one year from the date of the execution of the said agreement and as per the clause 13 of the said agreement, if the petitioner, who is the first party to the said agreement, fails to execute the registered sale deed in favour of the second party within the stipulated period of time, the second party shall have right to file a suit against the first party and get the registered sale deed from the competent court of law. The undisputed fact remains that during the period of one year or immediately thereafter, the informant did not file any case and the FIR was lodged only on 09.08.2018 i.e. a little less than two years after the said agreement came to an end because of efflux of the period of time of the said agreement.

4. Relying upon the judgment of the Hon’ble Supreme Court of India in the case of Vijay Kumar Ghai and Others v. State of West Bengal and Others reported in (2022) 7 SCC 124 wherein the Hon’ble Supreme Court of India has dealt with the ingredients to constitute the offence punishable under Section 420 of IPC in para 35 and 36 of the said judgment, which reads as under – “35. To establish the offence of cheating in inducing the delivery of property, the following ingredients need to be proved: (i) (ii) The representation made by the person was false. The accused had prior knowledge representation he made was false. (iii) The accused made false representation with dishonest intention in order to deceive the person to whom it was made. (iv) The act where the accused induced the person to deliver the property or to perform or to abstain from any act which the person would have not done or had otherwise committed.

36. As observed and held by this Court in R.K. Vijayasarathy v. Sudha Seetharam [R.K. Vijayasarathy v. Sudha Seetharam, (2019) 16 SCC 739 : (2020) 2 SCC (Cri) 454] , the ingredients to constitute an offence under Section 420 are as follows: (i) (ii) (a) a person must commit the offence of cheating under Section 415; and the person cheated must be dishonestly induced to: deliver property to any person; or 2 Cr.M.P. No. 1539 of 2019 [ 2025:JHHC:25349] (b) make, alter or destroy valuable security or anything signed or sealed and capable of being converted into valuable security. Thus, cheating is an essential ingredient for an act to constitute an offence under Section 420IPC.” It is submitted by learned counsel for the petitioner that in this case, the FIR was lodged with the purpose of wrecking vengeance, after the period of agreement entered into between the parties has come to an end, in terms of clause 11 of the agreement to force the petitioner to bend backwards. It is next submitted that the informant already instituted a money suit against the petitioner but he has not filed any suit for Specific Performance of Contract as the contract no more exists validly, between the parties. Learned counsel for the petitioner next relies upon the judgment of this Court in the case of Ganesh Pandey versus State of Jharkhand and another passed by this court in CrMP No. 2255 of 2016 dated 08.07.2025 wherein this Court relied upon the judgment of the Hon’ble Supreme Court of India in the case of Radheyshyam & Others vs. State of Rajasthan & Another reported in 2024 SCC OnLine SC 2311, para 12 of which reads as under:- “12. In the present case, the appellants were not entrusted with any property by respondent no. 2 - complainant. The only delivery made was of part payment towards an Agreement to Sell between the parties. The amount paid towards consideration cannot be said to have been entrusted with the appellants by respondent no. 2. Additionally, merely because the appellants are refusing to register the sale, it does not amount to misappropriation of the advance payment. Since there was no entrustment of property, the offence of misappropriation of such property and thereby criminal breach of trust cannot be said to be made out.” (Emphasis supplied) and submits that therein the Hon’ble Supreme Court of India has held that the amount paid towards consideration cannot be said to have been entrusted with the accused person by the complainant and merely because the seller is refusing to register the sale, it does not amount to misappropriation of the advance amount paid. 3 Cr.M.P. No. 1539 of 2019 [ 2025:JHHC:25349]

5. It is next submitted by learned counsel for the petitioner that in that case, this Court also relied upon the judgment of the Hon’ble Supreme Court of India in the case of Murari Lal Gupta vs. Gopi Singh reported in (2005) 13 SCC 699 para-6 of the said judgment, which reads as under:- “6. We have perused the pleadings of the parties, the complaint and the orders of the learned Magistrate and the Sessions Judge. Having taken into consideration all the material made available on record by the parties and after hearing the learned counsel for the parties, we are satisfied that the criminal proceedings initiated by the respondent against the petitioner are wholly unwarranted. The complaint is an abuse of the process of the court and the proceedings are, therefore, liable to be quashed. Even if all the averments made in the complaint are taken to be correct, yet the case for prosecution under Section 420 or Section 406 of the Penal Code is not made out. The complaint does not make any averment so as to infer any fraudulent or dishonest inducement having been made by the petitioner pursuant to which the respondent parted with the money. It is not the case of the respondent that the petitioner does not have the property or that the petitioner was not competent to enter into an agreement to sell or could not have transferred title in the property to the respondent. Merely because an agreement to sell was entered into which agreement the petitioner failed to honour, it cannot be said that the petitioner has cheated the respondent. No case for prosecution under Section 420 or Section 406 IPC is made out even prima facie. The complaint filed by the respondent and that too at Madhepura against the petitioner, who is a resident of Delhi, seems to be an attempt to pressurise the petitioner for coming to terms with the respondent.” (Emphasis supplied) wherein the Hon’ble Supreme Court of India has reiterated the settled principle of law that merely because an agreement to sell was entered into and which agreement, the accused person of the case failed to honour, it cannot be said that the seller has cheated the respondent and no case for prosecution under Section 420 or Section 406 of the Indian Penal Code is made out, hence, it is submitted the prayer as made this criminal miscellaneous petition be allowed.

6. Learned Addl. PP and learned counsel for the opp. Party no. 2 on the other hand vehemently oppose the prayer of the petitioner but the learned counsel for the opp. Party no. 2 fairly submits that the informant has filed a money suit for recovery of the advance 4 Cr.M.P. No. 1539 of 2019 [ 2025:JHHC:25349] amount paid by him to the petitioner and submits that this Criminal Miscellaneous Petition being without any merit, be dismissed.

7. Having heard the submissions made at the Bar and after going through materials available in the record, it is pertinent to mention here that it is crystal clear that the agreement for sale between the parties is no more in force as the said agreement starting from 29.08.2015 was valid only for one year and the FIR was instituted much after that, i.e. about two years after the said agreement came to an end. There is no dispute that the petitioner is the owner of the land and the only allegation against the petitioner is that he earlier entered into an agreement for sale with someone else. It is a settled principle of law that in order to constitute the offence of cheating, it has to be proved that the accused person must have played deception since the beginning of the transaction between the parties as has been held by Hon’ble Supreme Court of India in the case Uma Shankar vs. State of Bihar and Another reported in (2005) 10 SCC 336, para 6 of which reads as under- “6. Xxxxx It is well settled that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. In the present case it has nowhere been stated that at the very inception there was any intention on behalf of the accused persons to cheat which is a condition precedent for an offence under Section 420 IPC.” (Emphasis supplied)

8. Now coming to the facts of the case, there is no allegation against the petitioner that the petitioner played deception since beginning the transaction between the parties and there is no allegation against the petitioner of any dishonest misappropriation of any property entrusted to the petitioner and in the absence of the same, more so, when the agreement for sale between the parties is no more in force, having been come to an end by the efflux of time, this Court is of the considered view that even the entire allegation made against the petitioner is considered to be true in 5 Cr.M.P. No. 1539 of 2019 [ 2025:JHHC:25349] their entirety, still neither the offence punishable under Section 420 of IPC nor the offence punishable under Section 406 of IPC is made out against the petitioner. Hence, continuation of this criminal proceeding against the petitioner will amount to abuse of process of law.

9. Accordingly, the entire criminal proceeding as well as the First Information Report in connection with Sadar P.S. case no. 420 of 2018, is quashed and set aside qua the petitioner.

10. Accordingly, this Criminal Miscellaneous Petition is allowed qua the petitioner. High Court of Jharkhand, Ranchi Dated, the 12th August, 2025 Smita /AFR (Anil Kumar Choudhary, J.) 6 Cr.M.P. No. 1539 of 2019