High Court · 2025

Applicant :- Sanjay Tripathi @ Sanjay Tiwari Opposite Party :- State Of U.P. Thru. Prin. Secy. Deptt. Home Lko. And Another Counsel for Applicant :- Rahul Srivastava Counsel for Opposite Party :- G.A. Hon'ble Shree Prakash Singh,J.

1. Since legal question is involved in the instant application, therefore, the notice to the opposite party no. 2/informant is hereby dispensed with.

2. The present application has been moved with the following main prayers:- "(i) to quash the order dated 08.06.2023 in Sessions Trial No. 67595 of 2023 arising out of Case Crime No. 71 of 2021 under sections 406 and 420 of IPC at Police Station-Indira Nagar District-Lucknow. (ii) to quash the Chargesheet dated 07.12.2021 submitted by the investigating officer before the learned Upper Chief Judicial Magistrate- II, Court No. 26, Lucknow in Sessions Trail No. 67595/2023, "State Vs. Sanjay Tripathi". (iii) to stay the further proceedings of Sessions Trail No. 67595/2023, "State Vs. Sanjay Tripathi" pending before learned Upper Chief Judicial Magistrate-II, Court No. 26, Lucknow in Sessions Trail No. 67595/2023, "State Vs. Sanjay Tripathi."

3. The contention of learned counsel for the applicant is that the informant/opposite party no.2 lodged a first information report on 05.03.2021 which was registered as Case Crime No. 71 of 2021 under sections 406 and 420 of IPC Police Station- Indira Nagar District- Lucknow whereafter, the investigation was started and the same was concluded after recording the statement of informant under section 161 of Cr.P.C. which reiterated the version of the first information report and subsequently, the chargesheet was filed on 07.12.2021. He submits that the informant is a retired employee of police department who was appointed as Station House Officer in Lucknow and because of his approach in the police department, the present first information report has been lodged and for the same reason, the chargesheet has also been filed without any cogent evidence, against him. He further argued that the applicant never received any amount in his account or cash from the informant and even no property as is alleged, has ever been interested to the applicant.

4. Raising the legal issue, he submits that the offence under sections 406 and 420 of IPC could have been charged together as there are apparent distinctions between those as 'for cheating criminal intention is necessary at the time of making a false or misleading representation, since very inception and so far as the criminal breach of trust is concerned, the proof of entrustment is sufficient and in case of cheating, the offender fraudulently or dishonestly induces a person by deceiving him to deliver any property and therefore, the two offences cannot co-exist simultaneously.

5. In support of his contentions, he has placed reliance on the judgment rendered in the case of Delhi Race Club(1940) Ltd V. State of Uttar Pradesh reported in Air Online 2024 SC 612 and has referred paragraphs no. 27, 30 and 31 of the judgment, which read as under:- "27. In our view, the plain reading of the complaint fails to spell out any of the aforesaid ingredients noted above. We may only say, with 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 of trust as defined under Section 405 of IPC, punishable under Section 406 of IPC, is committed by the accused, then in the same breath it cannot be said that the accused has also committed the offence of cheating as defined and explained in Section 415 of the IPC, punishable under Section 420 of the IPC. 30 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, the intention of the accused at the time of inducement should be looked into which may be judged by a subsequent conduct, but for this, the subsequent conduct is not the sole test. Mere breach of contract cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right from the beginning of the transaction i.e. the time when the offence is said to have been committed. Therefore, it is this intention, which is the gist of the offence. Whereas, for the criminal breach of trust, the property must have been entrusted to the accused or he must have dominion over it. The property in respect of which the offence of breach of trust has been committed must be either the property of some person other than the accused or the beneficial interest in or ownership' of it must be of some other person. The accused must hold that property on trust of such other person. Although the offence, i.e. the offence of breach of trust and cheating involve dishonest intention. yet they are mutually exclusive and different in basic concept. There is a distinction between criminal breach of trust and cheating. For cheating, criminal intention is necessary at the time of making a false or misleading representation i.e., since inception. In criminal breach of trust, mere proof of entrustment is sufficient. Thus, in case of criminal breach of trust, the offender is lawfully 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 any property. In such a situation, both the offences cannot co-exist simultaneously.

31. At the most, the court of the Additional Chief Judicial Magistrate could have issued process for the offence punishable under Section 420 of the IPC i.e. cheating but in any circumstances no case of criminal breach of trust is made out. The reason being that indisputably there is no entrustment of any property in the case at hand. It is not even the case of the complainant that any property was lawfully entrusted to the appellants and that the same has been dishonestly misappropriated. The case of the complainant is plain and simple. He says that the price of the goods sold by him has not been paid. Once there is a sale, Section 406 of the IPC goes out of picture. According to the complainant, the invoices raised by him were not cleared. No case worth the name of cheating is also made out."

6. Referring the aforesaid, he submits that the case of the present applicant is also covered with the ratio of the judgment aforesaid as the learned trial court, after taking cognizance has issued summons against the applicant under Sections 406 and 420 of IPC while fixing the date for hearing on 17.07.2023, which, in fact, is against the ratio of the judgment abovesaid.

7. On the other hand, learned counsel appearing for the State has vehemently opposed the contentions of counsel for the applicant, but he has failed to dispute the settled proposition of law as relied upon by the learned counsel for the applicant.

8. Having heard learned counsels for the parties and after going through the records, including the judgment and order of the Hon'ble Supreme Court in the case of Delhi Race Club(Supra), it emerges that the order under challenge was passed by Additional Chief Judicial Magistrate, IInd Lucknow, whereby, the process was issued after taking cognizance under Sections 406 and 420 of IPC. The settled proposition of law is that the mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right from the beginning of the transaction and the criminal breach of trust would attract, where, the offender was lawfully entrusted with the property, therefore, both the offenses cannot be charged together as both cannot co-exist simultaneously.

9. Apparently, the learned trial court has issued summons for the offense under sections 406 and 420 of IPC in one breath, therefore, the same is unsustainable.

10. Consequently, the order impugned dated 08.06.2023 is hereby set aside.

11. The matter is remitted back to the learned trial court concerned to pass a fresh order in the light of the law laid down in the case of Delhi Race Club(Supra).

12. The application is allowed accordingly. Order Date :- 6.8.2025 Mayank MAYANK PRATAP SINGH High Court of Judicature at Allahabad, Lucknow Bench

Applicant :- Sanjay Tripathi @ Sanjay Tiwari Opposite Party :- State Of U.P. Thru. Prin. Secy. Deptt. Home Lko. And Another Counsel for Applicant :- Rahul Srivastava Counsel for Opposite Party :- G.A. Hon'ble Shree Prakash Singh,J.

1. Since legal question is involved in the instant application, therefore, the notice to the opposite party no. 2/informant is hereby dispensed with.

2. The present application has been moved with the following main prayers:- "(i) to quash the order dated 08.06.2023 in Sessions Trial No. 67595 of 2023 arising out of Case Crime No. 71 of 2021 under sections 406 and 420 of IPC at Police Station-Indira Nagar District-Lucknow. (ii) to quash the Chargesheet dated 07.12.2021 submitted by the investigating officer before the learned Upper Chief Judicial Magistrate- II, Court No. 26, Lucknow in Sessions Trail No. 67595/2023, "State Vs. Sanjay Tripathi". (iii) to stay the further proceedings of Sessions Trail No. 67595/2023, "State Vs. Sanjay Tripathi" pending before learned Upper Chief Judicial Magistrate-II, Court No. 26, Lucknow in Sessions Trail No. 67595/2023, "State Vs. Sanjay Tripathi."

3. The contention of learned counsel for the applicant is that the informant/opposite party no.2 lodged a first information report on 05.03.2021 which was registered as Case Crime No. 71 of 2021 under sections 406 and 420 of IPC Police Station- Indira Nagar District- Lucknow whereafter, the investigation was started and the same was concluded after recording the statement of informant under section 161 of Cr.P.C. which reiterated the version of the first information report and subsequently, the chargesheet was filed on 07.12.2021. He submits that the informant is a retired employee of police department who was appointed as Station House Officer in Lucknow and because of his approach in the police department, the present first information report has been lodged and for the same reason, the chargesheet has also been filed without any cogent evidence, against him. He further argued that the applicant never received any amount in his account or cash from the informant and even no property as is alleged, has ever been interested to the applicant.

4. Raising the legal issue, he submits that the offence under sections 406 and 420 of IPC could have been charged together as there are apparent distinctions between those as 'for cheating criminal intention is necessary at the time of making a false or misleading representation, since very inception and so far as the criminal breach of trust is concerned, the proof of entrustment is sufficient and in case of cheating, the offender fraudulently or dishonestly induces a person by deceiving him to deliver any property and therefore, the two offences cannot co-exist simultaneously.

5. In support of his contentions, he has placed reliance on the judgment rendered in the case of Delhi Race Club(1940) Ltd V. State of Uttar Pradesh reported in Air Online 2024 SC 612 and has referred paragraphs no. 27, 30 and 31 of the judgment, which read as under:- "27. In our view, the plain reading of the complaint fails to spell out any of the aforesaid ingredients noted above. We may only say, with 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 of trust as defined under Section 405 of IPC, punishable under Section 406 of IPC, is committed by the accused, then in the same breath it cannot be said that the accused has also committed the offence of cheating as defined and explained in Section 415 of the IPC, punishable under Section 420 of the IPC. 30 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, the intention of the accused at the time of inducement should be looked into which may be judged by a subsequent conduct, but for this, the subsequent conduct is not the sole test. Mere breach of contract cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right from the beginning of the transaction i.e. the time when the offence is said to have been committed. Therefore, it is this intention, which is the gist of the offence. Whereas, for the criminal breach of trust, the property must have been entrusted to the accused or he must have dominion over it. The property in respect of which the offence of breach of trust has been committed must be either the property of some person other than the accused or the beneficial interest in or ownership' of it must be of some other person. The accused must hold that property on trust of such other person. Although the offence, i.e. the offence of breach of trust and cheating involve dishonest intention. yet they are mutually exclusive and different in basic concept. There is a distinction between criminal breach of trust and cheating. For cheating, criminal intention is necessary at the time of making a false or misleading representation i.e., since inception. In criminal breach of trust, mere proof of entrustment is sufficient. Thus, in case of criminal breach of trust, the offender is lawfully 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 any property. In such a situation, both the offences cannot co-exist simultaneously.

31. At the most, the court of the Additional Chief Judicial Magistrate could have issued process for the offence punishable under Section 420 of the IPC i.e. cheating but in any circumstances no case of criminal breach of trust is made out. The reason being that indisputably there is no entrustment of any property in the case at hand. It is not even the case of the complainant that any property was lawfully entrusted to the appellants and that the same has been dishonestly misappropriated. The case of the complainant is plain and simple. He says that the price of the goods sold by him has not been paid. Once there is a sale, Section 406 of the IPC goes out of picture. According to the complainant, the invoices raised by him were not cleared. No case worth the name of cheating is also made out."

6. Referring the aforesaid, he submits that the case of the present applicant is also covered with the ratio of the judgment aforesaid as the learned trial court, after taking cognizance has issued summons against the applicant under Sections 406 and 420 of IPC while fixing the date for hearing on 17.07.2023, which, in fact, is against the ratio of the judgment abovesaid.

7. On the other hand, learned counsel appearing for the State has vehemently opposed the contentions of counsel for the applicant, but he has failed to dispute the settled proposition of law as relied upon by the learned counsel for the applicant.

8. Having heard learned counsels for the parties and after going through the records, including the judgment and order of the Hon'ble Supreme Court in the case of Delhi Race Club(Supra), it emerges that the order under challenge was passed by Additional Chief Judicial Magistrate, IInd Lucknow, whereby, the process was issued after taking cognizance under Sections 406 and 420 of IPC. The settled proposition of law is that the mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right from the beginning of the transaction and the criminal breach of trust would attract, where, the offender was lawfully entrusted with the property, therefore, both the offenses cannot be charged together as both cannot co-exist simultaneously.

9. Apparently, the learned trial court has issued summons for the offense under sections 406 and 420 of IPC in one breath, therefore, the same is unsustainable.

10. Consequently, the order impugned dated 08.06.2023 is hereby set aside.

11. The matter is remitted back to the learned trial court concerned to pass a fresh order in the light of the law laid down in the case of Delhi Race Club(Supra).

12. The application is allowed accordingly. Order Date :- 6.8.2025 Mayank MAYANK PRATAP SINGH High Court of Judicature at Allahabad, Lucknow Bench