Mere non-performance of a contract does not amount to cheating or criminal breach of trust; such civil disputes must be resolved through civil law remedies rather than criminal proceedings.

ORDER

1. Leave granted.

2. By the impugned judgment and order dated 27.09.2023 the High Court of Judicature for Rajasthan at Jodhpur has declined to quash the proceedings arising out of First Information Report [FIR] No.215 of 2022 under sections 420 and 406 of the Indian Penal Code, 1860 [IPC] registered at Police Station Rajgarh, district Churu, Rajasthan and, accordingly, dismissed the petition under Section 482 of the Code of Criminal Procedure, 1973 [CrPC] filed by the appellants.

3. Respondent no.2 and the appellants entered into an Agreement to Sell dated 29.06.2020 with respect to sale of Swami Towers, Shitla Bazar, Rajgarh for a total sale consideration of Rs.5,11,00,000/- (Rupees five crore eleven lakhs only) and an advance payment of Rs.11 lakhs i.e. Rs.5 lakhs in cash and Rs.6 lakhs by way of a cheque was made at the time of Agreement to Sell. Further respondent no.2 agreed to make the payment of Rs.1 crore by 30th September, 2020 and the balance amount of Rs.4 crores in the next fifteen months beginning 30th September, 2020, as per his convenience. The entire payment was to be made within 18 months from the date of execution of the Agreement to Sell.

4. It appears that the sale was not executed. Respondent no.2 filed an FIR on 24.05.2022, details of which have already been stated in the opening paragraph. A perusal of the complaint simply states that the Agreement to Sell had been executed between the parties on 29.06.2020. The appellants were the owners of the properties to be transferred and respondent no.2 had agreed to purchase the same for the price agreed for which advance of Rs.11 lakhs was paid at the time of the Agreement to Sell. Later on, respondent no.2 has paid a further amount of Rs.89 lakhs at different points of time. Thus, making a total payment of Rs.1 crore. Respondent no.2 thereafter approached the appellants to execute the registry of the property in question but the appellants refused to execute the registry and, therefore, it is further stated that their refusal is evident of the fact that the appellants have cheated respondent no.2 with dishonest intentions and have duped him of Rs.1 crore in collusion with his brother in furtherance of their criminal conspiracy. It is further stated in the complaint that respondent no.2 has been regularly contacting the appellants and requesting them to execute the registry of the property in question after taking the balance sale consideration but the appellants are now openly, with intention to cheat and dupe him, are saying that ‘do whatever you want, we will not execute the registry in your name’.

5. Soon thereafter respondent no.2 has instituted a Civil Suit for relief of specific performance of the contract against the appellants in June, 2023 which is registered as Civil Suit No.10/23 in the Court of First Additional District Judge, Rajgarh, District Churu titled ‘Mohd.Naseem Vs. Radhey Shyam and Ors.’ The said suit is still pending. The said suit is also filed on the basis of the same Agreement to Sell with similar facts as stated in the complaint.

6. As already indicated above, a perusal of the complaint which has been registered as the FIR does not spell out any element or ingredient of cheating or breach of trust. Mere non-performance of an Agreement to Sell by itself does not amount to cheating and breach of trust. Respondent no.2 has adequate remedy of filing a Civil Suit for relief of specific performance of a contract which he has already availed and the suit is still pending. The FIR only appears to be an arm-twisting mechanism to pressurise the appellants to execute the Sale Deed or to extract money. Every civil wrong cannot be converted into a criminal wrong. As we find in the present case, respondent no.2 is trying to abuse the criminal machinery for ulterior motives. It is not his case that the appellants duped him to pay the advance amount and entered into an Agreement to Sell. The High Court fell in error in recording a finding that the ing