The post-contract breach of a property sale agreement does not necessarily constitute the offence of cheating under Section 420, and the retention of the advance amount does not amount to misappropriation.

K. Sreedhar Rao, J.--Petition filed under Section 482 Code of Criminal Procedure for quashing of the proceedings in CC No. 8285 of 2000 on the file of the JMFC, Mangalore. The Petitioner is the accused No. 1 in the criminal case. The Respondent filed a private complaint under Section 200 Code of Criminal Procedure alleging the commission of offences punishable under Sections 406 and 420 Indian Penal Code read with Section 34 Indian Penal Code by the Petitioner and the other accused made in the complaint.

2. The facts reveal that the Respondent entered into an agreement with the Petitioner for the sale of certain immovable properties for a valuable consideration of Rs.10,99,500/- and an advance of Rs.55,000/- was paid under the written agreement executed on 30.6.1995. Under the terms of the agreement, the sale had to be completed by 13.9.1995 by executing a registered sale deed, and on payment of the balance amount. It appears that the agreement did not come through. The Respondent issued a legal notice, seeking performance of the contract and certain publications were also taken out in the newspaper informing the general public not to venture to purchase the property in question. Despite of such steps taken by the complainant, it is said that the first Petitioner sold the property in favour of accused No. 2 by executing a registered sale deed on 20.6.1996. It is said that accused No. 2 was also fully aware of the agreement between the Petitioner and the Respondent and further the second accused also sold the property in favour of the third accused on 18.8.1997 under an agreement for a sum of rupees seven lakhs and the third accused was also aware of the sale agreement between the Petitioner and the Respondent. It is said that a civil suit is also pending, seeking specific performance of the contract. In the background of the narrated facts, the Respondent had filed a private complaint alleging commission of offences punishable under Sections 406 and 420 read with Section 34 Indian Penal Code. The trial Court took cognizance, recorded the sworn statement and has issued process. Being aggrieved by the said order, the present petition is filed for quashing of the proceedings.

3. On keenly going through the material allegations in the complaint I find that necessary ingredients constitute an offence of cheating under Section 420 is totally absent. The Counsel for the Respondent referred to the averments in para 8 of the complaint which reads thus:

That the 1st accused dishonestly with an intention to cheat and to cause loss to the complainant made the complainant pay a sum of Rs.55,000/- saying the sale deed will be executed by 30.9.1995. Though the 2nd and 3rd accused were aware of the agreement dated 30.6.1995 and payment of Rs.55,000/- to the 1st accused by the complainant, they joined hands with the 1st accused in order to cause wrongful loss to the complainant.

4. On going through the allegations I find that the averments made totally fall short of the requirements of law to constitute an offence of cheating, there is nothing indicated in the averments of the complaint that the Petitioner had a frame of mind right from the time of entering into the contract of no intention of the performance of the terms of the agreement and for dishonest intention made the other party to enter into contract, however the breach of contract by post contract acts cannot be said that such a transaction attracts the offence under Section 420 Indian Penal Code. Needless to say that the parties have to approach the Civil Court to vindicate their rights for proper remedy. It was contended by the Counsel for the Petitioner that the advance amount of Rs.55,000/- is illegally retained which amounts to misappropriation. I am unable to agree with the said contention. If the advance amount is not refunded per se it does not amount to misappropriation and the wholesome reading of the material facts only indicate that the subject matter of dispute is esse