A breach of contract does not constitute a cognizable offence; criminal prosecution requires evidence of deceitful intent and breach of trust.

ORDER :

1. Heard learned counsel for the parties, gone through order under assail as well as the other relevant material as made available to this Court.

2. By way of filing instant petition a challenge has been made to the very lodging of the FIR No. 115/18, on the ground that even if the contents of the FIR are taken in its entirety or even on its face value or even it is not rebutted the same does not show cognizable offence rather it seems to be a dispute of predominately civil nature. I have minutely gone through the contents of the FIR and so also the other relevant material.

3. Indisputably the complainant in this regard had entered into an agreement for the sale of a piece of land with brother of the petitioner No.1 in the year 2013, it is the assertion of the complainant that after making an upfront amount, he had paid the entire amount of sale consideration to the brother of the petitioner No.1, however, he did not execute the sale deed in his favour which made him to lodge the FIR. It is further contended in the FIR that no payment was due with the vendor and therefore, he was supposed to execute the sale deed in favour of the complainant instead thereof he connived with his full blood brother and executed a sale deed in favour of his brother, who is petitioner herein, in the year2017.

4. The plea taken by learned counsel for the petitioner that at the best it may be the case of breach of condition of the agreement entered in between the complainant and brother of the petitioner and for which he should have filed a suit for specific performance of the contract, however, instead of doing so, he opted to lodge the FIR for mounting pressure upon the petitioner who has to do nothing with the transaction took place between the parties to the agreement.

5. There is a substance in the statement of the petitioner. The agreement of sale got executed in the year 2013 and upon asking whether any notice was given by the complainant to the vendor showing his willingness to execute the sale deed, the answer was in negative.

6. Learned counsel for the respondent repeatedly insisted upon to take note of the fact that the sale consideration has been paid to the vendor much before making payment by the petitioner to the vendor and thus, the dishonest intention on the part of the vendor and the petitioner is very much evident.

7. I have carefully considered this issue. Notably, the record lacks any evidence demonstrating why the complainant, despite the alleged non-performance by the vendor (his brother-in-law) for approximately five years, did not take any remedial steps. The agreement was executed on 08.03.2013. If, as alleged, the complainant had indeed paid the entire sale consideration, there was no impediment to him promptly insisting upon the vendor to execute the sale deed. It is crucial to distinguish between a breach of contract and a breach of trust. While a breach of contract may give rise to a civil liability, criminal prosecution typically arises from a breach of trust.

8. A breach of trust and dishonest intention should be evident from the inception of the agreement. In a situation where the initial agreement is executed with bona fide intentions but a subsequent breach occurs, it cannot be automatically construed as a criminal offence. This case appears to fall squarely within the ambit of Ilustration (g) of Section 415 of the Indian Penal Code (IPC), which states:

“A intentionally deceives Z into a belief that A means to deliver to Z a certain quantity of indigo plant which he does not intend to deliver, and thereby dishonestly induces Z to advance money upon the faith of such delivery. A cheats; but if A, at the time of obtaining the money, intends to deliver the indigo plant, and afterwards breaks his contract and does not deliver it, he does not cheat, but is liable only to a civil action for breach of contract.”

This illustration highlights that a mere breach of contract, even if deliberate, does not necessarily constitute