Mere breach of contract does not amount to cheating under IPC; dishonest intent must be proven to establish criminal liability.

Order :

FARJAND ALI, J.

1. The instant Criminal Misc. Petition has been filed under Section 482 of Cr.P.C. for quashing the FIR bearing No.0013/2023 dated 13.01.2023 registered at Police Station Ganga Shahar, District Bikaner for the offence under Sections 420 , 120-B, 467, 468, 470 of the INDIAN PENAL CODE .

2. The FIR alleges that the petitioners, along with others, had entered into an agreement to sell agricultural land to the complainant. The agreement stipulated that the petitioners would arrange for the sale deed to be executed by the original landowners within a specified time-frame. The complainant had paid an advance amount of Rs.75,00,000/- to the petitioners towards the purchase price. However, despite repeated demands, the petitioners failed to fulfill their obligations under the agreement and refused to return the advance amount. The complainant further alleged that the petitioners had forged documents and cheated him by making false representations.

3. The petitioners contended that the FIR is wholly misconceived and has been lodged with mala fide intentions to harass them. They argued that the dispute is essentially of a civil in nature arising from a failed transaction in relation to land and that there is no evidence to support the criminal allegations of fraud, forgery, and cheating. The petitioners asserted that they are ready and willing to fulfill their obligations under the agreement and that the complainant has resorted to criminal proceedings to exert undue pressure. They further argued that the complainant has approached the Court with unclean hands and has already initiated civil proceedings regarding the same matter.

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

5. This Court has meticulously examined the contents of the FIR lodged against the petitioners and the relevant materials presented. The FIR lodged by the complainant details a complex transaction involving an agreement for the sale of agricultural land. The petitioners, along with others, allegedly entered into an agreement with the complainant, receiving an advance payment of Rs.75,00,000/-. The complainant alleges that despite repeated demands, the petitioners failed to arrange for the execution of the sale deed by the original landowners, thus breaching the agreement. The complainant further accuses the petitioners of forgery and making false representations to induce the payment.

6. The petitioners argued that the dispute is civil in nature, arising from a breach of contract, and that the complainant should have pursued civil remedies such as a suit for specific performance. The Supreme Court, in plethora of judgments, has emphasized that civil disputes should not be given a criminal flavor unless there is clear evidence of criminal intent from the inception of the agreement. In this case, the primary contention is a failure to fulfill contractual obligations, which prima facie appears to be a civil matter.

7. Section 415 IPC, which defines cheating, requires dishonest intention from the outset, leading to wrongful gain or loss. Illustration (g) of Section 415 IPC elucidates that mere failure to perform a promise, without initial intent to deceive, does not amount to cheating. Here, the complainant’s allegations do not sufficiently establish that the petitioners had a dishonest intention at the time of entering into the agreement. A subsequent inability to fulfill the contractual terms does not per se constitute an offence of cheating.

This case appears to fall squarely within the ambit of Ilustration (g) of Section