Mere breach of contract does not amount to criminal breach of trust or cheating; intention to deceive must exist from the inception of the transaction for criminal liability to arise.

JUDGMENT :

Anil Kumar Choudhary, J.

1. Heard the parties.

2. This criminal miscellaneous petition has been filed invoking the jurisdiction of this Court under Section 528 of B.N.S.S., 2023 inter alia with the prayer to quash the entire criminal proceeding arising out of Ormanjhi P.S. Case No. 110 of 2022, corresponding to G.R. No. 3379 of 2023 along with the order dated 29.11.2023 wherein the learned Judicial Magistrate, Ranchi consequent upon the submission of charge sheet has taken cognizance of the offence punishable under Sections 420 /406/120B/34 of INDIAN PENAL CODE against the petitioners.

3. The allegation against the petitioners is that the petitioners entered into an agreement for sale with the informant and Md. Tabrej Alam and took advance for the same but did not sell the said land and the petitioners also entered into such agreement and taken advance for sale of his land from several persons also.

4. Learned counsel for the petitioners relies upon the judgment of this Court in the case of Maya Rani vs. The State of Jharkhand & Anr. reported in 2025 JHHC 19884 and submits that therein this Court relied upon the judgment of the Hon’ble Supreme Court of India in the case of Satishchandra Ratanlal Shah vs. State of Gujarat & Anr. reported in (2019) 9 SCC 148 wherein, the Hon’ble Supreme Court of India reiterated the settled principle of law that mere breach of promise, agreement or contract does not, ipso facto, constitute the offence of the criminal breach of trust contained in Section 405 of INDIAN PENAL CODE , without there being a clear case of entrustment. It is next submitted by the learned counsel for the petitioners that in that case, this Court also relied upon the judgment of the Hon’ble Supreme Court of India in the case of Radheyshyam & Ors. vs. State of Rajasthan & Anr. reported in 2024 SCC OnLine SC 2311, paragraph no. 12 of which reads as under:-

“12. In the present case, the appellants were not entrusted with any property by respondent no. 2 - complainant. The only delivery made was of part payment towards an Agreement to Sell between the parties. The amount paid towards consideration cannot be said to have been entrusted with the appellants by respondent no. 2. Additionally, merely because the appellants are refusing to register the sale, it does not amount to misappropriation of the advance payment. Since there was no entrustment of property, the offence of misappropriation of such property and thereby criminal breach of trust cannot be said to be made out.”

(Emphasis supplied)

wherein, the Hon’ble Supreme Court of India has held that the amount paid towards consideration cannot be said to have been entrusted with the accused persons and in that case, it was also observed by the Hon’ble Supreme Court of India that mere breach of contract does not constitute the offence of cheating or criminal breach of trust.

5. It is next submitted by the learned counsel for the petitioners that in that case also, this Court further relied upon the judgment of the Hon’ble Supreme Court of India in the case of Uma Shankar Gopalika vs. State of Bihar & Another reported in (2005) 10 SCC 336, paragraph No.6 of which reads as under:-

“ 6. Xxxxx xxxxx xxxxx xxxxx It is well settled that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. In the present case it has nowhere been stated that at the very inception there was any intention on behalf of the accused persons to cheat which is