Breach of contract does not constitute cheating unless deception and dishonest intention at inception. Advance payment for property sale is not entrustment; mere non-execution of sale deed without misappropriation fails criminal breach of trust ingredients.

JUDGMENT :

ANIL KUMAR CHOUDHARY, J.

Heard the parties.

2. This Criminal Miscellaneous Petition has been filed invoking the jurisdiction of this Court under Section 482 of the Code of Criminal Procedure with the prayer to quash the entire criminal proceeding arising out of Chas P.S. Case No.373 of 2022 registered for the offences punishable under Sections 406 and 420 of the Indian Penal Code, pending in the Court of learned S.D.J.M., Bokaro.

3. It is submitted by the learned counsel for the petitioner that the investigation of this case is still going and the charge-sheet has not yet been submitted. It is next submitted that the allegations against the petitioner is that the petitioner took Rs.11,00,000/- as advance to sell the land for Rs.28,65,000/- and, thereafter, he also took Rs.4,00,000/- in cash for construction of boundary wall over the land to be sold and when the informant insisted for construction of the boundary wall, the petitioner returned Rs.4,00,000/- to the informant and told him to construct the boundary wall himself but as yet he has not executed the sale deed and he is delaying the same on one pretext or the other.

4. Learned counsel for the petitioner relying upon the judgment passed by this Court in the case of Saloni Salvi Vs. The State of Jharkhand & Another reported in 2025:JHHC:31503, wherein this Court has 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-6 of which reads as under:-

6. “Xxxx xxxx xxxx 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 a condition precedent for an offence under Section 420 IPC.” (Emphasis supplied)

and submits that therein the Hon’ble Supreme Court of India has reiterated the settled principle of law 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 and if the intention to cheat has developed later on, the same cannot amount to cheating.

5. Learned counsel for the petitioner further submits that in that case this Court also relied upon the judgment of the Hon’ble Supreme Court of India in the case of Binod Kumar & Others vs. State of Bihar & Another reported in (2014) 10 SCC 663 paragraph-18 of which reads as under:-

“18. In the present case, looking at the allegations in the complaint on the face of it, we find that no allegations are made attracting the ingredients of Section 405 IPC. Likewise, there are no allegations as to cheating or the dishonest intention of the appellants in retaining the money in order to have wrongful gain to themselves or causing wrongful loss to the complainant. Excepting the bald allegations that the appellants did not make payment to the second respondent and that the appellants utilised the amounts either by themselves or for some other work, there is no iota of allegation as to the dishonest intention in misappropriating the property. To make