Failure to honor a contract or non-refund of advance payments does not constitute criminal cheating or breach of trust unless dishonest intent at the inception or proof of specific entrustment and misappropriation is demonstrated. Such disputes are fundamentally civil in nature, and criminal proceedings should be quashed.

JUDGMENT :

Heard the parties.

Learned counsel for the petitioner submits that this interlocutory application has been filed with a prayer for early hearing of the instant Cr.M.P.

Since, the hearing of instant Cr.M.P. is taken up today, hence, this interlocutory application stands disposed of being infructuous.

(Anil Kumar Choudhary, J.

Cr.M.P. No.695 of 2025 By the Court:- Heard the parties.

2. This Criminal Miscellaneous Petition has been filed invoking the jurisdiction of this Court under Section 528 of the B.N.S.S., 2023 with the prayer to quash and set aside the entire criminal proceeding arising out of Complaint Case No.319 of 2022 including the order taking cognizance dated 10.02.2025 passed by learned Chief Judicial Magistrate, Pakur whereby and where under the learned Chief Judicial Magistrate, Pakur has found prima facie case for the offences punishable under Sections 420/406 of the Indian Penal Code against the petitioner.

3. The allegation against the petitioner is that the petitioner entered into an agreement for sale with the complainant and received Rs.15,50,000/- as advance but did not return the money nor executed the sale deed.

4. Learned counsel for the petitioner relying 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)

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. If the intention to cheat has developed later on, the same cannot amount to cheating.

5. Learned counsel for the petitioner next relies 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 out a case of criminal breach of trust, it is not sufficient to show that money has been retained by the appellants. It must also be shown that the appellants dishonestly disposed of the same in some way or dishonestly retained the s