Criminal proceedings for cheating and breach of trust cannot be maintained for simple civil contract disputes. Prosecution requires proof of deceptive intent at the transaction's inception for cheating, and clear evidence of entrustment with dishonest misappropriation for breach of trust. Failure to establish these renders the process an abuse of law.

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 and set aside the entire criminal proceeding as well as the order dated 27.11.2017 passed by learned Judicial Magistrate-1st Class, Jamshedpur in connection with C1 Case No.2109 of 2016 whereby and where under the learned Judicial Magistrate-1st Class, Jamshedpur has found prima facie case for the offences punishable under Sections 420/406 of the Indian Penal Code against the petitioners.

3. The brief fact of the case is that the deceased husband of the petitioner no.2 namely Anil Kumar Akela and the petitioner no.2 were the directors of the petitioner no.1. The deceased husband of the petitioner no.2-Anil Kumar Akela entered into a development agreement with the two grandfathers of the complainant and paid Rs.4 lakhs as advance at the time of agreement. The two grandfathers of the complainant executed power of attorney in favor of the Anil Kumar Akela in 2008 and on the basis of power of attorney Anil Kumar Akela transferred 1 Bigha of land in favor of the petitioner no.1 but did not pay the consideration money of the said sale deed to the executors of the power of attorney in his favour. The grandfathers and the father of the complainant have died before the filing of the complaint. Anil Kumar Akela after the death of two grandfathers of the complainant made a rectification of the power of attorney in favor of the petitioner no.2. Anil Kumar Akela also entered into a development agreement in respect of 1 Bigha of land; which was in possession of the Anil Kumar Akela, with the father of the complainant. An MoU (Memorandum of Understanding) was prepared for 3 Bighas of land for Rs.2,40,000,00/- and advance of Rs.1 crore was paid but the remaining amount was not paid. Later on, the complainant came to know that the rest land has been transferred in the name of the petitioner no.1 and 2.

4. Learned counsel for the petitioners submit that the allegation against the petitioners is false and the dispute between the parties is basically a civil dispute. It is next submitted that there is no allegation against either of the petitioners of committing any offence and all the allegations are against Anil Kumar Akela who has died during the pendency of this Cr.M.P. It is next submitted that even though the entire allegations made against the petitioners are considered to be true in their entirety, still neither offence punishable under Section 406 of the Indian Penal Code nor the offence punishable under Section 420 of the Indian Penal Code is made out.

5. Learned counsel for the petitioners relies upon the judgment of this Court in the case of Ambuj Hotel and Real Estate Pvt. Ltd. & Others vs. The State of Jharkhand and Another in Cr.M.P. No.614 of 2024 dated 17.09.2024 and submits that therein this Court relied upon the judgment of the Hon’ble Supreme Court of India in the case of Sarabjit Kaur vs. State of Punjab & Another reported in (2023) 5 SCC 360 paragraph-13 of which reads as under:-

“13. A breach of contract does not give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction. Merely on the allegation of failure to keep up promise will not be enough to initiate criminal proceedings. From the facts available on record, it is evident that Respondent 2 had improved his case ever since the first complaint was filed in which there were no allegations against the appellant rather it was only against the property d