Criminal proceedings cannot proceed where allegations only constitute a civil dispute without intent to cheat.

1. This petition under Art.226 of the Constitution of India has been filed by the petitioners praying for quashment of FIR lodged against the petitioners by respondent No. 3 as also to restrain respondent No. 2 from effecting arrest of the petitioners.

2. The factual backdrop of event giving rise to this petition are that an agreement to sell in respect of immovable property, being open land, was executed by petitioner No. 1 - Renuka in favour of respondent No. 3 Niraj on 6-7-2002. It is claimed by respondent No. 3 that under that agreement to sell, a total amount of Rs. 89,600/- was paid to petitioner No.1 and a sale deed was to follow. However, the petitioner No. 1 did not execute any sale deed despite special request made by respondent No. 3. A notice was given on 22-5-2004 by Niraj Gupta (respondent No. 3) to Renuka (petitioner No. 1) to execute sale deed by remaining present in the office of Registrar Rajnandgaon, on 10-4-2004. However, the sale deed was not executed. Later on, respondent No. 3 came to know that instead of executing sale deed in his favour, petitioner No. 1 sold the property to one Santosh Ueky. A report was made in the Police Station on 22-5-2005 and a civil suit was also filed by respondent No. 3 on 5-7-2005 in the Court of First Additional District Judge, Rajnandgaon seeking a decree for specific performance of contract. The police took cognizance of the report and an offence under S.420/34 of the IPC was registered by the police of Police Station - Basantpur against the petitioners. According to the petitioners, this fact was known to them from the news report, whereafter this writ petition has been filed seeking quashment of FIR and criminal proceedings.

3. Learned counsel for the petitioners argued that the facts, stated in the written complaint, FIR and statement recorded under S.161 of CrPC, even if accepted as it is, do not constitute offence under S.420 of the IPC. Learned counsel for the petitioners argued that respondent No. 3 filed a civil suit against petitioner No. 1 seeking a decree for specific performance of contract, but later on, the suit has been withdrawn and instead of pursuing civil remedy available to respondent No. 3 under the law, in order to twist arm, the police machinery has been resorted to, whereas present is purely a dispute of civil nature. The allegation as stated in the complaint and the diary statement, at the most, make out a case of breach of contract and there is nothing to show that right from the beginning and at the time of execution of agreement to sell, there was any intention to cheat. Therefore, essential ingredients of cheating as defined under S.415 of the IPC are not made out and the institution of criminal proceedings is an abuse of process of law and an attempt of shortcut the dispute between the parties under the threat of criminal case.

4. On the other hand, learned counsel for the State argued that from the contents of written report, preliminary inquiry conducted by the police and FIR and diary statement, a prima facie case of cheating is made out. Therefore, no interference is warranted and it would be open for the petitioners to raise all defences available to them under the law in the criminal proceedings. Their defence cannot be considered at this stage.

5. Despite service of notice to respondent No. 3, he has appeared nor filed any return.

6. I have considered the rival submissions made by learned counsel for the parties and perused the records.

7. In its well known decision in the case of State of Haryana and Others v. Bhajan Lal and Others, 1992 KHC 600 : 1992 Supp (1) SCC 335 : AIR 1992 SC 604 :