Offences of criminal breach of trust and cheating are mutually exclusive; criminal breach of trust requires previous entrustment, while cheating requires initial dishonest intent. Mere failure to pay contractual consideration constitutes a civil liability and does not amount to a criminal offence.

JUDGMENT :

M. K. THAKKER, J.

1. The present application is filed for quashing of the FIR being I-C.R. No.219 of 2018 dated 28.06.2018 registered with Sarthana Police Station, District Surat, for the offences punishable under Sections 406, 420 and 114 of the Indian Penal Code against four accused, of whom accused Nos.1, 3 and 4 have approached this Court by way of the present application.

2. It is the case of the complainant (respondent No.2) that in the year 2016, he came into contact with accused No.2, as both belonged to the same village. The complainant intended to invest in land and construction projects, and accordingly, invested in an ongoing project known as “Somnath Villa,” undertaken by Parth Developers, wherein accused Nos.1 and 4 are partners and accused No.3 acted as a broker. The plots bearing Nos.79 to 88 were agreed to be sold for a total consideration of Rs.4,48,11,283/-, out of which the complainant paid Rs.1,86,00,000/- during the period between 22.08.2016 and 06.05.2016. A period of 14 months was stipulated for payment of the balance amount; however, accused No.2 failed to pay the remaining consideration, pursuant to which a Memorandum of Understanding came to be executed between the complainant and accused No.2 on 06.01.2018. Additionally, a “soda chiththi” dated 22.08.2016 was executed between accused No.2 and accused Nos.1 and 4, recording the agreed consideration and payment terms. Owing to the failure of accused No.2 to fulfill his financial obligations, the said “soda chiththi” came to be cancelled on 22.08.2018 by and between accused Nos.1 and 4 and accused No.2. As per the terms of the cancellation, accused No.2 agreed to hand over possession of plots Nos.79 to 88, with an understanding that in the event the said plots were sold prior to payment of the final instalment, the amount of Rs.1,86,00,000/- lying with Parth Developers would be repaid. Alleging breach of trust and cheating, the FIR came to be lodged against accused No.2 as well as the present applicants, who are partners of Parth Developers and the broker respectively, which is under challenge in the present proceedings.

3. Heard learned advocate Mr. Shakeel Qureshi for the applicant, learned advocate Mr. C.P. Chaniyara for respondent No.2, and learned APP Mr. Ronak Raval for the respondent-State.

4. Learned advocate Mr. Qureshi submits that there exists no privity of contract between the present applicant and the complainant, inasmuch as the investment in question was made by accused No.2 with the present applicant. It is submitted that by the learned advocate Mr. Qureshi that, as per the FIR itself, the understanding regarding investment was between the complainant and accused No.2, who, in turn, invested the amount with the present applicant. However, owing to failure on the part of accused No.2 to pay the entire consideration, the “soda chiththi” executed between the applicant and accused No.2 came to be cancelled. It is submitted that by the learned advocate Mr. Qureshi that, as on date, the plots in question have not been sold to third parties and, as per the understanding between accused No.2 and the present applicant, the amount is to be repaid as and when the plots are sold. It is contended that the essential ingredients of offences under Sections 406 and 420 of the IPC are not made out and, therefore, continuation of the proceedings against the present applicant would amount to gross abuse of the process of law. It is submitted that by the learned advocate Mr. Qureshi that, as per the FIR, the alleged offence pertains to 22.06.2016, whereas th