A mere breach of contract does not amount to cheating or criminal liability unless a fraudulent or dishonest intention is shown to exist at the inception of the transaction. Similarly, execution of a document by a person claiming authority does not constitute forgery unless it satisfies the definition of a false document.

The petitioners have filed the present petition for quashing of FIR No.26, dated 28.2.2024, registered at Police Station Gagret, District Una, H.P., for the commission of offences punishable under Section 420 and 120-B of the Indian Penal Code (IPC) and the consequential proceedings arising out of it. (The parties shall hereinafter be referred to in the same manner as they were arrayed before the learned trial Court for convenience).

Briefly stated, the facts giving rise to the present petition are that the informant filed an application before the police, asserting that he was the owner in possession of Plot Nos. 376, 377, 415 and 416 at the site Manohar Infrastructure and Construction Mulanpur, Chandigarh. He wanted to raise the construction of the residential houses on the site. The accused approached the informant and disclosed that they were running the construction business under the name and style of Nayyar Builders and Contractors. They agreed to build the residential houses for ₹ 1,88,30,700/-. The informant agreed to the proposal of the accused. Accused Nos. 1 and 2 entered into an agreement with the informant on 9.11.2019. This agreement was signed by the informant and accused No.1, Gaurav Nayyar, in the capacity of a partner of Nayyar Builders and Contractors. The construction work had to be completed within 120 days from the date of the agreement. It was also agreed that the accused would issue a bill every 15 days. The informant paid a total amount of ₹2,71,84,984/- to the accused, but the accused failed to complete the construction within the stipulated time. The informant told the accused that he would take action against them, after which the accused disclosed that accused No.1, Gaurav Nayyar, was neither the Director nor a partner of M/s Nayyar Builders and Contractors. Accused No.1 had falsely signed the agreement as a partner. The accused misappropriated the money advanced to them. Hence, it was prayed that an action be taken against them.

The police registered the FIR and investigated the matter. The police seized the documents and the details of the money paid by the informant. It was found that the informant and his family members had transferred ₹2,71,84,984/- in the accounts of the accused. Nayyar Builders and Construction was not registered with the Registrar of Companies, Punjab. The stamp paper for executing the agreement was purchased in the name of Devender Singh, who was an employee of the accused, and his services were subsequently terminated. Gaurav Nayyar was not authorised to issue the invoice on behalf of the firm before 25.5.2023. The documents were sent to the FSL, and the signatures tallied with the admitted signatures of Gaurav Nayyar. The charge sheet was filed before the Court, which is pending scrutiny by the prosecution Department.

Being aggrieved by the registration of the FIR, the accused have filed the present petition asserting that the informant Ajay Kumar approached Nayyar Builders and Contractors through Rajesh Nayyar for raising construction on four plots No. 376, 377, 415 and 416 situated at the Project Site of Manohar Infrastructure and Construction, Village Mulanpur, New Chandigarh, Mohali. A formal contract was drawn between the parties, and the total cost of construction was fixed as ₹1,88,30,700/- for raising the structure. Nayyar Builder and Contractor had Rajesh Kumar and Kavita Nayyar as partners. The agreement was signed by Gaurav Nayyar on behalf of Nayyar Builders and Contractors after getting authorisation from the partners. Gaurav Nayyar was looking after the affairs of the firm and was duly authorised by the partners to do the various acts. The structural work was completed in time, and a completion certificate was issued by the Architect. The informant asked the accused to carry out the interior work, and he agreed to pay the additional cost to the accused. The