Honest commercial transactions cannot be criminalized without evidence of initial fraudulent intent; mere breach of contract does not constitute cheating.

JUDGMENT

1) The petitioner, through the medium of present petition filed under Section 528 of BNS S, has challenged FIR No.228 of 2025 for offence under Section 318(4) of BNS registered with Police Station, Budgam.

2) The impugned FIR has been lodged on the basis of a complaint dated 9th August, 2025, made by complainant/ respondent No.2 with Police Station, Budgam. In the complaint it is stated that the complainant, who is a resident of Thane Mumbai, Maharashtra, is carrying on business operations in Dubai United Arab Emirates (UAE). It has been further stated that the petitioner is also engaged in business activities in Dubai, operating two commercial shops over there. According to the complainant, during his stay in Mumbai in March 2025, the petitioner offered to sell to him his two shops located in Al-Jaddaf, Dubai, UAE, for a total sale consideration of Rs. 20 crores, and for this purpose he proposed a meeting for finalizing transaction at Budgam near International Airport.

3) It has been further averred in the complaint that pursuant to the aforesaid proposal and after several telephonic and WhatsApp communications with the petitioner, the complainant came to Srinagar where he met the petitioner at FM Residency Hotel owned by the petitioner which is located outside Srinagar Airport. It is alleged that in the meeting held between the petitioner and the complainant at Humhama Budgam, it was agreed that the total sale consideration for two shops would be Rs.20.00 crores, out of which Rs.5.00 crores would be paid as an advance. It is further alleged in the complaint that during the meeting itself, the complainant paid an amount of Rs.2,50,000/ to the petitioner as token money.

4) It is the further case of the complainant that in March, 2025, when he returned to Dubai, he paid an amount of Rs.5.00 crores towards the part sale consideration to the petitioner and this transaction was duly attested by a Magistrate at Dubai. However, upon repeated requests by the complainant for transfer of ownership of two shops, the petitioner avoided the same on one pretext or the other. The petitioner, however, handed over a security cheque for the entire amount assuring the complainant that the transfer of property would take place shortly.

5) It is further alleged in the complaint that on 29^th April, 2025, the petitioner called the complainant for registration of property but on very next day, the complainant came to know that the petitioner had already sold the said property to a third party on 29^th April, 2025, without knowledge or consent of the complainant. Thus, according to the complainant, the petitioner, by dishonestly transferring the property to a third person, fraudulently and dishonestly induced the complainant to part with Rs.5.00 crores.

6) It has been alleged that on 30^th April, 2025, the petitioner sent a voice message to the complainant asking him to present the security cheque on the assurance the same would be honoured but the cheque was dishonoured due to insufficiency of funds

7) On the basis of the aforesaid facts, it has been alleged that the petitioner has committed the offence of cheating by dishonestly inducing the complainant to deliver a large sum of money and thereafter fraudulently dispose of the property to another person thereby causing wrongful loss to the complainant and wrongful gain to himself.

8) On the basis of the aforesaid complaint, the impugned FIR came to be registered by the police and investigation of the case was set into motion. However, vide interim order dated 03.09.2025, the investigation in the impugned FIR was stayed by this Court.

9) The petitioner has challenged the impugned FIR on the grounds that the same does not disclose commission of a cognizabl