Charges of criminal breach of trust and cheating cannot coexist based on the same factual matrix, and civil disputes must be adjudicated separately.

ORAL ORDER

In this petition, the petitioners seek the following reliefs: “Quash the charge sheet dated 15.11.2022 for offence punishable Sec. 451, 380, 411 of IPC in FIR No.243/2021, C.C.No.16416/2014 pending on the file of Chief Judicial Magistrate at Bengaluru and pass any other order/s as it may deem fit to the facts and circumstances of the case in the interest of justice.”

2. Heard learned counsel for the petitioners and learned HCGP for respondent No.1 and perused the material on record.

3. Though respondent No.2 was served with notice of this petition, he has not chosen to contest the petition and has remained unrepresented.

4. A perusal of the material on record will indicate that respondent – Police registered a case on 30.06.2021 against the accused in FIR in Crime No.243/2021 for offences punishable under Sections 406 , 420 R/w. Section 34 of IPC before the Chief Judicial Magistrate, Bengaluru. Aggrieved by the same, the petitioner is before this Court by way of the present petition.

5. A perusal of the material on record comprising of the complaint, FIR, charge sheet material, statement of witness, documents and etc., will clearly indicate that the same do not disclose the commission of the alleged offences. It is also relevant to state that the dispute between the parties is purely civil/commercial in nature in respect of the immovable property. In view of the judgment of Hon’ble Apex Court in the case of Delhi Race Club and ors Vs. State of Uttar Pradesh and Anr. , - (2024) SCC OnLine SC 2248, the two offences under Sections 406 and 420 of IPC cannot coexist simultaneously on the same set of facts/allegations and hence, the impugned proceedings deserves to be quashed.

6. In Delhi Race Club’s case supra, the Apex Court has held as under:

“36. From the aforesaid, there is no manner of any doubt whatsoever that in case of sale of goods, the property passes to the purchaser from the seller when the goods are delivered. Once the property in the goods passes to the purchaser, it cannot be said that the purchaser was entrusted with the property of the seller. Without entrustment of property, there cannot be any criminal breach of trust. Thus, prosecution of cases on charge of criminal breach of trust, for failure to pay the consideration amount in case of sale of goods is flawed to the core. There can be civil remedy for the non-payment of the consideration amount, but no criminal case will be maintainable for it. [See: Lalit Chaturvedi And 5 Others vs State Of U.P. And Another - 2024 SCC Online SC 171 and M/s Mideast Integrated Steels Ltd. (MESCO Steel Ltd.) & Ors. Vs. The State of Jharkhand & Anr -. 2023 SCC OnLine Jhar 301]

xxxx

42. When dealing with a private complaint, the law enjoins upon the magistrate a duty to meticulously examine the contents of the complaint so as to determine whether the offence of cheating or criminal breach of trust as the case may be is made out from the averments made in the complaint. The magistrate must carefully apply its mind to ascertain whether the allegations, as stated, genuinely constitute these specific offences. In contrast, when a case arises from a FIR, this responsibility is of the police – to thoroughly ascertain whether the allegations levelled by the informant indeed falls under the category of cheating or criminal breach of trust. Unfortunately, it has become a common practice for the police officers to routinely and mechanically proceed to register an FIR for both the offences i.e. criminal breach of trust and cheating on a mere allegation of some dishonesty or fraud, without any proper application of mind.

43. It is high time that the police officers across the country are imparted proper training in law so as to understand the fine distinction between the offence of cheating vi