Civil disputes cannot be converted into criminal prosecutions without evidence of fraudulent intent; mere failure to fulfill contractual obligations does not constitute cheating.

ORDER

The petitioners are accused in CC No. 1829/2016 on the file of the Judicial First Class Magistrate Court-III, Neyyattinkara. The above case is charge-sheeted alleging offence punishable under Sec. 420 r/w 34 IPC . The allegation levelled against the petitioners in the final report are to the effect that the accused had deceived the 2^nd respondent, after making her believe that they will bring her husband who had absconded on condition that she will sell 5 cents out of 35 cents of her property to the 2^nd petitioner. It is further alleged that despite registration of the sale deed, the petitioners had neither brought back the husband of the 2^nd respondent nor reconveyed the property and therefore, the petitioners committed the offence. According to the petitioners, even if the entire allegations are accepted, no offence is made out.

2. Heard the learned counsel for the petitioners and the learned Public Prosecutor. Even though notice is issued to the 2^nd respondent, there is no appearance.

3. The counsel for the petitioners submitted that even if the entire allegations are accepted, no offence is made out against the petitioners. The counsel submitted that the ingredients of Sec.420 IPC is not attracted in the facts and circumstances of this case. The Public Prosecutor submitted that the contentions raised by the petitioners are to be raised before the trial court, at the appropriate stage.

4. This Court considered the contentions of the petitioners and the Public Prosecutor. The allegation in Annexure-I final report against the petitioners is extracted hereunder :

5. Whether the same amounts to an offence under Sec.420 IPC is the question to be decided. According to the defacto complainant, the document is registered on condition that the petitioners will bring back her husband and if not, the property will be reconveyed. Admittedly, the property is assigned based on a registered sale deed as evident by Annexure-II. In such circumstances, if the 2^nd respondent has got a case that the sale deed executed by her is null and void, she has to approach the competent civil court. A civil remedy cannot be converted to a criminal proceedings. The Apex Court in Subbiah C @ Kadambur Jayaraj v. Superintendent of Police [2024 KHC 6288] observed that a civil litigation cannot be converted to criminal prosecution. The relevant portion of the above judgment is extracted hereunder :

40. “The complainant has clearly alleged that the accused caused him monetary loss because the appropriate share of profits was not passed on to him after some plots from the entire chunk had been sold. This Court in the case of Sarabjit Kaur v. State of Punjab and Anr , 2023 SCC OnLine SC 201 observed that: - "

A breach of contract does not give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction. Merely on the allegation of failure to keep up the promise will not be enough to initiate criminal proceedings".

41. Similarly, in the case of Vijay Kumar Ghai v. State of W.B. , 2022 (7) SCC 124 , this Court while tracing the earlier decisions on the subject observed as under:

24. This Court in G. Sagar Suri v. State of U.P. ( G. Sagar Suri v. State of U.P. , 2000 (2) SCC 636 ) observed that it is the duty and obligation of the criminal court to exercise a great deal of caution in issuing the process, particularly when matters are essentially of civil nature.

25. This Court has time and again cautioned about converting purely civil disputes into criminal cases. This Court in Indian Oil Corpn. ( Indi