IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD THE HONOURABLE SRI JUSTICE N.TUKARAMJI CRIMINAL PETITION No.1727 OF 2024

06^th April, 2026 Between:

Pagadala Yadaiah and Another …Petitioners AND The State of Telangana and Another …Respondents

ORDER:

This Criminal Petition is filed under Section 482 of the Code of Criminal Procedure, 1973 (for short, “Cr.P.C.”), seeking quashment of the proceedings against the petitioners/Accused Nos.1 and 2 in C.C. No.437 of 2023 on the file of the learned Judicial First Class Magistrate, Choutuppal.

2. Heard the submissions of learned counsel for the petitioners, the learned Additional Public Prosecutor appearing for respondent No.1/State; and Sri Y. Jayanth Naidu, learned counsel representing Sri Kothapalli Sai Sri Harsha, learned counsel for respondent No.2/defacto complainant.

3. The petitioners are arrayed as Accused Nos.1 and 2 in the above calendar case for the offences punishable under Sections 406 and 420 of the Indian Penal Code, 1860 (IPC).

4. The brief facts, as borne out from the record, are that the brother- in-law of the de facto complainant allegedly entered into an agreement of sale dated 22.03.2018 with the petitioners for the purchase of agricultural land admeasuring Ac. 2.22 guntas in Sy. No. 90 of Toopranpet Village, Choutuppal Mandal, for a total consideration of Rs. 26,00,000/-. It is stated that the entire sale consideration was paid and possession of the property was delivered, with an understanding that a registered sale deed would be executed as and when required. Subsequently, it is alleged that the petitioners sold the very same property to third parties, who attempted to raise construction thereon. On the basis of the complaint, Crime No. 716 of 2022 came to be registered. 5.1. Learned counsel for the petitioners contends that the dispute is purely civil in nature, arising out of an alleged breach of contract, and has been given a criminal colour with an ulterior motive. It is further submitted that the de facto complainant is not the aggrieved party and that the complaint has been lodged on behalf of his brother-in-law without any legal authorization, such as a power of attorney. It is argued that even if the allegations are accepted in their entirety, the essential ingredients of the offences under Sections 406 and 420 of the Indian Penal Code, 1860 are not made out. According to the learned counsel, the appropriate remedy, if any, lies in instituting civil proceedings for specific performance or recovery of damages.

5.2. It is further contended that there are material inconsistencies regarding the date and authenticity of the alleged agreement of sale, and that the said document does not bear the signatures of the petitioners. In the absence of a valid and enforceable agreement, the continuation of criminal proceedings is contended to be an abuse of the process of law.

5.3. In support of the above submissions, learned counsel places reliance on the following judgments of the Hon’ble Supreme Court:

In Hridaya Ranjan Prasad Verma v. State of Bihar, (2000) 4 SCC 168, it was held that mere breach of contract does not amount to cheating unless it is shown that there was fraudulent or dishonest intention at the inception of the transaction.

In International Advanced Research Centre for Powder Metallurgy and New Materials (ARCI) v. Nimra Cerglass Technics (P) Ltd., (2016) 1 SCC 348, it was reiterated that a purely contractual dispute, in the absence of initial fraudulent intent, cannot attract criminal liability.

In Md. Ibrahim v. State of Bihar, (2009) 8 SCC 751, the Hon’ble Supreme Court emphasized that criminal proceedings should not be permitted to be used as a tool for settling civil disputes.

In Mitesh Kumar J. Sha v. State of Karnataka, 2021 SCC OnLine SC 976, and Satishchandra Ratanlal Shah v. State of Gujarat, 2019 SCC OnLine SC 196, the Hon’ble Supreme Court cautioned against the misuse of criminal law in commercial and contractual disputes.

6.1. Per contra, lea