Delhi District Court
Shashi Bhushan Saurabh vs The State Govt Of Nct Of Delhi And Ors on 5 May, 2025
IN THE COURT OF ADDITIONAL SESSIONS JUDGE-05,
SOUTH DISTRICT, SAKET COURTS : DELHI
DLST010102302023
Cr Rev/389/2023
SHASHI BHUSHAN SAURABH Vs. THE STATE GOVT OF
NCT OF DELHI AND ORS.
Shashi Bhushan Saurabh
Aged 60 years
S/o Late Sita Ram Yadav
R/o B-2/18, Vasant Vihar,
New Delhi-110057
Versus
1. The State (Govt. Of NCT) of Delhi
2. Ashok Kumar Gupta,
S/o Sh. Puran Chand Gupta,
R/o D-54, Greater Kailash-II,
New Delhi-110059
3. Ramdhari Gupta,
S/o Sh. Puran Chand Gupta,
R/o D-54, Greater Kailash -II,
New Delhi-110059
DATE OF INSTITUTION : 05.10.2023
ARGUMENTS HEARD ON : 13.11.2024
DATE OF JUDGMENT : 05.05.2025
JUDGMENT
1. By this order I shall decide the criminal revision petition preferred against the impugned order dated Cr Rev No.389/2023 Shashi Bhushan Saurabh Vs. The State (Govt. Of NCT) of Delhi & Ors. Page No. 1 Of 30 Digitally signed by PURSHOTTAM PURSHOTTAM PATHAK PATHAK Date:
2025.05.06 12:27:48 +0530 06.06.2023, passed by Ld. CMM, South, Saket Courts, New Delhi in criminal case no. 2035351/2016 titled as 'State Vs. Ashok Gupta & Ors', FIR No. 178/2012, PS-
EOW, whereby the Trial court has discharged the respondents.
2. Briefly stated the facts given rise to the filing of the present criminal revision are that the complainant Sh. Shashi Bhushan Saurabh had lodged a complaint at PS EOW Mandir Marg, wherein it was alleged that in February 2006, the complainant came in contract with Sh. Ashok Gupta and Sh. Ramdhari Gupta (Gupta Brothers) through on Sh. Girdhari Lal Tanwar and an offer was made by them to the complainant to invest in a joint venture for construction and running of a hotel after purchasing 4.38 acres of land situated in village Chhattarpur, Delhi. At the meeting, the Gupta brothers also made an offer for promoting a new joint venture company where the complainant would get 49% share as foreign equity participation and the name of proposed company was decided as Vesselka Estates Pvt. Ltd. The Complainant paid Rs.15.25 Crores for the purpose of said land between 21.03.2006 to 11.05.2006 and later on Ashok Kumar Gupta returned Rs. 7,50,000,00/- equivalent to approximate 49% of the 15 crores 25 lacs to the complainant between July 2006 to August 2009. Gupta brothers used the amount Cr Rev No.389/2023 Shashi Bhushan Saurabh Vs. The State (Govt. Of NCT) of Delhi & Ors.
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obtained from the complainant to purchase the shares of the company M/s Raghav Buildcon Pvt. Ltd. which had already purchased the said land in the year 2005. They also asked complainant to give a letter of intent to process the RBI permission for allotting 49% share in M/s Raghav Buildcon Pvt. Ltd., which he gave accordingly. Complainant further invested an amount of Rs. 6.25 crores by cheques as share application money. The Gupta brothers reported this money to Foreign Exchange Control Department of RBI as share application money. Thereafter, another amount of Rs. 3 crore was also paid by the complainant to M/s Raghav Buildcon Pvt. Ltd. as share application money. It has been alleged that the Gupta brothers deliberately and dishonestly refrained from allotting 49% shares to the complainant and kept pending the share application. It is alleged that in the year 2011 when he was invited at Bhumi Poojan he came to know that hotel project is complete and the Gupta brothers are running it as a individual venture in the name and style of 'Oodle Hotel'. At this stage complainant realised that he has been cheated and he demanded the allotment of shares, to which Gupta brothers proposed to return the amount in instalments however, later on they refused to return the same. It is alleged that Company had acknowledged Rs. 6,25,000,00/ as share application money but after the hotel Cr Rev No.389/2023 Shashi Bhushan Saurabh Vs. The State (Govt. Of NCT) of Delhi & Ors. Digitally signed Page No. 3 Of 30 by PURSHOTTAM PURSHOTTAM PATHAK PATHAK Date:
2025.05.06 12:27:55 +0530 project had started and was proceeding, they turned dishonest, misappropriated Rs. 9,25,000,00/ and converted it to their own use. On the basis of allegations in the complaint, FIR No. 178/2012 was registered at Ps EOW on 26.12.2012.
3. After completion of investigation, the chargesheet against accused/respondents was filed before Ld. CMM.
After taking the cognizance of offences, the Ld. CMM had summoned the accused persons on 10.04.2014. Upon hearing the arguments, vide impugned order dated 06.06.2023, Ld. Trial Court discharged all the accused/respondents. Hence, the present revision petition.
4. The said impugned order has been challenged by the revisionist primarily on following grounds:-
i. that the impugned order dated 06.06.2023 passed by Ld. Trial court is illegal arbitrary, fanciful, whimsical, perverse and has been passed without application of mind, hence, liable to be set-aside.
ii. that the observations of Ld. Trial Court, that the said amount was utilised for the same purpose for which it was given by the petitioner to the accused persons and that merely because the accused persons instead of purchasing the land Cr Rev No.389/2023 Shashi Bhushan Saurabh Vs. The State (Govt. Of NCT) of Delhi & Ors.
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directly took over the entire company, which was the owner of land would not make out a case of cheating or criminal misappropriation is baseless.
iii. that the Ld. Trial Court misread the letter of content dated 01.05.2006 to say that the complainant has just shown interest in getting 49% equity participation and requested accused persons to value the equity shares of the company, as the petitioner was not aware of the procedure for acquisition of equity share in the company.
iv. that the Ld. Trial Court completely erred while observing that the revisionist requested for valuation and the accused persons gave valuation of the project at Rs. 145 Crores, including the cost of land of Rs. 65.7 crores, which was duly intimated to the complainant vide letter dated 26.06.2006.
v. that the Ld. Trial Court without application of mind has incorrectly given much emphasis on the fact that nothing has been produced either by the complainant or the prosecution and that during that period the petitioner never objected to the valuation put forth by the accused persons.Cr Rev No.389/2023
Shashi Bhushan Saurabh Vs. The State (Govt. Of NCT) of Delhi & Ors. PURSHOTTAM PATHAK Page No. 5 Of 30 Digitally signed by PURSHOTTAM PATHAK Date: 2025.05.06 12:28:02 +0530 vi. that the said valuation report dated 24.06.2006 was never intimated to the petitioner and the alleged reminders/ letters dated 15.02.2007, 28.01.2008, 01.11.2008 and 15.01.2010 are false and fabricated as they were never sent to the petitioner.
vii. that the Ld. Trial court has wrongly held that it is hard to believe that the petitioner who had paid a huge amount was not in contact for 4-5 years, and that the postal receipt dated 25.10.2011 was delivered to the complainant on 27.10.2011.
viii. that the accused persons had been representing that they are in the process of obtaining requisite permission from RBI for issue of the equity share in favour of the petitioner, which was taking time and when the matter was being grossly delayed then several emails were exchanged between the parties.
ix. that the Ld. Trial Court did not consider that there was no explanation for the delay in issuing the shares initially, when the share application money given by the petitioner was much more than the 45% of the equity shares.
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x. that the Ld. Trial Court has wrongly held that
the value of Rs. 32.7 crores by Punjab and Sindh Bank was only for the project cost and not for the land and the land was valued at Rs. 110 Crores.
xi. that on the one hand the accused persons were writing alleged letters reminding for deposit of share participation money, on the other hand they were seeking time for getting permission from RBI for allotment of shares and delaying the matter on false pretext that they are seeking RBI permission for allotment of equity share.
xii. that the order of Ld. Trial Court is perverse as to the observation that the accused persons as well as Ms/ Raghav Buildcon Pvt. Ltd. never disputed the payment made by the complainant and they have also intimated from time to time about the payment and the equity participation to the foreign exchange control department.
xiii. that the Trial Court failed to appreciate that the petitioner made payments of Rs. 6.25 Crores from his NRE account and a further sum of Rs. 3 crores from NRO account, however, instead of Cr Rev No.389/2023 Shashi Bhushan Saurabh Vs. The State (Govt. Of NCT) of Delhi & Ors.
Page No. 7 Of 30PURSHOTTAM PATHAK Digitally signed by PURSHOTTAM PATHAK Date: 2025.05.06 12:28:10 +0530 issuing the shares to the petitioner, the accused persons utilised the money for their own benefits.
xiv. that the accused persons did not issue the shares in violation of the said RBI circular bearing no. RBI/2007-08/213 AP(DIR Series), in respect of foreign direct investment, issue of shares under SBI and refund of advance remittances, as an Indian Company is required to report the receipt of the amount of consideration within 30 days.
xv. that the RBI vide letter dated 19.11.2007, sent to M/s Raghav Buildcon Pvt. Ltd. asked reasons for not issuing the shares to the foreign investor against the inward remittances and to file a detailed report.
xvi. that the accused persons delayed the matter on the false ground that RBI permission is required, however, as per FERA notification of RBI Exchange Control Department, no permission is required for allotment of shares to a non-resident Indian if the share is allotted up-to 51%.
5. The Ld. counsel for revisionist in support of her said grounds of revision argued that the Ld. Trial Court has failed to correctly appreciate that there was sufficient material on record to prima facie prove the guilt of Cr Rev No.389/2023 Shashi Bhushan Saurabh Vs. The State (Govt. Of NCT) of Delhi & Ors.
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respondents/accused. She further argued that no letters or reminders were sent to the revisionist by the respondents to fulfil his part of commitment or to pay the balance amount and the letters handed over by the respondents during the investigation are forged and fabricated. She argued that no letter was sent to the revisionist intimating him regarding the valuation arrived at by M/s Raghav Buildcon Pvt. Ltd. She submitted that complainant was always in contact with the accused persons as in this period he made several payments to the respondents. She argued that the RBPL company has misappropriated the share application money of Rs. 9.25 crores taken from complainant and has thus committed criminal breach of trust under Section 409 IPC. She further submitted that the revisionist was also mislead by CA Sanjeev Kapoor and CA Devender Arora by suppressing the fact that the company has been utilising the FDI for almost 10 years and that the permission earlier obtained from RBI had lapsed and the process for obtaining the fresh permission has been initiated again. She submitted that that the respondent no. 2 Ashok Gupta has siphoned the cheated amount by diverting it into various accounts pertaining to his family members. She further submitted that as per the documents dated 09.01.2008, sent by company to the chief manager Punjab and Sindh Bank, while applying for project term loan for Rs. 20 crores, the Cr Rev No.389/2023 Shashi Bhushan Saurabh Vs. The State (Govt. Of NCT) of Delhi & Ors. Digitally signed by Page No. 9 Of 30 PURSHOTTAM PURSHOTTAM PATHAK PATHAK Date:
2025.05.06 12:28:17 +0530 cost of entire project was Rs. 32.7 crores and the valuations shown by the respondent in various letters alleged to be sent to the revisionist is totally false. She further argued that it was never acknowledged by Sh. Nair, the representative of the complainant that the entire amount was duly settled between the complainant and accused and according to the report issued by Truth Labs, the signature on the alleged acknowledgment do not match with the signature of Mr. Nair. In support of her contention she relied upon the judgments:- (i) State of Maharashtra Vs. Sukhdev Singh 1992(3) SCC 700, Dayal Singh Vs. State of Uttaranchal 2012 (8) SCC 263, Manik Vs. State of Maharashtra 02.12.2012, Madan Gopal Kakkad Vs. Naval Dubey 1992 (2) SCC 204, Anwar Hussain Vs. State of Tripura 04.11.2019, Murari lal Vs. State of M. P. 1980 (1) SCC 704, Padam Kumar Vs. State of UP dated 14.01.2020, State of Rajasthan Vs. Ashok Kumar Kashyap 2021 (11) SCC 191, State of Maharashtra & Anr. Vs. Maroti S/o Kashinath Pimpalkar 2023 (4) SCC 298, State of Gujarat Vs. Dilipsinh Kishorsinh Rao CRI Appeal 2504/2023, Captain Manjit Singh Virdi (Retd) Vs. Hussain Mohammed Shattaf & Ors. CRI Appeal No. 1339/2023, Sheoraj Singh Ahlawat Vs. State of UP (2013) 11 SCC 476, Rumi Dhar Vs. State of West Bengal (2009) 6 SCC 364, Gurdeep Singh Vs. State (2013) SCC OnLine Del 2553, State Of Cr Rev No.389/2023 Shashi Bhushan Saurabh Vs. The State (Govt. Of NCT) of Delhi & Ors.
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Madhya Pradesh Vs. Deepak CRI Appeal No. 485/2019, National Projects Constructions Corporation Ltd. & Ors. Vs. Labour Enforcement Officer CRI Rev. No. 115 of 1984, Mathura Dass & Ors. Vs. State Cri Rev. No. 428/2001, A. M. Chakraborty Vs. Dr. Ved Varat And Ors. CRI Rev No. 167 and 169 of 2983.
6. Per contra, Ld. counsel for respondents contended that the revision petition is without merits and there is no legal and factual infirmity in the entire impugned order which calls for any interference. He submitted that the total amount taken by the respondents had been returned to the complainant. He further submitted that initially the project cost was valued at Rs. 145 crores and complainant had to pay Rs. 71.05 crores which was intimated to the complainant but despite several reminders he failed to make the payment. He submitted that cost of project escalated to Rs. 200 crores which was also notified to the complainant but then also he did not made the payment. He argued that reliance of petitioner on the project cost as supplied by Raghav Buildcon Private Ltd. vide letter dated 09.01.2008 is misleading as it does not contemplate the value of land and also the document specifically provides that the value of the land is around Rs. 110 crores. He submitted that it was only after complainant failed to make the payment to purchase 49% of equity shares amounting Cr Rev No.389/2023 Shashi Bhushan Saurabh Vs. The State (Govt. Of NCT) of Delhi & Ors.
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to Rs. 98 crores, the company passed a board resolution cancelling the application of complainant and refund the share application money to complainant, which was intimated to him vide letter dated 21.10 2011. Ld counsel for respondents urged that Ld Trial Court has passed the order keeping in view all the facts and circumstances of the case and the present revision petition has been filed only to harass the respondents. Hence same is liable to be dismissed.
7. Ld. Counsel for respondents has relied upon judgments: Taron Mohan Vs. State (reported in 2021 SCC OnLine Del 312), Sanjay Singh Ramrao Chavan Vs. Dattatray Gulabrao Phalke and Ors. (2015) 3SCC 123, Shambhubhai Patel Vs. Sumanbhai Kantibhai Patel & Ors. (Reported in (2017) 4 SCC 177), Kerala State Electricity Board and Anr. Vs. Kurien E. Kalathil and Ors. (2000) 6SCC 293,, Dilawar Balu Kurane Vs. State of Maharashtra (2002) 2 SCC 135.
8. I have summoned the Trial Court record and have carefully perused the same. Also gone through the reply and heard and considered the arguments of Ld. counsels for the parties and the Ld. APP for State.
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9. In the present case, looking at the allegations in the complaint, quoted in the preceding paragraphs of the order it appears that the revisionist and respondents (Gupta brothers) were under an obligation by way of agreement arrived between them. There was some business transaction between the parties to invest in a joint venture for construction and running a hotel in Chhatarpur Delhi. Initially the land was to be purchased and thereafter revisionist was to get 49% share as foreign equity in proposed company 'Vesselka Estate Pvt. Ltd.' Revisionist invested money for purchase of land and also for allotment of 49% of share in company. The respondents acquired a company 'Raghav Buildcon Pvt. Ltd', which was having the ownership of the land in question, but they did not allot the share of 49% in the company to the complainant, on the pretext that complainant has not paid the amount of Rs. 98 crores. Naturally, complainant would like to recover his money or 49% share in the company. For that the complainant has opted for criminal proceedings and after investigation chargesheet has been filed for offences u/s 406/420/120B/34/192/193/467/471 IPC.
10. Section 405 IPC deals with criminal breach of trust.
A careful reading of the section 405 IPC shows that a criminal breach of trust involves the following ingredients:
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(a) a person should have been entrusted with property, or entrusted with dominion over property;
(b) that person should dishonestly misappropriate or convert to his own use that property, or dishonestly use or dispose of that property or wilfully suffer any other person to do so;
(c) that such misappropriation, conversion, use or disposal should be in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract which the person has made, touching the discharge of such trust.
11. Section 406 IPC prescribes punishment for criminal breach of trust as defined in Section 405 IPC. For the offence punishable under section 406 IPC, the following conditions are required to be fulfilled:-
(i) that the accused was entrusted with property or with dominion over it and (ii) that he (a) misappropriated it, or
(b) converted it to his own use, or (c) used it, or (d) disposed of it.
12. In a case of criminal breach of trust, it must be shown that the accused dishonestly disposed of the same in some way or dishonestly retained the same. The mere fact Cr Rev No.389/2023 Shashi Bhushan Saurabh Vs. The State (Govt. Of NCT) of Delhi & Ors.
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that the respondents received some amount could not be said to be an act of criminal breach of trust. Therefore in the light of aforesaid factual admitted case, I have no hesitation in holding that since it was not the case of existence of any fiduciary relations between the parties and hence, whatever payments were made by the complainant/revisionist to the respondents were made by him in compliance of the agreement arrived between the parties. Hence, it could not be termed as 'entrustment' within its legal meaning for the breach of which, the respondents could be prosecuted under Section 406 IPC, as it was purely a contractual liability and not any relationship or liability arising out of any mutual trust between the parties.
13. The Trial Court has rightly observed that there is nothing on record to show any misappropriation on the part of accused.
14. So far as section 420 IPC is concerned, it deals with cheating. Essential ingredients of section 420 IPC are:-(i) cheating; (ii) dishonest inducement to deliver property or to make, alter or destroy any valuable security or anything which is sealed or signed or is capable of being converted into a valuable security, and (iii) mens rea of the accused at the time of making the inducement.
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15. It appears from the record that the primary allegations against the accused persons are that they induced the complainant/revisionist to invest in a project developed by accused/respondents for purchase of land and thereafter to construct a hotel on that land. Being misrepresented by them, the complainant gave Rs.15.25 crores for purchase of land and Rs. 9.25 Crores as share subscription to accused /respondents.
16. It is a settled proposition of law that for the purpose of conviction of a person for an offence u/s 420 IPC for cheating as defined u/s 415 IPC, the dishonest or fraudulent intention has to exist right from the beginning of the transaction and not at a later stage.
17. It is interesting to see from the complaint made by the complainant to the police, on the basis of which the present FIR was registered, no where the complainant had levelled any allegations of any dishonest or fraudulent intention on the part of the respondents herein to cheat him from inception and in the said complaint addressed to EOW, the complainant had stated that after the hotel project had started and was proceeding smoothly accused turned dishonest, misappropriated Rs. 9,25,000,00/- and converted to their own use and refused to allot any share. The complainant had nowhere mentioned about the fact of Cr Rev No.389/2023 Shashi Bhushan Saurabh Vs. The State (Govt. Of NCT) of Delhi & Ors.
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his being cheated at the hands of the respondents from inception of agreement. It could not be presumed from the given facts that the respondents were having any dishonest or fraudulent intention to cheat the complainant from right at the beginning of the transaction.
18. Admittedly, the complainant invested an amount of Rs 23.50 Crores in the project. Both the parties mutually agreed to the terms and conditions mentioned in the agreement. A distinction has to be kept in mind between mere breach of contract and the offence of cheating. It depends upon the intention of the accused at the time of inducement. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent, dishonest intention since inception is shown at the beginning of the transaction. In the present case, record would disclose that no representation as such claimed by the revisionist was made by the respondents/ accused persons.
19. It is also a settled proposition of law that in every case arising out of a breach of terms and conditions of an agreement/contract, either civil or criminal liabilities of the parties are got involved and that is why, it is mandatory for the courts to weigh those liabilities in the light of peculiar facts and circumstances of each independent case so as to Cr Rev No.389/2023 Shashi Bhushan Saurabh Vs. The State (Govt. Of NCT) of Delhi & Ors.
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arrive at a conclusion as to whether the same constitutes a civil or criminal liability. In matters, where from the nature of facts element of criminal nature is found more predominant than the civil element, then essentially the court of competent jurisdiction is empowered to proceed against the wrong doer, for an offence committed by him under criminal law. However, where the civil element dominates the so called criminal element, then any breach of an agreement or any of its terms and conditions would not ipso facto gets itself converted into a criminal offence.
20. There is no allegations against any of the respondents/ accused persons to have practiced fraud or to have dishonestly induced the complainant/respondent at any time. What appears from the record is that there are some breach of contract and perhaps both the parties have failed to discharge their obligations under contract.
21. Even, Superior Courts have time and again deprecated the initiation of false criminal proceedings in cases having the elements of civil dispute. The quick relief offered by a criminal prosecution as opposed to a civil dispute incentivizes the litigant to initiate false and vexatious proceedings.
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22. In V.P.Shrivastava Versus Indian Explosives limited and others, (2010) 10 Supreme Court Cases 361, criminal proceedings alleging commission of offence under section 420/406 & 120B PC were unsuccessfully challenged before the High Court. The criminal complaint had emanated from a tripartite agreement between the Indian Explosives Limited, M/s Bharat Coking Coal Limited and Fertilizer Corporation of India Limited. The appellants were senior employees of Fertilizer Corporation of India Limited which had become a sick company within the meaning of Sick Industrial Companies (Special Provision) Act, 1985. While evaluating the contentions advanced on behalf of the parties, the Hon'ble Supreme Court explained the ingredients of the offence of 'cheating' within the meaning of section 415 of IPC and of 'criminal breach of trust' as defined under Section 405 of IPC and thereafter in para No. 32 of the judgment concluded that "even if the allegations made in the complaint are taken to be correct on their face value, they may amount to breach of terms of contract by the Fertilizer Corporation of India Limited, but do not constitute an offence of 'Cheating' punishable under Section 420 IPC". Similarly, in para No.38 of the judgment, it was concluded that "there is nothing in the complaint which may even suggest remotely that Indian Explosives Limited had entrusted any property to the Cr Rev No.389/2023 Shashi Bhushan Saurabh Vs. The State (Govt. Of NCT) of Delhi & Ors.
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appellants or that the appellants had dominion over any of the properties of the Indian Explosives which they dishonestly converted to their own use so as to satisfy the ingredients of Section 405 IPC, punishable under Section 406 IPC".
23. In V.Y.Jose and another versus State of Gujarat and Anr, (2009) SCC 78, the Hon'ble Supreme Court quashed the proceedings initiated in a case of 'breach of trust' on finding that the case essentially involved a civil dispute and that mere 'breach of trust' does not necessarily involve 'cheating' as there was no culpable intention at the time of the initial promise.
24. The Hon'ble Apex Court in G. Sagar Suri Vs State of UP, Crl Appeal No.91/2000, date of decision 28.01.2000 has categorically observed as under :
"It is to be seen if a matter, which is essentially of civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing process a criminal court has to exercise a great deal of caution. For the accused it is a serious matter. This court has laid certain principles on the basis of which High Court is to exercise its jurisdiction under Section 482 Cr.P.C. Jurisdiction under this section has to be exercised to prevent abuse of the process of any court or otherwise to secure the ends of justice".
25. Further, in case titled as M/s Indian Oil Corporation VS M/s NEPC India Ltd & Ors, in Appeal (Crl) No. Cr Rev No.389/2023 Shashi Bhushan Saurabh Vs. The State (Govt. Of NCT) of Delhi & Ors.
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834/2002 date of judgment 20.07.2006, Hon'ble Apex court has observed as under:-
"While on this issue, it is necessary to take notice of a growing tendency in business circles to convert purely civil disputes into criminal cases. This is obviously on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. Such a tendency is seen in several family disputes also, leading to irretrievable break down of marriages/families. There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent do not involve any criminal offence, by applying pressure through criminal prosecution should be deprecated and discouraged."
26. The following observation made in the case of Uma Shankar Gopalika Vs. State of Bihar & Anr. (2005) 10 SCC 336 may be relevant to note at this stage:
6. Now the question to be examined by us is as to whether on the facts disclosed in the petition of the complaint any criminal offence whatsoever is made out much less offences under Section 420/120-B IPC. The only allegation in the complaint petitioner against the accused person is that they assured the complainant that when they receive the insurance claim amounting to Rs. 4,20,000, they would pay a sum of Rs.2,60,000 to the complainant out of that but the same has never been paid. It was pointed out that on behalf of the complainant that the accused fraudulently persuaded the complainant to agree so that the accused persons may take steps for moving the consumer forum in relation to the claim of Rs. 4,20,0000. It is well settled that every breach of contract would not give rise to an offence of cheating and only in those cases of breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. In the present case, it has nowhere been stated that at the very inception that there was intention on behalf of the accused person to cheat which is a condition precedent for an offence under 420 IPC.Cr Rev No.389/2023
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2025.05.06 12:29:03 +0530 "7. In our view petition of complaint does not disclose any criminal offence at all much less any offence either under Section 420 or Section 120-B IPC and the present case is a case of purely civil dispute between the parties for which remedy lies before a civil court by filing a properly constituted suit. In our opinion, in view of these facts allowing the police investigation to continue would amount to an abuse of the process of court and to prevent the same it was just and expedient for the High Court to quash the same by exercising the powers under Section 482 Cr.P.C which it has erroneously refused."
27. In Vesa Holdings Pvt. Ltd. & Anr Vs. State of Kerala & Ors., (2015) 8 SCC 293 the following observations were made:-
"13. It is true that a given set of facts may make out a civil wrong as also a criminal offence and only because a civil remedy may be available to the complainant that itself cannot be ground to quash a criminal proceeding. The real test is whether the allegations in the complaint disclose the criminal offence of cheating or not. In the present case, there is nothing to show that at the very inception there was any inception on behalf of an accused person to cheat which is a condition precedent for an offence u/s 420 IPC. In our view, the complaint does not disclose any criminal offence at all. Criminal proceedings should not be encouraged when it is found to be mala fide or otherwise an abuse of the process of the courts. Superior courts while exercising this power should also strive to serve the ends of justice. In our opinion, in view of these facts allowing the police investigation to continue would amount to an abuse of the process of the court and the High Court committed an error in refusing to exercise the power under Section 482 Cr.P.C to quash the proceedings."
28. If the present case is tested upon the principles of law as laid down by Apex Court in aforesaid cases, then it is evident that no offence for cheating or criminal breach of trust is made out in the present case and act of the accused/respodents can at the most be termed as breach of Cr Rev No.389/2023 Shashi Bhushan Saurabh Vs. The State (Govt. Of NCT) of Delhi & Ors.
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contract only. In my view, the revisionist is having a grievance of not getting the 49% of share in the company and appears to have filed the criminal complaint for recovery of same. Failed obligation and frustrated expectations cannot give rise to any criminal liability.
29. Further, it is also to be noticed here that in response to the complainant's letter dated 01.05.2006, showing his interest for 49% of the share capital of said company, it was categorically made clear to the complainant vide letter dated 26.06.2006 that the valuation of the project is Rs. 145 crores, including the cost of land of Rs. 65.7 crores. Thereafter complainant continued to give payments to the company and did not objected to the valuation. As time passed, he was required to deposit an amount of Rs. 98 crores as the cost of project escalated to Rs. 200 crores. Several letters/reminders were sent to the complainant to make the payment but he failed to do so and lastly the company passed a board resolution cancelling the application of complainant and refunding the money given by complainant for its share holding in the company. The revisionist has claimed that the letters sent to the complainant are forged and fabricated, however investigation qua these documents is already complete and they were not found to be forged and fabricated.
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30. It would be pertinent to point out here that nowhere in his complaint or statement recorded by the IO, it had been claimed by the complainant that he had made the payment of amount mentioned in letters. It is to be seen that the respondents vide communication dated 10.01.2010 as well as letter dated 21.10.2011 had asked the complainant to send requisite amount of Rs. 98 crores. However, it is an admitted case of parties that only an amount of Rs. 23.50 Crores had been paid by the complainant to the said company out of which, complainant received back Rs.7,50,00,000/-. The revisionist has also failed to explain why the amount of Rs.7,50,00,000/-was returned back to him by the respondents. It is also strange that the complainant who had invested a huge amount, neither regularly communicated with the respondents nor he visited to see the hotel under construction and came to know about the completion of Hotel only when he visited for Bhumi poojan in year 2011.
31. Both the parties failed to perform their part of obligations as the respondents did not allot the 49% shares of the company to the revisionist and the revisionist did not performed his part of contractual obligation of paying 98 crores. Hence, the complainant /revisionist has no right to ask the respondents to perform their part of obligations.
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In case titled as Nathulal Vs. Phoolchand reported in AIR 1970 Supreme Court 546, Hon'ble Apex Court held as under:-
"that under the terms of contract the obligation of parties have to be performed in a certain sequence, one of the parties, to the contract cannot require compliance with the obligations by the other party without in the first instance performing his own part of contract which in the sequence of obligations is performed by him earlier."
32. The revisionist has alleged that the amount given by him was diverted to the personal account of the family members of the respondent no.2, Ashok Kumar Gupta. Admittedly, amount of Rs. 15 crores 25 lac was given to the respondent no. 2 between 21.03.2006 to 11.05.2006 in account of respondent no. 2 and out of that amount respondents returned Rs.7,50,00,000/- between July to August 2009 to the revisionist. It is also admitted that the land was the property of a company Raghav Buildcon Pvt. Ltd. and the respondents used the amount obtained from complainant to purchase the shares of said company. Further, the additional sum of Rs. 6,25,00,000/- given in name of Raghav Buildcon Pvt. Ltd. was reported to Reserve Bank of India under the provision of Foreign Exchange Management Act as share application money and same is also shown in record of M/s Raghav Buildcon Pvt. Ltd. to have been utilised as share application money. Hence, there is nothing on record that the fund was utilised Cr Rev No.389/2023 Digitally signed by Shashi Bhushan Saurabh Vs. The State (Govt. Of NCT) of Delhi & Ors. PURSHOTTAM PURSHOTTAM PATHAK Page No. 25 Of 30 PATHAK Date:
2025.05.06 12:29:21 +0530 by respondents for any purpose other then for which it was given.
33. Ld. Counsel for the revisionist has contended that cheque no. 366293 and 366294 both dated 30.03.2006, valuation report dated 24.06.2006 and copy of letter dated 26.06.2006 were sent for expert opinion and as per the expert opinion given by Truth lab, it was found that the signature of said Mr. Nair was fabricated on these documents. It is evident from the record that IO was allowed to take second opinion on these documents and FSL Rohini vide its report dated 17.05.2016 found that signature of P.K. Ravindran Nair on the documents were genuine. Here two contradictory opinions have been given regarding the same documents. Truth lab has opined that signatures of Mr Nair is fabricated whereas as per FSL report, the signatures are genuine. In that case, the opinion of FSL Rohini which is a government agency and being more authentic shall prevail over the opinion given by Truth lab.
34. In regard to the contention that respondents have been always befooling the revisionist and delaying the issue of equity share on pretext that they had sought permission from RBI, which has lapsed and they are again seeking permission. It was found that intimation was given Cr Rev No.389/2023 Shashi Bhushan Saurabh Vs. The State (Govt. Of NCT) of Delhi & Ors.
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to GM Foreign Exchange Control Department of RBI regarding receipt of remittance of Rs.2,50,00,000/-, 75,00,000/, and Rs. 3,00,00,000/- for issue of equity shares to NRI. Even the amount of Rs.6.25 crores was returned to the revisionist after getting sanction from RBI. Ido not find any reason to take a view different from what Ld CMM has taken on this point.
35. The Ld. Counsel for the revisionist has also contended that as per the document dated 09.01.2008 send by complainant to Punjab and Sindh Bank while applying term loan of Rs. 20 Crores, the entire cost of project was Rs. 32.7 Crores. However, I do not find any force in such contention as the Ld. CMM has rightly observed that the documents itself provides that market value of land was around 110 Crores and term loan of Rs. 20 Crores was applied only for the project cost which was 32.7 Crores.
36. The law with regard to discharge of accused in criminal trial can be succinctly summarised as follows by referring to following judgments of Hon'ble Supreme Court:-
i. 2010 (9) SCC 368 Sajjan Kumar Vs. CBI.
ii. Union of India Vs. Prafulla Kumar Samal (1979) 3 SCC 4.Cr Rev No.389/2023
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iii.Dilawar Balu Kurane Vs. State of Maharashtra (2002) 2 SCC 135.
37. The court while considering the question of framing the charge under Criminal Procedure Code has undoubted power to sift and weigh the evidence for limited purpose of finding out whether or not a prima facie case against the accused has been made out. The test to determine prima facie case would depend upon the facts of each case.
i. Where the material placed before the court discloses grave suspicion against the accused which has not been properly explained, the court will be fully justified in framing a charge and proceeding with the trial.
ii. The court cannot act merely as a post office or a mouthpiece of the prosecution but has to consider the broad probabilities of the case, the total effect of the evidence and the documents produced before the court, any basic infirmities etc. However, at this stage, there cannot be roving enquiry into the pros and cons of the matter and weigh the evidence as if court was conducting a trial.
iii.The court is required to evaluate the material and documents on record with a view to find out if the Cr Rev No.389/2023 Shashi Bhushan Saurabh Vs. The State (Govt. Of NCT) of Delhi & Ors.
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facts emerging therefrom taken at their face value discloses the existence of all the ingredients constituting the alleged offence.
iv. If two views are possible and one of them give rise to suspicion only, as distinguished from grave suspicion, the Trial Judge will be empowered to discharge the accused.
38. It is a settled law that mere suspicion is not sufficient to frame charge against any accused and the existence of grave suspicion is a prerequisite for the purpose of framing of charge. However, in the instant case, in my considered view, no grave suspicion exists against the respondents so as to charge them for any offence with or without aid of section 120B IPC. I am of the view that the reasoning given by the Trial Court is correct.
39. There is no dispute as to the legal propositions laid down in the judgments relied upon by the Ld. Counsel for the revisionist however they are not applicable in the given facts.
40. In view of the above said discussion, I find no infirmity in the impugned order dated 06.06.2023. The revision petition is devoid of merits and the same is dismissed. PURSHOTTAM PATHAK Cr Rev No.389/2023 Shashi Bhushan Saurabh Vs. The State (Govt. Of NCT) of Delhi & Ors. Digitally signed by PURSHOTTAM Page No. 29 Of 30 PATHAK Date: 2025.05.06 12:29:40 +0530
41. TCR be sent back to the court concerned along with a copy of the present judgment.
42. Revision petition be consigned to record room after Digitally signed by due compliance. PURSHOTTAM PURSHOTTAM PATHAK PATHAK Date: 2025.05.06 12:29:45 +0530 ANNOUNCED IN THE OPEN COURT (PURSHOTAM PATHAK) TODAY ON THIS ASJ-05(SOUTH) th 05 DAY OF MAY, 2025 SAKET COURTS: N.D (This judgment contains total 30 signed pages) Cr Rev No.389/2023 Shashi Bhushan Saurabh Vs. The State (Govt. Of NCT) of Delhi & Ors.
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