Delhi District Court
Ajay Kumar vs State on 7 May, 2026
IN THE COURT OF SH. AKASH JAIN
ADDITIONAL SESSIONS JUDGE-04
EAST DISTRICT, KARKARDOOMA COURTS: DELHI
CNR No. DLET01-000660-2024
CR No. 28/24
Ajay Kumar
S/o Sh. K. P. Singh
R/o A-302, Amrapali Apartments
Sector-03, Vaishali
Ghaziabad, UP
...... Petitioner
Versus
State
...... Respondent
Date of Institution : 03.02.2024
Date of reserving Order : 18.04.2026
Date of pronouncement : 07.05.2026
ORDER
1. The present revision petition is essentially filed to assail the impugned order dated 05.10.2023 vide which charge was ordered to be framed by Ld. Trial Court against the accused person i.e. Ajay Kumar (hereinafter referred to as 'petitioner'), for the offences punishable under Sections 406/409/420 IPC read with Section 120B IPC.
2. Brief factual matrix of the case is that complainant CR No. 28/2024 Ajay Kumar v. State Page No. 1 of 20 AKASH Digitally signed by AKASH JAIN JAIN Date: 2026.05.07 17:30:41 +0530 Ashok Kumar had earlier filed a complaint against the accused persons for cheating him to the tune of Rs. 22,55,625/- against his booked flat no. K-9/206 in their 'Golf Homes' project at Noida Extension, Sector 4 Distt. Gautam Budh Nagar, Greater Noida, UP. It was stated that accused company i.e. M/s Amrapali Smart City Developers Pvt. Ltd. had advertised for booking flats in year 2010 in the project named 'Amrapali Golf Homes Project' at Noida extension and complainant booked 1115 Sqft three BHK Flat and got allotment of flat no. K-9/206, in October 2010. It was stated that complainant had made total payment of Rs. 22,55,625 (Twenty Two lakhs and fifty five thousands, six hundred twenty five rupees only) to accused company which was almost 90% of total flat cost i.e. Rs. 26.34 Lakhs. It was alleged that despite payment and passing of more than six years, the company failed to give possession of the flat which was committed in Jan-2015 and construction work had also been stopped. It was alleged that complainant's hard-earned money was cheated by the accused persons and company.
3. During investigation, it came to notice that accused company through its Directors had cheated home buyers on pretext of Subvention scheme. Under this scheme, it was claimed by the company that the project was already under construction and they were going to deliver the possession to their customers as per commitment. As per new plan 10% of the cost was to be paid by the customers and 80% was to be paid by the Bank and remaining 10% was to be paid at the time of giving actual possession. In this regard, another complainant Wing Commandar P. V. Ramna Rao CR No. 28/2024 Ajay Kumar v. State Page No. 2 of 20 Digitally signed AKASH by AKASH JAIN Date:
JAIN 2026.05.07 17:30:57 +0530 was examined and his statement was recorded. It had been assured to him by erstwhile directors of the company that project would be completed in time bound manner. Accordingly, he had booked flat in Tower C1, unit No. G04 and paid Rs.5,90,975/- in December 2014. However, in December 2015 the construction at site was completely stopped. Also, no damage was paid by the accused company to the home buyers in contravention of builder buyer agreement executed in this regard.
4. In terms of statements of about 576 victims, it was found that even before obtaining possession of land and sanction of plan by Greater Noida Authority, accused persons started taking money from the home buyers on inducement of booking of flats. IO had seized original brochure of Amrapali Group Project "Golf homes", news paper cuttings and web-edition of leading news papers and further recorded statements of all the victims/ home buyers who were wrongfully lured by accused persons into booking of flats in their projects and failed to provide the possession thereof despite lapse of repeated deadlines, while diverting the funds of those home buyers into group companies of accused persons.
5. On the basis of these allegations, the FIR in question was registered by the police for offences punishable under Sections 406/409/420/120B IPC. The investigation was conducted and in furtherance thereof the charge-sheet specifying the commission of offences punishable under Sections 406, 409, 420 and 120B of IPC was filed against the accused persons namely, CR No. 28/2024 Ajay Kumar v. State Page No. 3 of 20 AKASH Digitally signed by AKASH JAIN JAIN Date: 2026.05.07 17:31:04 +0530 Ajay Kumar, Anil Kumar Sharma, Shiv Priya and M/s Amrapali Smart City Developers Pvt. Ltd. through its Managing Director Anil Kumar Sharma. Later on, supplementary charge-sheet was filed whereby accused Chandra Prakash Wadhwa and Anil Mittal were summoned by the court.
6. After perusal of the material on record and hearing submissions on behalf of both the parties on the point of charge, Ld. Trial Court vide detailed order dated 05.10.2023 was pleased to order framing of charge against the accused persons Ajay Kumar, Anil Kumar Sharma, Shiv Priya and M/s Amrapali Smart City Pvt. Ltd. for offences under Sections 406/409/420 IPC read with Section 120B IPC and against the accused persons Chandra Prakash Wadhwa and Anil Mittal for offence under Section 420 IPC read with Section 120B IPC.
7. Being aggrieved of the aforesaid impugned order, the petitioner assailed the same on inter alia following grounds:-
(i) That impugned order dated 05.10.2023 passed by Ld. Trial Court is erroneous, perverse, arbitrary and passed without application of judicial mind;
(ii) That Ld. Trial Court exercised its discretion and jurisdiction in haste, while ignoring the material on record and without assigning any reason against settled tenets of law;
(iii) That Ld. Trial Court grossly erred by ordering to frame charges against accused persons Ajay Kumar (petitioner herein), Anil Kumar Sharma, Shiv Priya and M/s Amrapali Smart City Pvt. Ltd.
for offences under Sections 406/409/420/120B IPC while on the other hand, ordering to frame charge under Section 420/120B IPC against CR No. 28/2024 Ajay Kumar v. State Page No. 4 of 20 AKASH Digitally signed by AKASH JAIN JAIN Date: 2026.05.07 17:31:09 +0530 accused persons Chandra Prakash Wadhwa and Anil Mittal against whom similar allegations were levelled by the prosecution;
(iv) That Ld. Trial Court failed to appreciate that at the relevant time i.e. in the year 2010 when alleged inducement was made by the erstwhile directors of accused no. 4 company to the home-buyers, petitioner was not a Director in the said company;
(v) That Ld. Trial Court failed to appreciate that there were no specific allegations against petitioner as evident from the statements of witnesses recorded under Section 161 Cr.P.C.. Moreover, petitioner had no role in the financial matters, policy making and administration of affairs of accused no. 4 company;
(vi) That Ld. Trial Court failed to appreciate that mere transfer of funds from companies in the form of ICDs/loan to its sister companies is not unlawful transfer or misappropriation of home buyers funds being permitted under Section 372(8) of Companies Act 1956 and the same would not constitute breach of trust or misappropriation;
(vii) That Ld. Trial Court grossly erred in not considering that prosecution failed to explain the essential elements of entrustment with respect to property in question so as to constitute the offence of criminal breach of trust;
(viii) That Ld. Trial Court failed to appreciate that no alleged offence of cheating under Section 420 read with Section 120B IPC is further made out as the land in question was allotted to accused no. 4 company by Greater Noida Authority in April 2010 and the property was sanctioned in October, 2010, however, due to large scale farmers agitation during 2011 to 2015, the project got delayed which was beyond the control of accused persons and there was no ill -will or malice on the part of accused persons to defraud the home buyers;
(ix) That Ld. Trial Court failed to consider that no CR No. 28/2024 Ajay Kumar v. State Page No. 5 of 20 AKASH Digitally AKASH JAIN signed by JAIN Date: 2026.05.07 17:31:19 +0530 offence under Section 409 IPC was further made out against the petitioner as the company i.e. M/s Amrapali Smart City Pvt. Ltd is itself an accused in the present case and there is no allegation on behalf of the company that its Directors including petitioner had dishonestly misappropriated any property of the company.
8. Per contra, Ld. APP for the State argued that investigation has revealed complainant to be an investor in the aforementioned project and accused Ajay Kumar, Anil Kumar Sharma and Shiv Priya are the main Directors of the company M/s Amrapali Smart City Developers Pvt. Ltd., to whom Plot No.GH-02, Sector-04, Greater Noida, District- Gautam Budh Nagar, U.P measuring 245441.96 Sq. Mts was allotted by Greater Noida Authority. Further, project namely 'Golf Homes' was to be developed by the company in first phase and 'Kingswood' in second phase. It was argued that as per reply dated 22/04/2019 from Greater Noida Authority Company M/s. Amarpali Smart City Developers Pvt. Ltd. had to pay a total amount of Rs.400.38 Crores to the Authority including interest in installments as per lease deed dated 14/09/2010 and they had deposited only Rs. 53.62 Crores. The amount payable including penal interest (182.54 Crores) + additional compensation defaulted payment (94.68 Crores) + annual lease rent defaulted (18.79 Crores) and times extension penalties for construction (19.59 Crores), the grand total of default amount being 660.36 Crores as on date of reply. This indicates that accused persons had stopped making payment to Greater Noida Authority and diverted the amount received from home buyers to other companies. Consequently, Greater Noida Authority could not issue completion certificate to builder and also could not CR No. 28/2024 Ajay Kumar v. State Page No. 6 of 20 AKASH Digitally signed by AKASH JAIN JAIN Date: 2026.05.07 17:31:24 +0530 execute tri-partite sub-lease agreement between the home buyer, builder and Greater Noida Authority as full payment was not made as per lease agreement. Thus, accused persons created vicious circle for innocent home buyers, due to multiplicities of authorities.
9. It was submitted that on one hand, accused persons had taken hard earned money of home-buyers and on other hand deprived them of possession of their homes. It was stated that as per reply from Greater Noida Authority, company could start making booking of flats only after approval of Drawing/plan by Greater Noida Authority i.e 21/10/2010, where's from 576+ complaints which were received so far, in at least 205 complaints accused had booked flats prior to 21/10/2010. Hence, the accused persons had no authority to collect booking amount from home buyers on pre-launch. The same has been collected on false representation, thereby causing wrongful loss to the home buyers. In many cases, the builder had started taking money in month of August 2010, which was even before the signing of lease deed with Greater Noida authority which was signed on 14/09/2010.
10. It was submitted that accused persons in order to further extort money from the home buyers had launched Mission completion scheme in 2016 and collected additional Rs. 2 Lacs to Rs.2.5 Lacs each. Even after taking additional money from the home buyers, accused persons had not started any work. Moreover, as per company record no audit of books of accounts was carried out in 2016 and money was misappropriated by all CR No. 28/2024 Ajay Kumar v. State Page No. 7 of 20 AKASH Digitally signed by AKASH JAIN JAIN Date: 2026.05.07 17:31:29 +0530 accused persons. Accused persons had also launched Subvention scheme, in which they had promised to deliver the flat within a short period and under this scheme, they had taken 10% as booking amount, 80 % as one time payment at the signing of Builder buyer agreement and remaining 10% at the time of possession. Again, accused persons had failed to deliver the flats on time as promised and further misappropriated the amount for their own use or in other group companies instead of investing in construction of flats. It was submitted that the company had received Rs.7,012,102,336/- (seven hundred Crores approx) for year ending 31st March 2014 from 4608 home buyers and received Rs.9,775,945,106/- (Nine hundred seventy-seven Crores approx) in year ending 31st March, 2015, while diverting Rs. 144 Crores to its sister companies, without disclosing these facts to home buyers. It was thus, submitted that all accused persons had committed offences punishable u/s 420/406/409/120-B IPC. In support of his averments, the Ld. APP has placed reliance on the case law titled as R. K. Dalmia v Delhi Administration, AIR 1962 SC1821.
11. As regards specific role of petitioner herein, it was argued by Ld. Addl. PP for the State that the petitioner had signed the audited balance sheet of accused no. 4 company for the year 2013-14 and 2014-15, which shows that he was well aware of financial affairs of the company and factum of alleged diversion of funds was very well in his knowledge. It was argued that at the time of furnishing of report by statutory auditor S. N. Dhawan for the year ending on 31.03.2014, where it was pointed out that Rs.144 crores (approximate) was given by accused no. 4 company CR No. 28/2024 Ajay Kumar v. State Page No. 8 of 20 AKASH Digitally signed by AKASH JAIN JAIN Date: 2026.05.07 17:31:34 +0530 to its sister companies as unsecured loan, petitioner Ajay Kumar was then Director of accused no. 4 company, meaning thereby he was well in connivance with other Directors of the company. It was further argued that petitioner was Director in M/s Ultra Homes Construction Pvt. Ltd. from 07.04.2003, which company was one of the flagship company of accused no. 4 company having major share holding in the same, having received significant amount of unsecured loan from accused no. 4 company during the relevant period which clearly suggests that petitioner was very much involved in day-to-day affairs of accused no. 4 company right from the beginning and is equally responsible for the alleged offences along with other Directors.
12. I have heard the arguments on behalf of both the parties and carefully perused the record.
13. Before adverting to the rival contentions, it is imperative to refer to Section 415 and 420 IPC which read as under:-
415. Cheating:-
Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to "cheat".
Explanation.--A dishonest concealment of facts is a deception within the meaning of this section.
420. Cheating and dishonestly inducing delivery of property:-
CR No. 28/2024 Ajay Kumar v. State Page No. 9 of 20 AKASH Digitally signed by AKASH JAIN JAIN Date: 2026.05.07 17:31:39 +0530 Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine."
14. During investigation, IO had reportedly issued notice under Section 91 Cr.P.C to CEO/ Chairman, Greater Noida Authority to provide the details about project 'Golf Homes' of accused no. 4 company i.e. M/s Amrapali Smart City Developers Pvt. Ltd.. Notices under Section 91 Cr.P.C. were also issued to Bank of Maharashtra and Corporation Bank to provide details of bank account maintained in the name of aforesaid company. As per the reply received from Greater Noida Authority, the company could have started booking flats only after the approval of drawing / plan by Greater Noida Authority. Yet, as per reply received from accused no. 4 company, the accused persons had started booking of flats as early as 19.07.2010. The lease deed of aforesaid project was signed between accused no. 4 company and Greater Noida Authority on 14.09.2010 on which date possession of land was given to them. However, the accused persons had reportedly taken money from about 1441 home buyers till 14.09.2010. Thus, the argument of Ld. Addl. PP for the State that accused persons had dishonestly induced the home-buyers to buy flats from them while concealing material facts and misrepresenting that they had all the approvals from the authority, hold merit. It is pointed out by Ld. Addl. PP for the State that accused persons had started publishing advertisements in the newspapers and making bookings even CR No. 28/2024 Ajay Kumar v. State Page No. 10 of 20 AKASH Digitally AKASH JAIN signed by JAIN Date: 2026.05.07 17:31:43 +0530 before obtaining possession of the land, signing of lease deed and sanction of plans/ drawings which prima facie reflect their malicious intent since beginning.
15. IO had recorded statements of number of home buyers under Section 161 Cr.P.C, wherein they specifically stated that Directors and office bearers of M/s Amrapali Smart City Developers Pvt. Ltd had induced them to book flats in their project namely 'Golf Homes'. However, they failed to deliver the flats in time and repeatedly made defaults. All accused persons in order to further extort money from the home buyers had launched Mission completion scheme in 2016 and collected additional Rs. 2 Lacs to Rs.2.5 Lacs each. Even after taking additional money from the home buyers, accused persons had reportedly not started any work. Moreover, as per company record no audit of books of accounts was carried out in 2016 and money was allegedly misappropriated by all accused Directors.
16. Accused persons had also reportedly launched Subvention scheme, in which they had promised to deliver the flat within a short period. Under this scheme, they had taken 10% as booking amount, 80% as one time payment at the signing of builder buyer agreement and remaining 10% at the time of possession. Accused persons though, again failed to deliver the flats on time as promised and further misappropriated the amount for their own use or in other group companies instead of investing in construction of flats.
CR No. 28/2024 Ajay Kumar v. State Page No. 11 of 20
AKASH Digitally signed by
AKASH JAIN
JAIN Date: 2026.05.07
17:31:47 +0530
17. As per reply from Bank of Maharashtra and other banks, a/c No.60047843847 was in the name of M/s. Amrapali Smart city developers Pvt. Ltd. and accused Anil Kumar Sharma and Shiv Priya were Authorized persons to operate the said account. Later on, Ajay Kumar (petitioner herein) was also made Authorized Signatory in this account where majority of home buyer's money was credited.
18. As per report of S. N Dhawan, statutory Auditor for year ending 2013-14 and 2014-15, accused no. 4 company had received Rs.7,012,102,336/- (Seven hundred Crores approx) for year ending 31st March 2014 from 4608 home buyers. In the year ending 31st March 2015, accused no. 4 company had received Rs.9,775,945,106/- (Nine hundred seventy-seven Crores approx). It was also mentioned in their reply dated 27/02/2018 that inspite of regular follow up, company had not provided draft financial statements for audit. Hence, audit for the year ending 2015-16 could never be started. It was also indicated in the report that Rs.1,448,443,833/- which was given to group companies through ICD (Inter corporate deposits) as loans, were interest free and prejudicial to the interests of company. It is admitted position of facts that petitioner herein had signed the audited balance sheet of accused no. 4 company for the year 2013-14 and 2014-15 and he was already working as Director of accused no. 4 company when aforesaid report of auditor S. N. Dhawan was released reflecting grant of unsecured loan to the tune of Rs. 144 crores (approx.) by accused no.4 company to its sister companies. Thus, the argument of Ld. Addl. PP for the State that petitioner prima-facie cannot CR No. 28/2024 Ajay Kumar v. State Page No. 12 of 20 AKASH Digitally signed by AKASH JAIN JAIN Date: 2026.05.07 17:31:51 +0530 claim ignorance regarding commission of alleged offences by the accused persons during the relevant time, holds merit.
19. As per reply dated 22/04/2019 from Greater Noida Authority accused company M/s. Amrapali Smart City developers Pvt. Ltd. had to pay a total amount of Rs.400.38 Crores including interest in installments as per lease deed dated 14/09/2010. They had deposited only 53.62 Crores. The amount payable including penal interest (182.54 Crores) + additional compensation defaulted payment (94.68 Crores) + annual lease rent defaulted (18.79 Crores) and times extension penalties for construction (19.59 Crores), the grand total of Default amount being 660.36 Crores as on date of reply. This indicates accused persons had even stopped making payment to Greater Noida Authority and diverted the amount received from home buyers to other companies. Consequently, Greater Noida Authority could not issue completion certificate to builder and also was not in a position to execute tri-partite sub-lease agreement between the home buyer, builder and Greater Noida Authoirty as full payment was not made as per lease agreement. Thus, accused persons had created vicious circle for innocent home buyers, due to multiplicities of authorities. On one hand they had taken hard earned money of home-buyers and on other hand deprived them of possession of their homes.
20. Considering the totality of circumstances, specific allegations made by various complainants examined under Section 161 Cr.P.C. during investigation, fact that accused persons made CR No. 28/2024 Ajay Kumar v. State Page No. 13 of 20 AKASH Digitally signed by AKASH JAIN JAIN Date: 2026.05.07 17:31:55 +0530 booking of flats even prior to obtaining requisite approvals, execution of lease deed and obtaining possession from the authority, fact that accused persons committed repeated defaults and failed to fulfill their promise to give flats to the home-buyers, while continued to take advance from them and fact that they diverted money collected for the project to their sister concern companies as unsecured loan without disclosing to home-buyers, leads to strong suspicion that there is ground for presuming that the accused persons including petitioner herein had committed offence under Section 420 IPC read with Section 120-B IPC.
21. With respect to offence of criminal breach of trust, the Hon'ble Supreme Court of India in the case Raghavendra V. State of Andhra Pradesh, CBI, Criminal Appeal no.5 of 2010 decided on 13.12.2021 has held that to attract Section 405 IPC, the following ingredients must be satisfied:-
i) Entrusting any person with property or with any dominion over property;
ii) that person has dishonestly miss appropriated or converted that property to his own use;
iii) or that person dishonestly using or disposing of that property or wilfully suffering any other person so to do in violation of any direction of law or a legal contract.
22. It is essential for invoking section 405 IPC that the property which is stated to be the subject matter of entrustment or of the passing of dominion does not become the property of the accused at any point of time. The person to whom, the property is handed over does not become the beneficial owner thereof. The CR No. 28/2024 Ajay Kumar v. State Page No. 14 of 20 AKASH Digitally signed by AKASH JAIN JAIN Date: 2026.05.07 17:31:59 +0530 property has to be used in accordance with the directions given at the time of entrustment.
23. It has been specifically brought during investigation that accused no. 4 company i.e. M/s Amrapali Smart City Developers Pvt. Ltd. was required to pay total amount of Rs. 400.38 Crores including interest in installments in terms of lease deed dated 14.09.2010 to Greater Noida Authority and they had deposited only Rs. 53.62 Crores and grand total of default amount payable by accused no. 4 company to the Authority as on 22.04.2019 was Rs. 660.36 Crores. It is further brought during investigation that while accused persons were receiving advance against booking from home buyers in their project 'Golf Homes', they had been regularly diverting the substantial amount to its group companies. In terms of audit report of Statutary Auditor S.N. Dhawan, for the year ending 31st March, 2015, the accused no. 4 company had received Rs. 9,775,945,106/- (977 Crores approx.) as booking amount from 4608 home buyers, out of which Rs. 1,448,443,833/- (144 Crores approx.) had been given to the group companies by accused persons through ICD (Inter Corporate Deposits) as loans which were interest free and prejudicial to the interests of the company. It is further brought to the light during investigation that accused persons had mortgaged / hypothecated almost the entire project i.e. 'Golf Homes' to various banks and other financial institutions, as first charge upon the land and the project was of Greater Noida Authority and second charge was that of banks, innocent home buyers were last to claim their flats through legal process in vicious circle created CR No. 28/2024 Ajay Kumar v. State Page No. 15 of 20 AKASH Digitally signed by AKASH JAIN JAIN Date: 2026.05.07 17:32:04 +0530 by the accused persons. Moreover, the factum of these loans were never disclosed and concealed from the home buyers. Thus, in terms of ratio of judgment in the case of R. K. Dalmia (supra), accused no. 1 to 4 including petitioner are liable to be charged for the offences under Section 406/120B IPC as well.
24. As regards arguments of Ld. Counsel for the petitioner that offences under Section 420 IPC and 406/409 IPC are antithetical and cannot be simultaneously framed against the accused persons, reliance may be placed upon the case of Delhi Race Club v. State of Uttar Pradesh , 2024 INSC 626, wherein it was held by Hon'ble Supreme Court of India that offences under Sections 420 IPC and 406 IPC are independent, distinct and mutually antithetical and cannot co-exist simultaneously in the same set of facts. The fine distinction between both the offences of cheating and criminal breach of trust was carefully elaborated in the aforesaid judgment as under:-
".... 29. To put it in other words, the case of cheating and dishonest intention starts with the very inception of the transaction. But in the case of criminal breach of trust, a person who comes into possession of the movable property and receives it legally, but illegally retains it or converts it to his own use against the terms of the contract, then the question is, in a case like this, whether the retention is with dishonest intention or not, whether the retention involves criminal breach of trust or only a civil liability would depend upon the facts of each case.
30. The distinction between mere breach of contract and the offence of criminal breach of trust and cheating is a fine one. In case of cheating, the intention of the accused at the time of inducement should be looked into which may be judged by a subsequent conduct, but for this, the subsequent conduct is not the sole test. Mere breach of contract cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right from the beginning of CR No. 28/2024 Ajay Kumar v. State Page No. 16 of 20 AKASH Digitally signed by AKASH JAIN JAIN Date: 2026.05.07 17:32:08 +0530 transaction i.e. the time when the offence is said to have been committed. Therefore, it is this intention, which is the gist of the offence. Whereas, for the criminal breach of trust, the property must have been entrusted to the accused or he must have dominion over it. The property in respect of which the offence of breach of trust has been committed must be either the property of some person other than the accused or the beneficial interest in or ownership' of it must be of some other person. The accused must hold that property on trust of such other person. Although the offence, i.e. the offence of breach of trust and cheating involve dishonest intention, yet they are mutually exclusive and different in basic concept. There is a distinction between criminal breach of trust and cheating. For cheating, criminal intention is necessary at the time of making a false or misleading representation i.e., since inception. In criminal breach of trust, mere proof of entrustment is sufficient. Thus, in case of criminal breach of trust, the offender is lawfully entrusted with the property, and he dishonestly misappropriated the same. Whereas, in case of cheating, the offender fraudulently or dishonestly induces a person by deceiving him to deliver any property. In such a situation, both the offences cannot co-exist simultaneously...."
25. Thus, both the offences of cheating and criminal breach of trust are substantially distinct in how the property is parted with by the victim and when the accused's intention turns dishonest. A person cannot be simultaneously convicted for both the offences. However, this determination can only possibly be made after trial and at the initial stage of conviction on point of charge, an alternate charge for both the sections can be framed in the scheme of things.
26. Code of Criminal Procedure (Cr.P.C.) and corresponding Bharatiya Nagarik Suraksha Sanhita (BNSS) considers the possibility of such scenario arising and explicitly permits framing of alternate charges in terms of Section 221 CR No. 28/2024 Ajay Kumar v. State Page No. 17 of 20 AKASH Digitally signed by AKASH JAIN JAIN Date: 2026.05.07 17:32:12 +0530 Cr.P.C. which reads as under:-
221. Where it is doubtful what offence has been committed
(i) If a single act or series of acts is of such a nature that it is doubtful which of several offences the facts which can be proved will constitute, the accused may be charged with having committed all or any of such offences, and any number of such charges may be tried at once; or he may be charged in the alternative with having committed some one of the said offences.
(ii) If in such a case the accused is charged with one offence, and it appears in evidence that he committed a different offence for which he might have been charged under the provisions of Sub-Section (1), he may be convicted of the offence which he is shown to have committed, although he was not charged with it.
27. Thus, while an accused can either be convicted for an offence of cheating or criminal breach of trust, there is no bar in framing alternate charge for both the offences against the accused persons. The petitioner Ajay Kumar is therefore liable to be charged for offence under Section 420 r/w 120-B IPC and alternatively under Section 406 r/w 120-B IPC.
28. As regards offence under Section 409 IPC, reliance of Ld. Addl. PP for the State in the case of R. K. Dalmia (supra) is without any consequence as in the said case, accused Dalmia committed criminal breach of trust with respect to securities of funds of the company in the course of his duty as Chairman and Director of the company. However, in the present case, accused no. 1, 2 and 3 had not committed alleged criminal breach of trust with respect to property of accused no. 4 company while serving as its directors or agents. The Indian Penal Code does not define CR No. 28/2024 Ajay Kumar v. State Page No. 18 of 20 AKASH Digitally signed by AKASH JAIN JAIN Date: 2026.05.07 17:32:17 +0530 an agent. The definition is given under Section 182 of the Indian Contract Act and it is as follows:-
182. 'Agent' and 'principal' defined. An 'agent' is a per employed to do any act for another, or to represent another in dealings with third person. The person for whom such act is done, or who is so represented, is called the 'principal'.
29. As is apparent from the complaint and other material appended with the charge-sheet, the complainant had never employed any of the accused persons to do any act for itself or to represent the complainant in dealings with any third-party. The complainant was never the principal of the accused persons.
30. It has been alleged against the accused persons namely Ajay Kumar, Anil Kumar Sharma and Shiv Priya that they being the directors of the accused no. 4 company M/s Amrapali Silicon City Pvt. Ltd. had acted as its agent and had diverted its funds thereby dishonestly misappropriating them. Ld. APP has argued that for this reason the accused persons should be charged and tried for the offence punishable under section 409 IPC. Admittedly, the accused no. 4 company is itself an accused in the present case. There is no allegation on behalf of the company that the accused persons or any of them has dishonestly misappropriated any property of the company. Therefore, none of the accused persons including petitioner herein can be charged for the offence punishable under Section 409 IPC.
31. Keeping in view the totality of circumstances, CR No. 28/2024 Ajay Kumar v. State Page No. 19 of 20 AKASH Digitally signed by AKASH JAIN JAIN Date: 2026.05.07 17:32:21 +0530 material on record and observations as above, it is concluded that petitioner/ accused Ajay Kumar is liable to be charged for offences under Sections 420 r/w 120-B IPC and alternatively under Sections 406 r/w 120-B IPC. He is though liable to be discharged for offence under Section 409 IPC. Impugned order dated 05.10.2023 is partially modified to that effect.
32. Accordingly, the revision petition stands disposed of in terms thereof. Copy of this order along with Trial Court record be sent back to Ld. Trial Court for information and compliance.
33. File be consigned to Record room after due compliance. Digitally signed by AKASH JAIN AKASH Date:
JAIN 2026.05.07
17:32:30
+0530
ANNOUNCED IN OPEN (AKASH JAIN)
COURT ON 07.05.2026 ASJ-04, EAST DISTRICT
KARKARDOOMA COURTS
DELHI
This order contains 20 pages and each paper is signed by me.
Digitally signedAKASH by AKASH JAIN Date:
JAIN 2026.05.07 17:32:34 +0530 (AKASH JAIN) ASJ-04, EAST DISTRICT KARKARDOOMA COURTS DELHI CR No. 28/2024 Ajay Kumar v. State Page No. 20 of 20