Gujarat High Court
Bhavinchandra Suryakant Purohit vs State Of Gujarat on 9 March, 2026
NEUTRAL CITATION
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE
FIR/ORDER) NO. 9681 of 2023
FOR APPROVAL AND SIGNATURE:
HONOURABLE MRS. JUSTICE M. K. THAKKER
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Approved for Reporting Yes No
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BHAVINCHANDRA SURYAKANT PUROHIT
Versus
STATE OF GUJARAT & ORS.
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Appearance:
MR. BHAVIN S PUROHIT(6973) for the Applicant(s) No. 1
PARTY IN PERSON(5000) for the Applicant(s) No. 1
MR ANKIT SHAH(6371) for the Respondent(s) No. 2,3
MR. RONAK RAWAL, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MRS. JUSTICE M. K. THAKKER
Date : 09/03/2026
JUDGMENT
1. The present application has been filed seeking the following reliefs:-
"A) Be pleased to admit and allow this application;
B) Be pleased to quash and set aside the FIR registered with the Gotri Police of Vadodara in Crime Register No. 11196004230076 of 2023 on dated 31/01/2023 for the offence punishable under the Page 1 of 16 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Wed Mar 11 2026 Downloaded on : Wed Mar 11 21:38:01 IST 2026 NEUTRAL CITATION undefined section 406 and 420 of the Indian Penal Code.
C) Pending admission, hearing and final disposal of this petition, be pleased to stay further criminal proceedings for all complaints falls under the FIR 11196004230076 of 2023, like CC/10397/2023, CRMA/1192/2023 and any other present and future criminal proceedings brought before any court of Law with reference to the above FIR be stayed in the interest of justice.
D) Be pleased to pass an Order to the Nazir of Vadodara District and Sessions Court to release Petitioners Passport No. J-6415271 Expiry 09/09/2023 taken in custody on 13/2/2023.
E) Be pleased to Order the arrest as an unlawful arrest and set aside the Atak Memo (Arrest Memo).
F) Be pleased to Order to grant a compensation of Rupees Five Crore to be paid by Gujarat State Government to the Accused for unlawful torture, chasing accused since September 2022 without registering FIR and unlawful detention and later arrest thereby compromising personal liberty and fundamental rights of the accused, a citizen of India.
G) Be pleased to Order an investigation against the Complainants under the Land Grabbing Act and issue Orders to hand over the possession of flat 102/C, Shantam Flats, Gadapura, Gotri, Vadodara to its rightful owner the accused, Mr Bhavinchandra Purohit of 29, Kuvareshwar Society, Harni Road, Vadodara 390022.
H) Be pleased to Order the DGP Gujarat and Commissioner of Police to investigate the failures of police and set an example that no such incident ever happens to any innocent. citizens or resident of India.Page 2 of 16 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Wed Mar 11 2026 Downloaded on : Wed Mar 11 21:38:01 IST 2026
NEUTRAL CITATION undefined I) Be pleased to pass such other and further relief/s that may be deemed fit and proper; in the facts and circumstances of the case;"
2. Heard the party-in-person, namely Mr. Bhavin Purohit, and the learned advocate Mr. Ankit Shah appearing on behalf of the respondent.
3. Mr. Bhavin Purohit, party-in-person, submitted that the impugned FIR pertains to a dispute of purely civil nature. It is contended that on account of non-execution of the sale deed, allegations under Sections 406 and 420 of the Indian Penal Code have been levelled. It is further submitted that a bare reading of the allegations made in the FIR does not disclose the commission of any offence under the provisions of the Indian Penal Code. In the aforesaid circumstances, it is submitted that the FIR is nothing but an abuse of the process of law and, therefore, the impugned FIR deserves to be quashed and set aside.
4. Per contra, learned advocate Mr. Ankit Shah appearing for the respondent submitted that after accepting the amount, a Banakhat was executed. It is contended that though the complainant was ready and willing to pay the Page 3 of 16 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Wed Mar 11 2026 Downloaded on : Wed Mar 11 21:38:01 IST 2026 NEUTRAL CITATION undefined remaining amount of the sale consideration, the applicant refused to execute the sale deed. Therefore, it is submitted that the FIR requires proper investigation and the applicant must face the charges levelled against him. In this background, it is prayed that the present petition be dismissed.
5. Having considered the submissions advanced by party-
in-person as well as the learned advocate for the respondent and upon perusal of the impugned FIR registered at Gotri Police Station at the instance of the complainant on 31.01.2023, it appears that a Banakhat was executed between the complainant and the applicant for the sale of a house situated at Amardeep Cooperative Housing Society, near Utkarsh Vidhyalay, Vadodara, bearing House No. 107. The sale consideration was fixed at Rs. 15,50,000/-, out of which an amount of Rs. 4,00,000/- was paid through cheque bearing No. 986340 dated 12.05.2012 and Rs. 3,50,000/-
was allegedly paid in cash. As per the averments made in the FIR, the remaining amount of Rs. 8,00,000/- was also paid in cash and an assurance was given that the sale deed would be executed as and when the Page 4 of 16 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Wed Mar 11 2026 Downloaded on : Wed Mar 11 21:38:01 IST 2026 NEUTRAL CITATION undefined complainant informed the applicant. It is further alleged that thereafter the applicant went abroad and, upon returning, when the complainant requested execution of the sale deed, the applicant refused to do so. In this background, the FIR under Sections 406 and 420 of the Indian Penal Code came to be registered.
6. This Court has referred to the decision rendered by the Apex Court in the case of Delhi Race Club (1940) Ltd.
& Ors. Versus State of Uttar Pradesh & Anr.
reported in (2024) 10 SCC 690, wherein the Apex Court has held as under:-
"35. This Court in its decision in S.W. Palanitkar & Ors. v. State of Bihar & Anr. reported in (2002) 1 SCC 241 expounded the difference in the ingredients required for constituting an of offence of criminal breach of trust (Section 406 IPC) viz-a-viz the offence of cheating (Section 420). The relevant observations read as under:
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"9. The ingredients in order to constitute a criminal breach of trust are: (i) entrusting a person with property or with any dominion over property, (ii) that person entrusted (a) dishonestly misappropriating or converting that property to his own use; or
(b) dishonestly using or disposing of that property or wilfully suffering any other person so to do in violation (i) of any direction of law prescribing the mode in which such trust is to be discharged, (ii) of any legal contract made, touching the discharge Page 5 of 16 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Wed Mar 11 2026 Downloaded on : Wed Mar 11 21:38:01 IST 2026 NEUTRAL CITATION undefined of such trust.
10. The ingredients of an offence of cheating are: (i) there should be fraudulent or dishonest inducement of a person by deceiving him, (ii)(a) the person so deceived should be induced to deliver any property to any person, or to consent that any person shall retain any property; or (b) the person so deceived should be intentionally induced to do or omit to do anything which he would not do or omit if he were not so deceived; and (iii) in cases covered by (ii)(b), the act of omission should be one which causes or is likely to cause damage or harm to the person induced in body, mind, reputation or property."
36. What can be discerned from the above is that the offences of criminal breach of trust (Section 406 IPC) and cheating (Section 420 IPC) have specific ingredients.
In order to constitute a criminal breach of trust (Section 406 IPC):
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1) There must be entrustment with person for property or dominion over the property, and
2) The person entrusted: -
a) dishonestly misappropriated or converted property to his own use, or
b) dishonestly used or disposed of the property or willfully suffers any other person so to do in violation of:
i. any direction of law prescribing the method in which the trust is discharged; or ii. legal contract touching the discharge of trust (see: S.W.P. Palanitkar (supra).Page 6 of 16 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Wed Mar 11 2026 Downloaded on : Wed Mar 11 21:38:01 IST 2026
NEUTRAL CITATION undefined Similarly, in respect of an offence under Section 420 IPC, the essential ingredients are: -
1) deception of any person, either by making a false or misleading representation or by other action or by omission;
2) fraudulently or dishonestly inducing any person to deliver any property, or
3) the consent that any persons shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit (see: Harmanpreet Singh Ahluwalia v. State of Punjab, (2009) 7 SCC 712 : (2009) Cr.L.J. 3462 (SC))
37. Further, in both the aforesaid sections, mens rea i.e. intention to defraud or the dishonest intention must be present, and in the case of cheating it must be there from the very beginning or inception.
38. In our view, the plain reading of the complaint fails to spell out any of the aforesaid ingredients noted above. We may only say, with a view to clear a serious misconception of law in the mind of the police as well as the courts below, that if it is a case of the complainant that offence of criminal breach of trust as defined under Section 405 of IPC, punishable under Section 406 of IPC, is committed by the accused, then in the same breath it cannot be said that the accused has also committed the offence of cheating as defined and explained in Section 415 of the IPC, punishable under Section 420 of the IPC.
39. Every act of breach of trust may not result in a penal offence of criminal breach of trust unless there is evidence of manipulating act of fraudulent misappropriation. An act of breach Page 7 of 16 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Wed Mar 11 2026 Downloaded on : Wed Mar 11 21:38:01 IST 2026 NEUTRAL CITATION undefined of trust involves a civil wrong in respect of which the person may seek his remedy for damages in civil courts but, any breach of trust with a mens rea, gives rise to a criminal prosecution as well.
It has been held in Hari Prasad Chamaria v. Bishun Kumar Surekha & Ors., reported in (1973) 2 SCC 823 as under:
"4. We have heard Mr. Maheshwari on behalf of the appellant and are of the opinion that no case has been made out against the respondents under Section 420 Penal Code, 1860. For the purpose of the present appeal, we would assume that the various allegations of fact which have been made in the complaint by the appellant are correct. Even after making that allowance, we find that the complaint does not disclose the commission of any offence on the part of the respondents under Section 420 Penal Code, 1860. There is nothing in the complaint to show that the respondents had dishonest or fraudulent intention at the time the appellant parted with Rs. 35.000/- There is also nothing to indicate that the respondents induced the appellant to pay them Rs. 35,000/- by deceiving him. It is further not the case of the appellant that a representation was made, the respondents knew the same to be false. The fact that the respondents subsequently did not abide by their commitment that they would show the appellant to be the proprietor of Drang Transport Corporation and would also render accounts to him in the month of December might create civil liability on the respondents for the offence of cheating."
40. 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 Page 8 of 16 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Wed Mar 11 2026 Downloaded on : Wed Mar 11 21:38:01 IST 2026 NEUTRAL CITATION undefined 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.
41. 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 the 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.
42. 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.
43. 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 Page 9 of 16 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Wed Mar 11 2026 Downloaded on : Wed Mar 11 21:38:01 IST 2026 NEUTRAL CITATION undefined 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.
44. At the most, the court of the Additional Chief Judicial Magistrate could have issued process for the offence punishable under Section 420 of the IPC i.e. cheating but in any circumstances no case of criminal breach of trust is made out. The reason being that indisputably there is no entrustment of any property in the case at hand. It is not even the case of the complainant that any property was lawfully entrusted to the appellants and that the same has been dishonestly misappropriated. The case of the complainant is plain and simple. He says that the price of the goods sold by him has not been paid. Once there is a sale, Section 406 of the IPC goes out of picture. According to the complainant, the invoices raised by him were not cleared. No case worth the name of cheating is also made out.
45. Even if the Magistrate would have issued process for the offence punishable under Section 420 of the IPC, i.e., cheating the same would have been liable to be quashed and set aside, as none of the ingredients to constitute the offence of cheating are disclosed from the materials on record.
46. It has been held in State of Gujarat v. Jaswantlal Nathalal reported in (1968) 2 SCR 408, "The term "entrusted" found in Section 405 IPC governs not only the words "with the property"
immediately following it but also the words "or with any Page 10 of 16 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Wed Mar 11 2026 Downloaded on : Wed Mar 11 21:38:01 IST 2026 NEUTRAL CITATION undefined dominion over the property" occurring thereafter--see Velji Raghvaji Patel v. State of Maharashtra [(1965) 2 SCR 429]. Before there can be any entrustment there must be a trust meaning thereby an obligation annexed to the ownership of property and a confidence reposed in and accepted by the owner or declared and accepted by him for the benefit of another or of another and the owner. But that does not mean that such an entrustment need conform to all the technicalities of the law of trust -- see Jaswantrai Manilal Akhaney v. State of Bombay [1956 SCR 483]. The expression "entrustment" carries with it the implication that the person handing over any property or on whose behalf that property is handed over to another, continues to be its owner. Further the person handing over the property must have confidence in the person taking the property so as to create a fiduciary relationship between them. A mere transaction of sale cannot amount to an "entrustment"".
47. Similarly, in Central Bureau of Investigation, SPE, SIU(X), New Delhi v. Duncans Agro Industries Ltd., Calcutta reported in (1996) 5 SCC 591 this Court held that the expression "entrusted with property" used in Section 405 of the IPC connotes that the property in respect of which criminal breach of trust can be committed must necessarily be the property of some person other than the accused or that the beneficial interest in or ownership thereof must be in the other person and the offender must hold such property in trust for such other person or for his benefit. The relevant observations read as under: -
"27. In the instant case, a serious dispute has been raised by the learned counsel appearing for the respective parties as to whether on the face of the allegations, an offence of criminal breach of Page 11 of 16 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Wed Mar 11 2026 Downloaded on : Wed Mar 11 21:38:01 IST 2026 NEUTRAL CITATION undefined trust is constituted or not. In our view, the expression "entrusted with property" or "with any dominion over property" has been used in a wide sense in Section 405 IPC. Such expression includes all cases in which goods are entrusted, that is, voluntarily handed over for a specific purpose and dishonestly disposed of in violation of law or in violation of contract. The expression 'entrusted' appearing in Section 405 IPC is not necessarily a term of law. It has wide and different implications in different contexts. It is, however, necessary that the ownership or beneficial interest in the ownership of the property entrusted in respect of which offence is alleged to have been committed must be in some person other than the accused and the latter must hold it on account of some person or in some way for his benefit. The expression 'trust' in Section 405 IPC is a comprehensive expression and has been used to denote various kinds of relationships like the relationship of trustee and beneficiary, bailor and bailee, master and servant, pledger and pledgee. When some goods are hypothecated by a person to another person, the ownership of the goods still remains with the person who has hypothecated such goods. The property in respect of which criminal breach of trust can be committed must necessarily be the property of some person other than the accused or the beneficial interest in or ownership of it must be in the other person and the offender must hold such property in trust for such other person or for his benefit. In a case of pledge, the pledged article belongs to some other person but the same is kept in trust by the pledgee. [...]"
(Emphasis supplied)
48. The aforesaid exposition of law makes it clear that there should be some entrustment of property to the accused wherein Page 12 of 16 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Wed Mar 11 2026 Downloaded on : Wed Mar 11 21:38:01 IST 2026 NEUTRAL CITATION undefined the ownership is not transferred to the accused. In case of sale of movable property, although the payment may be deferred yet the property in the goods passes on delivery as per Sections 20 and 24 respectively of the Sale of Goods Act, 1930.
"20. Specific goods in a deliverable state. -- Where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made and it is immaterial whether the time of payment of the price or the time of delivery of goods, or both, is postponed.
Xxx xxx xxx
24. Goods sent on approval or "on sale or return". -- When goods are delivered to the buyer on approval or "on sale or return" or other similar terms, the property therein passes to the buyer--
(a) when he signifies his approval or acceptance to the seller or does any other act adopting the transaction;
(b) if he does not signify his approval or acceptance to the seller but retains the goods without giving notice of rejection, then, if a time has been fixed for the return of the goods on the expiration of such time, and, if no time has been fixed, on the expiration of a reasonable time."
49. 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 Page 13 of 16 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Wed Mar 11 2026 Downloaded on : Wed Mar 11 21:38:01 IST 2026 NEUTRAL CITATION undefined 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 Others v. State of Uttar Pradesh and Another :
2024 SCC OnLine SC 171 & Mideast Integrated Steels Ltd. (MESCO Steel Ltd.) and Others v. State of Jharkhand and Another : 2023 SCC OnLine Jhar 301]
50. The case at hand falls in category No. 1 as laid in Smt. Nagawwa (supra) referred to in para 7 of this judgment.
51. If it is the case of the complainant that a particular amount is due and payable to him then he should have filed a civil suit for recovery of the amount against the appellants herein. But he could not have gone to the court of Additional Chief Judicial Magistrate by filing a complaint of cheating and criminal breach of trust. It appears that till this date, the complainant has not filed any civil suit for recovery of the amount which according to him is due and payable to him by the appellants. He seems to have prima facie lost the period of limitation for filing such a civil suit.
52. In such circumstances referred to above, the continuation of the criminal proceeding would be nothing but abuse of the process of law."
7. Applying the aforesaid ratio to the facts of the present case, it emerges that the first informant has called upon the accused to execute the sale deed in terms of the Banakhat (agreement to sell), which has been denied by Page 14 of 16 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Wed Mar 11 2026 Downloaded on : Wed Mar 11 21:38:01 IST 2026 NEUTRAL CITATION undefined the accused. From a plain reading of the averments made in the FIR, the essential ingredient of dishonest intention is conspicuously absent. The dispute, which essentially bears the flavour of a civil dispute arising out of contractual obligations, has been sought to be given a colour of criminality by initiating criminal proceedings.
Furthermore, the alleged agreement to sell is dated 16.05.2012, whereas the FIR has been registered on 31.01.2023. It is pertinent to note that even for instituting a suit under the Specific Relief Act, 1963 seeking specific performance, the prescribed period of limitation is three years. It therefore appears that, upon the expiry of the said limitation period, the first informant has attempted to secure the relief indirectly by initiating criminal proceedings in relation to an alleged breach of contractual obligations. Even otherwise, in view of the law laid down by the Hon'ble Apex Court in Delhi Race Club (1940) Ltd. & Ors.
(supra), both remedies cannot be permitted to co-exist simultaneously in the manner sought to be pursued in the present case. Hence, the continuation of the impugned criminal proceedings would amount to Page 15 of 16 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Wed Mar 11 2026 Downloaded on : Wed Mar 11 21:38:01 IST 2026 NEUTRAL CITATION undefined nothing but an abuse of the process of law.
8. In the aforesaid background, the impugned FIR being C.R. No. 11196004230076 of 2023 dated 31.01.2023 is hereby quashed and set aside. Consequently, all further and consequential proceedings arising therefrom shall also stand quashed and set aside.
9. In view of the aforesaid, the present application deserves to be allowed and is accordingly allowed.
10. Rule is made absolute.
(M. K. THAKKER,J) NIVYA A. NAIR Page 16 of 16 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Wed Mar 11 2026 Downloaded on : Wed Mar 11 21:38:01 IST 2026