Gujarat High Court
Ishwarbhai Shankarbhai Patel vs State Of Gujarat on 6 March, 2025
NEUTRAL CITATION
R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025
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Reserved On : 14/02/2025
Pronounced On : 06/03/2025
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC. APPLICATION NO. 3500 of 2021
(FOR QUASHING & SET ASIDE FIR/ORDER)
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE DIVYESH A. JOSHI : Sd/-
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Approved for Reporting Yes No
- √
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ISHWARBHAI SHANKARBHAI PATEL & ANR.
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR APURVA R KAPADIA(5012) for the Applicant(s) No. 1,2
MR KSHITIJ M AMIN(7572) for the Respondent(s) No. 2
MR MANAN MAHETA APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE DIVYESH A. JOSHI
CAV JUDGMENT
1. Rule. Learned APP Mr.Manan Maheta waives service of notice of rule for respondent no.1 - State of Gujarat.
2. By filing instant petition under Section 482 of the Code of Criminal Procedure, 1973 ("CrPC" for short), the applicants - original accused nos.3 and 5 seek to invoke inherent and extraordinary jurisdiction of this Court for quashing of the FIR being C.R. No.I-60 of 2018 registered with Bopal Police Station, Ahmedabad for the offence punishable under sections 406, 420 and 114 of the Page 1 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined Indian Penal Code and subsequent proceedings of Criminal Case No.1404 of 2019 pending before the Court of learned 4th Additional Civil Judge & Judicial Magistrate First Class, Mirzapur, Ahmedabad.
3. The allegations in nutshell are as under, Though the respondent no.2 herein has purchased the land bearing Survey No.314 (Old Survey No.245/1/2/3/4) admeasuring 0-96-12 Sq.Mtrs. situated in the sim of Village : Ghuma, District : Ahmedabad from the original accused nos.1, 2 and others, they have sold the land to the applicants herein by executing registered sale deed taking advantage of their name running in the revenue record and thereby the accused have committed alleged offences.
4. Heard learned advocate, Mr. Apurva Kapadia for the applicants and learned APP Mr. Manan Maheta for the respondent - State of Gujarat. Learned advocate, Kshitij Amin has not remained present when the matter was called out.
5. Learned advocate, Mr. Apurva Kapadia submitted that the impugned FIR is nothing but a sheer abuse and misuse of the power of law and is filed with oblique motive, therefore, the same may be quashed and set aside. He submitted that in fact, there is inordinate and unexplained delay caused in filing the impugned FIR because the so-called incident had occurred on 17.05.2018, for which, the impugned FIR has been lodged on 02.09.2018, which Page 2 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined suggests false implication of the applicants herein. He submitted that the applicants herein have purchased the aforesaid parcel of land from the original owner by executing registered sale deed in the year 2008 and before executing the said sale deed, the applicants have verified the title of the land, which clearly goes on to show that the name of the original land owners were running in the revenue record, therefore under the bonafide belief, they have entered into sale transaction and on the strength of the registered sale deed, the name of the applicants came to be mutated in the revenue record. He further submitted that mutation of entry was challenged by the respondent no.2 herein by instituting revenue proceedings, however in all attempts, the respondent no.2 has lost and in fact, findings are given by the revenue authority in favour of the applicants and, thereafter in the year 2018, the impugned FIR has been lodged against the applicants and others. He submitted that it is the specific case of the respondent no.2 that he had entered into an agreement with the original land owner of the said land and by executing the registered sale deed of the land, he had become the absolute owner of the said property in the year 2017 but despite the fact that the original owner had executed registered sale deed in favour of the respondent no.2 herein in the year 2017, the applicants herein have entered into sale Page 3 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined transaction, therefore, the applicants have committed offences under under Sections 406 and 420 of the IPC. He, however, submitted that it is an admitted position of fact that there was no transaction took place between the respondent no.2 and the present applicants and the applicants and the respondent no.2 were not at all entered into any transaction even though with a sole intent to create pressure upon the applicants, absolute false and fabricated FIR has been lodged by creating concocted story. He further submitted that the respondent no.2 was not domain over the land and also not owner of the land nor his name was also mutated in the revenue record, therefore by no stretch of imagination, it can be said that the applicants were aware about the said fact that the respondent no.2 herein had already entered into transaction with the original land owners. He submitted that in fact, the respondent no.2 had executed registered sale deed through Power of Attorney for some of the owners of the land, however, those owners have not assigned any power to anyone, therefore by making cursory glance upon the recital of the allegations leveled in the body of the FIR, it can safely be said that no offence much less any offence enumerated in the body of the FIR can be said to have been made out.
6. Learned advocate submitted that as stated above, mutation of entry was challenged by the respondent no.2 herein and during the course of revenue Page 4 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined proceedings, the applicants herein have come to know about the fact that the respondent no.2 herein has committed offence, therefore, applicants have registered complaint against the respondent no.2 before Bopal Police Station and in connection with the said complaint, the investigation was carried out and ultimately at the end of day, the concerned IO filed chargesheet against the accused persons and thus, the impugned FIR is nothing but a counterblast to the complaint filed by the applicants with a sole intent to settle the score with the applicants, therefore, the prosecution launched against the applicants is required to be quashed and set aside.
7. Learned advocate further submitted that it is the settled proposition of law that powers under Section 482 of the Code can be exercised by this Court in extraordinary circumstances and looking to the allegations and accusations levelled against the applicants in the impugned FIR, this is a fit case where the Court can exercise its power under section 482 of the Code. He further submits that if this Hon'ble Court would make a cursory glance upon the allegations levelled against the applicants in the impugned FIR, in that event, it would be found out that right from the inception, the intention of the applicants was not to deceive and cheat the respondent no.2. He further submitted that in the FIR, no specific averments and allegations with regard to ill-
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8. Learned advocate, at this stage, has placed reliance upon following decisions, (1) the judgment of the Hon'ble Supreme Court in case of Kishan Singh Vs. Gurpal Singh, reported in (2010) 8 SCC 775;
(2) the judgment of this Hon'ble Court in case of Khandubhai Poonabhai Tandel Vs. State of Gujarat, reported in 2015 (2) GLR 1146; (3) the judgment of the Hon'ble Court in case of Prakash Ramchandra Barot Vs. State of Gujarat, reported in 2011 (3) GLH 211; (4) the judgment of the Hon'ble Supreme Court in case of Mohammad Ibrahim & Ors. Vs. State of Bihar, reported in 2010 (1) GLH 184;
(5) the order dated 16.01.2025 passed by this Court in Criminal Misc. Application No.12469/2015 in case of Dilipkumar Dahyalal Soni & Ors. Vs. State of Gujarat & Anr.;
(6) the order dated 10.12.2015 passed by the Coordinate Bench of this Court in Criminal Misc. Application No.1113/2024 in case of Parulbhai Kotadawala Vs. State of Gujarat & Anr.;
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9. Referring to the aforesaid decisions, learned advocate submitted that the case of the applicant is squarely covered by those decisions. Learned advocate has also put reliance upon the decisions of the Hon'ble Apex Court in case of State of Haryana Vs. Bhajan Lal, reported in AIR 1992 SC 604 as well as in case of R.P. Kapur Vs. State of Punjab, reported in AIR 1960 SC 866 : 1960 Cri LJ 1239 and submitted that considering the principle of law laid down by the Hon'ble Apex Court in the aforesaid decisions, the impugned FIR is required to be quashed and set aside. It is, therefore, urged that the present application may be allowed.
10. Per contra, learned APP Mr. Manan Maheta appearing for the respondent - State of Gujarat has objected present application with vehemence and forcefully submitted that in fact by making cursory glance upon the body of the FIR, basic, essential and requisite ingredients to constitute the offence under Sections 406 and 420 are clearly established against the applicants. He submitted that pursuant to registration of the impugned FIR, the investigation was put into motion and during the course of investigation, the concerned IO had collected ample evidence/ material against the accused persons as also recorded the statements of number of witnesses and recital of those statements prima facie lead to the involvement of the applicants in the commission of crime, hence, considering the cumulative effect of the evidence Page 7 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined collected by the IO, the chargesheet came to be filed before the competent court. It is, therefore, urged that instant application preferred by the applicants is required to be rejected.
11. I have given my thoughtful consideration to the submissions advanced by the learned advocates for the respective parties.
12. Before evaluating the contentions advanced on behalf of the parties, this Court would like to consider the scope of jurisdiction of this Court under Section 482 of the CrPC to quash the proceedings. The scope and ambit of inherent powers of the Court under Section 482 CrPC or the extra-ordinary power under Article 226 of the Constitution of India, now stands well defined by series of judicial pronouncements. Undoubtedly, this Court has inherent power to do real and substantial justice, or to prevent abuse of the process of the Court. At the same time, the Court must be careful to see that its decision in exercise of this power is based on sound principles. The inherent power vested in the Court should not be exercised to stifle a legitimate prosecution. However, this Court can exercise its inherent power or extra-ordinary power if it comes to the conclusion that allowing the proceeding to continue would be an abuse of the process of the Court, or the ends of justice require that the proceeding ought to be quashed.
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13. At this stage, it will be useful to briefly notice the scope and ambit of the inherent powers of the High Court under Section 482 of the CrPC. The section itself envisages three circumstances, under which, the inherent jurisdiction may be exercised, namely, (i) to give effect to an order under the Code; (ii) to prevent an abuse of the process of court; and to otherwise secure the ends of justice. Nevertheless, it is neither possible nor discernible to lay down any inflexible rule which govern the exercise of inherent jurisdiction of the court. Undoubtedly, the power possessed by the High Court under the said provision is very wide, but is not unlimited. Therefore, it has to be exercised sparingly, carefully and cautiously, ex debito justitiae to do real and substantial justice for which alone the court exits. It needs little emphasis that the inherent jurisdiction does not confer any arbitrary power on the High Court to act according to whim or caprice. The power exists to prevent abuse of authority and not to produce any justice.
14. In the case of R.P. Kumar (supra), the Supreme Court had summarized some of the categories of cases where the inherent power under Section 482 of the Code could be exercised by the High Court to quash criminal proceedings against the accused. These are; (i) where it manifestly appear that there is a legal bar against the institution or continuance of the proceedings e.g. want of Page 9 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined sanction; (ii) where allegations in the first information report or complaint taken at its face value and accepted in their entirety do not constitute the offence alleged; (iii) where the allegations constitute an offence, but there is no legal evidence adduced or the evidence adduced clearly or manifestly fails to prove the charge.
15. In the case of G. Sagar vs. State of U.P., reported in (2000) 2 SCC 636, the Supreme Court had opined as follows;
"Jurisdiction under Section 482 of the Code has to be exercised with a great care. In exercise of its jurisdiction High Court is not to examine the matter superficially. 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 of the Code, 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."
16. Coming back to the facts of the case, bare perusal of the contents of the FIR, it is found out that Page 10 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined the impugned FIR has been lodged alleging inter alia about the cheating and criminal breach of trust committed by the accused named in the FIR to the effect that though the respondent no.2 herein is the owner of the land in question, registered sale deed has been executed in favour of the applicants by other accused taking advantage of the fact that their names are running in the revenue record. It is, however, required to be noted that the applicants have purchased the said land by executing registered sale deed, that too, after verifying the record as also title of the land. Not only that, when on the strength of the registered sale deed, entry was mutated, it was challenged by the respondent no.2 herein but in none of revenue proceedings, the respondent no.2 got success and on the contrary, if the findings given by the revenue authorities are examined, in that event, it would be found out that the findings are in favour of the applicants. It has also come to the notice that the applicants herein have filed complaint against the respondent no.2 herein, which was investigated and chargesheet has been filed before the competent court and thus, the respondent no.2 is facing criminal proceeding pursuant thereto and thus, this is nothing but a counterblast to the said complaint as canvassed by learned advocate for the applicant. Over and above that the alleged incident had occurred on 17.05.2018, for which, FIR has been lodged on Page 11 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined 02.09.2018 and there is no explanation offered by the respondent no.2 for such delay. Over and above that, it seems from the documents produced on record as also facts of the case as stated above, it is a civil dispute, which has been converted into criminal one in view of the fact that the respondent no.2 had initiated revenue records but he could not get any success therein and, thereafter, the impugned FIR has been lodged.
17. At this juncture, I may quote with profit the observations made by the Hon'ble Supreme Court in case of Delhi Race Club (1940) Ltd. (supra), upon which reliance has been placed by learned advocate for the applicant, wherein the Hon'ble Supreme Court has the difference between criminal breach and trust and cheating as also aspect of civil dispute, which was considered in criminal colour. Relevant observations made by the Hon'ble Supreme Court in Paragraph Nos.24 to 39 as under,
24. 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: -
"9. The ingredients in order to constitute a criminal breach of trust are: (i) entrusting a person with property or with Page 12 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined 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 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. "
25. 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 Page 13 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined ingredients.
In order to constitute a criminal breach of trust (Section 406 IPC): -
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) ishonestly 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).
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 Page 14 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined 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)
26. 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.
27. 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.
28. 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 Page 15 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined misappropriation. An act of breach 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 Page 16 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined 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."
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 Page 17 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined 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. 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 Page 18 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined 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.
31. 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, Page 19 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined the invoices raised by him were not cleared. No case worth the name of cheating is also made out.
32. 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.
33. 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 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 Page 20 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined "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"".
34. 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 Page 21 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined as to whether on the face of the allegations, an offence of criminal breach of 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 tuts 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 Page 22 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined 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)
35. The aforesaid exposition of law makes it clear that there should be some entrustment of property to the accused wherein 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 Page 23 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined 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."
36. 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 Page 24 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined 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 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]
37. The case at hand falls in category No. 1 as laid in Smt. Nagawwa (supra) referred to in para 7 of this judgment.
38. 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.
Page 25 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined
39. 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."
18. By catena of judicial pronouncements, it is well settled that 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. As observed by the Hon'ble Apex Court in the aforesaid decision, 'with a view to clear a serious misconception of law in the mind of the police as well as the courts concerned, 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 402 of the IPC'. It is settled proposition of law that every act of breach of trust may not be resulted in a penal offence of criminal breach of trust unless there is express evidence available on record, which clearly goes on to show that there was manipulating act of fraudulent misappropriation. An act of breach of trust Page 26 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined 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. Admittedly in the case on hand, at the time of purchase of land, the applicants have taken all precautions and before execution of the registered sale deed, the applicants have verified the title and the said fact is supported by the documents available on record. Over and above that, it is well settled that in order to constitute an offence of cheating, it must be shown that the accused had fraudulent or dishonest intention at the time of making the representation or promise and such a culpable intention right at the time of entering into an agreement cannot be presume merely from his failure to keep the promise subsequently. However if the facts of the present case are examined, in that event, it would be found out that the applicants have not given any promise to the respondent no.2 and there was no transaction between them and thus, basic and essential ingredients to constitute alleged offences are missing in the present case qua the applicants.
19. In a series of decisions, the Hon'ble Supreme Court as well as this Hon'ble Court have explained the contours of the power under Section 482 CrPC. In a decision of the Hon'ble Supreme Court in case of Bhajan Lal (supra), in the backdrop of Page 27 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined interpretation of various relevant provisions of the CrPC and of the principles of law relating to the exercise of extraordinary power under Article 226 or the inherent powers under Section 482 CrPC, the Hon'ble Supreme Court gave the following categories of cases, by way of illustrations, wherein such power could be exercised, either to prevent abuse of the process of the Court or otherwise to secure the ends of justice, making it clear that it may not be possible to lay down any precise, clearly-defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases, wherein such power should be exercised:
(a) where the allegations made in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused;
(b) where the allegations in the First Information Report and other materials, if any, accompanying the F.I.R. do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code;
(c) where the uncontroverted allegations made in the FIR or complaint and the evidence Page 28 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined collected in support of the same do not disclose the commission of any offence and make out a case against the accused;
(d) where the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code;
(e) where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused;
(f) where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and / or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party;
(g) where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him Page 29 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025 NEUTRAL CITATION R/CR.MA/3500/2021 CAV JUDGMENT DATED: 06/03/2025 undefined due to private and personal grudge."
20. Thus in view of above, the present case on hand, in my considered opinion, warrants interference inasmuch as the ingredients of the offence of cheating punishable under Section 420 IPC has not been made out. The requirement that the applicants carried a dishonest intention to cheat the respondent no.2 right from the beginning is not made out from the impugned FIR and thus, the core postulate of dishonest intention in order to deceive the respondent no.2 is not in existence even on acceptance of all the averments made in the impugned FIR on their face value. Hence, the impugned FIR and subsequent proceedings therefrom deserve to be quashed and set aside.
21. In the result, the application succeeds and is hereby allowed. Accordingly, the FIR being C.R. No.I-60 of 2018 registered with Bopal Police Station, Ahmedabad and subsequent proceedings being Criminal Case No.1404 of 2019 pending before the Court of learned 4th Additional Civil Judge & Judicial Magistrate First Class, Mirzapur, Ahmedabad arising out of the impugned FIR are hereby quashed and set aside qua the applicants.
22. Rule is made absolute to the aforesaid extent.
Direct service is permitted.
Sd/-
(DIVYESH A. JOSHI, J.) Gautam Page 30 of 30 Uploaded by PATIL GAUTAMBHAI GOPALBHAI(HC00190) on Thu Mar 06 2025 Downloaded on : Sat Mar 08 01:00:28 IST 2025