Telangana High Court
M/S Dodla Dairy Limited vs The State Of Telengana on 11 April, 2025
THE HONOURABLE SRI JUSTICE K.SURENDER
CRIMINAL PETITION No. 7471 OF 2019
O R D E R:
This Criminal Petition is filed under Section 482 of the Code of Criminal Procedure, 1973 (for short 'Cr.P.C.') by the petitioner/Complainant, questioning the orders of the trial Court and the Appellate Revision Court in dismissing the private complaint filed by the petitioner herein against the respondent/accused.
2. A private complaint was filed by the petitioner herein to refer the case for the purpose of investigation. The learned III Additional Chief Metropolitan Magistrate, Hyderabad, recorded the statement of the person representing the complainant company as PW.1. According to the case of the complainant, the respondent/accused approached the complainant and offered their lands for sale. After entering into a contract dated 06.04.2013, they took Rs.50 lakhs towards advance. However, the issue was dragged on without registering the land. When the complainant insisted on the return of the amount, a cheque for Rs.50 lakhs was issued by the accused. When the said cheque was presented for clearance, the cheque was returned unpaid. In fact, the agreement was for purchase of 50 acres of land at the rate of Rs.12,75,000/- per acre.
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3. The learned Magistrate found that the transaction pertains to a sale, and that the complainant ought to have approached the Civil Court by filing a suit for specific performance, if the complainant had the resources to pay the amounts covered by the contract. It was further observed that there was no intention to cheat in the present circumstances of the case, and it is a clear case of breach of contract. The criminal prosecution cannot be permitted since the dispute is purely civil in nature. The said order, dismissing the complaint filed by the complainant, was passed on 07.08.2018 in S.R.No.5101/2018.
4. Aggrieved by the said order passed by the learned Magistrate, the complainant approached the Sessions Court by filing Criminal Revision Petition No.270 of 2018.
5. The learned Sessions Judge considered the revision application and found that the complainant, except stating that the accused approached them with a criminal intent, had not set forth any circumstances before the Court to infer any dishonest intention. Further, in the complaint, there was no mention about any kind of inducement by the accused, except that a Memorandum of Understanding was entered into between the complainant and the accused. Further, the learned Sessions Judge found that there is no averment in the complaint that the 3 alleged threat by the accused caused any kind of alarm to attract an offence under Sections 406 and 506 of the Indian Penal Code.
6. The learned Sessions Judge further found that it was explicit from the transactions and the Memorandum of Understanding that the case is purely civil in nature, and that any failure on the part of the accused to abide by any of the conditions in the Memorandum of Understanding ought to have been addressed by the complainant before a Civil Court. The learned Sessions Judge stated that the trial Court had rightly dismissed the complaint.
7. The complaint was filed on the allegation of committing the offences under Sections 406, 409, 420, and 506 of the Indian Penal Code.
8. The Honourable Supreme Court, in S.K.Alagh v. State of Uttar Pradesh and others 1, held as follows:
"18. Ingredients of the offence under Section 406 are:
"(1) a person should have been entrusted with property, or entrusted with dominion over property;
(2) that person should dishonestly misappropriate or convert to his own use that property, or dishonestly use or dispose of that property or wilfully suffer any other person to do so;1
(2008) 5 SCC 662 4 (3) that such misappropriation, conversion, use or disposal should be in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract which the person has made, touching the discharge of such trust."
9. The Honourable Supreme Court, in N.Raghavender v. State of Andhra Pradesh, CBI 2, held that:
"Ingredients necessary to prove a charge under Section 409IPC
45. Section 409 IPC pertains to criminal breach of trust by a public servant or a banker, in respect of the property entrusted to him. The onus is on the prosecution to prove that the accused, a public servant or a banker was entrusted with the property which he is duly bound to account for and that he has committed criminal breach of trust. (See Sadhupati Nageswara Rao v. State of A.P. [Sadhupati Nageswara Rao v. State of A.P., (2012) 8 SCC 547 : (2012) 3 SCC (Cri) 979 : (2012) 2 SCC (L&S) 638] )
46. The entrustment of public property and dishonest misappropriation or use thereof in the manner illustrated under Section 405 are a sine qua non for making an offence punishable under Section 409IPC. The expression "criminal breach of trust" is defined under Section 405IPC which provides, inter alia, that whoever being in any manner entrusted with property or with any dominion over a property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property contrary to law, or in violation of any law prescribing the mode in which such trust is to be discharged, or contravenes 2 (2021) 18 Supreme Court Cases 70 5 any legal contract, express or implied, etc. shall be held to have committed criminal breach of trust. Hence, to attract Section 405IPC, the following ingredients must be satisfied:
46.1. Entrusting any person with property or with any dominion over property.
46.2. That person has dishonestly misappropriated or converted that property to his own use.
46.3. Or that person is 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.
47. It ought to be noted that the crucial word used in Section 405IPC is "dishonestly" and therefore, it pre-supposes the existence of mens rea. In other words, mere retention of property entrusted to a person without any misappropriation cannot fall within the ambit of criminal breach of trust. Unless there is some actual use by the accused in violation of law or contract, coupled with dishonest intention, there is no criminal breach of trust. The second significant expression is "misappropriates" which means improperly setting apart for ones use and to the exclusion of the owner.
48. No sooner are the two fundamental ingredients of "criminal breach of trust" within the meaning of Section 405IPC proved, and if such criminal breach is caused by a public servant or a banker, merchant or agent, the said offence of criminal breach of trust is punishable under Section 409IPC, for which it is essential to prove that:
(i) The accused must be a public servant or a banker, merchant or agent;
(ii) He/She must have been entrusted, in such capacity, with property; and 6
(iii) He/She must have committed breach of trust in respect of such property.
49. Accordingly, unless it is proved that the accused, a public servant or a banker, etc. was "entrusted" with the property which he is duty-bound to account for and that such a person has committed criminal breach of trust, Section 409IPC may not be attracted."
10. The Honourable Supreme Court, in A.M.Mohan v. The State rep. by SHO and others 3, held as follows:
"18. Section 420 of the Penal Code reads thus:
"420. Cheating and dishonestly inducing delivery of property.--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."
19. The ingredients to constitute an offence under Section 420 are as follows:
19.1. A person must commit the offence of cheating under Section 415; and 19.2. The person cheated must be dishonestly induced to
(a) deliver property to any person; or
(b) make, alter or destroy valuable security or anything signed or sealed and capable of being converted into valuable security.3
2024 SCC OnLine SC 339 7
20. Cheating is an essential ingredient for an act to constitute an offence under Section 420."
11. The Honourable Supreme Court, in Madhushree Datta v. The State of Karnataka and others 4, held that:
"33. This brings us to the offence under Section 506 of the IPC, which the High Court has found to be prima facie disclosed against the appellants. Section 506 of the IPC prescribes the punishment for the offence of criminal intimidation, while Section 503 defines the offence of criminal intimidation.
34. This Court had the occasion to examine the ingredients of Sections 503 and 506 of the IPC in Manik Taneja v. State of Karnataka16, where it was observed as follows:
"11. xxxxxxxxxxxx A reading of the definition of 'criminal intimidation' would indicate that there must be an act of threatening to another person, of causing an injury to the person, reputation, or property of the person threatened, or to the person in whom the threatened person is interested and the threat must be with the intent to cause alarm to the person threatened or it must be to do any act which he is not legally bound to do or omit to do an act which he is legally entitled to do."
12. In the entire complaint filed, there is nothing for this Court to infer that there was any kind of misrepresentation or any deceptive practices at the inception of the transaction, when there was an agreement between the complainant and the accused for the transaction of sale of land.
4 2025 SCC OnLine SC 165 8
13. A Memorandum of Understanding was entered into between the accused and the complainant for purchase of 50 Acres of land situated at Gudrampally village of Chityal Mandal, for an amount of Rs.12,75,000/- per acre. An amount of Rs.50 lakhs was paid, and the Memorandum of Understanding entered into between the complainant and the accused was revoked by the complainant, who then sought return of the Rs.50 lakhs paid as advance. The termination letter of the Memorandum of Understanding was also addressed to the accused. The cheque issued towards repayment of Rs.50 lakhs was returned for the reason of 'drawer's signature differs'. For the said reason, the criminal complaint was filed.
14. In the entire complaint, except the transaction of entering into a Memorandum of Understanding and thereafter paying an amount of Rs.50 lakhs, there is no averment to suggest that the accused entertained any intention to cheat the complainant. The mere cancellation of the Memorandum of Understanding between the parties, by itself, would not mean that the accused intended to cheat the complainant/petitioner from the inception of the transaction. What is required to substantiate the offence of cheating is the deceit played by a person at the inception of the transaction. In fact, the Memorandum of Understanding was cancelled by the complainant. It is not the case of the complainant 9 that the lands were not available or that the accused refused to provide the lands as sought by the complainant. As rightly found by the Courts below, the transactions between the complainant and the accused are purely civil in nature.
15. For the aforesaid reasons, Criminal Petition is dismissed.
Miscellaneous Petitions, pending if any, shall stand closed.
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K.SURENDER, J
Date: 11.04.2025
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THE HONOURABLE SRI JUSTICE K.SURENDER
CRIMINAL PETITION No. 7471 OF 2019
Dt. 11.04.2025
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