R/CR.MA/3791/2020 ORDER DATED: 31/07/2025 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE FIR/ORDER) NO. 3791 of 2020 ========================================================== PRAFULBHAI AMRUTBHAI SHAH & ANR. Versus STATE OF GUJARAT & ANR. ========================================================== Appearance: MR CHETAN K PANDYA(1973) for the Applicant(s) No. 1,2 MR NARANBHAI D ASAL(11055) for the Respondent(s) No. 2 MS AKSHITA MOHNOT(12118) for the Respondent(s) No. 2 MR TIRTHRAJ PANDYA, ADDL. PUBLIC PROSECUTOR for the Respondent(s) No. 1 ========================================================== CORAM:HONOURABLE MR. JUSTICE J. C. DOSHI Date : 31/07/2025 ORAL ORDER 1. By way of this application under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as ”the Code”), the petitioners prayed for quashing and setting aside FIR being C.R.No.I – 56 of 2019 registered with Gandhinagar Sector 21 Police Station, for the offences punishable under Sections 406, 420, 120B of the IPC as well as all other consequential proceedings arising out of the aforesaid FIR qua the petitioners herein. 2. When the matter is called out, learned advocate for the respondent No.2 is absent. 3. In the peculiar facts of the case, according to the FIR, the complainant has agreed to purchase certain plots of survey No.909 at Gandhinagar from Mr. Pankaj Patel being Director of Madhav Infra Housing Private Limited, whereby R/CR.MA/3791/2020 ORDER DATED: 31/07/2025 Mr. Pankaj Patel Director of Madhav Infra Housing Private Limited entered into MOU with the petitioners for selling all plots of survey No.909. The FIR further states that the complainant has paid sale consideration for plot No.909/4 to Pankaj Patel as well as to the Bombay Tablet Manufacturing Company Private Limited and yet, registered sale deed has not been executed and in that circumstances, according to the complainant, present petitioners as well as Pankaj Patel and Krupesh Patel, Directors of Madhav Infra Housing Private Limited have committed the aforestated offences. 4. It is noticeable that Pankaj Patel is the person with whom the complainant entered into an agreement for purchase of various plots of survey No.909. Sale deed of few of them have been executed, but plot No.909/5. Annexure R2 indicates that the complainant entered into compromise with Pankaj Patel and pursuant to which, in Special Criminal Application No.8463 of 1999, the Coordinate Bench of this Court vide order dated 15.9.2021, quashed the FIR on consent. The role of the present petitioners are much less than the role alleged to have been played by Pankaj Patel. In the aforesaid circumstances, continuation of proceedings against the petitioners is abuse of process of law. 5. Nonetheless, even the allegations taken in its fact as correct, they are not sufficient enough to establish essential ingredients of offences u/s 406 and 420 of the IPC. Breach of terms and conditions of the agreement to sell, if any, would not attract offence of criminal breach of trust or cheating. Page 2 of 6 R/CR.MA/3791/2020 ORDER DATED: 31/07/2025 6. The law is well settled in case of Radheyshyam and Others Vs. State of Rajasthan, 2024 SCC Online 2311, wherein the hac in para 6 to 13 reads as under:- “6. As already indicated above, a perusal of the complaint which has been registered as the FIR does not spell out any element or ingredient of cheating or breach of trust. Mere non-performance of an Agreement to Sell by itself does not amount to cheating and breach of trust. Respondent no. 2 has adequate remedy of filing a Civil Suit for relief of specific performance of a contract which he has already availed and the suit is still pending. The FIR only appears to be an arm-twisting mechanism to pressurise the appellants to execute the Sale Deed or to extract money. Every civil wrong cannot be converted into a criminal wrong. As we find in the present case, respondent no. 2 is trying to abuse the criminal machinery for ulterior motives. It is not his case that the appellants duped him to pay the advance amount and entered into an Agreement to Sell. The High Court fell in error in recording a finding that the ingredients of offences under sections 420 and 406 of IPC are present in the instant case. 7. Section 420, IPC provides that: “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.” For an offence under Section 420, IPC, the following ingredients must be present: i. Cheating as defined under Section 415, IPC, that is, there should be a fraudulent or dishonest inducement of a person; ii. An intention to deceive; and R/CR.MA/3791/2020 ORDER DATED: 31/07/2025 iii. 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. 8. Thus, cheating forms an essential ingredient to constitute and offence under Section 420, IPC. Further, to constitute cheating as defined under Section 415, IPC, it is necessary that a fraudulent or dishonest inducement is done and the deceived person is made to deliver any property owing to the fraud. Section 415, IPC, defines ‘cheating’, as: “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”.” 9. From the bare perusal of the FIR, it is evident that there was no act of cheating, that is, the complainant was nowhere fraudulently induced or dishonestly deceived by the appellants. A commercial transaction took place between the parties during which the parties consensually agreed for the sale of the property of the appellants and respondent no. 2 paid the part consideration. The default in payment of their loan dues on part of the appellants is not reflective of their deceitful intention towards the complainant. Mere non-registration of the sale or its refusal cannot amount to cheating. The delivery of the advance payment towards consideration was made in furtherance of an Agreement to Sell and it is not the case of the respondent that he was in anyway deceived or duped to make such payments to the appellants. It is a civil dispute and gives rise to the complainant's right to resort to the remedies R/CR.MA/3791/2020 ORDER DATED: 31/07/2025 provided under civil law by filing a suit for specific performance. 10. Additionally, the appellants have also been accused of committing the offence of criminal breach of trust under Section 406, IPC. This offence is defined under Section 405, IPC as follows: “Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes off that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits “criminal breach of trust”.” 11. For an offence punishable under Section 406, IPC, the following ingredients must exist: i. The accused was entrusted with property, or entrusted with dominion over property; ii. The accused had dishonestly misappropriated or converted to their own use that property, or dishonestly used or disposed of that property or wilfully suffer any other person to do so; and iii. 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. 12. In the present case, the appellants were not entrusted with any property by respondent no. 2 - complainant. The only delivery made was of part payment towards an Agreement to Sell between the parties. The amount paid towards consideration cannot be said to have been entrusted with the appellants by respondent no. 2. Additionally, merely because the appellants are refusing to register the sale, it does not amount to misappropriation of the advance payment. Since there was no entrustment of R/CR.MA/3791/2020 ORDER DATED: 31/07/2025 property, the offence of misappropriation of such property and thereby criminal breach of trust cannot be said to be made out. 13. Therefore, the ingredients of none of the offences alleged in the FIR are made out against the appellants and thus, no offence can be said to have been committed by them. The act of the appellant at best constitutes a civil wrong and does not call for any criminal action against them. A civil wrong cannot be given a criminal colour merely to coerce the appellants into registering the sale. The judicial process cannot be used as a tool to enforce specific performance of an agreement. Respondent no. 2 has ample remedies under the civil law and he has already resorted to the same by filing a civil suit for specific performance which is pending adjudication before the relevant forum. Thus, such a criminal proceeding cannot be allowed to continue.” 7. In the aforesaid circumstances, while applying ratio in case of Radheyshyam (supra), I am of the considered opinion that the petitioners have made out case to exercise inherent jurisdiction. 8. In the result, present petition is allowed and impugned FIR being C.R.No.I – 56 of 2019 registered with Gandhinagar Sector 21 Police Station, for the offences punishable under Sections 406, 420, 120B of the IPC as well as all other consequential proceedings arising out of the aforesaid FIR qua the petitioners herein are hereby quashed and set aside. Direct service is permitted. (J. C. DOSHI,J) SHEKHAR P. BARVE Original copy of this order has been signed by the Hon'ble Judge. Digitally signed by: SHEKHAR PRAFULBHAI BARVE(HC00200), Principal Pvt. Secretary, at High Court of Gujarat on 31/07/2025 16:38:03