[2026:JHHC:16328] 1 Cr. M.P. No.2865 of 2025 IN THE HIGH COURT OF JHARKHAND AT RANCHI Cr.M.P. No.2865 of 2025 ------ Prakash Kumar, aged about 29 years, son of Sri Ramesh Mahto resident of Vill:- Dokatoli, P.O.: Piska Nagri, P.S.:- Nagri, District- Ranchi. … Petitioner Versus 1. The State of Jharkhand 2. Pankaj Kumar, son of Suresh Paswan, resident of Qtr. No. B- 2314, Site-5, Sector-2, H.E.C., Dhurwa, P.O. & P.S.: Dhurwa, District- Ranchi. … Opposite Parties ------ For the Petitioner : Mr. Ashim Kr. Sahani, Advocate For the State : Mrs. Shweta Singh, A.P.P. ------ P R E S E N T HON’BLE MR. JUSTICE ANIL KUMAR CHOUDHARY By the Court:- Heard the parties. 2. This Criminal Miscellaneous Petition has been filed invoking the jurisdiction of this Court under Section 528 of the B.N.S.S., 2023 with a prayer to quash the entire criminal proceeding including the order dated 05.10.2024 passed by learned J.M.F.C., Ranchi in C.P. case no. 2869 of 2022 whereby and whereunder, learned J.M.F.C. has found prima face case in respect of the offences punishable under Section 406 and 417 of the I.P.C. and passed the summoning order. 3. It is submitted by learned counsel for the petitioner that the charge has not yet been framed in this case and the case is next fixed to 04.07.2026 for evidence before the charge. Though, notice has validly been served upon the opposite party no.2, but no one turns up on behalf of the opposite party no.2 in spite of repeated calls. [2026:JHHC:16328] 2 Cr. M.P. No.2865 of 2025 4. Learned counsel for the petitioner submits that the allegation against the petitioner is that the petitioner entered into an agreement for sale of land with the complainant and the complainant in total paid 90% of the consideration amount to the petitioner from time to time, but now the petitioner has become greedy and selling his own land independently without the involvement of the complainant. On the basis of the complaint, statement on solemn affirmation of the complainant and the statement of the inquiry witnesses, learned Judicial Magistrate, First Class, Ranchi found prima facie case as indicated above. 5. The learned counsel for the petitioner relying upon the judgment of this Court in the case of Puran Chandra Poddar versus State of Jharkhand and Another dated 30.10.2023 passed in Criminal Miscellaneous Petition No. 332 of 2022 submits that this court in that case relied upon the judgment of Hon’ble Supreme Court of India in the case of Sarabjit Kaur vs. State of Punjab & Another reported in (2023) 5 SCC 360 para-13 of which reads as under:- 6. “13. A breach of contract does not give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction. Merely on the allegation of failure to keep up promise will not be enough to initiate criminal proceedings. From the facts available on record, it is evident that Respondent 2 had improved his case ever since the first complaint was filed in which there were no allegations against the appellant rather it was only against the property dealers which was in subsequent complaints that the name of the appellant was mentioned. On the first complaint, the only request was for return of the amount paid by Respondent 2. When the offence was made out on the basis of the first complaint, the second complaint was filed with improved version making allegations against the appellant as well which was not there in the earlier complaint. The entire idea seems to be to convert a civil dispute into criminal and put pressure on the appellant for return of the amount allegedly paid. The criminal [2026:JHHC:16328] 3 Cr. M.P. No.2865 of 2025 courts are not meant to be used for settling scores or pressurise parties to settle civil disputes. Wherever ingredients of criminal offences are made out, criminal courts have to take cognizance. The complaint in question on the basis of which FIR was registered was filed nearly three years after the last date fixed for registration of the sale deed. Allowing the proceedings to continue would be an abuse of process of the court.” (Emphasis Supplied) Wherein the Hon’ble Supreme Court of India has reiterated the settled principle of law that unless fraudulent or dishonest intention is shown right at the beginning of the transaction, a breach of contract will not give rise to a criminal prosecution. 7. It is next submitted that in that case, this Court also relied upon the judgment of Hon’ble Supreme Court of India in the case of Uma Shankar Gopalika vs. State of Bihar & Another reported in (2005) 10 SCC 336, paragraph No.6 of which reads as under :- “6. Xxxx xxxx xxxx It is well settled that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. In the present case it has nowhere been stated that at the very inception there was any intention on behalf of the accused persons to cheat which is a condition precedent for an offence under Section 420 IPC.” (Emphasis supplied)” Wherein Hon’ble Supreme Court of India has reiterated the settled principle of law that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating; where there was any deception played at the very inception and if the intention to cheat has developed later on, the same will not amount to cheating. [2026:JHHC:16328] 4 Cr. M.P. No.2865 of 2025 8. It is next submitted that in that case this court relied upon the judgment of Hon’ble Supreme Court of India in the case of Satishchandra Ratanlal Shah vs. State of Gujarat & Anr. reported in (2019) 9 SCC 148, paragraph Nos.11 to 13 of which reads as under:- “11. Having observed the background principles applicable herein, we need to consider the individual charges against the appellant. Turning to Section 405 read with Section 406 IPC, we observe that the dispute arises out of a loan transaction between the parties. It falls from the record that Respondent 2 knew the appellant and the attendant circumstances before lending the loan. Further it is an admitted fact that in order to recover the aforesaid amount, Respondent 2 had instituted a summary civil suit which is still pending adjudication. The law clearly recognises a difference between simple payment/investment of money and entrustment of money or property. A mere breach of a promise, agreement or contract does not, ipso facto, constitute the offence of the criminal breach of trust contained in Section 405 IPC without there being a clear case of entrustment. 12. In this context, we may note that there is nothing either in the complaint or in any material before us, pointing to the fact that any property was entrusted to the appellant at all which he dishonestly converted for his own use so as to satisfy the ingredients of Section 405 punishable under Section 406 IPC. Hence the learned Magistrate committed a serious error in issuing process against the appellant for the said offence. Unfortunately, the High Court also failed to correct this manifest error. 13. Now coming to the charge under Section 415 punishable under Section 420 IPC. In the context of contracts, the distinction between mere breach of contract and cheating would depend upon the fraudulent inducement and mens rea. (See Hridaya Ranjan Prasad Verma v. State of Bihar [Hridaya Ranjan Prasad Verma v. State of Bihar, (2000) 4 SCC 168: 2000 SCC (Cri) 786]) In the case before us, admittedly the appellant was trapped in economic crisis and therefore, he had approached Respondent 2 to ameliorate the situation of crisis. Further, in order to recover the aforesaid amount, Respondent 2 had instituted a summary civil suit seeking recovery of the loan amount which is still pending adjudication. The mere inability of the appellant to return the loan amount cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, as it is this mens rea which is the crux of the offence. Even if all the facts in the complaint and material are taken on their face value, no such dishonest representation or inducement could be found or inferred.” (Emphasis supplied) [2026:JHHC:16328] 5 Cr. M.P. No.2865 of 2025 Wherein Hon’ble Supreme Court of India has reiterated the settled principle of law that if the property entrusted to an accused is used by him, mere use of that property would not amount to dishonest misappropriation of the property and in para 09 and 11 of the judgment in the case of Puran Chandra Poddar versus State of Jharkhand and Another (supra), this court also mentioned the ingredients of the offences punishable under Sections 406 and 420 of the Indian Penal Code. 9. It is next submitted that even if the entire allegation made against the petitioner are considered to be true, neither of the offences in respect of which prima facie case has been found by the learned J.M.F.C., Ranchi is not made out. Hence, it is submitted that the prayer as prayed for be allowed. 10. The learned A.P.P. on the other hand vehemently opposes the prayer and submits that even if the entire allegation against the petitioner are considered to be true in their entirety, then both the offences in respect of which prima facie case has been found by the learned J.M.F.C. is in fact been made out. Hence, it is submitted that this Cr.M.P. being without any merit be dismissed. 11. Having heard the submissions made at the Bar and after carefully going through the materials available in the record, it is pertinent to mention here that it is the settled principle of law as has been held by the Hon’ble Supreme Court of India in the case of Dalip Kaur and Others v. Jagnar Singh and Another reported in (2009) 14 SCC 696 para-10 of which reads as under:- [2026:JHHC:16328] 6 Cr. M.P. No.2865 of 2025 “10. The High Court, therefore, should have posed a question as to whether any act of inducement on the part of the appellant has been raised by the second respondent and whether the appellant had an intention to cheat him from the very inception. If the dispute between the parties was essentially a civil dispute resulting from a breach of contract on the part of the appellants by non-refunding the amount of advance the same would not constitute an offence of cheating. Similar is the legal position in respect of an offence of criminal breach of trust having regard to its definition contained in Section 405 of the Penal Code. (See Ajay Mitra v. State of M.P. [(2003) 3 SCC 11 : 2003 SCC (Cri) 703] )” (Emphasis supplied) If the dispute between the parties was essentially a civil dispute resulting from a breach of contract on the part of the accused persons by not refunding the advance amount the same would not constitute an offence of cheating. 12. Now coming to the fact of the case, the only allegation against the petitioner is that the petitioner has taken some advance amount on the basis of an agreement entered into with the complainant. There is absolutely no allegation against the petitioner of having played deception since the beginning of the transaction between the parties. In the absence of this essential ingredient; in view of the principles of law as already discussed above, this Court is of the considered view that even if the entire allegation is considered to be true in their entirety, still the offence punishable under Section 417 of the I.P.C. is not made out. 13. So far as the offence punishable under Section 406 of the I.P.C. is concerned, there is absolutely no allegation of dishonest misappropriation of any entrusted property. The only allegation against the petitioner is that though the petitioner has taken advance amount, but he is not honouring the agreement in terms of which he has received the advance amount. Thus, in view of the settled principle of law as [2026:JHHC:16328] 7 Cr. M.P. No.2865 of 2025 discussed above, in the absence of any allegation of dishonest misappropriation of any property, in the considered opinion of this Court, the allegations made against the petitioner, even if are considered to be true in their entirety, still the same is insufficient to constitute the offence punishable under Section 406 of the I.P.C.. 14. In view of the discussions made above, as neither of the offences in respect of which prima facie case has been found by the learned J.M.F.C., Ranchi is made out, even if the entire allegation is made against the petitioner are considered to be true in their entirety, this court is of the considered view that the continuation of the criminal proceeding against the petitioner will amount to abuse of process of law. Therefore, this is a fit case where the entire criminal proceedings including the order dated 05.10.2024 in C.P. case no. 2869 of 2022, which is now pending before the court of learned J.M.F.C., XXVII, Ranchi be quashed and set aside. 15. Accordingly, the entire criminal proceedings in connection with C.P. case no. 2869 of 2022 including the summoning order dated 05.10.2024 after finding prima facie case for the offence punishable under Sections 406 and 417 of the Indian Penal Code and the said case is now pending before the learned J.M.F.C., XXVII, Ranchi is quashed and set aside against the petitioner. 16. In the result, this Cr.M.P. stands allowed. (Anil Kumar Choudhary, J.) High Court of Jharkhand, Ranchi Dated the 08th of June, 2026 AFR/ Amar Uploaded on 11/06/2026