APHC010698442025 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3521] MONDAY, THE NINETEENTH DAY OF JANUARY TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE DR JUSTICE Y. LAKSHMANA RAO CRIMINAL PETITION NO: 13278/2025 Between: DEVARAKONDA ARUNA KUMARI, D/O. D. VENKATESWARLU, FEMALE, AGED ABOUT 42 YEARS OCC CHIEF MANAGER, GDCC BANK R/O. INNER RING ROAD, REDDYPALEMGUNTUR, GUNTUR DISTRICT ...PETITIONER/ACCUSED No.1 AND 1. THE STATE OF ANDHRA PRADESH, REP. BY THE SHO, NALLAPADU PSGUNTUR DISTRICT THROUGH THE PUBLIC PROSECUTOR HIGH COURT OF ANDHRA PRADESH 2. THE DIVISIONAL CO OPERATIVE OFFICER, GUNTUR ...RESPONDENT/COMPLAINANT(S): Counsel for the Petitioner/accused: PEDDIBHOTLA VENKATA SAI RAJESH Counsel for the Respondent/complainant(S): PUBLIC PROSECUTOR The Court made the following: 2 Dr.YLR,J Crl.P.No.13278 of 2025 Dated 19.01.2026 ORDER: The Criminal Petition has been filed under Sections 480 and 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (for brevity ‘the BNSS’), seeking to enlarge the Petitioner/Accused No.1 on bail in Crime No.1281 of 2025 of Nallapadu Police Station, Guntur District, registered against the Petitioner/Accused No.1 herein for the offence punishable under Sections 120b, 420 and 409 read with 34 of the Indian Penal Code, 1860 (for brevity ‘the IPC’). 2. The learned counsel for the petitioner submits that the petitioner is innocent. She has been falsely implicated in this case. She is a law-abiding citizen. She has not committed any offence. She has got fixed abode. She is working as a Chief Manager of Guntur District Cooperative Central Bank. She has been in judicial custody for the past 28 days. Substantial portion of the investigation has been completed. Therefore, it is urged that this Court may be pleased to enlarge the petitioner on bail. 3. Per contra, Ms.P.Akhila Naidu, the learned Assistant Public Prosecutor opposed the grant of bail to the petitioner, contending that the investigation is still at progressive stage and that some more material witnesses are yet to be examined and it is urged to dismiss the petition. 4. Heard the learned counsel for the Petitioner and the learned Assistant Public Prosecutor. Perused the record. 3 Dr.YLR,J Crl.P.No.13278 of 2025 Dated 19.01.2026 5. As seen from the record, it appears that the petitioner/Accused No.1, at the relevant point of time, was working as Chief Manager of GDCC Bank. The allegation against the petitioner is that she violated certain norms while granting loans to the concerned persons. The properties of the petitioner were attached. There is no finding in the inquiry report that the petitioner indulged in misappropriation of the funds of the Central Bank. The disputed property, in respect of which pledge loans were granted to chilli producers, pertains to the year 2022–2023. The petitioner was arrested on 19.12.2025. She has been in judicial custody for the past 28 days. The petitioner is also alleged to have committed offences punishable for misappropriation and cheating. 6. The Hon’ble Apex Court in Delhi Race Club (1940) Ltd. v. State of U.P.,1at paragraph Nos.44 & 49 held as under: “44. At the most, the Court of the Additional Chief Judicial Magistrate could have issued process for the offence punishable under Section 420IPC 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 406IPC 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. 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 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 v. State of U.P. [Lalit Chaturvedi v. State of U.P., (2024) 12 SCC 483 : 2024 SCC OnLine SC 171] and Mideast Integrated Steels 1(2024) 10 SCC 690 4 Dr.YLR,J Crl.P.No.13278 of 2025 Dated 19.01.2026 Ltd. v. State of Jharkhand [Mideast Integrated Steels Ltd. v. State of Jharkhand, 2023 SCC OnLineJhar 301” 7. The Hon’ble Apex Court in Arshad Neyaz Khan v. State of Jharkhand2, at paragraph No.21 held as under: “21. Furthermore, it is pertinent to mention that if it is the case of the complainant/respondent No. 2 that the offence of criminal breach of trust as defined under Section 405 IPC, punishable under Section 406 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 in Section 415, punishable under Section 420 IPC. This Court in Delhi Race Club (1940) Limited v. State of Uttar Pradesh, (2024) 10 SCC 690 observed that there is a distinction between criminal breach of trust and cheating. For cheating, criminal intention is necessary at the time of making 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 misappropriates the same. Whereas, in case of cheating, the offender fraudulently or dishonestly induces a person by deceiving him to deliver a property. In such a situation, both offences cannot co-exist simultaneously. Consequently, the complaint cannot contain both the offences that are independent and distinct. The said offences cannot co-exist simultaneously in the same set of facts as they are antithetical to each other.” 8. Section 406 of ‘the I.P.C.,’ deals with criminal breach of trust, which presupposes lawful entrustment of property followed by dishonest misappropriation or conversion. In contrast, Section 420 of ‘the I.P.C.,’ addresses cheating and dishonestly inducing delivery of property, which requires deception at the inception of the transaction. Thus, while Section 406 of ‘the I.P.C.,’ arises from a breach of an existing fiduciary relationship, Section 420 of ‘the I.P.C.,’ is predicated upon fraudulent inducement at the very outset. The two offences, therefore, operate in distinct spheres. 9. On perusal of the record, there is no entrustment of the property. On further perusal of the record, there is no misappropriation alleged to have been 22025 SCC OnLine SC 2058 5 Dr.YLR,J Crl.P.No.13278 of 2025 Dated 19.01.2026 committed by the petitioner. As per the inquiry report, it is mentioned that the petitioner is liable for prosecution under Section 79 of the Andhra Pradesh Cooperative Societies Act, 1964. Police custody was ordered by the learned jurisdictional Court, and the petitioner was taken into police custody for a period of four days. The said police custody expired on 06.01.2025. 10. Considering the facts and circumstances of the case, the nature and gravity of allegations levelled against the Petitioner/Accused No.1, this Court is inclined to enlarge the Petitioner/Accused No.1 on bail. 11. In the result, the Criminal Petition is allowed with the following stringent conditions: i. The Petitioner/Accused No.1 shall be enlarged on bail subject to her executing bond for a sum of Rs.25,000/- (Rupees Twenty Five Thousand only),with two sureties each for the like sum to the satisfaction of the learned Special Mobile Magistrate, Guntur. ii. The Petitioner/Accused No.1 shall appear before the Station House Officer concerned, on every Saturday in between 10:00 am and 05:00 pm, till filing of the charge sheet. iii. The Petitioner/Accused No.1 shall not leave the limits of the State of Andhra Pradesh without prior 6 Dr.YLR,J Crl.P.No.13278 of 2025 Dated 19.01.2026 permission from the Station House Officer concerned. iv. The Petitioner/Accused No.1 shall not commit or indulge in commission of any offence in future. v. The Petitioner/Accused No.1 shall not, directly or indirectly, make any inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him/her from disclosing such facts to the Court. vi. The Petitioner/Accused No.1 shall cooperate with the investigating officer in further investigation of the case and shall make herself available for interrogation by the investigating officer as and when required. 12. In the result, the Criminal Petition is allowed. _________________________ DR. Y. LAKSHMANA RAO, J Date: 19.01.2026 PRA