Pradeep Sharma vs The State Of Madhya Pradesh

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IN THE HIGH COURT OF MADHYA PRADESH

AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE B. P. SHARMA
th
ON THE 9 OF APRIL, 2026
MISC. CRIMINAL CASE No. 30017 of 2024
PRADEEP SHARMA AND OTHERS
Versus
THE STATE OF MADHYA PRADESH AND OTHERS
Appearance:
Shri Sankalp Kochar - Advocate for the petitioner.
Shri Manikant Sharma - Advocate for the respondent No.2.
Shri Amit Singh Baghel - P.L. for respondent/State.
ORDER
The present petition has been instituted under Section 482 of the
Code of Criminal Procedure, 1973 invoking the inherent jurisdiction of this
Court for quashment of the First Information Report bearing Crime No.
1021/2023 registered at Police Station Kolar Road, District Bhopal for
offences punishable under Sections 420 and 120-B of the Indian Penal Code,
1860 and Section 3(1)(f) of the Scheduled Castes and Scheduled Tribes
(Prevention of Atrocities) Act, 1989, along with all consequential
proceedings arising therefrom.
2. The factual matrix, reveals that the complainant/respondent No. 2,
namely Sujan Singh Kumre, is the owner of agricultural land bearing Khasra
No. 101/4 situated at Village Hinotia Alam, District Bhopal, which land,
owing to its proximity to the urban limits of Bhopal, had acquired significant
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commercial potential. It is further borne out that the complainant belongs to a

Scheduled Tribe category, and therefore any transfer of such land was
governed by statutory restrictions requiring prior permission of the
competent authority, namely the Collector.
3. It is the case of the complainant that the present applicants approached
him with a proposal for purchase of the said land and entered into an
agreement dated 31.10.2018. The understanding between the parties, as
alleged, was not a simple monetary transaction but a composite arrangement
involving payment of consideration partly through monetary mode and partly
through transfer or adjustment of land owned by the applicants situated in
Village Kodia, District Bhopal as per the order of the collector.
4. The record further discloses that the Collector, Bhopal, granted
permission for transfer of the land subject to certain conditions, including the
requirement of payment of consideration through scheduled instalments. It is
alleged that the applicants initially paid an amount of Rs. 25 lakhs through
RTGS at the time of execution of the agreement; however, thereafter they
deliberately avoided making further payments. The complainant has further
alleged that under the pretext of financial constraints during the Covid
period, the applicants induced him to part with certain cheques and to defer
enforcement of payment obligations, but despite repeated assurances, the
remaining amount was never paid. It is further alleged that the petitioners had
no intention to honour the terms of the agreement from the very inception
and had devised a calculated scheme to obtain control over the complainant’s
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land without paying the full consideration. On the basis of these allegations,

the impugned FIR dated 28.12.2023 came to be registered for offences under
Sections 420 and 120-B IPC and Section 3(1)(f) of the SC/ST Act.
5. Learned counsel for the petitioners has advanced elaborate
submissions contending that the entire dispute, even if accepted in its
entirety, arises out of a contractual transaction and is purely civil in nature. It
has been argued that the essential ingredients of the offence of cheating,
namely dishonest or fraudulent intention at the inception of the transaction,
are completely absent in the present case. It is submitted that the agreement
between the parties clearly demonstrates a consensual commercial
arrangement, and at best, the allegations pertain to non-performance or
breach of contractual obligations, which cannot be elevated to the status of a
criminal offence. It has been further contended that the complainant has
deliberately resorted to criminal proceedings in order to exert pressure upon
the applicants and to convert a civil dispute into a criminal prosecution.
6. The learned counsel has placed reliance upon a comprehensive list of
judgments to substantiate the aforesaid contentions. Heavy reliance has been
placed upon the judgment of the Hon’ble Supreme Court in ARCI v. Nimra
Cerglass Technics Pvt. Ltd. (2016) 1 SCC 348, wherein it has been held that
a mere breach of contract would not give rise to criminal prosecution for
cheating unless it is shown that there was fraudulent or dishonest intention at
the very inception of the transaction. Further reliance has been placed on
Mohd. Ibrahim v. State of Bihar (2009) 8 SCC 751 and Hridaya Ranjan
Prasad Verma v. State of Bihar (2000) 4 SCC 168, wherein the Hon’ble
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Supreme Court has explained the distinction between breach of contract and

the offence of cheating by emphasizing that the intention to deceive must
exist at the time when the inducement is made. Learned counsel has also
relied upon Rikhab Birani v. State of U.P. (2025 SCC OnLine SC 823), Lalit
Chaturvedi v. State of U.P. (2024) 12 SCC 483, Sarabjit Kaur v. State of
Punjab (2023) 5 SCC 360, Vesa Holdings (P) Ltd. v. State of Kerala (2015) 8
SCC 293 and V.Y. Jose v. State of Gujarat (2009) 3 SCC 78 to submit that
mere non-payment of money or failure to fulfil contractual terms cannot
constitute a criminal offence of cheating.
7. It has further been argued that the dispute sought to be raised by the
complainant is essentially civil in nature and cannot be given a criminal
colour. In this regard, reliance has been placed upon Anukul Singh v. State
of U.P., , (2025 INSC 1153), Sonia Verma v. State of Haryana (2024 INSC
227), Naresh Kumar v. State of Karnataka (2024 SC 196), Syed Yaseer
Ibrahim v. State of U.P. ( 2022 SCC OnLine SC 271 ) and G. Sagar Suri v.
State of U.P. [(2000) 2 SCC] wherein it has been held that criminal
proceedings cannot be permitted to continue where the dispute is
predominantly civil in nature. It has also been contended that even assuming
that the entire consideration has not been paid, the same cannot be a ground
for cancellation of sale deed or for criminal prosecution, and reliance has
been placed on Dahiben v. Arvindbhai Kalyanji Bhanusali (2020) 7 SCC 366
in this regard. Lastly, it has been argued that the complainant has suppressed
material facts relating to pending civil dispute and has initiated criminal
proceedings with mala fide intention, which amounts to abuse of process of
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law. Reliance has been placed upon S.N. Vijayalakshmi v. State of

Karnataka (2025 INSC 917) and Usha Chakraborty v. State of West Bengal
(2023 INSC 86) to contend that suppression of material facts by the
complainant vitiates the criminal proceedings.
8. Per contra, learned counsel appearing for the State as well as for the
complainant has opposed the petition and has submitted that the FIR and
material on record clearly disclose commission of cognizable offences and
that the petition is devoid of merit. It has been contended that the
petitioners, right from the inception of the transaction, had dishonest
intention and induced the complainant to enter into the agreement by making
false representations regarding payment of consideration and adjustment of
land. It is further submitted that the petitioners after obtaining partial control
over the property, deliberately defaulted in making payment and adopted
dilatory tactics to avoid their obligations.
9. Learned counsel has drawn attention, wherein it has been specifically
stated that the petitioners had structured the transaction in such a manner so
as to deprive the complainant of his land without paying the entire
consideration, and that the complainant was misled into parting with his
property under false assurances. It has also been contended that the
transaction involves land belonging to a member of Scheduled Tribe
category, and therefore any act of deprivation or exploitation assumes greater
seriousness and attracts provisions of the SC/ST Act.
10. Learned counsel has further submitted that at this stage this Court is
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not required to examine the veracity or otherwise of the allegations, and if

the allegations prima facie disclose commission of offence, the proceedings
ought not to be quashed. Reliance has been placed on the judgment of the
Hon’ble Supreme Court in Vijay Kumar Ghai v. State of West Bengal (2022)
7 SCC 124 wherein it has been reiterated that the inherent powers under
Section 482 Cr.P.C. should not be exercised to stifle legitimate prosecution.
In the case of Avitel Post Studioz Limited v. HSBC PI Holdings (Mauritius)
Ltd., (2021) 4 SCC 713, as relied upon by the respondent, holds that
allegations of fraud and dishonest inducement cannot be treated as mere civil
disputes, and the existence of a civil remedy does not bar criminal
prosecution. It emphasizes that where fraudulent intent is alleged from the
inception, proceedings should not be quashed under Section 482 Cr.P.C., as
such matters require trial.
11. Having bestowed thoughtful consideration to the rival submissions
advanced by learned counsel for the parties, and upon meticulous perusal of
the record. The inherent powers of the High Court under Section 482 Cr.P.C.
are undoubtedly wide, but such powers are neither unlimited nor unbridled.
The exercise of such jurisdiction is governed by well-established judicial
principles that such powers are to be exercised sparingly, with
circumspection and only in exceptional cases where the Court is satisfied that
continuation of the criminal proceedings would amount to abuse of the
process of law or that the ends of justice require interference. It is equally
well settled that the Court, while exercising such jurisdiction, is not expected
to adjudicate upon disputed questions of fact which are essentially matters
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for trial.

12. The principal plank of argument advanced on behalf of the petitioners
is that the dispute in question is purely civil in nature arising out of a
contractual transaction, and that the essential ingredients of the offence of
cheating are absent. Mere breach of contract or failure to fulfil contractual
obligations does not ipso facto constitute an offence of cheating unless it is
shown that the accused had a fraudulent or dishonest intention at the very
inception of the transaction.
13. In Hridaya Ranjan Prasad Verma (supra) , the Hon’ble Supreme Court
has clearly delineated that the distinction between mere breach of contract
and the offence of cheating depends upon the intention of the accused at the
time of making the promise. Similarly, in Mohd. Ibrahim (supra), it has been
held that criminal proceedings should not be permitted to be used as a
weapon for enforcing civil claims. In Nimra Cerglass Technics (supra), the
Supreme Court has emphasized that where the dispute essentially arises from
non-performance of contractual terms, the same would not attract criminal
liability in the absence of initial dishonest intention. The judgments relied
upon by the petitioners under the category that a civil dispute cannot be
given a criminal colour and criminal law should not be set in motion for
setting scores arising out of civil disputes. Reliance on Dahiben (supra) has
been placed to contend that even non-payment of sale consideration does not
automatically render the transaction void or give rise to criminal
consequences. The judgment in S.N. Vijayalakshmi (supra) has been cited to
emphasize that suppression of material facts by the complainant and misuse
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of criminal process vitiate the proceedings.

14. The ratio of these decisions does not lay down an absolute proposition
that in every case involving a contractual dispute, criminal proceedings must
be quashed. The determinative factor remains whether the allegations, as
disclosed in the FIR and material collected during the investigation, prima
facie indicate the presence of fraudulent or dishonest intention at the
inception of the transaction. Turning now to the present case, the allegations
made by the complainant, as reflected in the FIR, and evidence placed on
record are not confined merely to non-payment of consideration or breach of
contractual terms. The intensity of the allegations is that the petitioners
induced the complainant, who belongs to a Scheduled Tribe category and
whose land was subject to statutory protections, to enter into a transaction by
making false representations regarding payment of consideration and
adjustment of land, and that such inducement was coupled with a
preconceived design to deprive the complainant of his property without
paying almost the entire consideration.
15. Upon consideration of the material placed on record, it emerges that
the complainant was the owner of land bearing Khasra No. 101/4 situated at
Village Hinotia Alam, District Bhopal, which, owing to its location, had
acquired developmental value. The complainant, not being a resident of
Bhopal, entered into an agreement dated 31.10.2018 with the petitioners for
sale of the said land. Since the complainant belongs to a Scheduled Tribe
category, the transfer was subject to permission from the Collector, which
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was subsequently granted vide order dated 15.05.2019, prescribing a

structured schedule for payment of consideration.
16. It is alleged that the petitioners, instead of making full payment,
structured the transaction in such a manner that a substantial portion of the
consideration was shown to be adjusted against the transfer of their own land
situated at Village Kodia in remote area of a lesser value. The complainant
has asserted that such arrangement was not genuine and was adopted to
circumvent statutory safeguards which were intended to protect the rights of
the Schedule Tribe community. Though an initial amount of Rs. 25 lakhs
was paid through RTGS, the remaining payments, including those stipulated
in the Collector’s order, were not made, and the complainant was allegedly
prevented from presenting cheques on the pretext of financial constraints
during Covid. While granting permission for transfer of the land, the
Collector had prescribed a specific and structured schedule for payment of
the sale consideration, compliance of which was mandatory in nature.
However, prima facie, it appears that the petitioners did not adhere to the said
schedule and failed to fulfil the conditions embodied in the Collector’s order
dated 15.05.2019. The subsequent agreement dated 03.07.2019, as alleged,
indicates a deviation from the prescribed mode of payment, thereby defeating
the statutory safeguards attached to the transfer of land belonging to a
member of a Scheduled Tribe. Furthermore, the Collector's order, the
compliance with which was mandatory, was not adhered to, which reflects
the intention of the petitioners at the time of agreement.
17. The record further reflects that on the date of execution of the sale
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deed, a subsequent agreement dated 03.07.2019 was executed showing an

amount of Rs. 1,64,56,000/- as payable through adjustment. It is also alleged
that the petitioners failed to honour their obligations relating to payment
despite repeated demands, compelling the complainant to initiate civil
proceedings for cancellation of the sale deed. Prima-facie, it appears that the
agreement dated 3.7.2019 was executed solely for the collector’s permission
so that the seller respondent No.2 does not become landless. In this case the
legal provisions protecting rights of the Scheduled Tribes Community have
been openly violated by the petitioners. The purpose for which the
respondent sold the land has been defeated, despite statutory protection.
18. It has additionally been alleged that the petitioners, after execution of
the sale deed, obtained mutation of the land in their favour by representing
that full consideration had been paid, whereas substantial amounts remained
unpaid. Thereafter, the land was developed into plots and sold to third
parties. These circumstances, as alleged, indicate that the complainant was
deprived of his land without receipt of consideration.
19. The defence sought to be projected by the petitioners, including their
version of the transaction, payments made, and alleged conduct of the
petitioners towards the complainant who is a member of a Schedule Tribe,
involves disputed questions of fact which require appreciation of evidence
and cannot be examined at this stage. The law is well settled that where the
matter requires adjudication on evidence, the inherent jurisdiction ought not
to be invoked to short-circuit the prosecution.
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20. In view of the aforesaid facts, this Court finds that the allegations,

taken at their face value, disclose more than a mere breach of contract and
prima facie indicate elements of inducement and misrepresentation. The
existence of civil proceedings does not preclude criminal liability, and the
issues raised involve disputed questions of fact requiring adjudication on
evidence. Accordingly, no case for quashment under Section 482 Cr.P.C. is
made out.
21. Accordingly, the present petition stands dismissed.
(B. P. SHARMA)
JUDGE
@SM@

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