Arjunpreet Singh Sahni vs State Of U.P. And 3 Others

A.F.R.
Reserved on 10.04.2026
Delivered on 26.05.2026
HIGH COURT OF JUDICATURE AT ALLAHABAD
CRIMINAL MISC. WRIT PETITION No. - 23655 of 2025
Arjunpreet Singh Sahni
…..Petitioner(s)
Versus
State of U.P. and 3 others
…..Respondent(s)
Counsel for Petitioner(s) : Kanchan Sharma, Prashant Vyas, Sr.
Advocate
Counsel for Respondent(s) : G.A., Nitin Chandra, Shashank Pandey
Connected with
CRIMINAL MISC. WRIT PETITION No. - 23649 of 2025
M/s Prasandi Infotech Park Private Limited and another
…..Petitioner(s)
Versus
State of U.P. and 3 others
…..Respondent(s)
Counsel for Petitioner(s) : Anubhav Singh, Kanchan Sharma,
Prashant Vyas, Sr. Advocate
Counsel for Respondent(s) : G.A., Nitin Chandra, Shashank Pandey
Connected with
CRIMINAL MISC. WRIT PETITION No. - 25666 of 2025
Harjeet Singh Sahani
…..Petitioner(s)
Versus
State of U.P. and 2 others
…..Respondent(s)
Counsel for Petitioner(s) : Anubhav Singh
Counsel for Respondent(s) : G.A., Nitin Chandra

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CRLP No. - 23655 of 2025
In Chamber
HON'BLE CHANDRA DHARI SINGH, J.
HON'BLE DEVENDRA SINGH-I, J.
Per: Hon’ble Chandra Dhari Singh,J.
Factual Matrix
1. All the aforesaid writ petitions arise out of the same factual
background and challenge the same First Information Report
(hereinafter “FIR”), namely Case Crime No. 227/2025, registered
on 03.10.2025 at Police Station - Knowledge Park, District Gautam
Budh Nagar, under Sections 406, 420, 467, 468, 469, 471 and
120-B of the Indian Penal Code, 1860. Since the allegations
levelled in the impugned FIR, the nature of the transactions
involved, the parties against whom accusations have been
levelled, and the legal issues raised in the petitions are
substantially common and interconnected, all the petitions were
heard together and are being decided by this common judgment.
2. The present batch of petitions has been filed by different
accused persons/entities arrayed in the aforesaid FIR. Criminal
Misc. Writ Petition No. 23655/2025 has been filed by the
petitioner namely Sh. Arunpreet Singh Sahni, who has been
described in the FIR as owner/director of the Solitarian Group and
also connected with M/s Prasandi Infotech Park Private Limited as
Additional Director. Criminal Misc. Writ Petition No. 23649/2025
has been instituted by the petitioners namely M/s Prasandi
Infotech Park Private Limited (petitioner no.1) along with Sh.
Rajkumar Sisodiya (petitioner no.2) himself. Criminal Misc. Writ
Petition No. 25666/2025 has been filed by the petitioner namely
Sh. Harjeet Singh Sahani, who has also been named as an
accused in the impugned FIR and has been alleged to be
associated with the affairs and management of the project in

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CRLP No. - 23655 of 2025
question. All the petitioners are named accused persons in the
impugned FIR.
3. The background of the matter is that the FIR in question
came to be lodged at the instance of respondent no.
4/informant/complainant Dr. Gurpreet Singh. The FIR alleges
commission of offences by the petitioners and several other
accused persons in relation to a commercial real estate project
known as “I.T. Square”, situated at Plot No. 21, Knowledge Park-
III, Greater Noida, Gautam Budh Nagar. The allegations broadly
pertain to inducement, collection of money under an assured
return scheme, non-delivery of possession of the allotted
commercial unit, execution/non-execution of sale/sub-lease
documents, alleged fabrication of allotment related documents
and alleged cheating in relation to a unit stated to be Shop No. 12
situated at Tower-D, Ground Floor of the project.
4. The record further discloses a detailed chronology regarding
the manner in which the project originally commenced (launched
and operated by a Company namely “Era”), the subsequent
changes in ownership/management, and the eventual entry M/s
Prasandi Infotech Park Private Limited and thereafter, the
Solitarian Group, into the affairs of the project.
5. The record also shows that on 31.05.2015, in the midst of
the aforesaid management structure, the alleged transaction
relating to Shop No. D/GF-12 took place in the name of Prasandi.
The petitioners have specifically pleaded that even at that stage,
the affairs of the company were under the management of SREI
Infrastructure Finance Limited/Bharat Nirman Fund and not under
Solitarian.
6. The next major development reflected in the record
concerns the incorporation and subsequent entry of Solitarian. It

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CRLP No. - 23655 of 2025
has been pleaded that Solitarian Buildinfra Private Limited was
incorporated on 18.08.2015. The petitioners have further stated
that Arunpreet Singh Sahni was associated with Solitarian and
that Solitarian Group entered into the management structure of
Prasandi only much later, namely around August, 2023.
7. According to the pleadings, after entering into the
management in August, 2023, Solitarian allegedly executed a
debt restructuring arrangement in March, 2024 and thereafter
acquired 100% shareholding/control from Bharat Nirman Fund on
09.04.2024. The petitioners have also alleged that despite
repayment of the restructured debt by September, 2024 and
issuance of No Objection Certificates in November, 2024, several
statutory records and company records were either not handed
over properly or only partially transferred by Bharat Nirman Fund,
thereby leaving several records untraceable.
8. The petitioners have thus attempted to portray a long and
layered commercial history of the project spanning multiple
entities and management transitions, namely:
(i) initial launch and development by Era Engineering
Innovations/Era Landmarks Limited in 2008;
(ii) transfer/association of the project with Prasandi Infotech
Park Private Limited;
(iii) takeover of shareholding and financial control by SREI
Infrastructure Finance Limited/SREI Alternative Investment
Trust/Bharat Nirman Fund pursuant to restructuring
arrangements between 2014 and 2015; and thereafter
(iv) eventual entry and takeover of management by the
Solitarian Group in the years 2023-2024.

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CRLP No. - 23655 of 2025
9. It is in the backdrop of the aforesaid corporate and
managerial transitions that the rival allegations have arisen
between the complainant and the accused persons regarding the
allotment, consideration, execution of documents and
existence/non-existence of Shop No. 12 in the “I.T. Square”
project as well as the dispute regarding execution of the allotment
letter of Shop No. 12.
10. As emerging from the FIR, the case is that on 31.03.2008,
the complainant booked three commercial units/shops bearing
Nos. 5, 6 and 7 situated at Tower-D, Ground Floor under a
discounted cash down plan for a total sale consideration of
Rs.1,17,76,050/-. The booking was allegedly made at the rate of
Rs.3,510/- per square foot and, according to the informant, the
entire amount stood paid. It is alleged that possession was
promised to be delivered by 03.01.2009.
11. The FIR further alleges that under the Builder Buyer
Agreement dated 31.03.2008, particularly Clause-C thereof, the
complainant was assured monthly returns of Rs.1,99,901/- for a
period of 36 months after deduction of TDS. According to the
informant, only partial assured returns were paid and thereafter
payment of assured returns amounting to approximately
Rs.35,46,900/- was discontinued. The complainant alleged that
when he approached the office of the company, he was informed
that the project, though proposed to be completed in the year
2009, was still incomplete and consequently assured returns were
not being released.
12. The FIR then narrates that after the complainant protested
and raised objections regarding non-payment and delay in
possession, certain representatives/directors including one Sh.
Atul Bhalla and Sh. Ganesh Prasad Badri allegedly proposed

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CRLP No. - 23655 of 2025
allotment of another commercial unit namely Shop No. 12
admeasuring approximately 948 sq. ft. situated at Tower-D,
Ground Floor, in lieu of the assured return component. It is
alleged that the value of Shop No. 12 was fixed at Rs.44,55,600/-
and payments towards the said shop were made by the
complainant through various cheques issued between 12.05.2015
and 30.10.2015. The FIR specifically mentions cheque numbers
and amounts allegedly paid by the complainant.
13. It is further alleged that on 13.05.2015, allotment letter,
payment plan and site plan in relation to Shop No. 12 were
handed over to the informant and, on the same date, five
cheques of Rs.1,50,000/- each and one cheque of Rs.1,58,700/-
were taken from him towards alleged brick and glass work. The
FIR specifically alleges that cheque bearing No. 179010
amounting to Rs.1,58,700/- was deposited and encashed without
the consent of the complainant.
14. According to the FIR, e-mails dated 05.09.2016 and
09.09.2016 were exchanged with one Sh. Sumit Sahu wherein
assurances were allegedly extended that construction/brick work
relating to Shop No. 12 would soon be completed and documents
would thereafter be furnished. The complainant has alleged that
despite passage of time, construction remained incomplete and
when he inspected the site, he allegedly found that instead of the
promised shop, a coffee shop was functioning at the site.
15. The FIR further alleges that in the meantime the Solitarian
Group had taken over the project and that Sh. Arunpreet Singh
Sahni, who is stated to be owner/director of the Solitarian Group,
was also associated with the petitioners’ company. It is alleged
that in April, 2022 the complainant was informed that the area of
Shop No. 12 had increased to approximately 975 sq. ft. and that

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CRLP No. - 23655 of 2025
additional amount would therefore be payable. Thereafter, on
16.04.2022, an allotment letter/document was allegedly issued
mentioning enhanced area, adjustment of assured returns and
other financial calculations.
16. The FIR further records that the revised valuation of the
shop was stated to be Rs.48,48,041/-, out of which pending
assured returns amounting to Rs.35,46,900/- and the cheque
amount of Rs.1,58,700/- were adjusted, leaving a balance amount
of Rs.11,42,441/-. According to the FIR, cheque bearing No.
445107 amounting to Rs.11,42,441/- was subsequently handed
over to Sh. Rajkumar Sisodiya and the amount was debited from
the account of the informant on 06.05.2022.
17. The complainant has also alleged that on 08.04.2022, an e-
mail was sent by the Solitarian Group stating that Shop No. 12
was being sold by the Solitarian Group and that money was being
received by them. It is then alleged that though sub-lease deeds
in respect of Shop Nos. 5, 6 and 7 were executed in the year
2022, the sale/sub-lease deed relating to Shop No. 12 was not
executed despite repeated requests. The complainant alleges that
one Sh. Naresh Kumar Khetan informed him that a certain
balance amount was still outstanding and therefore execution of
sale deed could not be undertaken.
18. The FIR also alleges that despite receiving a total amount of
Rs.48,48,041/-, the accused persons failed to execute the sale
deed in respect of Shop No. 12. It is further alleged that after the
death of the complainant’s father, when the complainant again
visited India in March, 2025 for execution of the sale deed, one
Ms. Anamika Dogra, General Manager of the Solitarian Group,
demanded a further amount of Rs.23,35,809/- towards
registration and other alleged charges. Reference is also made to

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CRLP No. - 23655 of 2025
an e-mail dated 22.04.2025 demanding additional amounts
towards holding charges, delayed payment charges and CAM
charges.
19. The FIR further states that when the complainant
approached Greater Noida Authority to verify the status of the
unit, he allegedly came to know that no sanctioned plan existed in
relation to Shop No. 12 and that the location allegedly shown as
Shop No. 12 was in fact a common passage/common area
situated at the Ground Floor. It is further alleged that the said unit
existed only on paper and that the accused persons had cheated
the informant by selling a non-existent unit.
20. On the basis of the aforesaid allegations, the impugned FIR
dated 03.10.2025 came to be registered against the present
petitioners and several other named persons including Sh. Atul
Bhalla, Sh. Ganesh Prasad Badri, Sh. Naresh Kumar Khetan, Sh.
Sumit Sahu, Sh. Raj Kumar Sisodiya, Sh. Harjeet Singh Sahani,
Sh. Arunpreet Singh Sahni, representatives of Solitarian Group
and others.
21. The petitioners, however, have disputed the allegations in
entirety and have asserted that the dispute is essentially
civil/commercial in nature arising out of real estate transactions
and contractual obligations.
22. The pleadings further disclose that M/s Prasandi Infotech
Park Private Limited had availed financial assistance from SREI
entities and, upon alleged financial defaults, the management and
shareholding structure underwent substantial changes over a
period of time. It has been stated that SREI Infrastructure
Finance Limited and Bharat Nirman Fund (BNF) came to acquire
and control the management of the company and that the

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CRLP No. - 23655 of 2025
Solitarian Group entered into the management only in or around
August, 2023 pursuant to restructuring arrangements.
23. The petitioners have specifically pleaded that several of the
acts alleged in the FIR pertain to periods when the present
petitioners were not in control of the company or the project. It
has further been pleaded that the allotment letter dated
16.04.2022 relied upon by the complainant was unsigned and
unenforceable and did not bear signatures of authorized
representatives. The petitioners have also asserted that Sh.
Harjeet Singh Sahani had resigned from the directorship of
Solitarian prior to registration of the FIR and that he was neither
employee, director nor shareholder at the relevant time. The
petitioners have relied upon various documents including e-mails,
allotment documents, MCA records, D-Mat holdings, reminders,
sub-lease deeds among other documents in support of their case.
24. The aforesaid facts, emerging from the pleadings and
documents filed in the connected petitions, constitute the broad
factual matrix giving rise to the present batch of matters.
Submissions on behalf of the petitioners
25. The learned counsel appearing for the petitioners in all the
connected petitions submitted that since all the present petitions
arise out of the same factual matrix and challenge the same FIR,
the petitions deserve to be heard and decided together by way of
a common judgment. It was submitted that the allegations
levelled in the impugned F.I.R. are substantially identical in nature
and are directed against different persons connected with the
management and affairs of the company at different points of
time.
26. It was argued on behalf of the petitioners in Criminal Misc.
Writ Petition No. 23649/2025, namely M/s Prasandi Infotech Park

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CRLP No. - 23655 of 2025
Private Limited through its authorized representative and
petitioner no.2, that petitioner no.1 company was incorporated on
17.10.2001 under the provisions of the Companies Act, 1956 and
was the lessee of Plot No. 21, Knowledge Park-III, Greater Noida
by virtue of lease deed dated 20.03.2002. It was submitted that
in the year 2008, ERA Landmarks Ltd., subsequently known as
ADEL Landmarks Ltd., launched a commercial project under the
name and style of “IT Square” over the said leased property and
under the understanding between the parties, ERA/ADEL had
absolute development and marketing rights over the project.
27. The petitioners further submitted that respondent
no.4/complainant had originally booked three commercial units
bearing Nos. D/GF-05, D/GF-06 and D/GF-07 in the aforesaid
project on 31.03.2008 at discounted rates and the complainant
had been assured returns in respect of the said units. It was
argued that possession of the said units had already been offered
to the complainant on 20.02.2012 and reminder letters dated
08.06.2012 were also issued requesting the complainant to clear
outstanding dues and complete necessary formalities. Learned
counsel submitted that despite the offer of possession, the
complainant got the sub-lease deeds executed only on
25.11.2022 after more than ten years.
28. It was next contended that during the years 2006-07 and
thereafter till 2013-14, ERA/ADEL became the majority and
subsequently the sole shareholder of petitioner no.1 company.
The learned counsel referred to annual returns and shareholding
documents filed along with the supplementary affidavits to
contend that the entire control, management and day-to-day
affairs of petitioner no.1 company were being managed by
ERA/ADEL and thereafter by SREI Infrastructure Finance Limited
(SIFL) and Bharat Nirman Fund (BNF). It was submitted that

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CRLP No. - 23655 of 2025
petitioner no.1 company had availed financial assistance from
SREI Infrastructure Finance Limited to the extent of
approximately Rs.300 crores and on account of financial
restructuring, the entire shareholding together with management
rights stood transferred to SREI/BNF pursuant to Share Purchase
Agreement dated 30.12.2014.
29. Learned counsel for the petitioners further argued that from
the year 2015 till March, 2024, the entire management, control
and operational affairs of petitioner no.1 company remained with
SREI Infrastructure Finance Limited and Bharat Nirman Fund and
thereafter Solitarian Group entered into the management of the
company in August, 2023 and subsequently acquired 100%
shareholding on 09.04.2024 pursuant to restructuring
arrangements. It was thus submitted that the petitioners against
whom criminal liability has now been fastened were not in control
of the affairs of the company during the relevant period when the
alleged transactions took place or when the alleged documents
were executed.
30. It was specifically submitted on behalf of petitioner no.1 in
Criminal Misc. Writ Petition No. 25666/2025, namely Sh. Harjeet
Singh Sahani, who has been arrayed as accused in the impugned
F.I.R., that he had already resigned from the
Directorship/management of Solitarian on 30.06.2025, much prior
to lodging of the impugned F.I.R. dated 03.10.2025. Learned
counsel submitted that the only allegation against the said
petitioner is that he, along with two other persons, had informed
respondent no.4/complainant regarding possession related
aspects and such allegation, even if accepted on its face value,
does not disclose commission of offences punishable under
Sections 406, 420, 467, 468, 469, 471 or 120-B of the IPC.

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CRLP No. - 23655 of 2025
31. Learned counsel appearing for petitioner Sh. Arjunpreet
Singh Sahani in Criminal Misc. Writ Petition No. 23655/2025
submitted that the said petitioner has falsely been implicated
merely because he was associated with the Solitarian Group at a
later stage. It was argued that the petitioner had no role
whatsoever in the original allotment of units in favour of
respondent no.4/complainant in the year 2008, nor was he
connected with the alleged representations made at the time of
booking of the units. It was submitted that the entire dispute
pertains to commercial transactions arising out of allotment of
commercial units in a real estate project and no element of
criminality is made out against the said petitioner.
32. The petitioners jointly contended that the allegations
contained in the impugned F.I.R. essentially arise out of
contractual and commercial obligations between the parties
concerning allotment, possession, assured returns and execution
of sub-lease deeds and the same at best constitute a civil dispute
for which appropriate civil remedies are available. Learned
counsel submitted that respondent no.4/complainant had
accepted possession and had also entered into sub-lease deeds in
respect of the allotted units, thereby acknowledging the
subsisting contractual relationship between the parties. It was
argued that the dispute relating to alleged non-payment of
assured returns, adjustment of dues, possession and execution of
documents cannot be converted into a criminal prosecution
merely to exert pressure upon the petitioners.
33. It was further argued that the allegations of forgery and
fabrication are wholly vague, bald and unsupported by any
material particulars. Learned counsel submitted that even
according to the petitioners, the alleged allotment
letter/document dated 16.04.2022 relied upon by the complainant

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CRLP No. - 23655 of 2025
does not bear signatures of the petitioners and therefore, the
same cannot legally be attributed to them. It was submitted that
even assuming such a document exists, the same was allegedly
issued during the period when the affairs of the company were
under the management and control of SIFL/BNF and not under
the petitioners. Hence, ingredients of offences under Sections
467, 468, 469 and 471 of the IPC are not made out against the
present petitioners.
34. The learned counsel further submitted that the impugned
F.I.R. suffers from gross and unexplained delay. It was argued
that the transactions in question pertain to the period
commencing from the year 2008, possession had admittedly been
offered in the year 2012 and various communications had been
exchanged between the parties over the years, yet the impugned
F.I.R. came to be lodged only on 03.10.2025 after an inordinate
lapse of time. It was contended that such abnormal delay clearly
demonstrates that the criminal proceedings have been initiated
with ulterior motives and only as a pressure tactic in relation to an
old commercial dispute.
35. It was also submitted that respondent no.4/complainant had
throughout remained aware of the status of the project, the
management changes and the possession related
communications. The petitioners referred to various reminder
letters, e-mails and allotment related documents annexed with
the writ petitions and supplementary affidavits to contend that
there had been continuous interaction between the parties and
therefore the allegations of cheating from inception are inherently
improbable.
36. Learned counsel for the petitioners further argued that
essential ingredients of the offence under Section 420 IPC are

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CRLP No. - 23655 of 2025
completely absent inasmuch as there was no dishonest intention
at the inception of the transaction. It was submitted that the
project was in fact developed, units were allotted, possession was
offered and sub-lease deeds were eventually executed, which
itself demonstrates that the dispute relates to performance of
contractual obligations and not to any fraudulent inducement
from the very beginning. It was argued that mere breach of
contractual terms or non-fulfilment of commercial expectations
cannot give rise to criminal prosecution in absence of fraudulent
or dishonest intention at inception.
37. It was next contended that no entrustment of property in
the manner contemplated under Section 405 IPC has been
pleaded or established and therefore offence under Section 406
IPC is also not attracted. Learned counsel submitted that the
monies paid by respondent no.4/complainant were paid pursuant
to contractual arrangements under commercial allotment
transactions and the same cannot be treated as entrustment for
the purposes of criminal breach of trust.
38. The petitioners also argued that the allegations contained in
the impugned F.I.R. are unsubstantiated and there is no specific
role attributed individually to each of the accused persons. It was
submitted that different petitioners were connected with the
company at different stages and periods, however the
complainant has mechanically implicated all of them without
disclosing any specific overt act attributable to each accused. It
was argued that such sweeping allegations without distinct
particulars are legally insufficient to sustain criminal prosecution.
39. Learned counsel further submitted that the present
proceedings are manifestly attended with mala fide and have
been instituted maliciously with an ulterior motive for wreaking

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CRLP No. - 23655 of 2025
vengeance and coercing the petitioners in relation to a long-
standing commercial dispute. It was argued that the criminal
process is being misused as a tool for recovery and settlement of
monetary claims arising out of contractual transactions.
40. It was also specifically submitted on behalf of petitioner
no.2 in Criminal Misc. Writ Petition No. 23649/2025 that Sh.
Rajkumar Sisodia had been falsely implicated despite not being
concerned with the original transaction of 2008 and despite the
fact that the relevant affairs of the company were being managed
by different entities over different periods. Similarly, on behalf of
petitioner Sh. Arjunpreet Singh Sahani in Criminal Misc. Writ
Petition No. 23655/2025 and petitioner Sh. Harjeet Singh Sahani
in Criminal Misc. Writ Petition No. 25666/2025, it was submitted
that they have been implicated merely because of their
subsequent association with Solitarian Group and no material has
been brought on record to demonstrate their involvement in the
original inducement or execution of the alleged forged
documents.
41. The petitioners have further submitted that the entire
controversy, even as per the own case of the informants,
substantially pertains to contractual and allotment disputes arising
out of commercial agreements executed between the parties and
therefore the matter is fundamentally civil and arbitrable in
nature. It has specifically been argued that the agreement dated
16.04.2022 and other agreements pertaining to any of the
allotment, relied upon by the informant itself, contains an
arbitration clause at ‘Clause 7 of Heading X’ of the allotments
letters, thereby, governing disputes inter se the parties. The
petitioners have thus contended that once the parties consciously
agreed to a contractual dispute resolution mechanism, invocation
of criminal machinery for enforcement of alleged contractual

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CRLP No. - 23655 of 2025
obligations is wholly impermissible. It has accordingly been urged
that the FIRs are nothing but an attempt to convert a commercial
dispute into a criminal prosecution for exerting pressure upon the
petitioners.
42. The petitioners have further argued that the principal
allotments originally made in favour of respondent
no.4/complainant were with respect to three commercial units
namely D/GF-05, D/GF-06 and D/GF-07 situated at Tower-D,
Ground Floor in the “IT Square” project and not with respect to
any fourth unit. It has been categorically argued that the
aforesaid three units were booked on 31.03.2008 under a
discounted cash down plan for a total consideration of
Rs.1,17,76,050/-. According to the petitioners, possession of
these three units had already been offered way back on
20.02.2012 and eventually sub-lease deeds in respect thereof
were executed on 25.11.2022. It is thus contended that insofar as
the original three units are concerned, the contractual relationship
substantially stood concluded and therefore no criminal offence
can be said to arise therefrom.
43. The petitioners have emphasized that the real dispute now
sought to be projected in the FIR substantially revolves around
the so-called “fourth unit” allegedly allotted to respondent
no.4/complainant against adjustment of assured returns.
According to the petitioners, since respondent no.4/complainant
was demanding adjustment towards alleged assured returns,
petitioner no.1 company proposed allotment of an additional
commercial unit in lieu thereof. Consequently, vide allotment letter
dated 13.05.2015, respondent no.4 was allegedly allotted one
additional unit bearing Shop No.12 in Tower-D having an area of
948 sq. ft. in the subject project. It has been submitted that the
total sale consideration reflected therein was Rs.44,55,600/-, out

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CRLP No. - 23655 of 2025
of which adjustment of Rs.35,46,900/- towards alleged assured
returns was proposed and the remaining amount was payable
through cheques.
44. The petitioners have thus contended that the FIR itself
demonstrates that the original three allotted units were
delivered/offered possession long back and the entire surviving
controversy is essentially confined to the disputed fourth alleged
unit, whose very allotment, execution, validity, location and
contractual status are seriously disputed by the parties. According
to the petitioners, such issues can only be adjudicated upon by a
competent civil forum or arbitral tribunal after appreciation of
documentary evidence and cannot constitute the basis for
criminal prosecution under Sections 406, 420, 467, 468, 471 and
120-B IPC.
45. On the aforesaid grounds, learned counsel for all the
petitioners prayed that the impugned first information report
dated 03.10.2025 registered as Case Crime No. 0227 of 2025
under Sections 406, 420, 467, 468, 469, 471 and 120-B IPC,
Police Station Knowledge Park, District Gautam Budh Nagar,
together with all consequential proceedings, be quashed by this
Court in exercise of powers under Article 226 of the Constitution
of India, as continuation of the criminal proceedings would
amount to abuse of process of law.
Submissions on behalf of the respondents
46. Per contra, learned counsel appearing for the State as well
as respondent no.4/complainant have vehemently opposed the
writ petitions and have submitted that the impugned FIRs disclose
commission of serious cognizable offences involving cheating,
forgery, criminal breach of trust, fabrication of documents and
conspiracy on the part of the petitioners and other accused

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CRLP No. - 23655 of 2025
persons. It has been contended that the allegations cannot be
brushed aside merely by describing the dispute as “civil” or
“commercial” in nature, particularly when the accusations disclose
dishonest intention, inducement, false representations and
preparation of forged documents.
47. The respondents have submitted that the petitioners
launched and marketed the project “IT Square” at Plot No.21,
Knowledge Park-III, Greater Noida by holding out categorical
assurances regarding allotment, possession, assured returns and
execution of documents, thereby inducing innocent purchasers to
invest substantial amounts. According to the respondents, the
complainant booked commercial units after being lured by
representations and assurances extended by the accused persons
and huge sums were paid relying upon the promises made by
them. It has been contended that despite receipt of substantial
consideration, the accused persons deliberately failed to honour
their commitments and instead adopted deceitful methods to
avoid their liabilities.
48. The respondents have further argued that the petitioners
cannot escape criminal liability merely by taking shelter under
internal corporate arrangements between ERA/ADEL, SREI,
Bharat Nirman Fund or Solitarian Group. According to the
respondents, all the accused persons acted in concert and
continuously represented themselves to be persons in control of
the project and competent to deal with the allottees. It has been
submitted that the subsequent change in shareholding pattern or
transfer of management cannot absolve the accused persons of
liability arising from fraudulent acts committed against
purchasers.

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CRLP No. - 23655 of 2025
49. It has specifically been argued by the complainant in
Criminal Misc. Writ Petition No.23649/2025 that petitioner no.2
Sh. Rajkumar Sisodia and petitioner no.1 company continued to
actively participate in discussions, meetings and negotiations
concerning the disputed unit and payments even during later
periods. It has been alleged that petitioner no.2 played an active
role in orchestrating transactions and induced the complainant to
deposit additional amounts on assurances regarding allotment
and adjustment of assured returns. According to the respondents,
the active participation of the petitioners in negotiations and
dealings clearly establishes their involvement in the alleged
offences.
50. The respondents have further submitted that the
controversy does not merely relate to delay in possession or
breach of contractual obligations but concerns fraudulent creation
and manipulation of documents. According to the respondents,
forged allotment letters, fabricated documents and manipulated
papers were prepared in order to mislead purchasers and to
illegally retain their money. It has been argued that the
genuineness, validity and authenticity of such documents can only
be examined during investigation and trial and therefore the writ
petitions seeking quashing at the threshold are wholly premature.
51. The respondents have also refuted the submission of the
petitioners that possession had already been validly offered and
delivered with respect to the original three units. According to the
complainant, despite repeated assurances and demands,
complete and lawful possession together with all rights was never
actually handed over in a legally enforceable manner. It has been
submitted that execution of sub-lease deeds at a highly belated
stage after several years cannot wipe out the criminality attached
to the conduct of the accused persons. The respondents contend

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CRLP No. - 23655 of 2025
that prolonged withholding of possession and repeated false
assurances demonstrate continuing dishonest intention on the
part of the accused persons.
52. The respondents have further submitted that the dispute
regarding the fourth unit cannot be trivialized by portraying it as a
mere contractual adjustment dispute. According to them, the
fourth unit was specifically allotted against adjustment of assured
returns and other dues legitimately payable to respondent no.4
and the petitioners deliberately induced respondent no.4 to
accept such arrangement while knowing fully well that they
neither intended nor were capable of honouring the same. It has
been argued that after extracting payments and obtaining
continued confidence of respondent no.4, the accused persons
subsequently denied the allotment itself and started disputing the
very documents executed by them. According to the respondents,
such conduct clearly discloses mens rea and ingredients of
cheating and forgery.
53. The respondents have also denied the contention regarding
discrepancies in tower identification being mere clerical or
contractual inconsistencies. It has been argued that the
conflicting descriptions of units, tower numbers and allotment
particulars themselves demonstrate manipulation and fabrication
of project records by the accused persons. According to the
respondents, the inconsistencies are not innocent discrepancies
but are indicative of fraudulent dealings requiring thorough
investigation by the investigating agency.
54. So far as the arbitration clause is concerned, learned
counsel for the respondents have submitted that existence of an
arbitration clause or availability of civil remedies does not bar
initiation of criminal proceedings where allegations prima facie

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CRLP No. - 23655 of 2025
disclose commission of cognizable offences. It has been argued
that civil liability and criminal culpability may coexist and merely
because the parties are governed by contractual arrangements,
the accused persons cannot seek immunity from criminal
prosecution. According to the respondents, where allegations of
forgery, cheating and criminal conspiracy are specifically made,
the matter cannot be relegated exclusively to arbitration
proceedings.
55. The respondents have further submitted that the petitions
under Article 226 of the Constitution seeking quashing of FIRs
deserve dismissal in view of the settled principles laid down by
the Hon’ble Supreme Court in Neeharika Infrastructure Pvt. Ltd. v.
1
State of Maharashtra . It has been contended that at the stage of
investigation the Court is only required to examine whether the
FIR discloses commission of cognizable offences and not whether
the allegations are ultimately likely to result in conviction.
According to the respondents, disputed questions of fact, rival
versions, genuineness of documents and defence pleas raised by
the accused persons cannot be adjudicated in writ jurisdiction.
56. The State has additionally submitted that the investigation is
at a nascent stage and substantial material is yet to be collected
regarding execution of documents, financial transactions, role of
various accused persons and movement of funds. It has therefore
been argued that interference by this Court at this premature
stage would seriously prejudice fair investigation into grave
economic offences involving large financial implications.
57. The respondents have thus prayed that the writ petitions,
being devoid of merits, be dismissed and the investigating agency
be permitted to proceed with investigation in accordance with law
without any interference by this Court.
1 2021 SCC OnLine SC 315

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CRLP No. - 23655 of 2025
Analysis and Findings
58. The principal questions which arise for consideration are -
first, whether the FIR and the materials relied upon by the
complainant disclose, on their face, the ingredients of the
offences under Sections 406, 420, 467, 468, 469, 471 and 120-B
of the IPC against the present petitioners; second, whether the
dispute is essentially civil/commercial in character; third, whether
the role attributed to each petitioner is specific enough in law to
justify continuation of criminal proceedings; and fourth, whether
the continuation of the impugned proceedings would amount to
abuse of process.
59. Since all the petitions arise from the same factual matrix,
pertain to the same project namely “IT Square”, Plot No.21,
Knowledge Park-III, Greater Noida and involve substantially
overlapping allegations and accused persons, they are being
decided together by this common judgment.
60. The principles governing quashing of criminal proceedings
2
are well settled. In State of Haryana v. Bhajan Lal , the Hon’ble
Supreme Court held that the High Court can exercise jurisdiction
to quash where the allegations taken at face value do not
constitute any offence, or where the criminal proceeding is ex
facie with mala fide and instituted with an ulterior motive. The
relevant paragraph of the same is as follows:
“102. In the backdrop of the interpretation of the various relevant
provisions of the Code under Chapter XIV and of the principles of law
enunciated by this Court in a series of decisions relating to the
exercise of the extraordinary power under Article 226 or the inherent
powers under Section 482 of the Code which we have extracted and
reproduced above, we have given the following categories of cases by
way of illustration wherein such power could be exercised either to
prevent abuse of the process of any court or otherwise to secure the
ends of justice, though it may not be possible to lay down any precise,
2 1992 Supp (1) SCC 335

23
CRLP No. - 23655 of 2025
clearly defined and sufficiently channelised and inflexible guidelines or
rigid formulae and to give an exhaustive list of myriad kinds of cases
wherein such power should be exercised.
(1) Where the allegations made in the first information report or
the complaint, even if they are taken at their face value and
accepted in their entirety do not prima facie constitute any
offence or make out a case against the accused.
(2) Where the allegations in the first information report and
other materials, if any, accompanying the FIR do not disclose a
cognizable offence, justifying an investigation by police officers
under Section 156(1) of the Code except under an order of a
Magistrate within the purview of Section 155(2) of the Code.
(3) Where the uncontroverted allegations made in the FIR or
complaint and the evidence collected in support of the same do
not disclose the commission of any offence and make out a case
against the accused.
(4) Where, the allegations in the FIR do not constitute a
cognizable offence but constitute only a non-cognizable offence,
no investigation is permitted by a police officer without an order
of a Magistrate as contemplated under Section 155(2) of the
Code.
(5) Where the allegations made in the FIR or complaint are so
absurd and inherently improbable on the basis of which no
prudent person can ever reach a just conclusion that there is
sufficient ground for proceeding against the accused.
(6) Where there is an express legal bar engrafted in any of the
provisions of the Code or the concerned Act (under which a
criminal proceeding is instituted) to the institution and
continuance of the proceedings and/or where there is a specific
provision in the Code or the concerned Act, providing efficacious
redress for the grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly attended with mala
fide and/or where the proceeding is maliciously instituted with an
ulterior motive for wreaking vengeance on the accused and with
a view to spite him due to private and personal grudge.”
61. In Neeharika Infrastructure Pvt. Ltd. v. State of Maharashtra
(Supra), the Hon’ble Supreme Court reiterated the
aforementioned principle of law regarding the quashing of the FIR
and held that though investigation should not be stifled as a
matter of routine, the Court must still see whether the FIR

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CRLP No. - 23655 of 2025
discloses commission of a cognizable offence on the allegations
made.
62. At the outset, it is equally well settled that a mere breach of
contract does not give rise to criminal prosecution for cheating
unless fraudulent or dishonest intention exists at the inception of
the transaction. The distinction between mere contractual non-
performance and criminal cheating has been repeatedly
emphasized by the Hon’ble Supreme Court. Similarly, for criminal
breach of trust under Section 406 IPC, there must be entrustment
and dishonest misappropriation or conversion of entrusted
property, and not a mere failure to honour a contractual
obligation. As regards forgery, the law requires making of a false
document or using a forged document as genuine with the
requisite knowledge and intent, commercial disputes regarding
validity or enforceability of allotment papers do not, by
themselves, satisfy these ingredients.
63. On the civil-commercial character of disputes, the Hon’ble
3
Supreme Court in A. Ayyasamy v. A. Paramasivam , and in Avitel
4
Post Studioz Ltd. v. HSBC PI Holdings (Mauritius) Ltd. ,
recognized that ordinary allegations of fraud arising between
parties to a commercial arrangement do not always take the
matter outside the domain of civil or arbitral adjudication. These
decisions underscore that every allegation of deception in a
commercial setting does not automatically justify a criminal
prosecution, especially where the dispute remains between
parties and documentary.
64. Before adverting to deal with the contentions, it would be
apposite to recapitulate the broad factual backdrop emerging
from the pleadings and documents brought on record.
3 (2016) 10 SCC 386
4 (2021) 4 SCC 713

25
CRLP No. - 23655 of 2025
65. The material available before the Court shows that
petitioner no.1 in Criminal Misc. Writ Petition No.23649/2025
namely M/s Prasandi Infotech Park Pvt. Ltd. became lease holder
of Plot No.21, Knowledge Park-III, Greater Noida by virtue of
lease deed dated 20.03.2002. Thereafter, in the year 2008, ERA
Landmarks Ltd., subsequently renamed as ADEL Landmarks Ltd.,
launched a commercial project in the name and style of “IT
Square” upon the aforesaid plot. The pleadings and documents
placed before the Court further prima facie indicate that
ERA/ADEL was entrusted with development and marketing rights
of the project.
66. It is also not in dispute that respondent no.4/complainant
initially booked three commercial units namely D/GF-05, D/GF-06
and D/GF-07 situated at Tower-D, Ground Floor in the said project
under a discounted cash down plan for a total consideration of
Rs.1,17,76,050/-. The material on record further reflects that
possession in respect of the aforesaid three units had already
been offered on 20.02.2012 and ultimately sub-lease deeds came
to be executed on 25.11.2022. Therefore, insofar as the original
three units are concerned, the admitted position emerging from
the record is that the parties remained engaged in a continuing
commercial relationship extending over several years.
67. This Court finds considerable significance in the fact that the
present criminal proceedings do not substantially arise out of the
original three units, but primarily revolve around the alleged
“fourth unit”, namely Shop No.D/GF-12, which admittedly did not
form part of the original allotment made in the year 2008.
68. The records reveal that disputes subsequently arose
between the parties with regard to alleged assured returns.
According to the complainant himself, he was thereafter offered

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CRLP No. - 23655 of 2025
another/additional unit in lieu of adjustment of assured returns
and related claims. Thus, even according to the prosecution case,
the alleged fourth unit emerged only during subsequent
commercial negotiations, facilitation, and financial settlements
between the parties.
69. The record indicates that vide the alleged allotment letter
dated 13.05.2015, an additional unit allegedly bearing Shop No.12
in Tower-D admeasuring approximately 948 sq.ft. was proposed
to be allotted in favour of the complainant against adjustment of
assured returns amounting to Rs.35,46,900/- out of total alleged
consideration of Rs.44,55,600/-. The remaining amount was
allegedly payable through cheques. Thus, the entire genesis of
the dispute qua the fourth unit itself arises out of
adjustment/accounting arrangements concerning assured returns
and reciprocal contractual obligations.
70. The aforesaid aspect assumes considerable importance
because it demonstrates that the dispute is deeply embedded in
contractual and financial dealings between the parties requiring
examination of accounts, documentary evidence, reciprocal
obligations and validity of allotment arrangements.
71. Even more significant is the fact that the allotment
agreements/letters of all the original three units as well as the
alleged agreement/document dated 16.04.2022 pertaining to
Shop No.D/GF-12 itself contains an arbitration clause. Clause 7
under Heading “X” of the said agreement specifically
contemplates reference of disputes to arbitration. Thus, the
parties themselves consciously agreed that disputes arising from
the said arrangement would be adjudicated through contractual
dispute resolution mechanisms. The said Clause has been
reproduced herein for reference:

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CRLP No. - 23655 of 2025
“(7) In the event of any disputes or differences between the parties
thereto arising out of the terms hereof or its scope, or interpretation,
applicability etc, the same unless amicably settled shall be referred for
arbitration. The sole arbitrator shall be appointed by the “LESSOR”.
The proceeding shall be held at Gautam Budh Nagar and the laws of
the State of UP or as may be made applicable to the State of UP shall
be applicable.”
72. This Court is conscious that mere existence of an arbitration
clause does not by itself bar criminal proceedings. However,
where the dispute substantially concerns enforcement of
contractual rights, validity of allotment documents, adjustment of
monetary liabilities, interpretation of agreements and entitlement
arising from commercial arrangements, the existence of an
arbitration clause becomes a relevant circumstance while
examining whether the allegations genuinely disclose criminality
or whether criminal law is being invoked to exert pressure in a
civil dispute.
73. The Hon’ble Supreme Court in Indian Oil Corpn. v. NEPC India
5
Ltd. , observed that a given set of facts may give rise to both civil
and criminal liability, but courts must guard against attempts to
cloak purely civil disputes with criminal colour. Similarly, in IV.Y.
6
Jose v. State of Gujarat , the Hon’ble Supreme Court held that a
contractual dispute should not be allowed to be converted into a
criminal case unless clear ingredients of the alleged offences are
disclosed. The relevant paragraph of NEPC India Ltd. (Supra) is as
follows:
“13. While on this issue, it is necessary to take notice of a growing
tendency in business circles to convert purely civil disputes into
criminal cases. This is obviously on account of a prevalent impression
that civil law remedies are time consuming and do not adequately
protect the interests of lenders/creditors. Such a tendency is seen in
several family disputes also, leading to irretrievable breakdown of
marriages/families. There is also an impression that if a person could
somehow be entangled in a criminal prosecution, there is a likelihood
of imminent settlement. Any effort to settle civil disputes and claims,
5 (2006) 6 SCC 736
6 (2009) 3 SCC 78

28
CRLP No. - 23655 of 2025
which do not involve any criminal offence, by applying pressure
through criminal prosecution should be deprecated and discouraged.
In G. Sagar Suri v. State of U.P. [(2000) 2 SCC 636 : 2000 SCC (Cri)
513] this Court observed: (SCC p. 643, para 8)
“It is to be seen if a matter, which is essentially of a civil
nature, has been given a cloak of criminal offence. Criminal
proceedings are not a short cut of other remedies available in law.
Before issuing process a criminal court has to exercise a great deal of
caution. For the accused it is a serious matter. This Court has laid
certain principles on the basis of which the High Court is to exercise
its jurisdiction under Section 482 of the Code. Jurisdiction under this
section has to be exercised to prevent abuse of the process of any
court or otherwise to secure the ends of justice.”
14. While no one with a legitimate cause or grievance should be
prevented from seeking remedies available in criminal law, a
complainant who initiates or persists with a prosecution, being fully
aware that the criminal proceedings are unwarranted and his remedy
lies only in civil law, should himself be made accountable, at the end
of such misconceived criminal proceedings, in accordance with law.
One positive step that can be taken by the courts, to curb
unnecessary prosecutions and harassment of innocent parties, is to
exercise their power under Section 250 CrPC more frequently, where
they discern malice or frivolousness or ulterior motives on the part of
the complainant. Be that as it may.
Section 405
21. We will next consider whether the allegations in the complaint
make out a case of criminal breach of trust under Section 405 which is
extracted below:
“405. Criminal breach of trust.—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 of 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’.”
*
23. In Chelloor Mankkal Narayan Ittiravi Nambudiri v. State of
Travancore Cochin [(1952) 2 SCC 392 : AIR 1953 SC 478 : 1954 Cri LJ
102] this Court held: (AIR p. 484, para 21)
“[T]o constitute an offence of criminal breach of trust it is
essential that the prosecution must prove first of all that the accused
was entrusted with some property or with any dominion or power

29
CRLP No. - 23655 of 2025
over it. It has to be established further that in respect of the property
so entrusted, there was dishonest misappropriation or dishonest
conversion or dishonest use or disposal in violation of a direction of
law or legal contract, by the accused himself or by someone else
which he willingly suffered to do.
It follows almost axiomatically from this definition that the
ownership or beneficial interest in the property in respect of which
criminal breach of trust is alleged to have been committed, must be in
some person other than the accused and the latter must hold it on
account of some person or in some way for his benefit.”
(emphasis supplied)
26. The question directly arose for consideration in Central Bureau of
Investigation v. Duncans Agro Industries Ltd. [(1996) 5 SCC 591 :
1996 SCC (Cri) 1045] It related to a complaint against the accused for
offences of criminal breach of trust. It was alleged that a floating
charge was created by the accused debtor on the goods by way of
security under a deed of hypothecation, in favour of a bank to cover
credit facility and that the said goods were disposed of by the debtor.
It was contended that the disposal of the goods amounted to criminal
breach of trust. Negativing the said contention, this Court after stating
the principle as to when a complaint can be quashed at the threshold,
held thus: (SCC pp. 607-08, para 27)
“[A] serious dispute has been raised by the learned counsel …
as to whether on the face of the allegations, an offence of criminal
breach of trust is constituted or not. In our view, the expression
‘entrusted with property’ or ‘with any dominion over property’ has
been used in a wide sense in Section 405 IPC. Such expression
includes all cases in which goods are entrusted, that is, voluntarily
handed over for a specific purpose and dishonestly disposed of in
violation of law or in violation of contract. The expression ‘entrusted’
appearing in Section 405 IPC is not necessarily a term of law. It has
wide and different implications in different contexts. It is, however,
necessary that the ownership or beneficial interest in the ownership of
the property entrusted in respect of which offence is alleged to have
been committed must be in some person other than the accused and
the latter must hold it on account of some person or in some way for
his benefit. The expression ‘trust’ in Section 405 IPC is a
comprehensive expression and has been used to denote various kinds
of relationships like the relationship of trustee and beneficiary, bailor
and bailee, master and servant, pledger and pledgee. When some
goods are hypothecated by a person to another person, the ownership
of the goods still remains with the person who has hypothecated such
goods. The property in respect of which criminal breach of trust can
be committed must necessarily be the property of some person other
than the accused or the beneficial interest in or ownership of it must
be in the other person and the offender must hold such property in

30
CRLP No. - 23655 of 2025
trust for such other person or for his benefit. In a case of pledge, the
pledged article belongs to some other person but the same is kept in
trust by the pledgee. In the instant case, a floating charge was made
on the goods by way of security to cover up credit facility. In our view,
in such case for disposing of the goods covering the security against
credit facility the offence of criminal breach of trust is not committed.”
(emphasis supplied)
Section 415
32. The essential ingredients of the offence of “cheating” are: (i)
deception of a person either by making a false or misleading
representation or by other action or omission, (ii) fraudulent or
dishonest inducement of that person to either deliver any property or
to consent to the retention thereof by any person or to intentionally
induce that person 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.
35. In Hridaya Ranjan Prasad Verma [(2000) 4 SCC 168 : 2000 SCC
(Cri) 786] this Court held: (SCC pp. 176-77, paras 14-15)
“14. On a reading of the section it is manifest that in the definition
there are set forth two separate classes of acts which the person
deceived may be induced to do. In the first place he may be induced
fraudulently or dishonestly to deliver any property to any person. The
second class of acts set forth in the section is the doing or omitting to
do anything which the person deceived would not do or omit to do if
he were not so deceived. In the first class of cases the inducing must
be fraudulent or dishonest. In the second class of acts, the inducing
must be intentional but not fraudulent or dishonest.
15. In determining the question it has to be kept in mind that the
distinction between mere breach of contract and the offence of
cheating is a fine one. It depends upon the intention of the accused at
the time of inducement which may be judged by his subsequent
conduct but for this subsequent conduct is not the sole test. Mere
breach of contract cannot give rise to criminal prosecution for
cheating unless fraudulent or dishonest intention is shown right at the
beginning of the transaction, that is, the time when the offence is said
to have been committed. Therefore it is the intention which is the gist
of the offence. To hold a person guilty of cheating it is necessary to
show that he had fraudulent or dishonest intention at the time of
making the promise. From his mere failure to keep up promise
subsequently such a culpable intention right at the beginning, that is,
when he made the promise cannot be presumed.”
Section 425

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CRLP No. - 23655 of 2025
37. Section 425 IPC provides:
“425. Whoever, with intent to cause, or knowing that he is likely to
cause, wrongful loss or damage to the public or to any person, causes
the destruction of any property, or any such change in any property or
in the situation thereof as destroys or diminishes its value or utility, or
affects it injuriously, commits ‘mischief’.”
The three ingredients of the section are: (i) intention to cause
or knowledge that he is likely to cause wrongful loss or damage to the
public or to any person; (ii) causing destruction of some property or
any change in the property or in the situation thereof; and (iii) the
change so made destroying or diminishing the value or utility or
affecting it injuriously. For the purpose of Section 425, ownership or
possession of the property is not relevant. Even if the property
belongs to the accused himself, if the ingredients are made out,
mischief is committed, as is evident from Illustrations (d) and (e) to
Section 425. The complaints clearly allege that NEPC India had
removed the engines thereby making a change in the aircrafts and
that such removal has diminished the value and utility of the aircrafts
and affected them injuriously, thereby causing loss and damage to
IOC, which has the right to possess the entire aircraft. The allegations
clearly constitute the offence of “mischief”. Here again, we are not
concerned with the proof or ultimate decision.”
74. The relevant paragraph of V.Y. Jose v. State of Gujarat (Supra)
has also been reproduced for reference:
26. Recently, in Vir Prakash Sharma v. Anil Kumar Agarwal [(2007) 7 SCC
373: (2007) 3 SCC (Cri) 370] , noticing, inter alia, the aforementioned
decisions, this Court held: (SCC p. 377, paras 13-16)
“13. The ingredients of Section 420 of the Penal Code are as follows:
(i) Deception of any persons;
(ii) Fraudulently or dishonestly inducing any person to deliver any
property; or
(iii) To consent that any person shall retain any property and finally
intentionally inducing that person to do or omit to do anything which
he would not do or omit.
No act of inducement on the part of the appellant has been alleged by the
respondent. No allegation has been made that he had an intention to cheat
the respondent from the very inception.
14. What has been alleged in the complaint petition as also the statement of
the complainant and his witnesses relate to his subsequent conduct. The
date when such statements were allegedly made by the appellant had not

32
CRLP No. - 23655 of 2025
been disclosed by the witnesses of the complainant. It is really absurd to
opine that any such statement would be made by the appellant before all of
them at the same time and that too in his own district. They, thus, appear to
be wholly unnatural.
15. In law, only because he had issued cheques which were dishonoured, the
same by itself would not mean that he had cheated the complainant.
Assuming that such a statement had been made, the same, in our opinion,
does not exhibit that there had been any intention on the part of the
appellant herein to commit an offence under Section 417 of the Penal Code.
16. Furthermore, admittedly, their residences are in different districts.
Whereas the appellant is a resident of the district of Ajamgarh, the
respondent is a resident of the district of Rampur. Cheques were admittedly
issued by the appellant at his place. There is nothing on record to show that
any part of the cause of action arose within the jurisdiction of the court
concerned. Even if such statements had been made, the same admittedly
have been made only at the place where the appellant resides. The learned
Magistrate, therefore, had no jurisdiction to issue the summons. (See
Mosaraf Hossain Khan v. Bhagheeratha Engg. Ltd. [(2006) 3 SCC 658 :
(2006) 2 SCC (Cri) 98] )”
27. The said principle has been reiterated in All Cargo Movers (I) (P) Ltd. v.
Dhanesh Badarmal Jain [(2007) 14 SCC 776 : (2007) 12 Scale 391] stating:
(SCC p. 781, para 16)
“16. For the said purpose, allegations in the complaint petition must
disclose the necessary ingredients therefor. Where a civil suit is pending and
the complaint petition has been filed one year after filing of the civil suit, we
may for the purpose of finding out as to whether the said allegations are
prima facie correct, take into consideration the correspondences exchanged
by the parties and other admitted documents. It is one thing to say that the
Court at this juncture would not consider the defence of the accused but it is
another thing to say that for exercising the inherent jurisdiction of this Court,
it is impermissible also to look to the admitted documents. Criminal
proceedings should not be encouraged, when it is found to be mala fide or
otherwise an abuse of the process of the court. Superior courts while
exercising this power should also strive to serve the ends of justice.”
28. A matter which essentially involves dispute of a civil nature should not be
allowed to be the subject-matter of a criminal offence, the latter being not a
short cut of executing a decree which is non-existent. The superior courts,
with a view to maintain purity in the administration of justice, should not
allow abuse of the process of court. It has a duty in terms of Section 483 of
the Code of Criminal Procedure to supervise the functionings of the trial
courts.
29. An offence of cheating may consist of two classes of cases:

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CRLP No. - 23655 of 2025
(1) Where the complainant has been induced fraudulently or dishonestly.
Such is not the case here;
(2) When by reason of such deception, the complainant has not done or
omitted to do anything which he would not do or omit to do if he was not
deceived or induced by the accused.
75. A perusal of the afore-quoted portions of the judgments
reveal that the Hon’ble Supreme Court has repeatedly cautioned
against the growing tendency of converting purely civil and
commercial disputes into criminal proceedings with a view to
exert pressure upon the opposite party or to secure
recovery/settlement through coercive criminal process. The
consistent view of the Hon’ble Supreme Court is that criminal law
cannot be permitted to be used as a substitute for civil remedies
or as a short-cut for enforcement of contractual and commercial
obligations, particularly where the dispute predominantly arises
out of contractual terms, monetary claims, business
arrangements, or alleged breach of reciprocal obligations.
76. It further emerges from the aforesaid decisions that while
exercising jurisdiction for quashing of criminal proceedings, the
Court is required to examine whether the allegations contained in
the FIR/complaint, even if taken at their face value and accepted
in their entirety, disclose the essential ingredients constituting the
offences alleged. In the absence of foundational averments
satisfying the statutory ingredients of the offences invoked,
continuation of criminal proceedings would amount to abuse of
the process of law warranting interference by the constitutional
courts in exercise of their inherent/writ jurisdiction.
77. Insofar as the offence of cheating is concerned, the Hon’ble
Supreme Court has consistently held that the sine qua non for
attracting the offence is the existence of fraudulent or dishonest
intention at the very inception of the transaction. Mere breach of
contract, subsequent non-performance, or failure to honour

34
CRLP No. - 23655 of 2025
assurances subsequently would not, by itself, constitute the
offence of cheating unless it is shown that the accused possessed
dishonest intention from the very beginning at the time when the
representation or promise was made. The distinction between a
mere contractual breach and the offence of cheating, though fine,
is nevertheless well recognised in law, and criminal liability cannot
arise merely on account of failure to fulfil contractual obligations.
78. Likewise, for constituting the offence of criminal breach of
trust, the essential requirement is entrustment of property or
dominion over property coupled with dishonest misappropriation
or conversion thereof in violation of law or contractual obligation.
The Hon’ble Supreme Court has clarified that the property alleged
to have been misappropriated must belong beneficially to a
person other than the accused and must have been entrusted to
the accused in a fiduciary or legally recognised capacity. In
commercial transactions involving contractual arrangements,
financial accommodations, or hypothecation/security interests,
mere non-payment or disposal of secured assets, absent the
essential ingredient of entrustment in the legal sense
contemplated under Section 405 IPC, would not ipso facto
constitute criminal breach of trust.
79. The aforesaid principles unequivocally demonstrate that
where the dispute essentially pertains to performance of
contractual obligations, settlement of accounts, commercial
understandings, recovery of money, or alleged breach of terms
governing a business transaction, and the necessary criminal
intent or statutory ingredients are conspicuously absent from the
allegations, permitting continuation of criminal proceedings would
result in misuse of the criminal justice machinery. In such
circumstances, the superior courts are duty-bound to exercise

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their jurisdiction to secure the ends of justice and to prevent
abuse of the process of Court.
80. Examining the allegations in the present case in light of the
aforesaid principles, this Court finds that the foundational
ingredients of the alleged offences are conspicuously absent.
81. So far as the offence under Section 420 IPC is concerned,
the law is well settled that there must exist dishonest or
fraudulent intention at the very inception of the transaction. Mere
breach of promise, subsequent non-performance or failure to
honour contractual obligations cannot amount to cheating unless
it is shown that the accused possessed fraudulent intention at the
time the representation was made.
7
82. In Hridaya Ranjan Prasad Verma , the Hon’ble Supreme
Court categorically held that distinction between mere breach of
contract and the offence of cheating depends upon intention of
the accused at the inception of the transaction.
83. Applying the aforesaid principles to the facts of the present
case, this Court finds no material whatsoever indicating dishonest
intention from inception. The initial allotments were made in the
year 2008. Construction activities admittedly progressed.
Possession of the three original units was admittedly offered on
20.02.2012. Sub-lease deeds came to be executed on
25.11.2022. The parties continued to engage in negotiations over
several years. Assured returns were allegedly paid at least to
some extent. Thereafter, the complainant himself allegedly agreed
to adjustment of claims through allotment of another/additional
unit. Such prolonged commercial dealings extending over years
completely negate the allegation that the accused persons
possessed fraudulent intention from the very inception.
7 (2000) 4 SCC 168

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84. The entire dispute rather reflects continuing disagreements
concerning performance of contractual obligations, adjustment of
assured returns and validity of subsequent arrangements. Such
disputes, by their very nature, fall within the domain of civil
adjudication.
85. Likewise, the essential ingredients of Section 406 IPC are
also not satisfied. Entrustment is the sine qua non for constituting
an offence of criminal breach of trust. The FIRs do not disclose
any entrustment in the legal sense. The money paid by the
complainant was paid as consideration under commercial builder-
buyer transactions. Mere non-delivery or delayed delivery of units
cannot by itself constitute criminal breach of trust.
86. This Court is also of the view that mere breach of
contractual obligations arising out of agreements to sell would not
by itself attract criminal breach of trust unless specific
entrustment and dishonest misappropriation are established.
87. The allegations under Sections 467, 468 and 471 IPC also
do not withstand scrutiny at this stage. The dispute regarding the
alleged fourth unit fundamentally turns upon validity and
execution of documents dated 13.05.2015 and 16.04.2022. The
petitioners have consistently disputed the authenticity and
execution of the said documents and specifically pleaded that the
agreement dated 16.04.2022 does not bear signatures of any
authorized representative/director of petitioner no.1 company.
88. A perusal of the material placed before this Court further
indicates that the said document appears to have been signed
only from the side of the complainant and not by any authorized
person of the management of petitioner no.1 company. Thus,
whether the document was validly executed, whether it was acted
upon, whether it creates enforceable rights and whether any

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CRLP No. - 23655 of 2025
forgery was actually committed are all matters requiring detailed
evidence and adjudication. Mere existence of disputed documents
does not automatically establish offences of forgery against the
petitioners before this Court.
89. Equally important is the issue regarding management and
control of petitioner no.1 company during the relevant period.
90. The documents on record prima facie show that pursuant to
restructuring arrangements and share transfer mechanisms, the
control and management of petitioner no.1 company remained
with SREI Infrastructure Finance Limited/Bharat Nirman Fund
from the year 2015 till March, 2024.
91. Petitioner Sh. Harjeet Singh Sahani in Criminal Misc. Writ
Petition No.25666/2025 has specifically pleaded that he resigned
from the directorship on 30.06.2025 whereas the FIR came to be
lodged subsequently on 03.10.2025. The record further prima
facie indicates that petitioner Sh. Arjunpreet Singh Sahni became
associated with the management only subsequently after
restructuring arrangements and takeover by Solitarian entities.
92. Thus, many of the documents and transactions now relied
upon by the complainants pertain either to periods prior to
induction of the petitioners before this Court or to periods when
management and operational control vested elsewhere. In
absence of specific allegations showing active participation
coupled with criminal intent attributable to each accused person,
sweeping criminal liability cannot be imposed merely on account
of subsequent association with the company.
93. Pertinently, this Court also notes that other than the
reference to arbitration clause, the complainant’s grievances
substantially fall within the framework of the Real Estate
(Regulation and Development) Act, 2016 (hereinafter “RERA”).

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Under Section 31 of the RERA Act, an aggrieved allottee
possesses the statutory remedy of filing complaint before the Real
Estate Regulatory Authority. Section 71 further contemplates
adjudication regarding compensation and related grievances by
the Adjudicating Officer. The legislature having created a
specialized statutory mechanism for adjudication of disputes
arising from real estate projects, disputes relating to delay in
possession, contractual defaults, compensation and allied builder-
buyer grievances ordinarily fall within the realm of civil/regulatory
adjudication unless clear criminality is independently disclosed.
94. A bare perusal of the allegations levelled in the
FIR/complaint would demonstrate that the substratum of the
dispute pertains to alleged delay in completion of the project,
non-delivery of possession within the stipulated timeline, alleged
deviation from representations made at the time of booking,
demands pertaining to payments/installments, dispute qua
map/site plan/non existence of allegedly sold unit, and grievances
concerning performance of obligations arising out of the Builder
Buyer Agreement and the real estate project in question. Such
disputes are intrinsically connected with the rights and obligations
flowing from a real estate transaction and squarely fall within the
regulatory framework contemplated under the RERA. The
grievance of the complainant is essentially directed against the
manner of execution and performance of the project and the
contractual obligations undertaken by the developer/promoter, for
which the statute itself provides a complete adjudicatory
mechanism.
95. The legislative intent behind enactment of the RERA
framework is to provide a specialised and sector-specific
mechanism for adjudication of disputes between allottees and
promoters/developers, particularly in relation to delay in

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possession, refund claims, project completion obligations,
disclosures, compensation and contractual defaults. The
allegations in the present case, when holistically examined,
substantially emanate from such builder-buyer and allotment
related disputes.
96. In the considered opinion of this Court, merely because
allegations of breach of assurances, delay, or non-fulfilment of
contractual obligations have been made, the same would not ipso
facto clothe the dispute with criminal colour in the absence of
specific allegations disclosing fraudulent or dishonest intention
from the inception of the transaction. Where the dominant nature
of the dispute is regulatory, contractual and compensatory, and
the statute itself creates an efficacious forum for redressal of such
grievances, criminal proceedings ought not to be permitted to
become a tool for arm-twisting or exerting pressure in matters
essentially falling within the domain of civil and regulatory
adjudication.
97. The respondents have repeatedly argued that the existence
of civil remedies cannot bar criminal proceedings. There can be
no quarrel with the said proposition. However, the equally settled
principle is that criminal law cannot be permitted to become an
instrument of pressure or harassment in disputes predominantly
civil in character.
98. This Court is of the considered view that criminal
proceedings should not be encouraged where the dispute is
essentially civil and criminal courts should not be used for settling
scores or exerting pressure in commercial disputes.
99. Therefore, taking into consideration the entirety of the
matter, this Court is further of the opinion that the present case
falls within the parameters illustratively laid down in State of

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Haryana v. Bhajan Lal (Supra). Even if the allegations contained in
the FIRs are accepted at face value, the same primarily disclose
civil and commercial disputes arising from real estate
transactions, adjustment of assured returns and validity of
allotment documents. The basic ingredients of offences under
Sections 406, 420, 467, 468, 471 and 120-B IPC are not prima
facie established against the petitioners before this Court.
100. The continuation of criminal proceedings in such
circumstances would amount to abuse of the process of law.
Conclusion
101. This Court is conscious of the fact that every dispute arising
out of a real estate transaction or every delay in completion of a
project cannot ipso facto be permitted to assume the character of
a criminal offence. The real estate sector inherently involves
complex commercial, regulatory and financial considerations, and
delays in execution of projects may occur on account of multiple
factors including market downturns, liquidity constraints,
regulatory approvals, force majeure circumstances, or other
unforeseen contingencies affecting the viability and timelines of
the project.
102. If every instance of delay in handing over possession, failure
to adhere to projected timelines, or inability of a developer to
immediately fulfil contractual commitments were to result in
registration of criminal cases, the same would not only amount to
criminalising commercial and contractual defaults but would also
have serious adverse repercussions on legitimate business and
commercial activity in the sector. Criminal law cannot be
permitted to operate as a mechanism for enforcing contractual
performance in ordinary commercial disputes, absent clear

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allegations disclosing the requisite criminal intent and statutory
ingredients of the offences alleged.
103. This Court also cannot lose sight of the hardship and
inconvenience which may have been caused to the complainant
on account of the alleged delay and non-fulfilment of expectations
arising from the transaction in question. The grievances projected
by the complainant may indeed entitle him to seek appropriate
reliefs including refund, compensation, interest, possession-
related directions, or other consequential remedies in accordance
with law. However, such sympathy, by itself, cannot justify
continuation of criminal prosecution where the essential
ingredients constituting a cognizable criminal offence are
otherwise not disclosed from the material placed on record. The
complainant has efficacious civil and statutory remedies available
under the governing contractual framework as well as under the
provisions of the RERA Act and other competent forums, where
appropriate relief in relation to the subject units and allied claims
may be duly adjudicated and granted in accordance with law.
104. It is true that, as noted from the record, the investigation is
still at a nascent stage and ordinarily this Court would be slow in
interfering with criminal proceedings at the threshold. However, it
is equally well settled that mere pendency of investigation cannot
operate as an absolute bar against exercise of writ or inherent
jurisdiction where the allegations contained in the FIR itself, even
if accepted in their entirety, fail to disclose the essential
ingredients of the alleged offences or where continuation of
criminal proceedings would amount to abuse of process of law.
105. The power of judicial review is intended precisely to prevent
misuse of criminal machinery in cases where disputes are
overwhelmingly civil or commercial in nature. In the present case,

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the foundational facts are substantially documentary and largely
undisputed, namely the original allotment of three units in the
year 2008, offer of possession on 20.02.2012, execution of sub-
lease deeds on 25.11.2022, subsequent negotiations concerning
assured returns and the alleged fourth unit, the existence of
arbitration clause under Clause 7 of Heading “X” of the agreement
dated 16.04.2022, as well as the shifting management structure
of petitioner no.1 company during the relevant periods.
106. Therefore, even at this stage, the Court is not required to
conduct a roving inquiry into disputed facts but only to examine
whether the uncontroverted allegations prima facie disclose
commission of cognizable offences.
107. Upon such examination, this Court finds that the dispute
essentially arises from contractual and commercial arrangements
relating to a real estate project and does not prima facie satisfy
the ingredients of offences under Sections 406, 420, 467, 468,
471 or 120-B of the IPC qua the present petitioners.
Consequently, merely because investigation is at a nascent stage
would not justify relegating the petitioners to prolonged criminal
proceedings which, in the facts of the present case, appear to be
manifestly civil in character, rather, quashing of the FIR at this
stage would prevent the misuse of the process of law.
108. Accordingly, all the connected writ petitions deserve to be
allowed.
109. In view thereof, impugned FIRs as well as all consequential
proceedings arising therefrom are hereby quashed qua the
petitioners.
110. It is made clear that the instant batch of petitions have
been adjudicated on the basis of the pleadings brought before
this Court and the observations made hereinabove shall not be

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construed as expression on the merits, rights and contentions of
the parties which they may seek to address or raise in other
proceedings or before any other forum of law, in accordance with
the law.
(Devendra Singh-I,J.) (Chandra Dhari Singh,J.)
May 26, 2026
Saurabh
Digitally signed by :-
SAURABH KUMAR
High Court of Judicature at Allahabad