VIJAYKUMAR NARBHESHANKAR RAJYAGURU vs STATE OF GUJARAT
- Court
- Gujarat High Court
R/CR.MA/1208/2018 (GJHC240098962018) JUDGMENT DATED: 31/08/2026
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC. APPLICATION (FOR QUASHING & SET
ASIDE FIR/ORDER) NO. 1208 of 2018
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE P. M. RAVAL
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Approved for Reporting Yes No
√
================================================
VIJAYKUMAR NARBHESHANKAR RAJYAGURU
Versus
STATE OF GUJARAT & ANR.
================================================
Appearance:
MR APURVA R KAPADIA(5012) for the Applicant(s) No. 1
NOTICE SERVED BY DS for the Respondent(s) No. 2
MR YUVRAJ BRAHMBHATT, APP for the Respondent(s) No. 1
================================================
CORAM: HONOURABLE MR.JUSTICE P. M. RAVAL
Date : 31/08/2026
ORAL JUDGMENT
1. This application under Section 482 of the Criminal Procedure
Code, 1973 (the Code) is filed by the applicant seeking to quash
and set aside the FIR being C.R. No. I-56 of 2017, registered with
Khambhaliya Police Station, District: Devbhoomi Dwarka for the
offence punishable under Sections 406, 420 and 114 of the Indian
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Penal Code, 1860 (IPC).
2. Though served, none has put in appearance on behalf of the
respondent No. 2 – original complainant. The matter is old, of
2018. Hence, the Court proceeded with the matter on merits.
3. Facts in brief, of the prosecution case are that the applicant
herein, despite having knowledge that land being Plot No. 53 was
belonging to one Jyotsanaben by virtue of a registered Sale Deed
dated 13.04.2012, allegedly again sold the said plot to the present
de facto complainant stating that he being power of attorney of the
original owner, is authorized to sell, for which, the de facto
complainant also paid a sale consideration of Rs.38,000/- to the
applicant and thereby, the applicant in connivance with co-
accused, committed fraud and criminal breach of trust with the de
facto complainant for which, FIR in question came to be filed.
4. Heard, learned advocate for the applicant and the learned
Additional Public Prosecutor.
4.1 The learned advocate for the applicant would submit that
the applicant is the power of attorney holder of the power of
attorney dated 20.03.2012, executed by the Developer namely
Jagdishchandra Jeshankar Modha in favour of the present
applicant to develop Plot Nos. 39 and 53, out of which, Plot No. 53
came to be sold to the de facto complainant by way of a registered
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Sale Deed dated 17.11.2016. However, the de facto complainant
lodged the present FIR mainly on the ground that said Plot No. 53
was already sold to one Jyotsanaben on 13.04.2012. The learned
advocate for the applicant would submit that, nonetheless, on
08.12.2016 i.e. prior to filing of the present FIR, upon the applicant
coming to know that mistake was committed in selling the plot
again, executed a Cancellation Deed from the previous owner
namely Jyotsanaben and thus, no cause was surviving as on the
date of filing of the FIR in question, however, although becoming
the exclusive owner of the said property and despite the earlier
sale deed was cancelled, present FIR is lodged on 29.03.2017 only
with mala fide and to exert pressure upon the applicant.
4.2 The learned advocate for the applicant would submit that in
the facts and circumstances of the case, ingredients of the offence
alleged against the applicant are not satisfied at all and the FIR
does not disclose commission of any offence as alleged against the
applicant as the earlier sale deed came to be cancelled by execution
of Cancellation Deed on 08.12.2016. Thus, he urged that this
application may be allowed and the FIR as well as the
consequential proceedings, if any, may be quashed and set aside.
5. As against that, learned Additional Public Prosecutor for the
respondent – State would submit that although Sale Deed dated
13.04.2012, which was executed in favour of Jyotsanaben, got to be
cancelled by way of the Cancellation Deed dated 08.12.2016,
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however, the fact remains that during subsistence of the said sale
deed, present sale came to be effected by the present applicant for
the property being Plot No. 53 and thus, a prima facie case is made
out against the present applicant and hence, he urged not to
entertain this application and it is requested to be rejected.
6. Heard, the learned advocates for the respective parties
present and perused the material on record.
7. Prior to assessing the factual matrix on the touchstone of
criminal jurisprudence, it is apposite to reinforce the settled legal
position governing the scope, ambit, and limits of the inherent
jurisdiction vested under Section 482 of the Code. The
jurisprudential parameters regulating the exercise of this
extraordinary power have been authoritatively catalogued by
Hon’ble Supreme Court in a long line of precedents, chief among
them being the authoritative in the case of State of Haryana v.
Bhajan Lal [AIR 1992 SC 604] . Therein, Hon’ble Supreme Court
crystallized seven distinct, illustrative categories of cases where
judicial intervention under Section 482 of the Code or Article 226
of the Constitution is necessitated to secure the ends of justice and
clip any abuse of the process of Court. The relevant portion of
Paragraph 102 of the said judgment is extracted below:
“ 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
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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, 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
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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.”
7.1 Evaluating the present applications on the anvil of the
principles enunciated in Bhajan Lal (supra) , this Court has to
determine whether the allegations in the FIR, even when accepted
at face value, satisfy the essential statutory ingredients of Sections
406, 420 and 114 of the IPC. This Court must ensure that criminal
machinery is not permitted to degenerate into an engine of
harassment where liability under criminal law is completely
absent.
7.2 Before analyzing the case on hand, it is apt to refer to the
settled legal position. The Apex Court in Delhi Race Club (1940)
Ltd. and Others v. State of Uttar Pradesh and Another, 2024 (0)
AIJEL-SC 73929 , held:
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“DIFFERENCE BETWEEN CRIMINAL BREACH OF TRUST
AND CHEATING
24. This Court in its decision in S.W. Palanitkar & Ors. v. State
of Bihar & Anr. Reported in (2002) 1 SCC 241 expounded the
difference in the ingredients required for constituting an of offence
of criminal breach of trust (Section 406 IPC) viz-a-viz the offence
of cheating (Section 420). The relevant observations read as under:-
“9. The ingredients in order to constitute a criminal breach
of trust are: (I) entrusting a person with property or with
any dominion over property, (ii) that person entrusted (a)
dishonestly misappropriating or converting that property to
his own use; or (b) dishonestly using or disposing of that
property or wilfully suffering any other person so to do in
violation (I) of any direction of law prescribing the mode in
which such trust is to be discharged, (ii) of any legal contract
made, touching the discharge of such trust.
10. The ingredients of an offence of cheating are: (I) there
should be fraudulent or dishonest inducement of a person by
deceiving him, (ii)(a) the person so deceived should be
induced to deliver any property to any person, or to consent
that any person shall retain any property; or (b) the person
so deceived should be intentionally induced to do or omit to
do anything which he would not do or omit if he were not so
deceived; and (iii) in cases covered by (ii)(b), the act of
omission should be one which causes or is likely to cause
damage or harm to the person induced in body, mind,
reputation or property. “
25. What can be discerned from the above is that the offences of
criminal breach of trust (Section 406 IPC) and cheating (Section
420 IPC) have specific ingredients.
In order to constitute a criminal breach of trust
(Section 406 IPC): -
1) There must be entrustment with person for property
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or dominion over the property, and
2) The person entrusted: -
a) dishonestly misappropriated or converted property to his
own use, or
b) dishonestly used or disposed of the property or willfully
suffers any other person so to do in violation of:
i. any direction of law prescribing the method in which
the trust is discharged; or
ii. legal contract touching the discharge of trust (see:
S.W.P. Palanitkar (supra).
Similarly, in respect of an offence under Section 420 IPC,
the essential ingredients are: -
1) deception of any person, either by making a false or
misleading representation or by other action or by omission;
2) fraudulently or dishonestly inducing any person to
deliver any property, or
3) the consent that any persons shall retain any property
and finally intentionally inducing that person to do or omit
to do anything which he would not do or omit (see:
Harmanpreet Singh Ahluwalia v. State of Punjab, (2009) 7
SCC 712 : (2009) Cr.L.J. 3462 (SC )
26. Further, in both the aforesaid sections, mens rea i.e.
intention to defraud or the dishonest intention must be present,
and in the case of cheating it must be there from the very beginning
or inception.
27. In our view, the plain reading of the complaint fails to spell
out any of the aforesaid ingredients noted above. We may only say,
with a view to clear a serious misconception of law in the mind of
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the police as well as the courts below, that if it is a case of the
complainant that offence of criminal breach of trust as defined
under Section 405 of IPC, punishable under Section 406 of IPC, is
committed by the accused, then in the same breath it cannot be said
that the accused has also committed the offence of cheating as
defined and explained in Section 415 of the IPC, punishable under
Section 420 of the IPC.
28. Every act of breach of trust may not result in a penal offence
of criminal breach of trust unless there is evidence of manipulating
act of fraudulent misappropriation. An act of breach of trust
involves a civil wrong in respect of which the person may seek his
remedy for damages in civil courts but, any breach of trust with a
mens rea, gives rise to a criminal prosecution as well. It has been
held in Hari Prasad Chamaria v. Bishun Kumar Surekha & Ors.,
reported in (1973) 2 SCC 823 as under:
“4. We have heard Mr. Maheshwari on behalf of the
appellant and are of the opinion that no case has been made
out against the respondents under Section 420 Penal Code,
1860. For the purpose of the present appeal, we would
assume that the various allegations of fact which have been
made in the complaint by the appellant are correct. Even
after making that allowance, we find that the complaint does
not disclose the commission of any offence on the part of the
respondents under Section 420 Penal Code, 1860. There is
nothing in the complaint to show that the respondents had
dishonest or fraudulent intention at the time the appellant
parted with Rs. 35.000/- There is also nothing to indicate
that the respondents induced the appellant to pay them Rs.
35,000/- by deceiving him. It is further not the case of the
appellant that a representation was made, the respondents
knew the same to be false. The fact that the respondents
subsequently did not abide by their commitment that they
would show the appellant to be the proprietor of Drang
Transport Corporation and would also render accounts to
him in the month of December might create civil liability on
the respondents for the offence of cheating.”
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29. To put it in other words, the case of cheating and dishonest
intention starts with the very inception of the transaction. But in
the case of criminal breach of trust, a person who comes into
possession of the movable property and receives it legally, but
illegally retains it or converts it to his own use against the terms of
the contract, then the question is, in a case like this, whether the
retention is with dishonest intention or not, whether the retention
involves criminal breach of trust or only a civil liability would
depend upon the facts of each case.
30. The distinction between mere breach of contract and
the offence of criminal breach of trust and cheating is a fine
one. In case of cheating, the intention of the accused at the
time of inducement should be looked into which may be
judged by a subsequent conduct, but for this, the subsequent
conduct is not the sole test. Mere breach of contract cannot
give rise to a criminal prosecution for cheating unless
fraudulent or dishonest intention is shown right from the
beginning of the transaction i.e. the time when the offence is
said to have been committed. Therefore, it is this intention,
which is the gist of the offence. Whereas, for the criminal
breach of trust, the property must have been entrusted to the
accused or he must have dominion over it. The property in
respect of which the offence of breach of trust has been
committed must be either the property of some person other
than the accused or the beneficial interest in or ownership of
it must be of some other person. The accused must hold that
property on trust of such other person. Although the offence,
i.e. the offence of breach of trust and cheating involve
dishonest intention, yet they are mutually exclusive and
different in basic concept. There is a distinction between
criminal breach of trust and cheating. For cheating, criminal
intention is necessary at the time of making a false or
misleading representation i.e., since inception. In criminal
breach of trust, mere proof of entrustment is sufficient. Thus,
in case of criminal breach of trust, the offender is lawfully
entrusted with the property, and he dishonestly
misappropriated the same. Whereas, in case of cheating, the
offender fraudulently or dishonestly induces a person by
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deceiving him to deliver any property. In such a situation,
both the offences cannot co-exist simultaneously.
31. At the most, the court of the Additional Chief Judicial
Magistrate could have issued process for the offence punishable
under Section 420 of the IPC i.e. cheating but in any
circumstances no case of criminal breach of trust is made out. The
reason being that indisputably there is no entrustment of any
property in the case at hand. It is not even the case of the
complainant that any property was lawfully entrusted to the
appellants and that the same has been dishonestly misappropriated.
The case of the complainant is plain and simple. He says that the
price of the goods sold by him has not been paid. Once there is a
sale, Section 406 of the IPC goes out of picture. According to the
complainant, the invoices raised by him were not cleared. No case
worth the name of cheating is also made out.
32. Even if the Magistrate would have issued process for the
offence punishable under Section 420 of the IPC, i.e., cheating the
same would have been liable to be quashed and set aside, as none of
the ingredients to constitute the offence of cheating are disclosed
from the materials on record.
33. It has been held in State of Gujarat v. Jaswantlal Nathalal
reported in (1968) 2 SCR 408 , “The term “entrusted” found in
Section 405 IPC governs not only the words “with the property”
immediately following it but also the words “or with any dominion
over the property” occurring thereafter-see Velji Raghvaji Patel v.
State of Maharashtra [(1965) 2 SCR 429] . Before there can be any
entrustment there must be a trust meaning thereby an obligation
annexed to the ownership of property and a confidence reposed in
and accepted by the owner or declared and accepted by him for the
benefit of another or of another and the owner. But that does not
mean that such an entrustment need conform to all the
technicalities of the law of trust – see Jaswantrai Manilal Akhaney
v. State of Bombay [1956 SCR 483]. The expression “entrustment”
carries with it the implication that the person handing over any
property or on whose behalf that property is handed over to
another, continues to be its owner. Further the person handing
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over the property must have confidence in the person taking the
property so as to create a fiduciary relationship between them. A
mere transaction of sale cannot amount to an “entrustment””.
34. Similarly, in Central Bureau of Investigation, SPE, SIU(X),
New Delhi v. Duncans Agro Industries Ltd., Calcutta reported in
(1996) 5 SCC 591 this Court held that the expression “entrusted
with property” used in Section 405 of the IPC connotes that 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 that the beneficial interest in or ownership
thereof must be in the other person and the offender must hold such
property in trust for such other person or for his benefit. The
relevant observations read as under: -
“27. In the instant case, a serious dispute has been raised by
the learned counsel appearing for the respective parties 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 tuts 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.
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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 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. [...]” (Emphasis supplied)
35. The aforesaid exposition of law makes it clear that there
should be some entrustment of property to the accused wherein the
ownership is not transferred to the accused. In case of sale of
movable property, although the payment may be deferred yet the
property in the goods passes on delivery as per Sections 20 and 24
respectively of the Sale of Goods Act, 1930.
“20. Specific goods in a deliverable state. - Where there is
an unconditional contract for the sale of specific goods in a
deliverable state, the property in the goods passes to the
buyer when the contract is made and it is immaterial
whether the time of payment of the price or the time of
delivery of goods, or both, is postponed.
xxx xxx xxx
24. Goods sent on approval or “on sale or return”. - When
goods are delivered to the buyer on approval or “on sale or
return” or other similar terms, the property therein passes to
the buyer -
(a) when he signifies his approval or acceptance to the
seller or does any other act adopting the transaction;
(b) if he does not signify his approval or acceptance to the
seller but retains the goods without giving notice of
rejection, then, if a time has been fixed for the return of the
goods on the expiration of such time, and, if no time has been
fixed, on the expiration of a reasonable time.”
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36. From the aforesaid, there is no manner of any doubt
whatsoever that in case of sale of goods, the property passes to the
purchaser from the seller when the goods are delivered. Once the
property in the goods passes to the purchaser, it cannot be said that
the purchaser was entrusted with the property of the seller.
Without entrustment of property, there cannot be any criminal
breach of trust. Thus, prosecution of cases on charge of criminal
breach of trust, for failure to pay the consideration amount in case
of sale of goods is flawed to the core. There can be civil remedy for
the non-payment of the consideration amount, but no criminal case
will be maintainable for it. [See : Pradesh and Another : 2024 SCC
OnLine SC 171 & Lalit Chaturvedi and Others v. State of Uttar
Mideast Integrated Steels Ltd. (MESCO Steel Ltd.) and Others v.
State of Jharkhand and Another : 2023 SCC OnLine Jhar 301 ]
37. The case at hand falls in category No. 1 as laid in Smt.
Nagawwa (supra) referred to in para 7 of this judgment.
38. If it is the case of the complainant that a particular amount
is due and payable to him then he should have filed a civil suit for
recovery of the amount against the appellants herein. But he could
not have gone to the court of Additional Chief Judicial Magistrate
by filing a complaint of cheating and criminal breach of trust.
39. It appears that till this date, the complainant has not filed
any civil suit for recovery of the amount which according to him is
due and payable to him by the appellants. He seems to have prima
facie lost the period of limitation for filing such a civil suit.
40. In such circumstances referred to above, the continuation of
the criminal proceeding would be nothing but abuse of the process
of law.”
7.3 Thus, while cheating and criminal breach of trust cannot co-
exist, the undisputed fact of the instant case is that as soon as the
applicant came to know about prior execution of the sale deed that
is to say, sale deed in favour of Jyotsanaben, he immediately took
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actions and got cancelled the said Sale Deed which was executed
in favour of Jyotsanaben only on 08.12.2016 i.e. prior to filing of
present FIR on 29.03.2017 and thus, it appears that the sale made to
the present de facto complainant became absolute. Further, there is
nothing on record to show that said Jyotsanaben has ever moved
this Court raising any grievance nor the original owner has come
before this Court. In such circumstances, it cannot be said that the
applicant had a prior intention to cheat the present complainant,
more particularly, when, prior to filing of the present FIR, the
applicant got cancelled the earlier sale made in favour of the
Jyotsanaben.
7.4 Further, FIR in question is filed only on 29.03.2017, whereas,
the Sale Deed in favour of the present de facto complainant is dated
21.09.2016 and the Cancellation Deed is dated 08.12.2016, and thus,
there is delay in lodging the FIR. Though, the aspect of delay can
be gone in to during trial however, considering other attended
circumstances delay also hits to the root of the case as held in the
case of Kishan Singh (Dead) Through LRs v. Gurpal Singh and
Others, (2010) 8 SCC 775, the filing of belated FIR without any
plausible explanation would amount to abuse of process of law.
7.5 Thus, in the considered opinion of this Court, no useful
purpose would be served in continuing the criminal proceedings
against the present applicant.
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7.6 The Apex Court in the decision in Madhavrao Jiwaji Rao
Scindia & Another etc. v. Sambhajirao Chandrojirao Angre &
Others Others, AIR 1988 SC 709 , held as under:
“The legal position is well-settled that when a prosecution at the
initial stage is asked to be quashed, the test to be applied by the
court is as to whether the uncontroverted allegations as made
prima facie establish the offence. It is also for the court to take into
consideration any special features which appear in a particular case
to consider whether it is expedient and in the interest of justice to
permit a prosecution to continue. This is so on the basis that the
court cannot be utilised for any oblique purpose and where in the
opinion of the court chances of an ultimate conviction is bleak and,
therefore, no useful purpose is likely to be served by allowing a
criminal prosecution to continue, the court may while taking into
consideration the special facts of a case also quash the proceeding
even though it may be at a preliminary stage. A case of breach of
trust may be both a civil wrong and criminal offence. But there
would be certain situations where it would predominantly be a
civil wrong and may or may not amount to criminal offence. The
instant case is one of that type where, if at all, the facts may
constitute a civil wrong and the ingredients of the criminal offence
are wanting”. (Para 7)
8. Thus, in view of aforesaid facts and circumstances of the case
vis-a-vis the settled legal position, the Court is of the considered
view that continuation of the criminal proceedings against the
present applicant would be an exercise in futility and accordingly,
present application deserves favourable consideration.
9. In fine, the application succeeds and is allowed, accordingly.
FIR being C.R. No. I-56 of 2017, registered with Khambhaliya
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R/CR.MA/1208/2018 (GJHC240098962018) JUDGMENT DATED: 31/08/2026
Police Station, District: Devbhoomi Dwarka for the offence
punishable under Sections 406, 420 and 114 of the Indian Penal
Code, 1860 with all consequential proceedings emanating
therefrom, are quashed and set aside qua the present applicant.
Rule is made absolute, accordingly.
9.10 Direct service is permitted.
[ P. M. Raval, J. ]
hiren/50tss31826
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