A contractual land-sale dispute without entrustment or misappropriation cannot constitute criminal breach of trust.

The complainant alleged that she had orally agreed to purchase 2.6 acres of land from the petitioner for ₹9,13,000 for expanding her private school.

Although the petitioner executed a registered sale deed dated 26 March 2010 for 15 katthas/60 decimals of land, he allegedly refused to execute a further sale deed despite having received the entire consideration.

The complainant further alleged that, on 17 May 2015, the petitioner and other persons assaulted and restrained her, abused and threatened her, and forcibly took away a suitcase containing documents and clothes.

After recording the complainant’s solemn affirmation and the statements of two enquiry witnesses, the Sub-Divisional Judicial Magistrate found a prima facie case under Sections 341, 323, 504 and 406 of the Indian Penal Code and issued process against the petitioner on 3 February 2016.

The petitioner invoked the High Court’s inherent jurisdiction under Section 482 of the Code of Criminal Procedure, contending that the dispute was civil in nature and that a title suit concerning the land was already pending.

1. Whether the allegations in the complaint, taken at face value, disclosed the essential ingredients of criminal breach of trust under Sections 405 and 406 of the Indian Penal Code?

2. Whether the allegations under Sections 341, 323 and 504 of the Indian Penal Code were sufficiently specific to justify issuance of process?

3. Whether continuation of the criminal proceedings constituted an abuse of process where the underlying dispute concerned performance of an alleged land-sale transaction and was substantially civil in nature?

The Court applied Section 405 of the Indian Penal Code, which requires entrustment of property or dominion over property, dishonest misappropriation or conversion, and such misuse in violation of law or an express or implied legal contract; Section 406 prescribes the punishment for criminal breach of trust.

It held that mere non-performance of an agreement to sell does not constitute criminal breach of trust in the absence of entrustment and dishonest misappropriation.

The Court relied on Anand Kumar Mohatta v. State (NCT of Delhi), (2019) 11 SCC 706, regarding quashing where the complaint does not disclose the ingredients of Section 406.

Rashmi Kumar v. Mahesh Kumar Bhada, (1997) 2 SCC 397, and Radheyshyam v. State of Rajasthan, 2024 SCC OnLine SC 2311, on the meaning and requirements of “entrustment”.

It further applied the principles in State of Haryana v. Bhajan Lal, 1992 Supp. (1) SCC 335, particularly the categories where the allegations do not constitute an offence, are inherently improbable, or where the proceedings are manifestly mala fide and instituted for an ulterior motive.

The High Court exercised its inherent jurisdiction under Section 482 CrPC to prevent abuse of the process of court.

The Court examined the complaint, the complainant’s statements, the legal notices and the pleadings in the pending title suit.

It found that the complainant admitted payment of ₹2,13,000, against which the petitioner had already executed the registered sale deed for 15 katthas/60 decimals.

There was no written agreement, no material showing payment of any further consideration, and no allegation that the petitioner had been entrusted with property or money for a specific purpose and had thereafter dishonestly misappropriated it.

The alleged conduct therefore amounted, at most, to a dispute regarding the execution of a further sale deed and enforcement of an alleged land-sale arrangement, for which civil proceedings were already pending.

The allegations of restraint, assault and abuse were also treated as bald and unsupported, while the alleged criminal acts appeared to have been added to exert pressure upon the petitioner to execute another sale deed without further consideration.

Applying the Bhajan Lal categories, the Court concluded that the prosecution lacked the foundational ingredients of the alleged offences and was attended by mala fide intent.

The criminal proceedings were found to be a mala fide attempt to convert a civil land-sale dispute into a criminal prosecution and to coerce the petitioner into executing a further sale deed.

Accordingly, the summoning order dated 3 February 2016 in Complaint Case No. 187(C) of 2015 and the criminal proceedings against the petitioner were quashed and set aside.

No order as to costs was made, and all pending interlocutory applications were disposed of.