A property dispute without dishonest intent at inception does not constitute cheating.

Respondent No. 2 complained that he agreed to purchase two acres of agricultural land from the petitioner. A sale deed was executed and registered in respondent No. 2’s favour on 23 June 2017.

The complaint alleged that the petitioner received Rs. 2,44,000, comprising Rs. 1,00,000 in cash and Rs. 1,44,000 by cheque, despite the petitioner’s wife and sister—said to have an interest in the ancestral property—not joining in the conveyance.

The cheque was dishonoured, and the petitioner issued a notice concerning it on 18 September 2017.

Respondent No. 2 lodged the complaint on 16 August 2018; the police registered Crime No. 127/2018 for an offence under Section 420 of the IPC, and proceedings were pending as C.C. No. 85/2023 before the Senior Civil Judge and JMFC, Malavalli.

The petitioner sought quashing under Section 482 CrPC, read with Section 528 BNSS.

1. Whether the complaint and material on record disclosed dishonest or fraudulent intention at the inception of the transaction, as required for an offence under Section 420 IPC

2. Whether continuation of the criminal proceedings would amount to an abuse of process warranting quashing under the Court’s inherent jurisdiction

3. Whether costs should be imposed on respondent No. 2 in the circumstances

Section 420 of the IPC requires dishonest or fraudulent intention at the inception of the transaction; a later failure to fulfil a promise, or a dispute concerning title or entitlement, does not by itself establish that intention.

The High Court’s inherent jurisdiction under Section 482 CrPC—invoked in the petition with reference to Section 528 BNSS—may be exercised to prevent abuse of process where the complaint and material do not disclose the essential ingredients of the alleged offence or continuation of the prosecution serves no legitimate purpose.

The Court noted that respondent No. 2 participated in and signed the registered sale deed, while the complaint was made more than a year after its execution.

The allegation that the petitioner’s wife and sister did not join the conveyance, together with the dispute over payment and the cheque’s dishonour, did not establish that the petitioner had a dishonest intention when the transaction began.

The Court therefore regarded the dispute as essentially concerning property rights and transaction-related payments, for which civil remedies may be available, rather than as a complaint disclosing the foundational elements of cheating.

In light of the resulting unnecessary criminal proceedings, it considered costs appropriate.

It allowed the petition and quashed C.C. No. 85/2023 in Crime No. 127/2018 and all consequential proceedings; respondent No. 2 was directed to pay Rs. 25,000 in costs to the petitioner within four weeks of receiving the order.

The order does not bar either party from pursuing any available civil remedy.