A property dispute without dishonest intent or entrustment cannot sustain cheating or criminal-breach-of-trust charges.

Respondent No. 2 complained that the petitioner had represented that he could facilitate purchases of land and received money in connection with proposed transactions, including ₹62 lakh relating to land in Sy.No.10/1, Siddapura Village. Sale deeds were allegedly not executed in respect of the other proposed transactions, and a dispute over Sy.No.10/1 was already the subject of O.S. No. 533/2022.

On the complaint dated 6 December 2023, the police registered Crime No. 479/2023 for offences under Sections 406 and 420 IPC. The petitioner sought quashing under Section 482 Cr.P.C., contending that the dispute was civil and that he had no connection with some of the alleged transactions. The State opposed the petition on the ground that investigation was at an early stage.

1. Whether the complaint and its supporting material disclosed a prima facie case of criminal breach of trust under Sections 405 and 406 IPC.

2. Whether the allegations disclosed cheating under Sections 415 and 420 IPC, including dishonest intention at the time of the alleged representation, or instead concerned a civil property and contractual dispute.

3. Whether continuation of the criminal proceedings amounted to an abuse of process warranting quashing under Section 482 Cr.P.C.

Sections 405 and 406 IPC require entrustment of property and dishonest misappropriation or conversion; a contractual breach, without those elements, does not by itself constitute criminal breach of trust.

Sections 415 and 420 IPC require fraudulent or dishonest inducement, with dishonest intention existing when the representation or promise was made; subsequent failure to perform or refund, without facts indicating such initial intent, is insufficient.

The Court also relied on the distinction between cheating and criminal breach of trust discussed in Delhi Race Club (1940) Ltd. v. State of Uttar Pradesh, (2024) 10 SCC 690.

The inherent jurisdiction should be exercised to prevent criminal proceedings from being used for harassment or private vendetta where no prima facie offence is made out.

The Court viewed the dispute as arising primarily from the parties’ rights and obligations concerning land transactions, with a civil suit already pending over Sy.No.10/1.

Applying the cited principles, it found no sufficient basis in the complaint to establish dishonest intention at the inception of the alleged promises or entrustment followed by dishonest misappropriation.

It also noted that the transactions allegedly occurred between 2018 and 2022, while the complaint was lodged in 2023, and treated the delay and pending civil suit as supporting its conclusion that continuation of the prosecution would be an abuse of process.