A property dispute without fraudulent intent or forged documents does not constitute cheating or forgery.

The informant alleged that the petitioner and others received ₹1,37,86,700 in connection with an agreement for sale but failed to execute the sale deed.

The petitioner contended that the property stood in the name of his father and that he possessed a one-third share therein. The agreement for sale was executed on 24 February 2019, whereas an injunction restraining alienation of the property was passed in Title Partition Suit No. 47 of 2017 only on 19 September 2019.

The petitioner further asserted that he had received only ₹55,31,000 towards his share and had deposited the entire amount before the court concerned.

The complainant acknowledged the deposit but alleged that the petitioner had subsequently entered into another agreement concerning the same land, indicating fraudulent intent.

The Additional Chief Judicial Magistrate-IX, Patna, took cognizance on 13 June 2022 under Sections 406, 419, 420, 467, 468, 469 and 471 IPC. The petitioner sought quashing of the cognizance order.

Whether the allegations disclosed the ingredients of cheating under Sections 415 and 420 IPC, particularly the existence of fraudulent or dishonest intention at the inception of the transaction?

Whether the petitioner’s conduct constituted forgery or use of a forged document under Sections 467 and 471 IPC when there was no allegation that he had fabricated or authored a false document?

Whether continuation of the criminal prosecution against the petitioner amounted to an abuse of the process of law, particularly after deposit of the amount received by him?

The Court considered Sections 406, 419, 420, 467, 468, 469 and 471 IPC, including Section 415 IPC, which requires fraudulent or dishonest inducement for the offence of cheating, and Section 464 IPC, which defines the making of a false document.

The Court held that an offence under Section 420 IPC requires fraudulent or dishonest intention from the inception of the transaction; a subsequent failure to perform a contractual obligation, without such initial intention, does not by itself constitute cheating.

For forgery, the document must fall within the statutory concept of a “false document,” and a person who executes a document claiming property as his own does not commit forgery merely because his title is disputed.

The Court relied on Mohd. Ibrahim v. State of Bihar, (2009) 8 SCC 751, holding that where the accused is neither impersonating another person nor falsely claiming authority to execute a document on another’s behalf, Sections 467 and 471 IPC are not attracted.

The Court found that, when the agreement was executed on 24 February 2019, no injunction restraining alienation was in force; the injunction was passed only on 19 September 2019. Therefore, the surrounding facts did not establish fraudulent or dishonest intention at the inception of the agreement.

Since the petitioner claimed an interest in the property through his father and allegedly dealt with his own share, the dispute concerned title and performance of a property transaction rather than deception or criminal breach of trust.

The Court also found no allegation that the petitioner had forged, fabricated, authored or used a document known to be forged. Applying Mohd. Ibrahim, it held that a disputed or invalid claim of ownership does not, without more, amount to making a false document or forgery.

The petitioner’s deposit of ₹55,31,000, which was acknowledged by the complainant, further supported the conclusion that the dispute was essentially civil and that continuation of the prosecution would serve no legitimate criminal-law purpose.

It accordingly quashed the order dated 13 June 2022 taking cognizance in Phulwari Sharif P.S. Case No. 588 of 2021, insofar as it related to the petitioner, and allowed the application.

The Court clarified that its observations were confined to the criminal proceedings and would not affect any pending civil litigation between the parties.