A subsequent breach of a sale agreement, without dishonest intent at inception, does not constitute cheating.

The complainant alleged that, under an agreement to sell dated 17 November 2015 for Rs. 1.25 crore, he paid Rs. 25 lakh as advance and was to pay the balance at execution of the sale deed. The land was later sold to a third party, prompting an FIR under Sections 420 and 114 IPC.

The applicants sought quashing under Section 482 CrPC, contending that the dispute was contractual, that the agreement relied on by the complainant was disputed, and that the FIR was a counterblast to an earlier complaint by applicant No. 1.

The complainant’s civil suit for specific performance and cancellation of the sale deed was dismissed, and the third-party purchaser had been discharged in the criminal case.

Applicant No. 1 died during the proceedings, and the application as to her abated.

1. Whether the charge-sheet materials, accepted at face value, disclosed the elements of cheating under Sections 415 and 420 IPC against the surviving applicants.

2. Whether the criminal proceedings against the surviving applicants should be quashed under Section 482 CrPC.

Section 415 IPC requires deception and fraudulent or dishonest inducement, including the requisite culpable intent; Section 420 IPC applies where cheating dishonestly induces delivery of property or the specified dealings with valuable security.

A later failure to perform a promise does not, by itself, establish dishonest intent at the time of the promise; the distinction between contractual breach and cheating turns on the accused’s intention at inception; Hridaya Ranjan Prasad Verma v. State of Bihar, (2000) 4 SCC 168; Prof. R.K. Vijayasarathy v. Sudha Seetharam, (2019) 16 SCC 739; Deepak Goda v. State of U.P., (2023) 3 SCC 423.

In exercising Section 482 CrPC jurisdiction, the court applied the four-step framework stated in Pradeep Kumar Kesarwani v. State of Uttar Pradesh, AIROnline 2025 SC 956, concerning the quality and effect of the accused’s material, whether it is refuted, and whether continuation would constitute abuse of process.

The Court found no concrete allegation that the applicants had a dishonest intention when the agreement was made; the later sale of the land, on the facts alleged, indicated at most a contractual breach.

It also noted the prior complaint by applicant No. 1 concerning alleged discrepancies in the agreement, the absence of specific acts of deception attributed to the surviving applicants, and the lack of sufficient basis to invoke Section 114 IPC independently of the alleged principal offence.

The Court further relied on the dismissal of the civil suit and the purchaser’s discharge, treating those judicial developments as supporting its conclusion that continuation of the prosecution would be an abuse of process.

It allowed the application and quashed the FIR and consequential proceedings qua applicants Nos. 2–5; the application qua applicant No. 1 stood abated following her death.