Cheating requires deception at inception; criminal breach of trust requires entrustment and misappropriation.

The petitioner, proprietor of DBA Investment Pvt. Ltd., entered into an agreement for development of land belonging to Opposite Party Nos. 2–5 and co-accused Paresh Banerjee. He issued a cheque for ₹11,00,000 to Paresh Banerjee, but the ownership of the land was not transferred.

At subsequent meetings, partial cash refunds were allegedly made, while the balance remained unpaid.

The Judicial Magistrate took cognizance of offences under Sections 406 and 420 IPC only against Paresh Banerjee and declined to summon Opposite Party Nos. 2–5.

The petitioner’s criminal revision was dismissed by the Sessions Judge, Dhanbad, who held that there was no specific allegation of deception, entrustment, or a criminal role against Opposite Party Nos. 2–5, and that the dispute was essentially civil in nature.

The petitioner thereafter invoked the High Court’s jurisdiction under Section 482 CrPC seeking quashing of the Magistrate’s and Revisional Court’s orders and issuance of summons against Opposite Party Nos. 2–5.

Whether the allegations against Opposite Party Nos. 2–5 disclosed the offence of cheating under Section 420 IPC, particularly the requirement of deception or dishonest intention at the inception of the transaction?

Whether the allegations disclosed criminal breach of trust under Section 406 IPC in the absence of entrustment of property to, and misappropriation by, Opposite Party Nos. 2–5?

Whether the Magistrate and Sessions Judge committed any illegality in declining to summon Opposite Party Nos. 2–5?

The Court exercised its inherent jurisdiction under Section 482 of the Code of Criminal Procedure, 1973.

For Section 420 IPC, the Court applied the principle that cheating requires deception and dishonest intention at the inception of the transaction; a subsequent failure to perform a contractual promise or a later-formed intention to cheat ordinarily constitutes a civil breach, not cheating, relying on Uma Shankar Gopalika v. State of Bihar, (2005) 10 SCC 336.

For Section 406 IPC, the Court applied the requirements of entrustment of property and subsequent dishonest misappropriation, conversion, or use contrary to a legal direction, relying on Ram Narayan Popli v. Central Bureau of Investigation, (2003) 3 SCC 641.

The Court found no allegation that Opposite Party Nos. 2–5 had a dishonest intention or had practised deception from the beginning of the transaction.

The mere failure to transfer ownership or refund the remaining amount did not satisfy the foundational requirement of Section 420 IPC.

Further, the allegation concerning payment and entrustment of ₹11,00,000 was specifically directed against co-accused Paresh Banerjee, and there was no allegation that Opposite Party Nos. 2–5 had received, misappropriated, or converted any entrusted property.

Consequently, even if the allegations were accepted in their entirety, the essential ingredients of Sections 406 and 420 IPC were absent against Opposite Party Nos. 2–5.

The lower courts therefore committed no illegality in refusing to summon them.

It upheld the orders dated 20 May 2022 of the Judicial Magistrate and 29 April 2023 of the Sessions Judge, Dhanbad, and dismissed the criminal miscellaneous petition as meritless.