Criminal Color cannot be Given to Civil Property Disputes Lacking Fraudulent Intent at Inception

The petitioner, a government school teacher, sought quashment of FIR No. 565/2020 registered at P.S. Gole Ka Mandir for offences under Sections 420 (Cheating) and 406 (Criminal Breach of Trust) of the IPC.

The complainant alleged that in 2013, the petitioner induced him to pay Rs. 35,00,000/- for a plot of land, primarily through an agreement to sell executed by one Rajendra Agrawal, which later turned out to involves forged consent letters and a lack of valid title.

The complainant further alleged that only Rs. 19,00,000/- was refunded, leaving a balance of Rs. 16,00,000/-.

Procedurally, the complainant had filed a similar complaint in 2014 naming only Rajendra Agrawal.

A 2018 police enquiry had already concluded the dispute was civil in nature.

1. Whether the allegations in the FIR constitute a criminal offence or represent a purely civil dispute arising from a contractual breach.

2. Whether the criminal proceedings amount to an abuse of the process of law warranting exercise of inherent powers under Section 482 CrPC (now Section 528 BNSS).

The Court applied the principle that for the offence of cheating under Section 420 IPC, fraudulent or dishonest intention must exist at the inception of the transaction.

It relied on Kunti v. State of Uttar Pradesh (2023) to hold that property disputes should not be given a "criminal hue".

Following Rajib Ranjan v. R. Vijaykumar (2015) and Rikhab Birani v. State of Uttar Pradesh (2025), the Court emphasized that criminal law cannot be used as a shortcut or a tool of coercion to recover money in civil matters.

Furthermore, under R. Nagender Yadav v. State of Telangana (2023), the Court noted that disputes regarding the validity of sale deeds and title are properly adjudicated by civil courts.

The Court observed that the 2014 foundational complaint did not name the petitioner, indicating his subsequent implication was an "afterthought" lacking bona fides.

The bench reasoned that the dispute—centered on an agreement to sell, title defects, and refund of consideration—was intrinsically civil and contractual.

The Court found no evidence of "dishonest intention at the inception" by the petitioner, as the primary transaction and alleged misrepresentations were attributed to others in earlier documents.

It further noted that the 2018 police inquiry had already classified the matter as civil, and the current FIR was a "second attempt" to criminalize the same facts.

Consequently, the bench determined that the essential ingredients of Sections 420 and 406 IPC were absent, and the criminal process was being misused for debt recovery.

The petition was allowed, and FIR No. 565/2020, along with all consequential proceedings against the petitioner, was quashed.

The holding reinforces that a mere breach of contract or failure to refund money does not ipso facto result in criminal liability unless initial dishonest intent is proven.