Failure to pay lease dues without proof of initial deceptive intent constitutes a civil breach, not cheating.

The petitioner, Pravin Kumar, was leased the "Modern Dak Bungalow" for three years by the Zila Parishad, Chatra.

The lease agreement required rental payments every six months.

An FIR (Chatra Sadar P.S. Case No. 90 of 2025) was registered against him under Sections 316(2) and 318(4) of the Bharatiya Nyaya Sanhita (BNS), 2023, alleging he defaulted on payments amounting to ₹34,06,168 and violated lease conditions.

The petitioner contended the dispute was civil, alleging that the District Authorities booked rooms without clearing bills and that Nagar Parishad staff had taken the keys under the guise of inspection.

1. Whether the failure to pay lease amounts constitutes "Criminal Breach of Trust" under Section 316(2) of the BNS in the absence of entrustment of property.

2. Whether a breach of contract amounts to "Cheating" under Section 318(4) of the BNS without evidence of deceptive intent at the inception of the agreement.

The court primarily applied Section 316(2) and Section 318(4) of the BNS, 2023 (corresponding to Sections 406 and 420 of the IPC respectively).

It established that Section 316(2) requires "dishonest misappropriation of entrusted property".

Regarding cheating, the court relied on the precedent set in *Uma Shankar Gopalika v. State of Bihar & Anr. (2005) 10 SCC 336*, which mandates that deceptive intent must exist at the very inception of the transaction to sustain a criminal charge; a subsequent breach of contract does not suffice.

The court reasoned that since the Dak Bungalow was taken on lease and was no longer in the petitioner's possession, and because there were no allegations of the petitioner being "entrusted" with property for the purpose of the section, the essential ingredients of criminal breach of trust under Section 316(2) were missing.

Regarding Section 318(4), the court noted that the FIR failed to allege any deception played by the petitioner at the beginning of the lease agreement.

The court observed that the dispute appeared to be purely civil in nature, concerning a breach of contract regarding lease payments, and that initiating criminal proceedings for a civil grievance constitutes an abuse of the process of law.

Consequently, the High Court allowed the petition and quashed the entire criminal proceeding in connection with Chatra Sadar P.S. Case No. 90 of 2025 against the petitioner.