Karnataka HC Quashes Cheating Case Against Property Seller’s Son Over ₹30 Lakh Deal, Finding No Material Of Dishonest Intent At Inception

Respondent No. 2 complained that he had entered into an oral agreement with the petitioner and the petitioner’s father, Vishwanath Reddy, to purchase property and paid them ₹30,00,000.

He alleged that the property was later sold to a third party and the amount was not refunded.

The complaint led to an FIR for offences under Sections 34, 120-B and 420 IPC; after investigation, a charge sheet was filed, and proceedings were pending in C.C. No. 2276 of 2021.

The petitioner sought to quash those proceedings, arguing that the allegations did not disclose the ingredients of the offences charged

Section 420 IPC requires deception and dishonest inducement to deliver property or to act or refrain from acting; the dishonest intention must exist when the inducement is made, and subsequent non-performance of a contractual obligation does not, by itself, establish that intention

Section 418 IPC requires cheating with knowledge that wrongful loss is likely to be caused to a person whose interests the accused is bound by law or legal contract to protect.

Section 120-B IPC requires material indicating an agreement to commit an illegal act, or to accomplish a lawful act by illegal means.

Section 34 IPC does not create a separate offence; it attributes joint liability where a criminal act is done by several persons in furtherance of their common intention.

The Court considered the petition under Section 482 CrPC/Section 528 BNSS, exercising its power to quash proceedings where the allegations and material do not disclose the essential ingredients of the alleged offences

The complaint did not specify when the oral agreement was made or the payment was paid, how payment was made, or what representation the petitioner allegedly made that was false to his knowledge at the time.

The charge-sheet material principally comprised statements referring to the agreement and payment, without further circumstances showing that the petitioner had dishonest intent at the inception of the transaction.

The later sale of the property and failure to refund the money could support civil remedies but did not, without more, establish cheating.

The material also disclosed neither the special obligation required for Section 418 nor an agreement to cheat or a common intention sufficient to attract Sections 120-B and 34 IPC.

The petition was allowed and the proceedings in C.C. No. 2276 of 2021 were quashed insofar as the petitioner was concerned, without prejudice to respondent No. 2’s right to pursue available civil remedies.