Non-payment of consideration in a sale of goods transaction constitutes a civil dispute, not criminal breach of trust.

The petitioner sought the quashing of FIR C.R.No.I-45/2019 filed under Sections 406 (criminal breach of trust), 420 (cheating), and 114 of the IPC

The complainant alleged that Accused No. 1 and 3 purchased 14 cows for Rs. 7,50,010/-, paid a partial amount via a cheque that subsequently bounced, and failed to pay the cash balance of Rs. 2,50,000/-

The petitioner (Salim Yakub Vora) was named in the FIR, but the specific role attributed to him was limited to being present during the transaction

Evidence suggested the petitioner acted merely as a conciliator and had assisted in returning 10 cows to settle the dispute

The FIR was lodged after a six-month delay

1. Whether the allegations in the FIR, even if taken at face value, satisfy the ingredients of Section 406 and 420 of the IPC against the petitioner.

2. Whether the dispute is of a civil nature, arising from a breach of contract, rather than a criminal offense.

The Court applied Sections 406 and 420 of the Indian Penal Code, 1860, noting that cheating requires fraudulent or dishonest inducement from the inception of the transaction

It relied on the Supreme Court precedent in Race Club (1940) Ltd. and Others v. State of Uttar Pradesh and Another (2024), which clarified that in a sale of goods, property passes upon delivery (Sections 20 and 24 of the Sale of Goods Act, 1930); thus, failure to pay consideration constitutes a civil breach, not criminal breach of trust

The Court also emphasized the inherent powers of the High Court under Section 482 of the CrPC to prevent the abuse of the process of law

The Court observed that the FIR was "conspicuously silent" regarding any specific role played by the petitioner, other than his mere presence at the time of the transaction

The primary allegations regarding the dishonored cheque and non-payment were directed toward Accused No. 1

Following the Race Club doctrine, the Court reasoned that since the cows were delivered as part of a sale, the ownership had transferred, making "entrustment" (a prerequisite for Sec. 406) impossible

Furthermore, there was no evidence of "inducement by fraud" by the petitioner to satisfy Sec. 420

The Court concluded that the complainant was attempting to use criminal litigation to exert pressure in a dispute that was fundamentally civil and commercial in nature

The Court quashed and set aside FIR C.R.No.I-45/2019 and all subsequent proceedings specifically as they pertained to the petitioner, Salim Yakub Vora

The petition was allowed