Subsequent failure to perform a promise, absent initial dishonest intent, does not constitute cheating.

Respondent No. 2 alleged that petitioners Romesh Kumar and Rekha Devi induced him to pay ₹15,00,000 for purchasing a building and shop at Exchange Road, Jammu.

They allegedly promised to pay him ₹20,000 per month from the rent generated by the building and stated that a tower would be installed there.

The petitioners paid the promised monthly amount until November 2016 but thereafter stopped making payments, allegedly breaching a written undertaking.

The complainant also alleged that the petitioners threatened his son.

On the complaint, FIR No. 0120/2024 was registered at Police Station Bakshi Nagar for offences under Sections 318(4) and 316(5) of the Bharatiya Nyaya Sanhita, 2023.

During the proceedings, the High Court stayed investigation on 20.09.2024; the Investigating Agency stated that witness statements under Section 180 BNSS had been recorded but further investigation could not proceed due to the stay.

The complainant did not oppose quashing of the FIR.

Whether the allegations in the FIR disclosed the offence of cheating under Section 318 of the Bharatiya Nyaya Sanhita, 2023, particularly when the petitioners had initially performed their promise to pay the agreed monthly amount.

Whether continuation of the criminal proceedings would amount to an abuse of the process of law where the dispute was essentially civil or commercial in nature.

The Court applied Section 318(1) BNS, which defines cheating as fraudulent or dishonest inducement to deliver property, permit retention of property, or undertake or omit an act causing or likely to cause harm to body, mind, reputation, or property.

The Court reiterated the settled principle that dishonest or fraudulent intention must exist at the inception of the transaction; subsequent failure to honour a promise, absent such initial dishonest intention, ordinarily constitutes a civil breach and does not amount to cheating.

The Court also applied the principle that criminal proceedings should not be permitted to continue where they merely give a criminal colour to a purely civil or commercial dispute and thereby constitute an abuse of process.

The FIR had been registered under Sections 318(4) and 316(5) BNS, although the Court’s substantive discussion focused on the ingredients of cheating under Section 318 BNS.

The Court found that the complainant’s own allegations established that the petitioners paid ₹20,000 per month until November 2016, thereby showing initial performance of the promise.

This conduct negated the existence of fraudulent or dishonest intention when the ₹15,00,000 transaction was entered into.

The subsequent cessation of payments could, at most, give rise to a civil claim for recovery or enforcement of the contractual undertaking; it did not retrospectively satisfy the requirement of dishonest intention at inception necessary for cheating.

Since the dispute arose from a commercial arrangement concerning investment, rent, and an alleged written promise, the Court held that the FIR had improperly given criminal form to a civil dispute.

Continued prosecution in these circumstances would therefore amount to abuse of the process of law.

It held that no offence of cheating was made out because the allegations did not establish fraudulent or dishonest intention at the inception of the transaction.

Treating the dispute as essentially civil and commercial, the Court allowed the petition and quashed FIR No. 0120/2024 registered at Police Station Bakshi Nagar, Jammu, along with all proceedings emanating from it.