The Allahabad High Court has quashed an FIR lodged against multiple individuals and entities in connection with an alleged cheating and forgery case arising out of a commercial real estate dispute concerning the “IT Square” project in Greater Noida, holding that criminal law cannot be invoked as a shortcut for enforcing contractual or commercial claims.
A Division Bench of Justice Chandra Dhari Singh and Justice Devendra Singh-I was dealing with a batch of petitions challenging an FIR registered in October 2025 under Sections 406, 420, 467, 468, 469, 471 and 120-B IPC at Knowledge Park Police Station, Gautam Buddh Nagar.
The FIR was lodged by a complainant who alleged that he had initially booked three commercial units in the IT Square project in 2008 under an assured return scheme. According to the complainant, after delays in possession and discontinuation of assured returns, he was offered a fourth commercial unit in lieu of dues. He alleged that despite paying substantial sums, the sale deed for the fourth unit was never executed, and later discovered that the purported unit allegedly existed only on paper, with the location being part of a common area.
The petitioners argued that the dispute was purely civil and commercial, arising out of contractual obligations relating to allotment, possession, assured returns, and execution of documents. They also pointed to the project’s complex ownership and management transitions over the years, contending that several accused had no connection with the original transactions.
Agreeing with the petitioners, the High Court held that the dispute fundamentally arose out of prolonged commercial dealings between the parties and did not disclose the essential ingredients of the criminal offences alleged.
The Court noted that the complainant’s original allotments dated back to 2008, possession of the original units had been offered in 2012, sub-lease deeds were eventually executed in 2022, and the dispute substantially revolved around a subsequently proposed fourth unit linked to adjustment of assured returns.
Holding that no dishonest intention at the inception of the transaction was made out—a key ingredient for cheating under Section 420 IPC—the Court said the long-standing commercial relationship between the parties negated allegations of fraudulent inducement from the outset.
The Bench further held that no case for criminal breach of trust was made out since the payments were made as commercial consideration under builder-buyer arrangements and did not amount to “entrustment” in the legal sense required under Section 406 IPC.
On the forgery allegations, the Court found that the dispute largely concerned the validity and enforceability of disputed allotment documents—issues more appropriately adjudicated in civil proceedings rather than criminal prosecution.
The Court also took note of the arbitration clause in the relevant agreements, observing that while an arbitration clause does not bar criminal proceedings per se, it is a relevant factor in assessing whether criminal law is being invoked to exert pressure in what is essentially a contractual dispute.
Emphasising settled law, the Court observed that there is a “growing tendency” to convert purely civil and commercial disputes into criminal cases to secure settlements or exert coercive pressure, cautioning against misuse of the criminal justice process.
Accordingly, the High Court quashed the FIR and all consequential proceedings against the petitioners.
