The Supreme Court set aside a Jharkhand High Court order that had refused to quash criminal proceedings against the appellant, Arshad Neyaz Khan, in a land sale dispute. A Bench of Justices B.V. Nagarathna and R. Mahadevan held that the ingredients of cheating and criminal breach of trust were not made out and that criminal law cannot be used to settle personal scores or vendettas.
The dispute arose from a 16 February 2013 agreement to sell property for ₹43,00,000, of which the complainant paid an advance of ₹20,00,000. The appellant allegedly failed to execute the sale for eight years, prompting the complainant to file a complaint on 29 January 2021, leading to FIR alleging offences under Sections 406, 420, and 120B IPC. During anticipatory bail proceedings, the parties mediated a settlement under which the appellant agreed to return ₹24,00,000 in five instalments, but default led to cancellation of his bail on 15 June 2022. His petition under Section 482 CrPC to quash the FIR was dismissed by the High Court on 19 January 2023.
Allowing the appeal, the Supreme Court held:
• Cheating (S.420) requires fraudulent or dishonest intention at the inception of the agreement, which was absent here. Mere failure to perform a promise does not constitute cheating.
• Criminal breach of trust (S.406) requires proof of entrustment and dishonest misappropriation, which the complaint failed to establish.
• Cheating and criminal breach of trust are mutually exclusive offences and cannot co-exist on the same set of facts (relying on Delhi Race Club (1940) Ltd. v. State of U.P., (2024) 10 SCC 690).
The Court emphasized settled principles in Inder Mohan Goswami v. State of Uttaranchal (2007) 12 SCC 1 and State of Haryana v. Bhajan Lal (1992 Supp (1) SCC 335), reiterating that criminal prosecution must not be used as a tool for harassment or private vendetta. It also referred to Vishal Noble Singh v. State of U.P., 2024 SCC OnLine SC 1680 on the need for courts to curb misuse of criminal justice mechanisms.
Given the eight-year delay, absence of criminal intent, and availability of civil remedies, the Court found the proceedings to be an abuse of process. Accordingly, it quashed the FIR, the complaint, and all consequential proceedings
Appearances:
For the Petitioner: Adv. Srija Choudhury, AOR
For the Respondents: Advs- Rajiv Shankar Dvivedi, Madhusmita Bora, and Pawan Kishore Singh.
