Summary
| Category | Data |
|---|---|
| Court | Supreme Court of India |
| Case Number | Crl.A. No.-005000-005000 – 2025 |
| Diary Number | 19086/2018 |
| Judge Name | HON’BLE MRS. JUSTICE B.V. NAGARATHNA |
| Bench |
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| Precedent Value | Binding authority on exercise of inherent powers under Section 482 CrPC |
| Overrules / Affirms | Affirms existing precedents on quashing and distinctness of offences under Sections 405–406 and 415–420 IPC |
| Type of Law | Criminal law / Criminal procedure |
| Questions of Law |
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| Ratio Decidendi |
The Court held that the complaint failed to satisfy essential ingredients of cheating (Section 420 IPC) and criminal breach of trust (Section 406 IPC), as there was no material showing fraudulent intention at inception or entrustment and dishonest misappropriation. It reaffirmed that offences under Sections 406 and 420 are distinct and antithetical and cannot co-exist on the same facts. Relying on Bhajan Lal, the Court exercised its inherent jurisdiction under Section 482 CrPC to quash proceedings that are mala fide, lacking prima facie case and amount to abuse of process, particularly where a civil remedy is available. |
| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon |
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| Facts as Summarised by the Court | A partnership firm was constituted in 1976; a supplementary deed (1981) provided reversion of the leased property to appellant; firm dissolved in 1997. In 2011 the appellant sold the disputed property; complainant filed civil and criminal proceedings (2012 & 2013) alleging breach of trust and cheating. The High Court quashed proceedings against co-accused but refused to quash against appellant, leading to this appeal. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts exercising inherent jurisdiction under Section 482 CrPC |
| Persuasive For | Other High Courts in quashing petitions under Section 482 CrPC |
| Distinguishes | Offences under Section 406 IPC (criminal breach of trust) and Section 420 IPC (cheating) cannot coexist |
| Follows | Principles laid down in Bhajan Lal and Inder Mohan Goswami |
What’s New / What Lawyers Should Note
- Clarifies that cheating under Section 420 IPC demands proof of fraudulent or dishonest intention at the time of representation, not mere breach of agreement.
- Confirms that criminal breach of trust under Section 406 IPC requires entrustment and dishonest misappropriation, absent here.
- Establishes that offences under Sections 406 and 420 IPC are distinct and cannot be alleged together on identical facts.
- Reinforces the high threshold for quashing under Section 482 CrPC to curb mala fide and vindictive prosecutions.
- Affirms that availability of a concurrent civil remedy weighs in favour of quashing criminal proceedings lacking prima facie case.
Summary of Legal Reasoning
- Ingredients of Section 420 IPC
- Section 420 requires fraudulent or dishonest intention at inception (Inder Mohan Goswami).
- Complaint fails to allege any misrepresentation or intention to deceive at the time of formation.
- Ingredients of Section 406 IPC
- Section 406 read with Section 405 IPC requires entrustment of property and dishonest conversion.
- Supplementary deed shows reversion of property to appellant; no entrustment or misappropriation alleged.
- Distinctness of Offences
- Cheating and criminal breach of trust are antithetical and cannot co-exist in the same transaction (Delhi Race Club).
- Abuse of Process and Civil Remedy
- Complainant had a pending civil suit for the same relief; criminal prosecution cannot be an instrument of harassment.
- Exercise of Inherent Jurisdiction
- Under Section 482 CrPC and Bhajan Lal, courts must quash proceedings where no prima facie offence is made out or mala fide intent is apparent.
- Preventing Misuse
- Citing Vishal Noble Singh, courts must guard against misuse of criminal justice system for private vendettas.
Arguments by the Parties
Petitioner (Appellant)
- Complaint is time-barred (filed 16 years after alleged acts) with no delay condonation.
- Supplementary (1981) and dissolution deeds (1997) show property reversion; complainant cannot dispute dissolution.
- Civil suit filed in 2012 makes criminal complaint an abuse of process.
- Appellant resided in Bangalore and was not entrusted with accounts.
Respondent (Complainant)
- Appellant was expressly entrusted with firm property under the partnership deed.
- Failure to account for profits and losses post-1993 constitutes breach.
- No legal bar on simultaneous civil and criminal proceedings.
- Alleged criminal elements justify continuation of criminal case.
Factual Background
The appellant joined a partnership in 1976, bringing in land on which godowns were built and leased until 1993; a 1981 supplementary agreement provided reversion of the land to him, and the firm was dissolved in 1997. In 2011 he sold the land to a third party. The complainant filed a civil suit in 2012 and a criminal complaint in 2013 under Sections 406/420/120B IPC. The High Court quashed proceedings against the co-accused but refused to quash against the appellant, prompting this appeal.
Statutory Analysis
- Section 406 IPC: Punishes criminal breach of trust; requires entrustment and dishonest misappropriation.
- Section 420 IPC: Punishes cheating; requires fraudulent or dishonest inducement at inception.
- Section 482 CrPC: Grants inherent powers to quash proceedings to prevent abuse of process and secure ends of justice.
Alert Indicators
- ✔ Precedent Followed – Existing tests for cheating, criminal breach of trust, and quashing under Section 482 CrPC reaffirmed.