# Sunpat & Ors v. State of U.P. & Anr

- **Citation:** (2019) 4 ILRA 81
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-07-12
- **Case number:** Crl. Misc. Application (U/S 482 Cr. P.C.) No. 3160 of 2018
- **Bench:** Rajiv Joshi
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/sunpat-ors-v-state-of-u-p-anr-44952
- **Pages:** 6

## Headnote

A. Criminal Law - Indian Penal Code,
1860 - Section 406/420 - Code of
82 INDIAN LAW REPORTS ALLAHABAD SERIES
Criminal Procedure - Section 482 -
Registered agreement to sell- Earnest
money paid in anticipation of sale deedSale deed not executed by the O.P.NO.2
-Another
agreement
executed
for
extending the time for execution of sale
deed in favour of the first informant-
Difference
between
"cheating"
and
"breach of contract"- Intention to cheat
from the very inception missing-Case is
squarely covered by illustration (i) in the
case of Bhajan Lal-Non-execution of a
sale deed or non-refund of earnest would
not amount to criminal breach of trust-
Appropriate remedy available to the first
informant/opposite party no.2 is to
approach civil court by way of filing a
suit for specific performance of contract
on the basis of agreement to sell as the
dispute between the parties is purely
civil in nature.

a. To constitute cheating, fraud / deception
has to be practiced by an accused at the time
of entering into a transaction to induce the
person so deceived to deliver any property to
any person. Once a transaction takes place
between the parties, subsequent dispute
may amount to breach of contract, but no
offence under Section 420 IPC is made out.

b. The property in respect of which,
criminal breach of trust committed must
be either the property of some person
other than the accused or the beneficial
interest in or ownership of which must
be of some other person and the accused
must hold such property on trust for
such other person or for his benefit
which is missing in the present case.
 (Para 10,11,14,15,18 & 19)

List of cases cited: -

## Text

4 All. Sunpat & Ors. Vs. State of U.P. & Anr.
81
business at the time when offence was
committed. Court further said :

"The High Court, in deciding a
quashing petition Under Section 482,
Code of Criminal Procedure, must
consider whether the averment made in
the complaint is sufficient or if some
unimpeachable
evidence
has
been
brought on record which leads to the
conclusion that the Director could never
have been in charge of and responsible
for the conduct of the business of the
company at the relevant time. While the
role of a Director in a company is
ultimately a question of fact, and no
fixed formula can be fixed for the same,
the High Court must exercise its power
Under Section 482, Code of Criminal
Procedure when it is convinced, from the
material on record, that allowing the
proceedings to continue would be an
abuse of process of the Court."

(emphasis added)

27. In the light of exposition of law
discussed above and the facts of this case,
I find that the complainant has simply
reiterated language of Section 47(1) but
has not shown as to how Directors
residing elsewhere are in-charge of
company or responsible for conduct of
business on day to day basis and nothing
has been said that anything has been done
with their consent or there is any
connivance on their part or negligence. In
a mechanical manner, complainant has
implicated all the Directors of Company
and if proceedings against applicants 6, 8
and 11 are allowed to continue, in my
view, it would be abuse of process of
Court.

28. Looking to entirety of facts and
circumstances and also the fact that this
matter is pending for last 27 years before
this Court, and applicants 6, 8 and 11 are
only Directors and there is nothing to
show that they were responsible for day to
day functioning or otherwise act of
Company concerned, I find it in the
interest of justice to quash proceedings
against them but do not find any reason to
interfere so far as proceedings initiated
against applicants 1 and 2 are concerned.

29. Application is accordingly
partly allowed. Further proceedings of
Case No. 74 of 1988 (U.P. Pollution
Control Board, Lucknow vs. M/s Upper
Doab Sugar Mills Shamli and others),
under Section 44 of Act, 1974, pending in
the Court of Special Judicial Magistrate
(Pollution), Lucknow, so far as it relates
to applicants 6, 8 and 11 is hereby
quashed, but, the same would continue
against applicants 1 and 2.
----------

(2019)12 ILR A81

ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 12.07.2019

BEFORE
THE HON'BLE RAJIV JOSHI, J.

Crl. Misc. Application (U/S 482 Cr. P.C.) No.
3160 of 2018

Sunpat & Ors. ...Applicants
Versus
State of U.P. & Anr. ...Opposite Parties

Counsel for the Applicants:
Sri Praveen Kumar Singh, Sri Anurag Bajpai

Counsel for the Opposite Parties:
A.G.A., Sri Moeez Uddin

A. Criminal Law - Indian Penal Code,
1860 - Section 406/420 - Code of
82 INDIAN LAW REPORTS ALLAHABAD SERIES
Criminal Procedure - Section 482 -
Registered agreement to sell- Earnest
money paid in anticipation of sale deedSale deed not executed by the O.P.NO.2
-Another
agreement
executed
for
extending the time for execution of sale
deed in favour of the first informant-
Difference
between
"cheating"
and
"breach of contract"- Intention to cheat
from the very inception missing-Case is
squarely covered by illustration (i) in the
case of Bhajan Lal-Non-execution of a
sale deed or non-refund of earnest would
not amount to criminal breach of trust-
Appropriate remedy available to the first
informant/opposite party no.2 is to
approach civil court by way of filing a
suit for specific performance of contract
on the basis of agreement to sell as the
dispute between the parties is purely
civil in nature.

a. To constitute cheating, fraud / deception
has to be practiced by an accused at the time
of entering into a transaction to induce the
person so deceived to deliver any property to
any person. Once a transaction takes place
between the parties, subsequent dispute
may amount to breach of contract, but no
offence under Section 420 IPC is made out.

b. The property in respect of which,
criminal breach of trust committed must
be either the property of some person
other than the accused or the beneficial
interest in or ownership of which must
be of some other person and the accused
must hold such property on trust for
such other person or for his benefit
which is missing in the present case.
 (Para 10,11,14,15,18 & 19)

List of cases cited: -

1. State of Haryana and others Vs. Bhajan Lal
and others, 1992 Supp (1) Supreme Court
Cases 335

(Delivered by Hon'ble Rajiv Joshi, J.)

1. Heard Sri Anurag Bajpai holding
brief of Sri Praveen Kumar Singh, learned
counsel for the applicants and Sri Moeez
Uddin, learned counsel for the opposite
party no.2.

2. Present application under Section 482
Cr.P.C. has been filed for quashing the charge
sheet dated 12.12.2017 as well as the entire
proceedings of Case No. 339 of 2018 (State
Vs. Sunpat and others) arising out of Case
Crime No. 610 of 2017, under Sections 406,
420 IPC, P.S. Dankaur, District Gautam Budh
Nagar, pending in the court of Additional
Chief Judicial Magistrate, Court No. 2,
Gautam Budh Nagar.

3. As per the prosecution case in the
F.I.R., an agreement to sell was executed
on 21.3.2015 by the father of the
applicants
in
favour
of
first
informant/opposite party no.2 in respect
of property bearing Khata no. 128, Gata
no. 142 Kha, measuring 0.0890 hectare
situated as Village Mutaina, Pargana
Dankaur, Tehsil Sadar, District Gautam
Budh Nagar for a sale consideration of
Rs. 7,00,000/-, out of which, a sum of Rs.
4,00,000/- was paid as earnest money and
rest of the amount was agreed to be paid
at the time of execution of sale deed. In
the agreement, it is mentioned that the
sale deed could be executed on or before
20.4.2015. After the execution of the said
agreement to sell, father of the applicants,
Jasram, died on 23.3.2015. Subsequently,
second agreement to sell was executed
between the applicants and the first
informant, whereby the time for executing
the sale deed was extended by 20.5.2015.

4. It is further stated in the first
information report that the first informant
remained present for the whole day on
20.5.2015 in the office of Sub Registrat
pursuant to the subsequent agreement, but
the applicants did not turn up and
4 All. Sunpat & Ors. Vs. State of U.P. & Anr.
83
therefore,
they
have
cheated
the
applicants and committed criminal breach
of trust by not executing the sale deed in
his favour.

5. The police after investigation,
submitted the charge sheet no. 496/2017
on 12.12.2017 under Sections 406 and
420 IPC on which cognizance was taken
by
the
Additional
Chief
Judicial
Magistrate, Court No. 2, Gautam Budh
Nagar
on
15.11.2018
and
all
the
applicants were summoned for trial for an
offence under Sections 406 and 420 IPC,
which is impugned herein.

6. Learned counsel for the applicants
submits that dispute between the parties is
purely civil in nature arising out of
registered agreement to sell executed by
the
father
of
the
applicants
and
admittedly, the first informant/opposite
party no.2 had paid Rs. 4,00,000/- and the
balance amount was agreed to be paid at
the time of execution of the sale deed and
therefore, remedy lies with the first
informant/opposite party no. 2 to file a
suit for specific performance of contract
before the civil court and therefore, no
offence under Section 406/420 IPC for
cheating and criminal breach of trust has
been made out and the applicants have
falsely been implicated deliberately in the
present case with ulterior motive, and the
prosecution being an abuse of process of
the Court, is liable to be quashed.

7. On the other hand, learned
counsel for the opposite party no.2
submits that in spite of the fact that first
informant/opposite
party
no.2
had
appeared
before
the
Sub
Registrar
pursuant to the agreement between the
parties and remained present for the
whole day, but the applicants did not turn
up for executing the sale deed and
therefore, they have cheated the first
informant/opposite party no.2 and thus,
have committed criminal breach of trust.

8. Learned AGA have also opposed
the submissions so raised by learned
counsel for the applicants.

9. I have considered the rival
submissions and perused the record.

10. The Apex Court in the case of
State of Haryana and others Vs. Bhajan
Lal and others, 1992 Supp (1) Supreme
Court Cases 335, after considering the
previous decisions of the Apex Court and
the provisions of the Code, categories,
power to be exercised while quashing the
criminal prosecution under Section 482
Cr.P.C. Paragraph 102 of the said
judgment mentioning the categories under
which such extraordinary power can be
exercised, is quoted hereunder:

"102.In the backdrop of the
interpretation of the various relevant
provisions of the Code under Chapter XIV
and of the principles of law enunciated by
this Court in a series of decisions relating
to the exercise of the extraordinary power
under Article 226 or the inherent powers
under Section 482 of the Code which we
have extracted and reproduced above, we
give the following categories of cases by
way of illustration wherein such power
could be exercised either to prevent abuse
of the process of any court or otherwise to
secure the ends of justice, though it may
not be possible to lay down any precise,
clearly
defined
and
sufficiently
channelised and inflexible guidelines or
rigid formulae and to give an exhaustive
list of myriad kinds of cases wherein such
power should be exercised.
84 INDIAN LAW REPORTS ALLAHABAD SERIES

(1) Where the allegations made
in the first information report or the
complaint, even if they are taken at their
face value and accepted in their entirety
do not prima facie constitute any offence
or make out a case against the accused.

(2) Where the allegations in the first
information report and other materials, if
any, accompanying the FIR do not
disclose a cognizable offence, justifying
an investigation by police officers under
Section 156(1) of the Code except under
an order of a Magistrate within the
purview of Section 155(2) of the Code.

(3)
Where
the
uncontroverted
allegations made in the FIR or complaint
and the evidence collected in support of
the same do not disclose the commission
of any offence and make out a case
against the accused.

(4) Where, the allegations in the
FIR do not constitute a cognizable offence
but constitute only a non-cognizable
offence, no investigation is permitted by a
police officer without an order of a
Magistrate as contemplated under Section
155(2) of the Code.

(5) Where the allegations made
in the FIR or complaint are so absurd and
inherently improbable on the basis of
which no prudent person can ever reach a
just conclusion that there is sufficient
ground
for
proceeding
against
the
accused.

(6) Where there is an express
legal bar engrafted in any of the
provisions of the Code or the concerned
Act (under which a criminal proceeding is
instituted)
to
the
institution
and
continuance of the proceedings and/or
where there is a specific provision in the
Code or the concerned Act, providing
efficacious redress for the grievance of the
aggrieved party.

(7) Where a criminal proceeding
is manifestly attended with mala fide
and/or
where
the
proceeding
is
maliciously instituted with an ulterior
motive for wreaking vengeance on the
accused and with a view to spite him due
to private and personal grudge."

11. Admittedly, there is no dispute
with regard to the execution of registered
agreement to sell between the parties and
the sale deed has not been executed till
date by the applicants in favour of the first
informant, hence, the appropriate remedy
in the facts and circumstances of the case,
is available to the first informant/opposite
party no.2 to approach civil court by way
of filing a suit for specific performance of
contract on the basis of agreement to sell
as the dispute between the parties is
purely civil in nature.

12. The offence under which the
applicants have been summoned for trial
are Section 406/420 IPC i.e. cheating and
criminal breach of trust. The cheating has
been defined under Section 415 of IPC, in
the following terms:

"415. Cheating.--Whoever, by
deceiving any person, fraudulently or
dishonestly
induces
the
person
so
deceived to deliver any property to any
person, or to consent that any person
shall retain any property, or intentionally
induces the person so deceived to do or
omit to do anything which he would not
do or omit if he were not so deceived, and
which act or omission causes or is likely
to cause damage or harm to that person
in body, mind, reputation or property, is
said to "cheat"."
4 All. Sunpat & Ors. Vs. State of U.P. & Anr.
85

13. From the definition of cheating,
as per Section 415 IPC, following are the
essential ingredients:

"1. Deception of any person;

(2)(a)fraudulently
or
dishonestly inducing that person;

(I) to deliver any property to
any person;

(ii) to consent that any person
shall retain any property; or

(iii) or intentionally induce the
person so deceived to do or omit to do
anything which he would not do or omit if
he were not so deceived, and which act or
omission causes or is likely to cause
damage or harm but that person, body,
mind, reputation of property, is said to
cheat."

14. To constitute cheating, fraud /
deception has to be practiced by an
accused at the time of entering into a
transaction to induce the person so
deceived to deliver any property to any
person. Once a transaction takes place
between the parties, subsequent dispute
may amount to breach of contract, but no
offence under Section 420 IPC is made
out. This is a classical difference between
"cheating" and "breach of contract".

15. The allegations made in the first
information report are that initially
agreement to sell was executed by the
father of the applicants and subsequently,
another
agreement
was
executed
extending the time for executing the sale
deed, but no sale deed has been executed
by the applicants in favour of first
informant/opposite party no.2 within the
extended time and therefore, they have
committed cheating. It appears that the
essential ingredients of cheating are
lacking in the present case and once the
said ingredients of cheating are lacking,
dispute, if any, remains in the realm of
breach of contract, actionable in civil law.

16. Section 405 defines criminal
breach of trust as under:

"405. Criminal breach of trust.--
Whoever, being in any manner entrusted
with property, or with any dominion over
property, dishonestly misappropriates or
converts to his own use that property, or
dishonestly uses or disposes of that
property in violation of any direction of
law prescribing the mode in which such
trust is to be discharged, or of any legal
contract, express or implied, which he has
made touching the discharge of such trust,
or wilfully suffers any other person so to
do, commits "criminal breach of trust".

17. The essential ingredients of
Section 405 are as under:

"1. Entrusting any person with
property or with any dominion over
property;

2. That person entrusted

(a)
dishonestly
misappropriating or converting to his own
use that property; or

(b)
dishonestly
using
or
disposing of that property or wilfully
suffering any other person so to do in
violation-

(i) of any direction of law
prescribing the mode in which such trust
is to be discharged, or

(ii) of any legal contract made
touching the discharge of such trust of
that person entrusted."

18. Admittedly, the applicants are
the owner of the property in dispute and
86 INDIAN LAW REPORTS ALLAHABAD SERIES
their father executed the registered agreement
to sell in favour of the first informant and
subsequently, another agreement was executed
by the applicants extending the time for
execution
of
the
sale
deed.
The
informant/opposite party no.2 is neither
entrusted nor conveyed any dominion of the
property in question by the applicants so far,
despite execution of the registered agreement to
sell, therefore, the applicants continue to be the
owner of the property in question with a
compromise under the agreement to execute a
sale deed in favour of the informant/opposite
party no.2 by 20.5.2015. The earnest money
was paid in anticipation of a sale deed. The
property in respect of which, criminal breach of
trust committed must be either the property of
some person other than the accused or the
beneficial interest in or ownership of which
must be of some other person and the accused
must hold such property on trust for such other
person or for his benefit which is missing in the
present case. Thus, non-execution of a sale
deed or non-refund of earnest would not
amount to criminal breach of trust.

19. On the allegations made in the
F.I.R/charge-sheet, no offence whatsoever
under Sections 420/406 is made out and
the case is squarely covered by illustration
(i) in the case of Bhajan Lal (supra) and
the relevant ingredients for constituting
the offence under Section 406/420 IPC
are absent, as for that purpose, there must
be an intention to cheat, which is missing
in the present case.

20. The application stands allowed.
The proceedings of Case No. 339 of 2018
(State Vs. Sunpat and others) arising out
of Case Crime No. 610 of 2017, under
Sections 406, 420 IPC, P.S. Dankaur,
District Gautam Budh Nagar pending in
the court of Additional Chief Judicial
Magistrate, Court No. 2, Gautam Budh
Nagar are quashed.
----------

(2019)12 ILR A86

ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 04.07.2019

BEFORE
THE HON'BLE SUDHIR AGARWAL, J.

Crl. Misc. Application (U/S 482 Cr. P.C.) No.
4419 of 2004

Shiv Poojan & Ors. ...Applicants
Versus
State of U.P. & Ors. ...Opposite Parties

Counsel for the Applicants:
Sri Tripathi B.G. Bhai

Counsel for the Opposite Parties:
A.G.A.

A. Criminal Law - Code of Criminal
Procedure, 1973 - Summoning order -
Sections 200, 202 (2) & Section 482 -
Witnesses of complaint- If Complainant
wanted to examine only two witnesses in
support
of
complaint
or
that
the
Magistrate was satisfied, it cannot be said
that
unless
all
persons
named
in
complaint are examined as witnesses, no
order of summoning could have been
passed by Magistrate - Magistrate has to
satisfy himself on the evidence adduced
led by prosecution, whether prima facie
case had been made out so as to put the
proposed accused on a regular trial. The
words "all his witnesses" contained in
Sub sec (2), proviso to Section 202 Cr.P.C.
cannot be read as "all witnesses"-Even
though in the complaint several persons
were named but only two persons were
examined under Section 202 Cr. P. C. and
thereafter
process
was
issued-The
procedure adopted by Court below cannot
be
said
to
be
vitiated
in
law.