Gujarat High Court
Gordhanbhai Mavjibhai Sejalia vs State Of Gujarat on 9 July, 2025
NEUTRAL CITATION
R/CR.MA/14356/2015 CAV JUDGMENT DATED: 09/07/2025
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Reserved On : 01/07/2025
Pronounced On : 09/07/2025
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE
FIR/ORDER) NO. 14356 of 2015
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE J. C. DOSHI
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Approved for Reporting Yes No
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GORDHANBHAI MAVJIBHAI SEJALIA & ANR.
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR BOMI SHETHNA for MR DAIFRAZ HAVEWALLA(3982) for the
Applicant(s) No. 1,2
MR AB MUNSHI(1238) for the Respondent(s) No. 2
MR CHINTAN DAVE, ADDL. PUBLIC PROSECUTOR for the Respondent(s)
No. 1
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CORAM:HONOURABLE MR. JUSTICE J. C. DOSHI
CAV JUDGMENT
1. By way of this application u/s 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as "the Code"), the petitioners have prayed for quashing and setting aside FIR being C.R.No.I - 132 of 2015 registered with Kadodara GIDC Police Station, for the offences punishable under Sections 406,420, 114 of the IPC as well as all other consequential proceedings arising Page 1 of 15 Uploaded by SHEKHAR P. BARVE(HC00200) on Thu Jul 10 2025 Downloaded on : Thu Jul 10 21:50:12 IST 2025 NEUTRAL CITATION R/CR.MA/14356/2015 CAV JUDGMENT DATED: 09/07/2025 undefined out of the aforesaid FIR qua the petitioners herein.
2. Brief facts of the case are as under:-
2.1 The FIR spells that the complainant is a land broker and therefore is indulged in the business of selling and purchasing of different parcels of lands. He was shown the disputed parcel of land in the year 2011 situated at moje Antroli village bearing revenue survey no. 25 and 256, block no. 202 admeasuring 14 vighas (in short "the disputed land") by two brokers namely Amratbhai Bharwad and his son Rajubhai Bharawad.
2.2 Upon inquiring about the title of the land in question the complainant came to know that the same was owned by the present applicant no. 1. And the said person was having the title documents with regard to the same. The complainant did not ask for the 7/12 extracts of the property. It is the case of the complainant that the accused no. 1 was cultivating the land in question. And upon their persuasion on 02.01.2011 the complainant entered into an agreement with the applicants and agreed for paying an amount of Rs 5,83,11,11/- of which an amount of Rs 15,00,000/- was paid to the applicants. The parties had executed a document for sale (sauda chitthi), pertaining to the said land.
2.3 That said Sauda Chhithi which is referred to by the complainant in his complaint is regarding the transaction which took place whereby it was agreed between the parties that the applicant no. 1 would get the sale deed executed between the Page 2 of 15 Uploaded by SHEKHAR P. BARVE(HC00200) on Thu Jul 10 2025 Downloaded on : Thu Jul 10 21:50:12 IST 2025 NEUTRAL CITATION R/CR.MA/14356/2015 CAV JUDGMENT DATED: 09/07/2025 undefined original owner and the complainant within a period of 6 months.
But it was no where submitted that the applicant had assured that he was the owner of the land in question. The original sauda chitthi is with the complainant, but the applicant has reduced the same in writing for the perusal of this Hon'ble Court.
2.4 It was agreed upon between the parties that remainder of the amount would be paid after 6 to 7 months upon executing a sale deed. The complainant all thorugh out was ready and willing to perform his part of the contract. After six months when the complainant inquired with the applicant no. 1 for performance of the contract the applicant no. 1 informed him that he was to talk to the original owner, and the applicant requested him to wait for a period of 4 to five months. Upon his requested the complainant waited till the year 2015. Then he came to know that the said parcel of land was sold to someone else.
2.5 Hence, present petition to quash the FIR.
3. Learned advocate Mr. Bomi Shethna appearing for learned advocate Mr. Daifraz Havewalla for the petitioners accused argued that the allegation in the FIR does not make out any offence of criminal breach of trust or cheating. The FIR refers that the petitioners have not repaid Rs.15 lakh being part of sale consideration for the agreement to sell executed in sauda chitthi for the disputed land. It is sought to be submitted that as per Page 3 of 15 Uploaded by SHEKHAR P. BARVE(HC00200) on Thu Jul 10 2025 Downloaded on : Thu Jul 10 21:50:12 IST 2025 NEUTRAL CITATION R/CR.MA/14356/2015 CAV JUDGMENT DATED: 09/07/2025 undefined the FIR since Rs.15 lakh was not repaid and no sale deed was executed qua the land sold through agreement to sell, the petitioners have committed the offence of criminal breach of trust and cheating as defined in sections 405 and 415 of the IPC having punishment defined in sections 406 and 420 of the IPC, however, intention to cheat or breach trust since inception is missing. He would further submit that the FIR is filed to create pressure upon the petitioners. It is also sought to be submitted that FIR spells that pure civil dispute has been converted into criminal liability. The unpaid amount, if any, cannot be called to criminal prosecution u/s 406 and 420 of the IPC.
3.1 Upon above submissions, learned advocate Mr. Shethna prays to allow the petition and to quash the impugned FIR.
4. Per contra, learned advocate Mr. Munshi appearing for the private respondent would submit that admittedly, the transaction took place between the complainant and the petitioners accused and Rs.15 lakh has been paid towards sale consideration. The petitioners have not repaid said amount nor has executed registered sale deed. It is submitted that the petitioners were knowing fully well that they are not the owners of the disputed property and yet, they have sold the disputed property to the complainant and accepted the amount of Rs.5 lakh, which indicates that the intention of the petitioners to defraud and cheat the complainant.
4.1 Upon above submissions, learned advocate Mr. Munshi Page 4 of 15 Uploaded by SHEKHAR P. BARVE(HC00200) on Thu Jul 10 2025 Downloaded on : Thu Jul 10 21:50:12 IST 2025 NEUTRAL CITATION R/CR.MA/14356/2015 CAV JUDGMENT DATED: 09/07/2025 undefined requests to dismiss the petition.
5. Learned APP, adopting the arguments of learned advocate for private respondent, prays to dismiss the petition.
6. I have heard learned advocates appearing for the respective parties and also perused the records of investigation papers placed by the investigating officer.
7. The FIR reveals following allegations (translated from Gujarati):-
"We are in the business of buying and selling land. In the year 2011, there was a land parcel located in Antroli village, bearing Survey Nos. 25 and 256, of which, the land with Block No. 202, which was approximately 14 Vigha and was for sale at that time. I came to know about this land through Amrutbhai Bharwad and his son Rajubhai Bharwad, who is a resident of Chalthan and has business of land brokerage. I went to inspect the said land and while confirming about it's ownership, I was told that the land belonged to Gordhanbhai Mavjibhai Savaliya, and he had some documents. However, I did not ask for a copy of the 7/12 extract to verify the ownership at that time, as they were in possession of the land and also cultivating it. Trusting their word, on 02/01/2011, Gordhanbhai Mavjibhai Sejliya (Mob. No. 9825109880) and his son Vishal Sejliya, both residents of Bungalow No. 1, Riverview Society, behind Zoo Park, near Sarathana Toll Booth, Varachha Road, Surat, along with myself as the buyer, my brother Rameshbhai Rikabchand Shah, and the brokers Amrutbhai Bharwad and Rajubhai Bharwad, finalized the deal for this land. The deal was made for Rs. 5,83,11,111/- (Five Crore Eighty-Three Lakh Eleven Thousand One Hundred Eleven). A token money chit was drafted, and at that time, we paid Rs. 15,00,000/- in cash Page 5 of 15 Uploaded by SHEKHAR P. BARVE(HC00200) on Thu Jul 10 2025 Downloaded on : Thu Jul 10 21:50:12 IST 2025 NEUTRAL CITATION R/CR.MA/14356/2015 CAV JUDGMENT DATED: 09/07/2025 undefined to Gordhanbhai and Vishal Sejliya in the presence of brokers Rajubhai and Amrutbhai Bharwad. Gordhanbhai signed as the first party on the agreement, I signed as the second party, broker Rajubhai signed as the third party, and Vishal Sejliya signed as the fourth party. It was decided that the remaining amount would be paid upon the execution of the sale deed and transfer of possession within 6 to 7 months. After that, we had to arrange the full payment within six to seven months, so we didn't discuss the land matter further with them until then. When I asked Gordhanbhai after about seven months, he told me that he hadn't yet spoken to the actual owners of the land and that the settlement was still pending. He asked me to wait for another four to five months, assuring me that he would settle everything. I have been waiting as per his words until today. For the last three years, whenever I have approached Gordhanbhai and his son Vishal Sejliya regarding the land deed and the terms of the deal, they have not given us any satisfactory response. Even when I spoke to the land brokers, Amrutbhai and Rajubhai Bharwad, who were present during the deal, they kept saying it would be done. Until today, they have not returned my Rs. 15,00,000/-. Currently, with the increase in land prices, I have come to know that Gordhanbhai and Vishal Sejliya have sold this land to another person. Upon verification, I found that the land has been sold to an individual named Balkrushna Chhaganlal Talaviya. The original owners of this land, as per the 7/12 extract, are:
(1) Savitaben Natvarbhai Morarbhai, (2) Bhupendrabhai Natvarbhai, (3) Jayantibhai Natvarbhai, (4) Lakshmiben Natvarbhai, (5) Vasantiben Natvarbhai, (6) Parvatiben Natvarbhai, (7) Shakuntalaben Natvarbhai, and (8) Sudhaben Natvarbhai.
The current occupants of the land are Pankaj Natvarlal Dolchiwala and Dineshbhai Natvarbhai Dolchiwala, and their power of attorney holder is Pankaj Jasraj Sejliya. It has been confirmed that Gordhanbhai Page 6 of 15 Uploaded by SHEKHAR P. BARVE(HC00200) on Thu Jul 10 2025 Downloaded on : Thu Jul 10 21:50:12 IST 2025 NEUTRAL CITATION R/CR.MA/14356/2015 CAV JUDGMENT DATED: 09/07/2025 undefined and Vishal Sejliya, in collusion with them, sold this land to Balkrushna Chhaganlal."
8. It is noticeable that one sauda chitthi - agreement to sale was executed between the parties and pursuant to which, according to the complainant, he has paid rupees 15 lakh to the petitioners accused, but in turn, did not get the registered sale deed of the disputed land or refund of the amount he has paid to the petitioners. The determinative aspect is that whether the complainant pleaded mere breach of contract or offence of cheating or both as fine line operating between the same. It is conspiciously settled that mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the inception of the transaction, even prima facie.
9. In Hridaya Ranjan Prasad Verma v. State of Bihar, (2000) 4 SCC 168, the Hon'ble Apex Court observed as follows:
"15. In determining the question it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time of inducement which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is the time when the offence is said to have been committed. Therefore it is the intention which is the gist of the offence. To hold a person guilty of cheating it is necessary to show that he had fraudulent or dishonest intention at the time of making the Page 7 of 15 Uploaded by SHEKHAR P. BARVE(HC00200) on Thu Jul 10 2025 Downloaded on : Thu Jul 10 21:50:12 IST 2025 NEUTRAL CITATION R/CR.MA/14356/2015 CAV JUDGMENT DATED: 09/07/2025 undefined promise. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed."
10. What could be noticed that the offence is alleged u/s 406 and 420 of the IPC. For the offence punishable u/s 406 of the IPC, following ingredients must exist:-
"i. The accused was entrusted with property, or entrusted with dominion over property;
ii. The accused had dishonestly misappropriated or converted to their own use that property, or dishonestly used or disposed of that property or wilfully suffer any other person to do so; and iii. Such misappropriation, conversion, use or disposal should be in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract." [See: Radheyshyam v. State of Rajasthan, 2024 SCC OnLine SC 2311]
11. Likewise, ingredients of offence of cheating punishable u/s 420 of the IPC reads as under:-
"16.1. There should be fraudulent or dishonest inducement of a person by deceiving him:
16.1.1. The person so induced should be intentionally induced to deliver any property to any person or to consent that any person shall retain any property, or 16.1.2. The person so induced should be intentionally induced to do or to omit to do anything which he would not do or omit if he were not so deceived; and Page 8 of 15 Uploaded by SHEKHAR P. BARVE(HC00200) on Thu Jul 10 2025 Downloaded on : Thu Jul 10 21:50:12 IST 2025 NEUTRAL CITATION R/CR.MA/14356/2015 CAV JUDGMENT DATED: 09/07/2025 undefined 16.2. In cases covered by 16.1.2. above, the act or omission should be one which caused or is likely to cause damage or harm to the person induced in body, mind, reputation or property." [See: Prof. R.K. Vijayasarathy and Anr v. Sudha Seetharam and Anr, (2019) 16 SCC 739]
12. Examining the case on hand, the root of dispute is sauda chitthi dated 2.1.2011 executed between the parties on a plain paper (page 53 of compilation). Now, what could be not noticeable that this sauda chitthi is not executed on any stamp paper, which is compulsory and requisite nor it is registered. In that circumstances, it does not create any right in favour of the complainant. The document upon which right is sought if not maintainable in eyes of law, same would not give rise of any cause of action. Moreover, if we examine the FIR, it does reflect that the petitioners are not the owners of the disputed land and it was not within the knowledge of the complainant at the time of executing sauda chitthi and handing over of Rs.15 lakh to the petitioners by the complainant, yet he entered into the sauda chitthi
13. The Addl. Sessions Judge while releasing the petitioners on anticipatory bail (page 54) observed in para 5 as under:-
"Perused police papers, more particularly statement of witness Ashokbhai Nanjibhai, it appers that the applicant has already repaid Rs.15 lakh to the complainant Civil litigation was also filed between the parties with regard to the land in dispute."
14. As per statement witness Ashokbhai Nanjibhai, which is Page 9 of 15 Uploaded by SHEKHAR P. BARVE(HC00200) on Thu Jul 10 2025 Downloaded on : Thu Jul 10 21:50:12 IST 2025 NEUTRAL CITATION R/CR.MA/14356/2015 CAV JUDGMENT DATED: 09/07/2025 undefined forming part of investigation, an amount of Rs.15 lakhs has already been paid back to the complainant by the petitioners accused. Perusal of the papers being part of the charge sheet and more particularly statement of Ashokbhai Nanjibhai dated 28.9.2014 indicates that he was accompanying the accused and went to the complainant, whereby Rs.15 lakh was given back to the complainant as the contract between the parties to purchase the land has been cancelled. It is also stated that the petitioners have demanded back the sauda chitthi, but the complainant said that the sauda chitthi is lying in his office and it will be returned back later on.
15. Looking to this aspect, what could be noticed that the FIR is nothing but a conversion of civil dispute with criminal prosecution with oblique motive to presurizze the petitioners. The complainant knowing fully well that the petitioners are not the owners of the disputed land, entered into the contract with the petitioners and paid Rs.15 lakh. At that time, the complaint was fully knowing that the petitioners are not the owner of the property and yet executed sale deed by paying Rs.15 lakh to the petitioners. According to the investigation papers, the amount of Rs.15 lakh has already been paid back to the complainant. Ultimately, what could be noticed that even if FIR is taken as correct on its face value, it discloses nothing more than mere breach of promise of contract. It does not raise any criminality. Learned advocate, Mr. Munshi appearing for the complainant is also failed to point out any other respect, which attracts provisions of sections 406 and 420 of the IPC. Dishonest Page 10 of 15 Uploaded by SHEKHAR P. BARVE(HC00200) on Thu Jul 10 2025 Downloaded on : Thu Jul 10 21:50:12 IST 2025 NEUTRAL CITATION R/CR.MA/14356/2015 CAV JUDGMENT DATED: 09/07/2025 undefined inducement or delivery of the property, etc., being essential for establishing offence of cheating are far from the reality.
16. In view of above, according to this court, the prosecution against the petitioners is absurd process and the petitioners cannot be put to face the turbulence of the trial as per the allegations levelled in the FIR.
17. In Arvindbhai Maganlal Master Versus State Of Gujarat, 2015 (1) GLH 149, the Coordinate Bench of this Court thoroughly examined and addressed the issue that what could be said criminal breach of trust and/or cheating u/s 406 and 420 of the IPC after referring catena of judgments. The Coordinate Bench of this Court observed that to attract the offence under both the sections mens rea i.e. intention to defraud or the dishonest intention must exist from the very beginning or inception without which either of these sections cannot be invoked. Para 27 to 29 are relevant, which reads as under:-
"27. Every act of breach of trust may not be resulted in a penal offence of criminal breach of trust unless there is evidence of manipulating act of fraudulent misappropriation. An act of breach of trust involves a civil wrong in respect of which the person may seek his remedy for damages in civil courts but any breach of trust with a mens rea gives rise to a criminal prosecution as well. It has been held in Hart Prasad Chamaria V/s. B.K. Surekha and others, reported in 1973(2) SCC 823 as under :
"We have heard Mr. Maheshwarit on behalf of the appellant and are of the opinion that no case has been made out against the respondents Page 11 of 15 Uploaded by SHEKHAR P. BARVE(HC00200) on Thu Jul 10 2025 Downloaded on : Thu Jul 10 21:50:12 IST 2025 NEUTRAL CITATION R/CR.MA/14356/2015 CAV JUDGMENT DATED: 09/07/2025 undefined under Section 420 Indian Penal Code. For the purpose of the present appeal, we would assume that the various allegations of fact which have been made in the complaint by the appellant are correct. Even after making that allowance, we find that the complaint does riot disclose the commission of any offence on the part of the respondents under Section 420 Indian Penal Code. There is nothing in the complaint to show that the respondents had dishonest or fraudulent intention at the time the appellant parted with Rs. 35.000/- There is also nothing to indicate that the respondents induced the appellant to pay them Rs. 35.000/- by deceiving him. It is further not the case of the appellant that a representation was made, the respondents knew the same to be false. The fact that the respondents subsequently did not abide by their commitment that they would show the appellant to be the proprietor of Drang Transport Corporation and would also render accounts to him in the month of December might create civil liability on the respondents for the offence of cheating."
28. To put it in other words, the case of cheating the dishonest intention starts with the very inception of the transaction. But in the case of criminal breach of trust, the person who comes into possession of the movable property receives it legally, but illegally retains it or converts it to his own use against the terms of the contract. Then the question is, in a case like this, whether the retention is with dishonest intention or not. Whether the retention involves criminal breach of trust or only a civil liability would depend upon the facts of each case.
29. The distinction between mere breach of contract and the offence of criminal breach of trust and cheating are fine one. In case of cheating, it depends upon the intention of the accused at the time of inducement, which may be judged by a subsequent conduct but for this the subsequent conduct is not the sole test but mere breach of contract which cannot Page 12 of 15 Uploaded by SHEKHAR P. BARVE(HC00200) on Thu Jul 10 2025 Downloaded on : Thu Jul 10 21:50:12 IST 2025 NEUTRAL CITATION R/CR.MA/14356/2015 CAV JUDGMENT DATED: 09/07/2025 undefined give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right from the beginning of the transaction i.e. the time when the offence is said to have been committed. Therefore, it is his intention, which is the gist of the offence. Whereas, for the criminal breach of trust, the property must have been entrusted to the accused or he must have dominion over it. The property in respect of which the offence after breach of trust has been committed must be either the property of some person other than the accused or the beneficial interest in or ownership of it must be of some other person. The accused must hold that property on trust of such other person. But the offence, i.e. the offence of breach of trust and cheating involve dishonest intention but they are mutually exclusive and different in basic concept. There is a distinction between criminal breach of trust and cheating. For cheating, criminal intention is necessary at the time of entrustment. In criminal breach of trust, mere proof of entrustment is sufficient. Thus, in case of criminal breach of trust, the offender is lawfully entrusted with the property and he dishonestly misappropriated the same. Whereas, in case of cheating, the offender practices fraudulent or dishonest to induce with another person to deliver the property. In such situation, both the offences cannot co-exist simultaneously."
18. The court is quite conscious of the inherent jurisdiction under section 482 of the Code, though wide, is to be exercised sparingly, carefully and with caution, only when such exercise is justified by tests specifically laid down in the section itself. But in the case on hand, the FIR and the evidence collected in the investigation on carefully scrutinizing, does not justify accusation again the petitioners. No criminality is ruled against the petitioners. In view above circumstances, the court is required to exercise its inherent jurisdiction.
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19. In the case of State of Haryana Vs. B.Bhajanlal & ors., AIR 1992 SC 604, the Hon'ble Apex Court summed up the proposition of law, which reads as under:-
"(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 ins the F.I.R. and other materials, if any, accompanying the F.I.R. do not disclose a cognizable offence, justifying an investigation by police officers under S.156(1) of the Code except under an order of a Magistrate within the purview of S.155(2) of the code.
(3) Where, the uncontroverted allegations made in the F.I.R. or complaint and the evidence collected in support of the same donot disclose the commission of any offence and make out the case against the accused.
(4) Where, the allegations in the F.I.R. 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 S.155(2) of the Code.
(5) Whether, the allegations made in the F.I.R. 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 bare engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) toi the institution 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.Page 14 of 15 Uploaded by SHEKHAR P. BARVE(HC00200) on Thu Jul 10 2025 Downloaded on : Thu Jul 10 21:50:12 IST 2025
NEUTRAL CITATION R/CR.MA/14356/2015 CAV JUDGMENT DATED: 09/07/2025 undefined (7) Where a criminal proceeding is manifestly attended with malafide 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."
19.1 The findings of the Hon'ble Apex Court in para 1,3 and 7 are attracted in the present case. In view of above, present petition deserves consideration.
20. In the result, present petition is allowed. Impugned FIR being C.R.No.I - 132 of 2015 registered with Kadodara GIDC Police Station, for the offences punishable under Sections 406,420, 114 of the IPC as well as all other consequential proceedings arising out of the aforesaid FIR qua the petitioners herein are hereby quashed and set aside. Rule made absolute to the aforesaid extent. Direct service is permitted.
(J. C. DOSHI,J) SHEKHAR P. BARVE Page 15 of 15 Uploaded by SHEKHAR P. BARVE(HC00200) on Thu Jul 10 2025 Downloaded on : Thu Jul 10 21:50:12 IST 2025