Jharkhand High Court
M/S Budh Vihar Construction Pvt. Ltd vs The State Of Jharkhand on 13 November, 2025
Author: Anil Kumar Choudhary
Bench: Anil Kumar Choudhary
( 2025:JHHC:34204 )
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Cr.M.P. No.701 of 2018
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1. M/s Budh Vihar Construction Pvt. Ltd., through its Managing
Director, Anil Kumar Akela, aged-48 years, S/o Raj Kumar Singh,
R/o Katalpur, P.O.-Bairaka, P.S.-Atari, District-Gaya (Bihar)
having its office at Subhash Colony, Dimna Road Mango, P.S. +
P.O.-Mango, Jamshedpur, District-East Singhbhum.
2. Chandra Kanta Kumari, aged about 46 years, wife of Sri Anil
Kumar Akela, Resident of Sundar Garden, Sanjay Path, Subhash
Colony, Mango, P.O. & P.S.-Mango, Jamshedpur, East
Singhbhum. Permanent resident of village-Katalpur, P.O.-
Bairaka, P.S.-Atari, District-Gaya (Bihar).
... Petitioners
Versus
1. The State of Jharkhand
2. Basant Kumar Pradhan, aged 50 years, son of Late Pitobas
Pradhan, resident of Post Office Road, Mango, P.O. + P.S.-Mango,
Jamshedpur, District-East Singhbhum.
... Opposite Parties
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For the Petitioners : Mr. Rahul Dev, Advocate
: Mr. Priyansh Nilesh, Advocate
: Ms. Shipra Sonam, Advocate
For the State : Mr. Sunil Kr. Dubey, Addl.P.P.
For the O.P. No.2 : Mr. Pankaj Verma, Advocate
: Mr. Neelanjan Chatterjee, Advocate
------
PRESENT
HON'BLE MR. JUSTICE ANIL KUMAR CHOUDHARY
By the Court:- Heard the parties.
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2. This Criminal Miscellaneous Petition has been filed invoking the
jurisdiction of this Court under Section 482 of the Code of Criminal
Procedure with the prayer to quash and set aside the entire criminal
proceeding as well as the order dated 27.11.2017 passed by learned
Judicial Magistrate-1st Class, Jamshedpur in connection with C1 Case
No.2109 of 2016 whereby and where under the learned Judicial
Magistrate-1st Class, Jamshedpur has found prima facie case for the
offences punishable under Sections 420/406 of the Indian Penal Code
against the petitioners.
3. The brief fact of the case is that the deceased husband of the
petitioner no.2 namely Anil Kumar Akela and the petitioner no.2 were the
directors of the petitioner no.1. The deceased husband of the petitioner
no.2-Anil Kumar Akela entered into a development agreement with the
two grandfathers of the complainant and paid Rs.4 lakhs as advance at
the time of agreement. The two grandfathers of the complainant executed
power of attorney in favor of the Anil Kumar Akela in 2008 and on the
basis of power of attorney Anil Kumar Akela transferred 1 Bigha of land
in favor of the petitioner no.1 but did not pay the consideration money of
the said sale deed to the executors of the power of attorney in his favour.
The grandfathers and the father of the complainant have died before the
filing of the complaint. Anil Kumar Akela after the death of two
grandfathers of the complainant made a rectification of the power of
attorney in favor of the petitioner no.2. Anil Kumar Akela also entered
into a development agreement in respect of 1 Bigha of land; which was in
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possession of the Anil Kumar Akela, with the father of the complainant.
An MoU (Memorandum of Understanding) was prepared for 3 Bighas of
land for Rs.2,40,000,00/- and advance of Rs.1 crore was paid but the
remaining amount was not paid. Later on, the complainant came to know
that the rest land has been transferred in the name of the petitioner no.1
and 2.
4. Learned counsel for the petitioners submit that the allegation
against the petitioners is false and the dispute between the parties is
basically a civil dispute. It is next submitted that there is no allegation
against either of the petitioners of committing any offence and all the
allegations are against Anil Kumar Akela who has died during the
pendency of this Cr.M.P. It is next submitted that even though the entire
allegations made against the petitioners are considered to be true in their
entirety, still neither offence punishable under Section 406 of the Indian
Penal Code nor the offence punishable under Section 420 of the Indian
Penal Code is made out.
5. Learned counsel for the petitioners relies upon the judgment of this
Court in the case of Ambuj Hotel and Real Estate Pvt. Ltd. & Others vs.
The State of Jharkhand and Another in Cr.M.P. No.614 of 2024 dated
17.09.2024 and submits that therein this Court relied upon the judgment
of the Hon'ble Supreme Court of India in the case of Sarabjit Kaur vs.
State of Punjab & Another reported in (2023) 5 SCC 360 paragraph-13 of
which reads as under:-
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"13. A breach of contract does not give rise to criminal
prosecution for cheating unless fraudulent or dishonest
intention is shown right at the beginning of the transaction.
Merely on the allegation of failure to keep up promise will not
be enough to initiate criminal proceedings. From the facts
available on record, it is evident that Respondent 2 had
improved his case ever since the first complaint was filed in
which there were no allegations against the appellant rather it
was only against the property dealers which was in subsequent
complaints that the name of the appellant was mentioned. On
the first complaint, the only request was for return of the
amount paid by Respondent 2. When the offence was made out
on the basis of the first complaint, the second complaint was
filed with improved version making allegations against the
appellant as well which was not there in the earlier complaint.
The entire idea seems to be to convert a civil dispute into
criminal and put pressure on the appellant for return of the
amount allegedly paid. The criminal courts are not meant to be
used for settling scores or pressurise parties to settle civil
disputes. Wherever ingredients of criminal offences are made
out, criminal courts have to take cognizance. The complaint in
question on the basis of which FIR was registered was filed
nearly three years after the last date fixed for registration of the
sale deed. Allowing the proceedings to continue would be an
abuse of process of the court." (Emphasis supplied)
Wherein the Hon'ble Supreme Court of India reiterated the settled
principle of law that a breach of contract does not give rise to criminal
prosecution for cheating unless fraudulent or dishonest intention is
shown right at the beginning of the transaction. Merely, the allegation of
failure to keep up promise will not be enough to initiate criminal
proceedings.
6. It is next submitted that in that case, this Court also relied upon the
judgment of the Hon'ble Supreme Court of India in the case of Uma
Shankar Gopalika vs. State of Bihar & Another reported in (2005) 10
SCC 336 paragraph-6 of which reads as under:-
6. "Xxxx xxxx xxxx It is well settled that every breach of
contract would not give rise to an offence of cheating and only in
( 2025:JHHC:34204 )
those cases breach of contract would amount to cheating where
there was any deception played at the very inception. If the
intention to cheat has developed later on, the same cannot
amount to cheating. In the present case it has nowhere been
stated that at the very inception there was any intention on
behalf of the accused persons to cheat which is a condition
precedent for an offence under Section 420 IPC." (Emphasis
supplied)
Wherein it was held that every breach of contract would not give
rise to an offence of cheating and only in those cases breach of contract
would amount to cheating; where there was any deception played at the
very inception, if the intention to cheat has developed later on, the same
will not amount to cheating.
7. Learned counsel for the petitioner next relies upon the judgment of
this Court in the case of Sandeep Bhargava vs. The State of Jharkhand &
Another with allied cases in Cr.M.P. No.3245 of 2021 dated 11.03.2024
and submits that therein this Court relied upon the judgment of the
Hon'ble Supreme Court of India in the case of Binod Kumar & Others vs.
State of Bihar & Another reported in (2014) 10 SCC 663 paragraph-18 of
which reads as under:-
"18. In the present case, looking at the allegations in the
complaint on the face of it, we find that no allegations are made
attracting the ingredients of Section 405 IPC. Likewise, there
are no allegations as to cheating or the dishonest intention of
the appellants in retaining the money in order to have wrongful
gain to themselves or causing wrongful loss to the complainant.
Excepting the bald allegations that the appellants did not make
payment to the second respondent and that the appellants
utilised the amounts either by themselves or for some other
work, there is no iota of allegation as to the dishonest intention
in misappropriating the property. To make out a case of
criminal breach of trust, it is not sufficient to show that money
has been retained by the appellants. It must also be shown that
the appellants dishonestly disposed of the same in some way or
dishonestly retained the same. The mere fact that the appellants
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did not pay the money to the complainant does not amount to
criminal breach of trust." (Emphasis supplied)
wherein it has categorically been held by the Hon'ble Supreme
Court of India that to make out a case of criminal breach of trust, it is not
sufficient to show that money has been retained by the accused persons
but it must also be shown that the accused person dishonestly disposed of
the same in some way or dishonestly retained the same.
8. Learned counsel for the petitioners next relies upon the judgment of
this Court in the case of Yogesh Beriwal vs. The State of Jharkhand &
Another in Cr.M.P. No.4402 of 2022 dated 14.08.2023 and submits that in
that case, this Court relied upon the judgment of the Hon'ble Supreme
Court of India in the case of Satish Chandra Ratanlal Shah vs. State of
Gujarat & Anr. reported in (2019) 9 SCC 148, paragraph nos. 11 of which
reads as under:-
"11. Having observed the background principles
applicable herein, we need to consider the individual charges
against the appellant. Turning to Section 405 read with Section
406 IPC, we observe that the dispute arises out of a loan
transaction between the parties. It falls from the record that
Respondent 2 knew the appellant and the attendant
circumstances before lending the loan. Further it is an admitted
fact that in order to recover the aforesaid amount, Respondent 2
had instituted a summary civil suit which is still pending
adjudication. The law clearly recognises a difference between
simple payment/investment of money and entrustment of money
or property. A mere breach of a promise, agreement or contract
does not, ipso facto, constitute the offence of the criminal breach
of trust contained in Section 405 IPC without there being a clear
case of entrustment." (Emphasis supplied)"
wherein the Hon'ble Supreme Court of India has reiterated the
settled principle of law that a mere retention of the property would not
( 2025:JHHC:34204 )
amount to dishonest misappropriation of the property, hence, it is
submitted that the prayer as prayed for in this Cr.M.P., be allowed.
9. Learned Addl.P.P. appearing for the State and the learned counsel
for the opposite party No.2 on the other hand vehemently oppose the
prayer of the petitioner made in the instant Cr.M.P and submit that the
materials available in the record is sufficient to constitute both the
offences punishable under Section 406 of the Indian Penal Code as well as
the offence punishable under Section 420 of the Indian Penal Code, hence,
it is submitted that this Cr.M.P., being without any merit, be dismissed.
10. Having heard the rival submissions made at the Bar and after
carefully going through the materials available in the record, it is
pertinent to mention here that it is a settled principle of law that every
breach of contract would not give rise to an offence of cheating and only
in those cases breach of contract would amount to cheating where there
was any deception played at the very inception. If the intention to cheat
has developed later on, the same cannot amount to cheating as has been
held by the Hon'ble Supreme Court of India in the case of Uma Shankar
Gopalika vs. State of Bihar & Another (supra).
11. Now, coming to the facts of the case, so far as the offence
punishable under Section 420 of the Indian Penal Code is concerned, there
is absolutely no allegation against the petitioners that the petitioners
played deception since the beginning of the transaction between the
parties. In fact, there is no allegation against the petitioners of having any
transaction with the complainant.
( 2025:JHHC:34204 )
12. Under such circumstances, this Court is of the considered view that
even if the allegations against the petitioners are considered to be true in
their entirety still the offence punishable under Section 420 of Indian
Penal Code is not made out.
13. So far as the offence punishable under Section 406 of the Indian
Penal Code is concerned, it is a settled principle of law that in order to
constitute the said offence, the essential ingredient is that there has to be
dishonest misappropriation of the entrusted property by the accused
persons.
14. Now, coming to the facts of the case, there is absolutely no
allegation of any entrustment against either of the petitioners nor there is
any allegation of dishonest misappropriation of the entrusted property.
Under such circumstances, this Court is of the considered view that even
if the allegations against the petitioners are considered to be true in their
entirety, still the offence punishable under Section 406 of Indian Penal
Code is not made out.
15. In view of the discussions made above as neither the offence
punishable under Section 420 of the Indian Penal Code nor the offence
punishable under Section 406 of the Indian Penal Code is made out,
hence, this Court is of the considered view that the continuation of this
criminal proceeding against the petitioners will amount to abuse of
process of law and this is a fit case where the entire criminal proceeding
as well as the order dated 27.11.2017 passed by learned Judicial
( 2025:JHHC:34204 )
Magistrate-1st Class, Jamshedpur in connection with C1 Case No.2109 of
2016, be quashed and set aside.
16. Accordingly, the entire criminal proceeding as well as the order
dated 27.11.2017 passed by learned Judicial Magistrate-1st Class,
Jamshedpur in connection with C1 Case No.2109 of 2016, is quashed and
set aside.
17. In the result, this Cr.M.P., stands allowed.
18. In view of disposal of the instant Cr.M.P., the interim relief granted,
if any, is vacated.
(Anil Kumar Choudhary, J.)
High Court of Jharkhand, Ranchi
Dated the 13th of November, 2025
AFR/ Abhiraj
Uploaded on 20/11/2025
