Faisan vs State Of Kerala
2026 Latest Caselaw 1856 Ker

Kerala High Court

Faisan vs State Of Kerala on 20 February, 2026

CRL.MC NO.510/2020               1



                                             2026:KER:15329

         IN THE HIGH COURT OF KERALA AT ERNAKULAM

                            PRESENT

        THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M.

FRIDAY, THE 20TH DAY OF FEBRUARY 2026 / 1ST PHALGUNA, 1947

                     CRL.MC NO.510 OF 2020

 CRIME NO.274/2019 OF MANNARKKAD POLICE STATION, PALAKKAD

         CC NO.486/2019 OF JUDICIAL MAGISTRATE OF FIRST
                     CLASS, MANNARKKAD

PETITIONERS/ACCUSED 1 TO 3:

    1    FAISAN,
         AGED 39 YEARS
         S/O.HAMZA, RAYIMARAKKAR VEEDU,
         PUTHANPALLI, GURUVAYOOR, THRISSUR DISTRICT.

    2    HAMZA,
         AGED 77 YEARS
         S/O.KUNHIMON, RAYIMARAKKAR VEEDU,
         PUTHANPALLI, GURUVAYOOR, THRISSUR DISTRICT.

    3    THASNIM,
         AGED 30 YEARS
         W/O.FAISAN, RAYIMARAKKAR VEEDU, PUTHANPALLI,
         GURUVAYOOR, THRISSUR DISTRICT.

         BY ADVS.
         SRI.P.JAYARAM
         SRI.AKHIL P


RESPONDENTS:

    1    STATE OF KERALA,
         REPRESENTED BY PUBLIC PROSECUTOR,
         HIGH COURT OF KERALA, ERNAKULAM-682031.

    2    SHAMEER BABU,
         AGED 42 YEARS
         S/O.KUNHIMUHAMMED, PURONA HOUSE,
 CRL.MC NO.510/2020                 2



                                                 2026:KER:15329

         CHIRAKKALPADI, P.O.,TRIKKALUR,
         MANNARKAD, PALAKKAD DISTRICT, PIN-678593.

         BY ADV.
         SRI.SUNIL KUMAR KURIAKOSE, PUBLIC PROSECUTOR



     THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON
20.02.2026,   THE    COURT   ON   THE   SAME   DAY   PASSED   THE
FOLLOWING:
 CRL.MC NO.510/2020                      3



                                                             2026:KER:15329



                              ORDER

Dated this the 20th day of February, 2026

This Crl.M.C. is filed invoking Section 482 of the Cr.P.C.

seeking to quash Annexure A2 Final Report and all further

proceedings in C.C.No.486 of 2019 on the files of the Judicial First

Class Magistrate, Mannarkkad.

2. Petitioners are accused Nos.1 to 3 in the C.C. and they

stand charged under Sections 406 and 420 read with Section 34 of

the IPC.

3. The allegation against the petitioners in Annexure A2 Final

Report is that during the period 05.03.2017 to 31.03.2018,

petitioners 1 to 3 had made the de facto complainant believe that he

would be inducted as a partner in the ongoing restaurant business

in Malaysia and had realised from him directly as well as through

Banks and other means, an amount of Rs.27,30,500/-. Thereafter,

neither did the petitioners make the de facto complainant a partner

as promised, nor was he taken to Malaysia. The money realised

from him was not returned either. The de facto complainant, hence,

alleged that he had been cheated at the hands of the petitioners and

that monetary loss had been caused to him. C.C.No.486 of 2019

2026:KER:15329

was thus filed and pursued against the petitioners, alleging

commission of offences punishable under Sections 406 and 420

read with Section 34 IPC. Petitioners seek to quash the said

proceedings as legally unsustainable.

4. Heard Sri.P.Jayaram, Advocate for the petitioners and

Sri.Sunil Kumar Kuriakose, the learned Public Prosecutor. Though

the service against the 2nd respondent defacto complainant, is

complete, there is no appearance on his behalf.

5. The learned counsel for the petitioners contended that the

petitioners are innocent of the charges levelled against them and

that none of the ingredients to even prima facie maintain a charge

under Sections 406 and 420 read with Section 34 IPC have been

made out in the Final Report. It is submitted that the complaint

would, at the most, reveal only a civil dispute between the parties

arising out of a partnership arrangement, and no criminal overtones

could be ascribed to the same. Contending that the formation of a

partnership is purely a civil contract and breach, if any, of the same

cannot be graduated to the level of breach of trust or cheating, it is

submitted that the Final Report produced as Annexure A2, as well

as all further proceedings pursuant thereto, are fit to be quashed.

2026:KER:15329

Placing reliance on the dictum in Indian Oil Corporation v. NEPC

India Ltd. and others [(2006) 6 SCC 736], it is contended that

criminal law cannot be used as a tool to settle scores in commercial

or contractual matters, and that such misuse amounts to abuse of

process. Reliance is also placed on the dictum laid down in

Shailesh Kumar Singh @ Shailesh R. Singh v. State of Uttar

Pradesh and others [2025 SCC OnLine SC 1462] wherein the

practice of using criminal proceedings as a substitute for civil

remedies was deprecated, observing that money recovery cannot

be enforced through criminal prosecution where the dispute is

essentially civil.

6. The learned Public Prosecutor objected to the contentions

put forth and submitted that the Crl.M.C. is not fit to be allowed, and

none of the ingredients would justify the exercise of Section 482

Cr.P.C., and to quash the Final Report had been attracted. The

precedents relied on by the petitioners do not apply to the facts of

the case at hand, and there exists no circumstance to quash the

proceedings against the petitioners. It is thus prayed that the

Crl.M.C. may be dismissed.

7. It is a settled position of law that the inherent jurisdiction of

2026:KER:15329

this Court 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. Appreciation of evidence has been held to be not permissible

while considering a petition under Section 482 Cr.P.C. (See State of

Haryana and others v. Bhajan Lal and others [1992 Supp.(1)

SCC 335]; Kaptan Singh v. State of Uttar Pradesh and others

[(2021) 9 SCC 35].

8. It is the specific case of the de facto complainant that there

had been dishonest and fraudulent intentions in the petitioners from

the very beginning. The petitioners specifically contend that the FIR

or the Final Report does not disclose nor even allege that the

petitioners had such a dishonest and fraudulent intention from the

inception. This contention thus requires closer scrutiny.

9. The law on the point has been succinctly laid down by the

Hon'ble Supreme Court in Hridaya Ranjan Prasad Verma and

others v. State of Bihar and another [AIR 2000 SC 2341].

"13. Cheating is defined in Section 415 of the Code as, "415. 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

2026:KER:15329

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".

Explanation - A dishonest concealment of facts is a deception within the meaning of this section."

The section requires -

(1) Deception of any person.

(2) (a) Fraudulently or dishonestly inducing that person

(i) to deliver any property to any person; or

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

(b) intentionally inducing that person 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.

14. On a reading of the section it is manifest that in the definition there are set forth two separate classes of acts which the person deceived may be induced to do. in the first place he may be induced fraudulently or dishonestly to deliver any property to any person. The second class of acts set forth in the section is the doing or omitting to do anything which the person deceived would not do or omit to do if he were not so deceived. In the first class of cases the inducing must be fraudulent or dishonest. In the second class of acts, the inducing must be intentional but not fraudulent or dishonest.

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 to 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 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."

2026:KER:15329

10. The Hon'ble Supreme Court in A.M.Mohan v. State rep.

by SHO [2024 SCC OnLine SC 339] after elaborating on the

ingredients to attract offences under Sections 415 and 420 of the

IPC succinctly stated as follows:

"It could thus be seen that for attracting the provision of Section 420 of IPC, the FIR/complaint must show that the ingredients of Section 415 of IPC are made out and the person cheated must have been dishonestly induced to deliver the property to any person; or to make, alter or destroy valuable security or anything signed or sealed and capable of being converted into valuable security. In other words, for attracting the provisions of Section 420 of IPC, it must be shown that the FIR/complaint discloses:

(i) the deception of any person;

(ii) fraudulently or dishonestly inducing that person to deliver any property to any person; and

(iii) dishonest intention of the accused at the time of making the inducement."

11. It is in the backdrop of the above legal position as laid

down by the Hon'ble Supreme Court that the contentions put forth in

the case at hand are to be appreciated.

12. I note that Annexure A2 Final Report states that during

the period 05.03.2017 to 31.03.2018, the petitioners had been paid

an amount of Rs.27,30,500/- by the de facto complainant, relying on

the promise by the former to the latter that he would be made a

partner in the restaurant business in Malaysia. Nevertheless, the

petitioners did not take the de facto complainant to Malaysia, nor did

they return the money. This, as per the Final Report, attracts

2026:KER:15329

offences punishable under Sections 406 and 420 read with Section

34 IPC.

13. It is also relevant in this context to examine the case of

the de facto complainant in the complaint preferred by him on

31.08.2018. It states that he has an acquaintance with 1st Petitioner

Faisan of Rayimarakkar House, Guruvayoor, who, along with his

father Hamza (2nd Petitioner), has been conducting hotel business

in Malaysia for years. The said Faisan is also a friend of one Nias,

who is a relative of the de facto complainant. The said Faisan had

informed Nias that he is on the lookout for persons interested in

investing in a hotel branch in Malaysia. Accordingly, the de facto

complainant and another person met Hamza, the father of Faisan,

who conveyed to them his long-standing experience in conducting

hotel business in Malaysia. Based on the confidence thus created

and the assurance given, an amount of Rs. 27 lakhs was paid on

demand by the de facto complainant, and the remaining amount

was paid in instalments. The said payment was made to the said

Hamza and Thasnim, wife of Faisan. Certain documents were also

executed in this respect. Despite this, neither the de facto

complainant nor the other person was made a partner in the

2026:KER:15329

business, nor was given any share of the business's profits. The

amount invested had not been returned to them either. The

complaint alleges that the said Faisan and his wife Thasnim had

cheated the de facto complainant.

14. It is relevant to note that neither the complaint nor the

Final Report discloses any material to even prima facie conclude

that the accused had a fraudulent or dishonest intention at the time

of making the purported promise. On the contrary, the specific claim

of the de facto complainant in the complaint is that the petitioners

failed to keep their promise to include him in the partnership and to

share the partnership's profits. Thus, a culpable intention right at the

beginning, that is, when the petitioners allegedly made the promise,

is not at all disclosed and the same cannot be presumed.

15. As regards the charge under Section 406 IPC is

concerned, it is trite as laid down by the Hon'ble Supreme Court in

S.W. Palanitkar v. State of Bihar [(2002) 1 SCC 241] that in order

to constitute a criminal breach of trust under Section 406 of IPC:

1) There must be entrustment with person for property or

dominion over the property, and

2) The person entrusted: -

2026:KER:15329

a) dishonestly misappropriated or converted property to

his own use, or

b) dishonestly used or disposed of the property or willfully

suffers any other person so to do in violation of:

i. any direction of law prescribing the method in which the trust

is discharged; or

ii. legal contract touching the discharge of trust.

16. It is noted that neither the complaint nor the Final report/

Charge Sheet spells out any of the said ingredients. On the other

hand, it is the admitted case of the de facto complainant that there

existed a partnership arrangement that did not play out as intended

by the parties. The entrustment of amounts allegedly commenced in

2017, and the FIR was lodged by 2019. The Hon'ble Supreme Court

in A.M.Mohan (supra) had deprecated the practice of making a

criminal case out of a purely civil/ commercial dispute in the

following terms:

"13. While on this issue, it is necessary to take notice of a growing tendency in business circles to convert purely civil disputes into criminal cases. This is obviously on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. Such a tendency is seen in several family disputes also, leading to irretrievable breakdown of marriages/families. There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent

2026:KER:15329

settlement. Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure through criminal prosecution should be deprecated and discouraged. In G.Sagar Suri v. State of U.P. [(2000) 2 SCC 636 : 2000 SCC (Cri) 513] this Court observed: (SCC p. 643, para 8)

"8. ......... It is to be seen if a matter, which is essentially of a civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing process, a criminal court has to exercise a great deal of caution. For the accused it is a serious matter. This Court has laid certain principles on the basis of which the High Court is to exercise its jurisdiction under Section 482 of the Code. Jurisdiction under this section has to be exercised to prevent abuse of the process of any court or otherwise to secure the ends of justice."

17. In the total absence of even an averment, either in the

complaint or an allegation in the charge sheet, that the petitioners

had at the time of promising the de facto complainant a role in the

partnership as well as a consequential share in the benefits derived

therefrom, harboured a dishonest intention, the charges under sec.

420 IPC would not lie against them. Similarly, there is nothing to

even prima facie point towards the dishonest misappropriation or

conversion of property by the petitioners, individually or collectively,

to their own use.

18. Accordingly, I find that none of the ingredients to lay a

charge under Sections 406, 420 read with Section 34 IPC against

the petitioners has been made out.

2026:KER:15329

The Crl.M.C. is allowed and Exhibit A2 Final Report and all

further proceedings in C.C.No.486 of 2019 on the files of the

Judicial First Class Magistrate, Mannarkkad, are hereby quashed.

Sd/-

SYAM KUMAR V.M. JUDGE csl

2026:KER:15329

APPENDIX OF CRL.MC NO.510 OF 2020

PETITIONERS ANNEXURES

ANNEXURE A1 COPY OF THE FIRST INFORMATION REPORT AND FIRST INFORMATION STATEMENT IN CRIME NO.274/2019 MANNARKKAD POLICE STATION.

ANNEXURE A2 COPY OF THE FINAL REPORT AGAINST THE PETITIONERS IN CRIME NO.274/2019, MANNARKAD POLICE STATION/CC NO.486/2019, ON THE FILE OF JUDICIAL 1ST CLASS MAGISTRATE, MANNARKKAD.

ANNEXURE A3 COPY OF THE COMPLAINT OF THE DEFACTO COMPLAINANT DATED 31.8.2018 FILED BEFORE ASSISTANT COMMISSIONER OF POLICE, GURUVAYUR.

ANNEXURE A4 COPY OF THE STATEMENT OF DEFACTO COMPLAINANT RECORDED BY THE POLICE U/S.161 OF CR.P.C. IN CRIME NO.274/2019, MANNARKKAD POLICE STATION.

ANNEXURE A5 COPY OF THE AFFIDAVIT DATED NIL, ALLEGEDLY ENTERED BETWEEN THE PETITIONER HEREIN, DEFACTO COMPLAINANT AND ONE ANOTHER.

ANNEXURE A6 COPY OF DEMAND REPORT DATED 15.7.2019 SUBMITTED BY THE POLICE IN CRIME NO.274/2019 OF MANNARKKAD POLICE STATION BEFORE THE JUDICIAL 1ST CLASS MAGISTRATE, MANNARKAD.