Ganpat Jain vs The State Of Telangana
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Telangana High Court

Ganpat Jain vs The State Of Telangana on 30 June, 2025

     THE HON'BLE SHRI JUSTICE ANIL KUMAR JUKANTI

          CRIMINAL PETITION No.15406 OF 2024

O R D E R:

This Criminal Petition is filed under Section 528 of the

Bharatiya Nagarik Suraksha Sanhita (for short 'BNSS') by

petitioner/accused No.2 to quash the proceedings against

him in CC.No.2628 of 2020 on the file of V Additional

Metropolitan Magistrate Court, Medchal Malkajgiri District,

at L.B.Nagar. The offences alleged against petitioner are

under Sections 406 and 420 read with Section 34 of the

Indian Penal Code (for short 'IPC').

2. Heard Mr. Baglekar Akash Kumar, learned counsel for

petitioner and Mr. Surepalli Prashanth, learned Assistant

Public Prosecutor for respondent No.1 - State. Perused the

material on record.

3. An FIR.No.305 of 2019, dated 02.07.2019, was lodged

in Nacharam Police Station, on the basis of a complaint filed

by respondent No.2/complainant. As per FIR/complainat,

the complainant was running gold business. On 21.04.2019,

a lady by name Kasula Varija/accused No.1 (resident of Flat

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No.21, Annapurna Nagar, Uppal), called complainant on

phone and requested to arrange sum of Rs.15,00,000/-. In

return the lady promised 550 grams of her gold to

complainant lying in Marwadi Shop (Ganesh Jewellers). That

believing her, respondent No.2 paid Rs.15,00,000/- in cash.

The date, time and place of handing over the cash are not

mentioned.

4. It is further stated in the complaint that after receiving

amount, Kasula Varija took the complainant to the Marwadi

Shop at 15:30 hours, paid the amount to owner of the shop

(petitioner/accused No.2) asked the complainant to wait

for some time. That they waited till 19:30 hours and

later called the shop owner (petitioner/accused No.2).

Petitioner/accused No.2 informed that Kasula Varija owed a

debt of Rs.18,00,000/- to him and he collected

Rs.15,00,000/- as part of her debt due to him. It is stated

that five cheques of Rs.3,00,000/- (each) were given to the

complainant by Kasula Varija and sought 45 days time.

On 25.06.2019, respondent No.2 presented one of the

cheque(s) bearing No.465531 in the Syndicate bank and the

cheque bounced.

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5. It is observed from the record that there is no allegation

in the FIR/complaint against petitioner/accused No.2.

Charge sheet is filed naming petitioner as accused No.2. In

the entire complaint, there is no allegation against

petitioner/accused No.2 that he induced the complainant

nor is there any allegation fulfilling the ingredients of charge

of breach of trust. No proceedings have been initiated by the

complainant against Kasula Varija for dishonor of cheque.

6. In the entire complaint/FIR, there is no whisper that

there is a transaction or even a conversation between

petitioner/accused No.2 and the complainant earlier. Except

the statement of petitioner/accused No.2 that Kasula Varija

owed a debt of Rs.18,00,000/- to him and that an amount of

Rs.15,00,000/- was paid as a part of that debt. No other

statement is reflected in the FIR/complaint indicating

petitioner/accused No.2's involvement. In the absence of any

specific or even remote allegations against accused No.2/

petitioner, he cannot be dragged into legal process. In the

absence of any ingredients being made out under Sections

406 and 420 of IPC, charges cannot be levelled on

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petitioner/accused No.2. It is relevant to extract Sections

406 and 420 of IPC are as follows:

"406. Punishment for criminal breach of trust.--

Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with, or with both.

420. Cheating and dishonestly inducing delivery of property.--

Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine."

7. Learned counsel appearing on behalf of petitioner/

accused No.2 placed reliance on the judgment of the Hon'ble

Apex Court in the case of Delhi Race Club (1940) Limited

and Others v. State of Uttar Pradesh and Another 1.

The distinction between the offence of criminal breach of

trust and cheating is lucidly brought out in the judgment of

the Hon'ble Apex Court. The relevant paragraphs of the

judgment are as follows:

"29. To put it in other words, the case of cheating and dishonest intention starts with the very

2024 SCC Online SC 2248

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inception of the transaction. But in the case of criminal breach of trust, a person who comes into possession of the movable property and 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.

30. The distinction between mere breach of contract and the offence of criminal breach of trust and cheating is a fine one. In case of cheating, the intention of the accused at the time of inducement should be looked into which may be judged by a subsequent conduct, but for this, the subsequent conduct is not the sole test. Mere breach of contract cannot 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 this 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 of 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. Although the offence, i.e. the offence of breach of trust and cheating involve dishonest intention, yet 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 making a false or misleading representation i.e., since inception. 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 fraudulently or dishonestly induces a person by

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deceiving him to deliver any property. In such a situation, both the offences cannot co-exist simultaneously.

42. When dealing with a private complaint, the law enjoins upon the magistrate a duty to meticulously examine the contents of the complaint so as to determine whether the offence of cheating or criminal breach of trust as the case may be is made out from the averments made in the complaint. The magistrate must carefully apply its mind to ascertain whether the allegations, as stated, genuinely constitute these specific offences. In contrast, when a case arises from a FIR, this responsibility is of the police - to thoroughly ascertain whether the allegations levelled by the informant indeed falls under the category of cheating or criminal breach of trust. Unfortunately, it has become a common practice for the police officers to routinely and mechanically proceed to register an FIR for both the offences i.e. criminal breach of trust and cheating on a mere allegation of some dishonesty or fraud, without any proper application of mind.

43. It is high time that the police officers across the country are imparted proper training in law so as to understand the fine distinction between the offence of cheating viz-a-viz criminal breach of trust. Both offences are independent and distinct. The two offences cannot coexist simultaneously in the same set of facts. They are antithetical to each other. The two provisions of the IPC (now BNS, 2023) are not twins that they cannot survive without each other.

8. In the present case, petitioner/accused No.2 never

made any promise to the complainant. It is only Kasula

Varija/accused No.1, who promised the complainant that

she would arrange 550 grams of her gold lying in the shop

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and believing the version of accused No.1, respondent No.2

(complainant) handed over cash.

9. As spelled out by the Hon'ble Apex Court, in the case of

cheating, dishonest intention starts from the very inception

of a transaction. In case of cheating, the intention of the

accused at the time of inducement should be looked

into which may be judged by a subsequent conduct. No such

dishonest intention from inception of transaction is

forthcoming from the record.

10. To attract the offence of criminal breach of trust, the

property must have been entrusted to the accused or he

must have domination over it. The property in respect of

which the offence of breach of trust is 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. The ingredients of breach of trust

under Section 406 of IPC are not made out in the facts of

the case.

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11. Charges are levelled under both the Sections, in the

facts and circumstances of the case. This Court holds that

ingredients of Sections 406 and 420 of IPC are not made out,

hence, are liable to be set aside.

12. Learned counsel for petitioner/accused No.2 submitted

that in spite of the distinction spelled out with regard to

Sections 406 and 420 of IPC (corresponding provisions

in BNS under Sections 316 and 318(4)), officers of the State

are registering crimes under Sections 406 and 420 of IPC on

the same set of facts. Learned counsel for petitioner further

submits that Courts of Competent jurisdiction are taking

cognizance on the basis of charge sheet, where charges are

registered under both the Sections (for offences), without

delving into the aspect of the fine distinction spelled out by

the Hon'ble Apex Court in Delhi Race Club's case (supra 1).

13. Learned counsel submitted that as per the Hon'ble

Apex Court judgment in Arnesh Kumar v. State of Bihar 2,

the accused in the present case be let out and the officers of

the State be roped in for contempt for violating the Apex

(2014) 8 SCC 273

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Court's decision and non adhering to procedure under

Section 41(A) of Cr.P.C. It is further contended that initiation

of disciplinary proceedings can be contemplated against the

judicial officers for non adherence to Section 41(A) of Cr.P.C.,

and taking the cognizance of the cases. Learned counsel

invited the attention of this Court to the relevant portion of

the Judgment of the Hon'ble Apex Court in Arnesh Kumar's

case (supra 2) wherein it is held that Courts and Officers are

bound to follow the procedure as laid down in the judgment.

14. On considering the entire factual matrix of the case,

this Court is of the opinion that ingredients necessary to

prove the charge under Sections 406 and 420 of IPC are

not made out against petitioner/accused No.2, hence,

continuance of proceedings are an abuse of process of law.

15. Registry is directed to annex a copy of the judgment of

the Hon'ble Apex Court in Delhi Race Club's case (supra 1)

along with this judgment and circulate the same to all the

Judicial Officers of the State for adherence to the law laid

down by the Hon'ble Apex Court. A copy of this judgment

along with the judgment of Delhi Race Club's case (supra 1)

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be marked to the Director General of Police, so that

necessary instructions be issued to all police officers in the

State to abide by the law laid down in Delhi Race Club's

case (supra 1).

16. For reasons aforesaid, the proceedings against

petitioner/accused No.2 in CC.No.2628 of 2020 on the file of

V Additional Metropolitan Magistrate Court, Medchal

Malkajgiri District, at L.B.Nagar, are liable to be quashed

and are hereby quashed.

17. Accordingly, the criminal petition is allowed.

Miscellaneous applications pending, if any, shall stand

closed.

___________________________ ANIL KUMAR JUKANTI, J

Date: 30.06.2025 Note:- Registry is directed to-

1. Mark a copy of this order along with a copy of the judgment of Hon'ble Apex Court in Delhi Race Club and circulate the same to all Judicial Officers.

2. Furnish a copy of this order to the Director General of Police along with a copy of the judgment of Hon'ble Apex Court in Delhi Race Club.

(B/o) Kgk