PENAL CODE, 1860 — Ss. 420, 415 — CHEATING — ESSENTIAL INGREDIENTS — FRAUDULENT OR DISHONEST INTENTION AT INCEPTION — NOT MADE OUT Held, to constitute an offence under S. 420 IPC, complainant must show fraudulent or dishonest intention at the time of making the promise. Mere non-fulfilment of a later promise does not establish culpable intention from the beginning. Complaint does not disclose any intentional deception, false representation, or dishonest inducement at the inception of the partnership. Allegation that appellant “dishonestly induced” complainant to invest is unsupported by material. Offence under S. 420 not made out. (Paras 18–20)

PENAL CODE, 1860 — Ss. 420, 415 — CHEATING — ESSENTIAL INGREDIENTS — FRAUDULENT OR DISHONEST INTENTION AT INCEPTION — NOT MADE OUT

Held, to constitute an offence under S. 420 IPC, complainant must show fraudulent or dishonest intention at the time of making the promise. Mere non-fulfilment of a later promise does not establish culpable intention from the beginning. Complaint does not disclose any intentional deception, false representation, or dishonest inducement at the inception of the partnership. Allegation that appellant “dishonestly induced” complainant to invest is unsupported by material. Offence under S. 420 not made out. (Paras 18–20)

PENAL CODE, 1860 — Ss. 406, 405 — CRIMINAL BREACH OF TRUST — ENTRUSTMENT — FAILURE TO ALLEGE OR ESTABLISH ENTRUSTMENT — NO DISHONEST MISAPPROPRIATION

For criminal breach of trust, complainant must show entrustment and dishonest misappropriation. Complaint nowhere discloses how the disputed property was entrusted to the appellant. Partnership deed (01-10-1976) shows disputed property was solely owned by appellant and only brought into partnership for business; supplementary agreement (03-04-1981) records reversion of property to appellant after expiry of FCI lease. No averment that appellant came into possession illegally or misappropriated property entrusted to him. Ingredients of S. 406 not satisfied. (Paras 21–22)

CRIMINAL LAW — CHEATING AND CRIMINAL BREACH OF TRUST — MUTUALLY INCONSISTENT OFFENCES — CANNOT CO-EXIST ON SAME FACTS

Applying Delhi Race Club (1940) Ltd. v. State of U.P., (2024) 10 SCC 690: cheating requires dishonest inducement from inception; breach of trust requires lawful entrustment followed by misappropriation. Both cannot coexist on same facts. Complaint alleging both offences is legally untenable. (Para 23)

PARTNERSHIP — CIVIL DISPUTE — INTER SE RIGHTS OF PARTNERS — REVERSION CLAUSE — CRIMINAL PROCEEDINGS NOT MAINTAINABLE

Partnership deed and supplementary deed (03-04-1981) clearly stipulated that on expiry of the lease period (01-06-1993), disputed property would revert to appellant. Dissolution deed (03-04-1997) transferred all assets and liabilities to appellant as sole proprietor. Complainant cannot “blow hot and cold” by agreeing to reversion yet alleging misappropriation. Matter is essentially civil, already subject of Title Suit No. 160/2012. Resort to criminal law impermissible. (Paras 15, 22, 24)

CrPC — Ss. 482 / BNSS S. 528 — QUASHING — BHARJAN LAL PRINCIPLES — MATTER PURELY CIVIL — PROSECUTION MALAFIDE

Applying State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335:
– Allegations even if taken at face value do not constitute any offence;
– Ingredients of Ss. 406/420 not disclosed;
– Complaint filed after 16 years of alleged events;
– Criminal proceedings being used vindictively to settle partnership disputes.
Proceedings manifestly attended with mala fide; continuation would be an abuse of criminal process. (Paras 26–27)

LIMITATION — CrPC Ss. 468, 473 — COMPLAINT FILED 16 YEARS AFTER ALLEGED ACTS — BARRED BY LIMITATION

Complaint filed on 19-09-2013 alleging acts of 1997; limitation for S. 406 is three years; no application for condonation under S. 473 CrPC. On appellant’s submission, complaint time-barred. Though Court decides case on merits, limitation is an additional relevant circumstance. (Para 14)

CRIMINAL PROCEEDINGS MISUSED FOR ULTERIOR MOTIVES — COURTS MUST BE VIGILANT

Referring to Vishal Noble Singh v. State of U.P., 2024 SCC OnLine SC 1680: increasing misuse of criminal justice system for vested interests requires courts to be alert. Present complaint contains grave allegations without justification, causing unwarranted burden on courts and parties. (Para 28)

OUTCOME

Impugned order of Gauhati High Court set aside. Complaint Case No. 3230c/2013 and all consequential proceedings quashed. Appeal allowed. (Paras 29–30)