The Gauhati High Court set aside an order taking cognizance in an alleged case of cheating related to a land transaction and reiterated that every breach of trust may not result in a criminal breach of trust unless there is evidence showing an act of fraudulent misappropriation.

The High Court was considering a Petition filed by the Petitioner under Section 482 of the Cr.P.C. read with Sections 401,397 seeking quashing of the impugned order of the Sub-Divisional Judicial Magistrate whereby the Magistrate Court had taken cognizance of the offences under Sections 420,406 of IPC against the accused/petitioner.

The Single Bench of Justice Kaushik Goswami explained, “The act of breach of trust involves a civil wrong, in which a person who is aggrieved, may seek redressal for damages in civil Court but a breach of trust with mens rea gives rise to criminal prosecution. Similarly, 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. To hold the person guilty of cheating, it is necessary to show that he had fraudulent or dishonest intention at the time of making promise.”

Advocate B. Goswami represented the Petitioner while Advocate P.S. Lahkar represented the Respondent.

Factual Background

The complainant/respondent no.2 filed a complaint petition before the Chief Judicial Magistrate stating that he was in search of a plot of land for constructing a permanent residence and the accused/petitioner agreed to sell his plot of land. The complainant was asked to make an advance payment of Rs 2 lakh. Accordingly, the complainant, in the presence of two witnesses, paid the same, but the accused/petitioner did not comply with the sale and a legal notice was issued.

It was alleged that the accused/petitioner had cheated the complainant. The Sub-Divisional Judicial Magistrate recorded the statement of the complainant and thereafter took cognizance against the accused/petitioner. Thus, the present petition was filed seeking to quash the complaint as well as the order taking cognizance.

Reasoning

The Bench, at the outset, said, “It is well settled that every breach of trust may not result in criminal breach of trust unless there is evidence showing act of fraudulent misappropriation.”

On a perusal of the facts of the case and the averments, the Bench held that there appeared to be no misappropriation or fraudulent or dishonest intention at the beginning of the transaction and, as such, no case under Section 420/406 could be said to be made out from reading the complaint. “Mere breach of a promise cannot give rise to criminal prosecution”, it added.

Thus, finding the order of the Magistrate Court taking cognizance under Section 420/406 of IPC against the accused/petitioner to be manifestly erroneous, the Bench allowed the Criminal Petition and quashed the impugned order and the proceedings against the Petitioner.

Cause Title: Sri Brajendra Das v. The State Of Assam (Neutral Citation: 2025:GAU-AS:2446)

Appearance:

Petitioner: Advocate B. Goswami

Respondent: Advocate P.S. Lahkar

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Gauhati High CourtJustice Kaushik Goswami

Tulip Kanth

Assistant Editor

Tulip Kanth is an Assistant Editor at Verdictum having over 5 years of experience in the field of legal journalism and editing. She extensively covers judgments of the Supreme Court, High Courts as well as Tribunals. She has previously worked with a legal publishing website where she oversaw the work of other editors and has also created updates on notifications of different Government Ministries. She holds an English Honours Degree from SGTB Khalsa College, Delhi University and has completed her LLB course with specialisation in Corporate Law from Amity University.