Patna HC Dismisses Quashing Petition, Holds Non-Payment of Land Sale Balance Is a Civil Dispute, Not Cheating

Justice Alok Kumar Pandey of the Patna High Court dismissed a quashing petition, holding that failure to pay Rs. 90.20 lakh under a land sale agreement discloses no criminal offence under Sections 406, 420 or 120B of the IPC.

The Patna High Court has dismissed a criminal miscellaneous petition seeking to quash orders by which a land-dispute complaint was rejected at the trial stage and again in criminal revision. Justice Alok Kumar Pandey, sitting singly, found that the complaint filed by Yogesh Kumar Singh — centred entirely on the non-payment of the remaining consideration money of Rs. 90,20,000 under a land sale agreement — did not disclose the ingredients of cheating, criminal breach of trust, or criminal conspiracy under the Indian Penal Code. Both courts below had reached the same conclusion, and the High Court found no reason to disturb their concurrent findings.

The Land Sale Agreement and the Complaint

The dispute traces its origin to an agreement dated 15 January 2021. Under that agreement, Yogesh Kumar Singh, acting as the agent of a land owner identified as Mukundachari Mishra, was authorised to facilitate the sale of 5 kattha of land belonging to Opposite Party Nos. 2 and 3 — Lalita Devi and Shivji Prasad, residents of Siwan. The agreed price for that parcel was Rs. 2,26,00,000, and an advance of Rs. 20,00,000 was paid at the time.

Subsequently, according to the complaint, the accused persons orally pressurised the complainant to arrange the registration of a larger area — 6 kattha and 6 dhur — in favour of Lalita Devi. On 25 February 2022, the land owner executed the sale deed for that larger area. Against that registration, the accused paid Rs. 1,60,00,000 into the accounts of the land owner's wife and son, and promised to pay the balance — Rs. 46,00,000 for the originally agreed parcel and Rs. 44,20,000 for the extra 1 kattha and 6 dhur, totalling Rs. 90,20,000 — within 15 days. That balance was never paid despite repeated reminders.

The complainant filed Complaint Case No. 763 of 2022 before the Judicial Magistrate, Siwan, invoking Sections 120B, 406, 420, 504 and 506 read with Section 34 of the IPC. He alleged that the refusal to pay Rs. 90,20,000 amounted to cheating, criminal breach of trust, and criminal conspiracy.

Rejection at Two Successive Courts

On 24 January 2024, the Judicial Magistrate, First Class, Siwan dismissed the complaint under Section 203 of the Code of Criminal Procedure, 1973. The Magistrate found no prima facie case. The reasoning recorded was that the matter essentially involved a civil dispute arising from a contractual arrangement, and that matters of civil nature cannot be converted into criminal proceedings.

The complainant challenged that dismissal before the Additional Sessions Judge-XI, Siwan in Criminal Revision No. 49 of 2024. On 1 October 2024, the revisional court dismissed the revision as well. The Additional Sessions Judge affirmed the Magistrate's reasoning, observing that the gist of the case was the enforcement of an agreement and recovery of money, which is a civil remedy. The revisional court also took note of a specific procedural gap: the complaint alleged that on 22 April 2022 the complainant went to the accused and demanded the balance amount, and that the accused refused. Yet during the enquiry conducted by the Magistrate, neither the complainant himself nor the two enquiry witnesses — Dharan Kumar Singh and Gautam Kumar Yadav — made any reference to that incident of 22 April 2022.

Aggrieved by both orders, Yogesh Kumar Singh filed CR. MISC. No. 5203 of 2025 before the Patna High Court, seeking to quash the revisional court's order dated 1 October 2024.

Petitioner's Case Before the High Court

Counsel for the petitioner argued that the enquiry witnesses had supported the version in the complaint, that the accused had assured payment and on that assurance the land was registered in their names, and that after execution of the sale deed the accused refused to pay the balance. The submission was that this constituted breach of trust, cheating, and forgery. The petitioner's counsel further submitted that neither the trial court nor the revisional court had properly appreciated the material on record, and that both had arrived at a wrong conclusion.

State's Response and the Concurrent Findings

The Additional Public Prosecutor, appearing for the State, supported the orders of both lower courts. The State's submission was that the complaint was filed solely to recover the unpaid balance of Rs. 90,20,000, and that dressing a civil money claim in criminal language does not import criminality. The State pointed out that the substantial portion of the agreed price — Rs. 1,80,00,000 — had already been paid, which itself negated any inference of a dishonest or fraudulent intention from the outset. The failure of both enquiry witnesses to corroborate the alleged incident of 22 April 2022 was also pressed as fatal to the complainant's case.

The High Court's Reasoning on Sections 420, 406 and 120B IPC

Justice Pandey examined the ingredients of each offence invoked in the complaint against the admitted facts on record.

On Section 420 IPC, the Court reiterated the settled position that for cheating, the accused must have had a fraudulent or dishonest intention at the time of making the promise. Subsequent failure to honour a promise does not, without more, justify the inference that a culpable intention existed from the beginning. On the facts, the accused had paid Rs. 1,80,00,000 in all. The Court found nothing in the complaint to show that the accused induced delivery of any property through deception or that dishonest inducement was present at the inception of the transaction. The sole grievance was the non-payment of the remaining Rs. 90,20,000, which did not satisfy the test of dishonest inducement under Section 420.

On Section 406 IPC (criminal breach of trust), the Court applied the framework of Section 405 IPC and held that the complainant had not placed any material on record to show that he had entrusted any property to the accused, or that any such property was thereafter dishonestly misappropriated or converted. Without those foundational averments, the ingredients of criminal breach of trust were absent.

Justice Pandey then addressed a point of internal inconsistency in the complaint. Relying on the Supreme Court's decision in Delhi Race Club (1940) Limited v. State of Uttar Pradesh, reported in (2024) 10 SCC 690, the Court observed that criminal breach of trust and cheating are distinct and antithetical offences. In criminal breach of trust, the offender is lawfully entrusted with property and dishonestly misappropriates it — criminal intention arises after lawful possession. In cheating, the offender fraudulently induces delivery of property through deception operating from the outset. The two offences cannot co-exist on the same set of facts. A complaint that simultaneously invokes both is therefore internally contradictory.

On the Section 120B charge, the Court found no independent basis for criminal conspiracy once the predicate offences of cheating and criminal breach of trust were not made out.

The Court further applied the principle from Vesa Holdings Private Limited and Another v. State of Kerala and Others, reported in (2015) 8 SCC 293, that every breach of contract does not give rise to cheating. A breach of contract amounts to cheating only where deception was played at the very inception of the transaction. Where an intention to default developed later, it cannot constitute cheating under Section 420. On the admitted facts — substantial payment made, balance not paid — there was nothing to show that the accused harboured a fraudulent intention when the agreement was entered into in January 2021 or when the sale deed was executed in February 2022.

The Court observed that the claim regarding the incident of 22 April 2022 — when the accused allegedly refused outright to pay — was not referred to by the complainant or either enquiry witness during the Magistrate's enquiry. This gap, noted by both earlier courts, remained unaddressed before the High Court as well.

Finding the reasoning of the revisional court legally sound and not contrary to any settled principle, Justice Pandey declined to interfere. The Court recorded that “the view taken by revisional court is justified and legal” and that the petitioner had not made out any case warranting interference.

Outcome

CR. MISC. No. 5203 of 2025 was dismissed on 7 August 2026. The order of the Additional Sessions Judge-XI, Siwan dated 1 October 2024 — dismissing the criminal revision against the Magistrate's order rejecting the complaint under Section 203 Cr.PC — was left undisturbed. Any interlocutory applications arising in the miscellaneous petition were also disposed of. The complainant's remedy, if any, remains on the civil side.