Rakesh Kumar @ Rakesh Kumar Gautam vs the State of U.P. Thru. Prin. Secy. Home Civil Sectt. Lko. and Another

2. The instant application under Section 528 BNSS has been filed by the applicant with a prayer to quash/set aside the summoning order dated 21.12.2024 passed in Case Crime No.6485 of 2024, arising out of F.I.R. No.579 of 2024, under Sections 406 and 420 I.P.C., Police Station Kotwali Nagar, District Sultanpur.

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3. Learned counsel for the applicant has submitted that the applicant is innocent and has been falsely implicated in the present case by opposite party no.2 with an ulterior motive to harass and blackmail him. He has also submitted that the Opposite Party No.2

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NA528 No. - 468 of 2026

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lodged the FIR on 28.08.2024 regarding an alleged occurrence dated 04.08.2018, after a delay of about six years, alleging commission of offences by the applicant and others. His further submission is that the FIR has been lodged belatedly without any satisfactory explanation for such delay and the allegations made therein are false and baseless. During investigation, statements of witnesses under Section 161 Cr.P.C. were recorded, however, according to the applicant, the said statements do not disclose the commission of the alleged offences.

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4. It has also been submitted on behalf of the applicant that the learned Magistrate has taken cognizance in Case Crime No.6485 of 2024 under Sections 406 and 420 I.P.C. which could not have been done simultaneously in light of the judgment of the Hon'ble Supreme Court in Delhi Race Club (1940) Ltd. vs. State of Uttar Pradesh reported in AIROnline 2024 SC 612.

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5. Having heard learned counsel for parties and upon perusal of the records it transpires that in the instant case, learned Magistrate has taken cognizance while issuing summons both under Section 406 and 420 I.P.C. which could not have been done in view of the law laid down as noted hereinabove.

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6. The summoning of an accused in a criminal case is a serious matter and cannot be set into motion as a matter of course. The order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. The Hon’ble Supreme Court in the case of S.W.

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NA528 No. - 468 of 2026

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Palanitkar v. State of Bihar, (2002) 1 SCC 241 expounded the difference in the ingredients required for constituting of an offence of criminal breach of trust (Section 406 IPC) vis-à-vis the offence of cheating (Section 420). The relevant observations as made in paragraph 9 and 10 of the judgment are reproduced hereinbelow :-

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“9. The ingredients in order to constitute a criminal breach of trust are : (i) entrusting a person with property or with any dominion over property; (ii) that person entrusted : (a) dishonestly misappropriating or converting that property to his own use; or (b) dishonestly using or disposing of that property or wilfully suffering any other person so to do in violation (i) of any direction of law prescribing the mode in which such trust is to be discharged, (ii) of any legal contract made, touching the discharge of such trust.

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10. The ingredients of an offence of cheating are : (i) there should be fraudulent or dishonest inducement of a person by deceiving him, (ii)(a) the person so deceived should be induced to deliver any property to any person, or to consent that any person shall retain any property; or (b) the person so deceived should be intentionally induced to do or omit to do anything which he would not do or omit if he were not so deceived; and (iii) in cases covered by (ii)(b), the act of omission should be one which causes or is likely to cause damage or harm to the person induced in body, mind, reputation or property.”

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NA528 No. - 468 of 2026

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7. The Hon’ble Supreme Court in the case of CBI v. Duncans Agro Industries Ltd., (1996) 5 SCC 591 has held that the expression “entrusted with property” used in Section 405 IPC connotes that the property in respect of which criminal breach of trust can be committed must necessarily be the property of some person other than the accused or that the beneficial interest in or ownership thereof must be in the other person and the offender must hold such property in trust for such other person or for his benefit. The relevant observations in paragraph no.27 of the judgement is quoted hereinbelow :-

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“27. In the instant case, a serious dispute has been raised by the learned counsel appearing for the respective parties as to whether on the face of the allegations, an offence of criminal breach of trust is constituted or not. In our view, the expression “entrusted with property” or “with any dominion over property” has been used in a wide sense in Section 405IPC. Such expression includes all cases in which goods are entrusted, that is, voluntarily handed over for a specific purpose and dishonestly disposed of in violation of law or in violation of contract. The expression “entrusted” appearing in Section 405IPC is not necessarily a term of law. It has wide and different implications in different contexts. It is, however, necessary that the ownership or beneficial interest in the ownership of the property entrusted in respect of which offence is alleged to have been committed must be in some person other than the accused and the latter must hold it on account of some

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NA528 No. - 468 of 2026

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person or in some way for his benefit. The expression “trust” in Section 405IPC is a comprehensive expression and has been used to denote various kinds of relationships like the relationship of trustee and beneficiary, bailor and bailee, master and servant, pledger and pledgee. When some goods are hypothecated by a person to another person, the ownership of the goods still remains with the person who has hypothecated such goods. The property in respect of which criminal breach of trust can be committed must necessarily be the property of some person other than the accused or the beneficial interest in or ownership of it must be in the other person and the offender must hold such property in trust for such other person or for his benefit. In a case of pledge, the pledged article belongs to some other person but the same is kept in trust by the pledgee.”

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8. Attention of this Court has been drawn to paragraph 30 of the aforesaid judgment, which is reproduced hereinbelow :-

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"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.

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

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9. In both the aforesaid sections i.e. 406 and 420 I.P.C. the intention to defraud or the dishonest intention must be present and in the case of cheating it must be there from the very beginning or inception. 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

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NA528 No. - 468 of 2026

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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 when the offence is said to have been committed. Therefore, it is the intention, which is the gist of the offence. Whereas, in the case of 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. For cheating, the criminal intention is necessary at the time of making a false or misleading representation. In criminal breach of trust, mere proof of entrustment is sufficient. Thus, in a case of criminal breach of trust, the offender is lawfully entrusted with the property, and he dishonestly misappropriates the same. Whereas, in case of cheating, the offender fraudulently or dishonestly induces a person by deceiving him to deliver any property. In such a situation, both the offences cannot co-exist simultaneously.

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10. Coming to the present case, this Court finds that learned Chief Judicial Magistrate, Sultanpur while passing the summoning order dated 21.12.2024 did not

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apply its mind and issued summons in Sections 406 and 420 I.P.C. which cannot co-exist simultaneously as discussed hereinabove in preceding paragraphs.

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11. In view of the above, the instant application under Section 528 B.N.S.S. stands allowed . The summoning order dated 21.12.2024 passed in Case Crime No.6485 of 2024, arising out of F.I.R. No.579 of 2024, under Sections 406 and 420 I.P.C., Police Station Kotwali Nagar, District Sultanpur is hereby quashed.

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12. The matter is remitted back to the court of Chief Judicial Magistrate, Sultanpur for passing fresh order with regard to taking cognizance and summons in Case Crime No.579 of 2024, under Sections 406 and 420 I.P.C., Police Station Kotwali Nagar, District Sultanpur within a period of three weeks from the date of production of a certified copy of this order. The concerned court shall deliberate upon and take decision whether offence under Sections 406 or under Section 420 is made out while taking cognizance as both the offences cannot co-exist simultaneously and issue summons accordingly in the instant case.

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(Amitabh Kumar Rai,J.)

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May 15, 2026 Ashish Dewal

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Digitally signed by :- ASHISH DEWAL High Court of Judicature at Allahabad, Lucknow Bench

Rakesh Kumar @ Rakesh Kumar Gautam v. the State of U.P. Thru. Prin. Secy. Home Civil Sectt. Lko. and Another

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Rakesh Kumar @ Rakesh Kumar Gautam v. the State of U.P. Thru. Prin. Secy. Home Civil Sectt. Lko. and Another

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