Allowed

Kailas Rameshwar Agrawal and Others v. the State of Maharashtra and Anr.

Bombay HC3 Jan 2023WP/829/2019

Case brief

AI extract

What is this about?

Division Bench of the High Court of Bombay at Aurangabad quashed an FIR and charge-sheet alleging cheating under Section 420 IPC. The court held that the facts showed no fraudulent intent or culpable intention on the part of the petitioners. It ruled that mere breach of contract or delay in registration due to objections by a third party cannot constitute criminal cheating.

What did the court decide?

FIR no. 0258 of 2019 and consequential charge-sheet no. 7/2020 were quashed and set aside.

Kailas Rameshwar Agrawal and Others Vs the… — Contract and Commercial Disputes | Bombay HC (2023)

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908.WP.829.2019.doc

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD

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CRIMINAL WRIT PETITION NO.829 OF 2019

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1. Kailas Rameshwar Agrawal, Age : 56 years, Occ: Business,

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2. Vijaya Suresh Agrawal, Age : 52 years, Occ: Business,

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3. Sangita Satish Agrawal, Age : 52 years, Occ: Business,

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4. Beena Vijay Agrawal, Age : 48 years, Occ: Business,

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5. Vijay Rameshwar Agrawal, Age : 58 years, Occ : Business

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(All R/o Kasturi Palace,
Weekly Market, Bhusawal,
Tq. Bhusawal, Dist. Jalgaon)

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...Petitioners

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Versus

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1. The State of Maharashtra

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2.Ravindra Murdlidhar Attarde,
Age : 62 years, Occ : Business,
R/o. 6, Shakuntal, Patel Nagar,
Jalgaon, Tq. & Dist. Jalgaon.
And alternate address:
Starglaze Precitech Pvt. Ltd.
Additional Jalgaon, Industrial
Area MIDC, Mehrun, Jalgaon
Tq. & Dist. Jalgaon....Respondents

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...

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Mr. H.P. Randhir h/f Mrs. Chaitali Chaudhari Kutti,
Advocate for the Petitioners.
Mr. A.R. Kale, APP, for the Respondent – State.
Mr. S.P. Brahme and Mr. M.S. Shah, Advocate for
Respondent No. 2.

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...

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Page 1 of 7

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Malani

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908.WP.829.2019.doc

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CORAM:SMT. ANUJA PRABHUDESSAI & R.M. JOSHI, JJ

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DATE:JANUARY 03, 2023

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PER COURT :

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1.With consent of learned Counsel appearing for
respective parties, matter is heard finally at the
stage of admission.

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2.This is a Petition filed under Article 226 &
227 of the Constitution of India read with Section 482
of Cr.P.C for quashing FIR no. 0258 of 2019 registered
with MIDC Police Station, Jalgaon for the offences
punishable under Section 420 read with 34 of the Indian
Penal Code, 1860 and consequential charge-sheet no.
7/2020 (R.C.C. No. 192/2019) pending on the file of
Learned JMFC, Jalgaon.

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3.We have perused the record and considered the
submissions advanced by learned Counsel appearing for
respective parties.

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4.The short point for consideration is, whether
the first information report and the other records
disclose commission of offence under Section 420 read
with Section 34 of the Indian Penal Code.

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Page 2 of 7

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Malani

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908.WP.829.2019.doc

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5.The record reveals that the Petitioners herein
were the lessees of plot no. F-28, MIDC, Jalgaon
admeasuring 5026 sq.mts. The Petitioners entered into
an agreement dated 04.09.2017 with the Respondent No. 2
for transferring leasehold rights in respect of said
plot in his favour. Pursuant to the said agreement, the
Respondent No. 2 paid an amount of Rs. 21 lacs to the
Petitioners and the deed of assignment was to be
executed within three months from the date of
agreement. The record further reveals that the deed of
assignment was in fact executed on 01.10.2018 and
before the said deed could be registered, brother of
the Petitioner sent an email to the Respondent No. 2
claiming that he was in possession of the said plot.
Claim put-forth by the brother of the Petitioners
caused hindrance in registration of the deed of
assignment. Being aggrieved, the Respondent No. 2
lodged first information report alleging that the
Petitioners had entered into an agreement and accepted

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an amount of Rs. 21 lacs by misrepresenting that they
were in possession of the property.

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Page 3 of 7

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Malani

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908.WP.829.2019.doc

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6.It is not in dispute that the subject land
belongs to MIDC and the said land was leased to a
partnership firm namely, Amit Steel Rolling Mill. The
Petitioners as well as Ajay Agrawal, who is one of the
brothers of the Petitioners, was a partner of the Amit
Steel Rolling Mill. The record reveals that by
retirement deed executed on 19th December, 1987, the
brother Ajay Agarwal had retired and the present
Petitioners continued to be the partners of the said
partnership firm. The retirement deed reveals that the
parties had agreed that the continuing partners would
be at liberty to carry out the business under the name
and style of M/s. Amit Steel Rolling Mill and retiring
partner would have no objection for the same. The
letter dated 30.08.2018 of MIDC also reveals that the
lease was originally in the name of the Petitioners as
well as Ajay Agarwal. The subsequent transfer was only
in the name of Petitioners herein.

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7.The aforesaid material on record reveals that
the Petitioners herein were holding leasehold rights in
respect of the subject land. The Petitioners had

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Page 4 of 7

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Malani

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908.WP.829.2019.doc

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cooperated with the Respondent No. 2 in recording his
name as transferee. In fact the name of the Respondent
No. 2 has been recorded in the records of the MIDC as a
transferee. The records reveal that the deed of
assignment of executed, however the deed was not
registered due to the objections raised by the brother
of the Petitioners. It is stated that the Respondent
No. 2 has already instituted a suit for specific
performance.

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8.The question is whether non-registration of
deed of assignment would constitute offence of
cheating. InVijay Kumar Ghai & Ors. Vs. The State of
West Bengal and Ors reported in (2022) 7 SCC 124, the
Hon’ble Supreme Court in para 38 has observed that

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“There can be no doubt that a mere breach of contract
is not in itself a criminal offence and gives rise to
the civil liability of damages. However, as held by
this Court in Hridaya Ranjan Prasad Verma v. State of
Bihar1, the distinction between mere breach of contract
and cheating, which is criminal offence, is a fine one.
While breach of contract cannot give rise to criminal
prosecution for cheating, fraudulent or dishonest

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1 (2000) 4 SCC 168

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Page 5 of 7

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Malani

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908.WP.829.2019.doc

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intention is the basis of the offence of cheating.”

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9.In the instant case, the FIR and the charge-
sheet do not disclose that the Petitioners had culpable
intention to cheat at the time they had agreed to
assign the lease rights in favour of the Respondent No.
2. It is not the case that the Petitioners had entered
into the agreement with malafide intentions. On the
contrary, the records indicate that the Petitioners
have all throughout cooperated in transferring the
lease rights in favour of Respondent No. 2. In such
circumstances, mere failure or the delay caused in
registration of deed of assignment in view of
objections raised by the brother of the Petitioners,
would not constitute offence of cheating.

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10.In view of the above facts and circumstances,
continuation of the criminal proceedings against the
Petitioners would be an abuse of the process of law.
Hence, the Petition is allowed in terms of prayer
clause ‘B’. Consequently, FIR no. 0258 of 2019
registered with MIDC Police Station, Jalgaon for
offence punishable under Section 420 read with 34 of
the Indian Penal Code, 1860 and consequential charge-

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Page 6 of 7

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Malani

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908.WP.829.2019.doc

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sheet no. 7/2020 (R.C.C. No. 192/2019) pending on the
file of Learned JMFC, Jalgaon, are hereby quashed and
set aside.

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(R.M. JOSHI, J.)

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(SMT. ANUJA PRABHUDESSAI, J)

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Page 7 of 7

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Malani

Kailas Rameshwar Agrawal and Others v. the State of Maharashtra and Anr.

Case brief

What is this about?

What did the court decide?

Kailas Rameshwar Agrawal and Others v. the State of Maharashtra and Anr.

Case brief

What is this about?

What did the court decide?

What the court decided

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