Gujarat High Court
Bhavinchandra Suryakant Purohit vs State Of Gujarat on 9 March, 2026
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE
FIR/ORDER) NO. 9681 of 2023
FOR APPROVAL AND SIGNATURE:
HONOURABLE MRS. JUSTICE M. K. THAKKER
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Approved for Reporting Yes No

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BHAVINCHANDRA SURYAKANT PUROHIT
Versus
STATE OF GUJARAT & ORS.
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Appearance:
MR. BHAVIN S PUROHIT(6973) for the Applicant(s) No. 1
PARTY IN PERSON(5000) for the Applicant(s) No. 1
MR ANKIT SHAH(6371) for the Respondent(s) No. 2,3
MR. RONAK RAWAL, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MRS. JUSTICE M. K. THAKKER
Date : 09/03/2026
JUDGMENT
1. The present application has been filed seeking the
following reliefs:-
“A) Be pleased to admit and allow this application;
B) Be pleased to quash and set aside the FIR registered with the
Gotri Police of Vadodara in Crime Register No. 11196004230076
of 2023 on dated 31/01/2023 for the offence punishable under thePage 1 of 16
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section 406 and 420 of the Indian Penal Code.
C) Pending admission, hearing and final disposal of this petition,
be pleased to stay further criminal proceedings for all complaints
falls under the FIR 11196004230076 of 2023, like CC/10397/2023,
CRMA/1192/2023 and any other present and future criminal
proceedings brought before any court of Law with reference to the
above FIR be stayed in the interest of justice.
D) Be pleased to pass an Order to the Nazir of Vadodara District
and Sessions Court to release Petitioners Passport No. J-6415271
Expiry 09/09/2023 taken in custody on 13/2/2023.
E) Be pleased to Order the arrest as an unlawful arrest and set
aside the Atak Memo (Arrest Memo).
F) Be pleased to Order to grant a compensation of Rupees Five
Crore to be paid by Gujarat State Government to the Accused for
unlawful torture, chasing accused since September 2022 without
registering FIR and unlawful detention and later arrest thereby
compromising personal liberty and fundamental rights of the
accused, a citizen of India.
G) Be pleased to Order an investigation against the Complainants
under the Land Grabbing Act and issue Orders to hand over the
possession of flat 102/C, Shantam Flats, Gadapura, Gotri,
Vadodara to its rightful owner the accused, Mr Bhavinchandra
Purohit of 29, Kuvareshwar Society, Harni Road, Vadodara
390022.
H) Be pleased to Order the DGP Gujarat and Commissioner of
Police to investigate the failures of police and set an example that
no such incident ever happens to any innocent. citizens or
resident of India.
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I) Be pleased to pass such other and further relief/s that may be
deemed fit and proper; in the facts and circumstances of the
case;”
2. Heard the party-in-person, namely Mr. Bhavin Purohit,
and the learned advocate Mr. Ankit Shah appearing on
behalf of the respondent.
3. Mr. Bhavin Purohit, party-in-person, submitted that the
impugned FIR pertains to a dispute of purely civil
nature. It is contended that on account of non-execution
of the sale deed, allegations under Sections 406 and 420
of the Indian Penal Code have been levelled. It is further
submitted that a bare reading of the allegations made in
the FIR does not disclose the commission of any offence
under the provisions of the Indian Penal Code. In the
aforesaid circumstances, it is submitted that the FIR is
nothing but an abuse of the process of law and,
therefore, the impugned FIR deserves to be quashed and
set aside.
4. Per contra, learned advocate Mr. Ankit Shah appearing
for the respondent submitted that after accepting the
amount, a Banakhat was executed. It is contended that
though the complainant was ready and willing to pay the
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remaining amount of the sale consideration, the
applicant refused to execute the sale deed. Therefore, it
is submitted that the FIR requires proper investigation
and the applicant must face the charges levelled against
him. In this background, it is prayed that the present
petition be dismissed.
5. Having considered the submissions advanced by party-
in-person as well as the learned advocate for the
respondent and upon perusal of the impugned FIR
registered at Gotri Police Station at the instance of the
complainant on 31.01.2023, it appears that a Banakhat
was executed between the complainant and the
applicant for the sale of a house situated at Amardeep
Cooperative Housing Society, near Utkarsh Vidhyalay,
Vadodara, bearing House No. 107. The sale
consideration was fixed at Rs. 15,50,000/-, out of which
an amount of Rs. 4,00,000/- was paid through cheque
bearing No. 986340 dated 12.05.2012 and Rs. 3,50,000/-
was allegedly paid in cash. As per the averments made
in the FIR, the remaining amount of Rs. 8,00,000/- was
also paid in cash and an assurance was given that the
sale deed would be executed as and when the
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complainant informed the applicant. It is further alleged
that thereafter the applicant went abroad and, upon
returning, when the complainant requested execution of
the sale deed, the applicant refused to do so. In this
background, the FIR under Sections 406 and 420 of the
Indian Penal Code came to be registered.
6. This Court has referred to the decision rendered by the
Apex Court in the case of Delhi Race Club (1940) Ltd.
& Ors. Versus State of Uttar Pradesh & Anr.
reported in (2024) 10 SCC 690, wherein the Apex
Court has held as under:-
“35. This Court in its decision in S.W. Palanitkar & Ors. v. State
of Bihar & Anr. reported in (2002) 1 SCC 241 expounded the
difference in the ingredients required for constituting an of offence
of criminal breach of trust (Section 406 IPC) viz-a-viz the offence
of cheating (Section 420). The relevant observations read as under:
–
“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 dischargePage 5 of 16
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of such trust.
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.”
36. What can be discerned from the above is that the offences of
criminal breach of trust (Section 406 IPC) and cheating (Section
420 IPC) have specific ingredients.
In order to constitute a criminal breach of trust (Section 406 IPC):
–
1) There must be entrustment with person for property or
dominion over the property, and
2) The person entrusted: –
a) dishonestly misappropriated or converted property to his own
use, or
b) dishonestly used or disposed of the property or willfully suffers
any other person so to do in violation of:
i. any direction of law prescribing the method in which the trust
is discharged; orii. legal contract touching the discharge of trust (see: S.W.P.
Palanitkar (supra).
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Similarly, in respect of an offence under Section 420 IPC, the
essential ingredients are: –
1) deception of any person, either by making a false or misleading
representation or by other action or by omission;
2) fraudulently or dishonestly inducing any person to deliver any
property, or
3) the consent that any persons shall retain any property and
finally intentionally inducing that person to do or omit to do
anything which he would not do or omit (see: Harmanpreet Singh
Ahluwalia v. State of Punjab, (2009) 7 SCC 712 : (2009) Cr.L.J.
3462 (SC))
37. Further, in both the aforesaid sections, mens rea i.e. 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.
38. In our view, the plain reading of the complaint fails to spell
out any of the aforesaid ingredients noted above. We may only
say, with a view to clear a serious misconception of law in the
mind of the police as well as the courts below, that if it is a case
of the complainant that offence of criminal breach of trust as
defined under Section 405 of IPC, punishable under Section 406 of
IPC, is committed by the accused, then in the same breath it
cannot be said that the accused has also committed the offence of
cheating as defined and explained in Section 415 of the IPC,
punishable under Section 420 of the IPC.
39. Every act of breach of trust may not result in a penal offence
of criminal breach of trust unless there is evidence of
manipulating act of fraudulent misappropriation. An act of breachPage 7 of 16
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of trust involves a civil wrong in respect of which the person may
seek his remedy for damages in civil courts but, any breach of
trust with a mens rea, gives rise to a criminal prosecution as well.
It has been held in Hari Prasad Chamaria v. Bishun Kumar
Surekha & Ors., reported in (1973) 2 SCC 823 as under:
“4. We have heard Mr. Maheshwari on behalf of the appellant
and are of the opinion that no case has been made out against
the respondents under Section 420 Penal Code, 1860. For the
purpose of the present appeal, we would assume that the various
allegations of fact which have been made in the complaint by the
appellant are correct. Even after making that allowance, we find
that the complaint does not disclose the commission of any
offence on the part of the respondents under Section 420 Penal
Code, 1860. There is nothing in the complaint to show that the
respondents had dishonest or fraudulent intention at the time the
appellant parted with Rs. 35.000/- There is also nothing to
indicate that the respondents induced the appellant to pay them
Rs. 35,000/- by deceiving him. It is further not the case of the
appellant that a representation was made, the respondents knew
the same to be false. The fact that the respondents subsequently
did not abide by their commitment that they would show the
appellant to be the proprietor of Drang Transport Corporation and
would also render accounts to him in the month of December
might create civil liability on the respondents for the offence of
cheating.”
40. To put it in other words, the case of cheating and dishonest
intention starts with the very inception of the transaction. But in
the case of criminal breach of trust, a person who comes into
possession of the movable property and receives it legally, but
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illegally retains it or converts it to his own use against the terms
of the contract, then the question is, in a case like this, whether
the retention is with dishonest intention or not, whether the
retention involves criminal breach of trust or only a civil liability
would depend upon the facts of each case.
41. 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.
Therefore, it is this intention, which is the gist of the offence.
42. 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.
43. 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
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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.
44. At the most, the court of the Additional Chief Judicial
Magistrate could have issued process for the offence punishable
under Section 420 of the IPC i.e. cheating but in any
circumstances no case of criminal breach of trust is made out. The
reason being that indisputably there is no entrustment of any
property in the case at hand. It is not even the case of the
complainant that any property was lawfully entrusted to the
appellants and that the same has been dishonestly
misappropriated. The case of the complainant is plain and simple.
He says that the price of the goods sold by him has not been
paid. Once there is a sale, Section 406 of the IPC goes out of
picture. According to the complainant, the invoices raised by him
were not cleared. No case worth the name of cheating is also
made out.
45. Even if the Magistrate would have issued process for the
offence punishable under Section 420 of the IPC, i.e., cheating the
same would have been liable to be quashed and set aside, as none
of the ingredients to constitute the offence of cheating are
disclosed from the materials on record.
46. It has been held in State of Gujarat v. Jaswantlal Nathalal
reported in (1968) 2 SCR 408, “The term “entrusted” found in
Section 405 IPC governs not only the words “with the property”
immediately following it but also the words “or with any
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dominion over the property” occurring thereafter–see Velji
Raghvaji Patel v. State of Maharashtra [(1965) 2 SCR 429]. Before
there can be any entrustment there must be a trust meaning
thereby an obligation annexed to the ownership of property and a
confidence reposed in and accepted by the owner or declared and
accepted by him for the benefit of another or of another and the
owner. But that does not mean that such an entrustment need
conform to all the technicalities of the law of trust — see
Jaswantrai Manilal Akhaney v. State of Bombay [1956 SCR 483].
The expression “entrustment” carries with it the implication that
the person handing over any property or on whose behalf that
property is handed over to another, continues to be its owner.
Further the person handing over the property must have
confidence in the person taking the property so as to create a
fiduciary relationship between them. A mere transaction of sale
cannot amount to an “entrustment””.
47. Similarly, in Central Bureau of Investigation, SPE, SIU(X), New
Delhi v. Duncans Agro Industries Ltd., Calcutta reported in (1996)
5 SCC 591 this Court held that the expression “entrusted with
property” used in Section 405 of the 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 read as under: –
“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 ofPage 11 of 16
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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 405 IPC. 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 405 IPC 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
person or in some way for his benefit. The expression ‘trust’ in
Section 405 IPC 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. […]”
(Emphasis supplied)
48. The aforesaid exposition of law makes it clear that there
should be some entrustment of property to the accused wherein
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the ownership is not transferred to the accused. In case of sale of
movable property, although the payment may be deferred yet the
property in the goods passes on delivery as per Sections 20 and
24 respectively of the Sale of Goods Act, 1930.
“20. Specific goods in a deliverable state. — Where there is an
unconditional contract for the sale of specific goods in a
deliverable state, the property in the goods passes to the buyer
when the contract is made and it is immaterial whether the time
of payment of the price or the time of delivery of goods, or both,
is postponed.
Xxx xxx xxx
24. Goods sent on approval or “on sale or return”. — When
goods are delivered to the buyer on approval or “on sale or
return” or other similar terms, the property therein passes to the
buyer–
(a) when he signifies his approval or acceptance to the seller or
does any other act adopting the transaction;
(b) if he does not signify his approval or acceptance to the seller
but retains the goods without giving notice of rejection, then, if a
time has been fixed for the return of the goods on the expiration
of such time, and, if no time has been fixed, on the expiration of
a reasonable time.”
49. From the aforesaid, there is no manner of any doubt
whatsoever that in case of sale of goods, the property passes to
the purchaser from the seller when the goods are delivered. Once
the property in the goods passes to the purchaser, it cannot be
said that the purchaser was entrusted with the property of the
seller. Without entrustment of property, there cannot be any
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criminal breach of trust. Thus, prosecution of cases on charge of
criminal breach of trust, for failure to pay the consideration
amount in case of sale of goods is flawed to the core. There can
be civil remedy for the non-payment of the consideration amount,
but no criminal case will be maintainable for it. [See : Lalit
Chaturvedi and Others v. State of Uttar Pradesh and Another :
2024 SCC OnLine SC 171 & Mideast Integrated Steels Ltd. (MESCO
Steel Ltd.) and Others v. State of Jharkhand and Another : 2023
SCC OnLine Jhar 301]
50. The case at hand falls in category No. 1 as laid in Smt.
Nagawwa (supra) referred to in para 7 of this judgment.
51. If it is the case of the complainant that a particular amount is
due and payable to him then he should have filed a civil suit for
recovery of the amount against the appellants herein. But he
could not have gone to the court of Additional Chief Judicial
Magistrate by filing a complaint of cheating and criminal breach
of trust. It appears that till this date, the complainant has not
filed any civil suit for recovery of the amount which according to
him is due and payable to him by the appellants. He seems to
have prima facie lost the period of limitation for filing such a
civil suit.
52. In such circumstances referred to above, the continuation of
the criminal proceeding would be nothing but abuse of the
process of law.”
7. Applying the aforesaid ratio to the facts of the present
case, it emerges that the first informant has called upon
the accused to execute the sale deed in terms of the
Banakhat (agreement to sell), which has been denied by
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the accused. From a plain reading of the averments
made in the FIR, the essential ingredient of dishonest
intention is conspicuously absent. The dispute, which
essentially bears the flavour of a civil dispute arising out
of contractual obligations, has been sought to be given a
colour of criminality by initiating criminal proceedings.
Furthermore, the alleged agreement to sell is dated
16.05.2012, whereas the FIR has been registered on
31.01.2023. It is pertinent to note that even for
instituting a suit under the Specific Relief Act, 1963
seeking specific performance, the prescribed period of
limitation is three years. It therefore appears that, upon
the expiry of the said limitation period, the first
informant has attempted to secure the relief indirectly
by initiating criminal proceedings in relation to an
alleged breach of contractual obligations. Even
otherwise, in view of the law laid down by the Hon’ble
Apex Court in Delhi Race Club (1940) Ltd. & Ors.
(supra), both remedies cannot be permitted to co-exist
simultaneously in the manner sought to be pursued in
the present case. Hence, the continuation of the
impugned criminal proceedings would amount to
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nothing but an abuse of the process of law.
8. In the aforesaid background, the impugned FIR being
C.R. No. 11196004230076 of 2023 dated 31.01.2023 is
hereby quashed and set aside. Consequently, all further
and consequential proceedings arising therefrom shall
also stand quashed and set aside.
9. In view of the aforesaid, the present application deserves
to be allowed and is accordingly allowed.
10. Rule is made absolute.
(M. K. THAKKER,J)
NIVYA A. NAIR
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