Telangana High Court
Kiran Kumar vs The State Of Telangana on 17 July, 2026
Author: N.Tukaramji
Bench: N.Tukaramji
IN THE HIGH COURT FOR THE STATE OF TELANGANA
AT HYDERABAD
THE HONOURABLE SRI JUSTICE N.TUKARAMJI
CRIMINAL PETITION No.7589 OF 2021
DATE: 17.07.2026
Between :
Mr. Kiran Kumar CEO of M/s. Suchir India Ltd.
... Petitioners/Accused No.1.
AND
The State of Telangana, through its Public Prosecutor,
High Court, Hyderabad and another.
... Respondent/Defacto-complainant
ORDER:
This Criminal Petition is filed under Section 482 of the Code of
Criminal Procedure, 1973 (for short, “CrPC“), seeking to quash the
proceedings against the petitioner/accused No.1 and the CEO of
Suchir India Ltd., in C.C. No.2364 of 2020 on the file of XVII Additional
Metropolitan Magistrate at Malkajgiri, arising out of Crime No.307 of
2019 of Keesara police station registered for the offences under
Sections 406, 420, 506 of the Indian Penal Code, 1860 (for short,
“IPC“).
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2. Heard Mr. D. Raghavendar Rao, learned counsel appearing for
Mr. D. Madhava Rao, learned Counsel for the petitioner; and learned
Additional Public Prosecutor appearing for respondent No.1-State.
3. The prosecution case, in brief, is that the complainant entered
into an Agreement of Sale dated 15.07.2017 with M/s. Suchir India
Infratech Pvt. Ltd. for the purchase of a plot of land admeasuring 267
square yards in Sy. Nos. 221, 222, 223, 232 and 234 situated at
Bhogaram Village, for a total sale consideration of Rs.16,82,100/-.
Pursuant thereto, the complainant paid an advance of Rs.3,10,000/-
and was allotted Plot No.395. Thereafter, the complainant allegedly
discovered that the allotted plot had already been mortgaged to HMDA.
It is the prosecution case that the complainant, along with her husband,
requested the accused to allot an alternative plot. However, the
accused allegedly refused to resolve the issue and instead abused and
threatened them with dire consequences. It is further alleged that the
accused, in furtherance of their common intention, dishonestly induced
the complainant to purchase the mortgaged plot despite having prior
knowledge of the subsisting mortgage, thereby cheated and criminally
misappropriated the amounts. On the basis of the complaint lodged by
the complainant, Keesara Police Station registered the crime. Upon
completion of the investigation, the police filed the charge sheet.
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4.1. Learned counsel for the petitioner contended that neither the
allegations in the complaint nor the material collected during the course
of investigation disclose the commission of any offence against the
petitioner. It was submitted that the Agreement of Sale itself, in Clause
5(iii) and (iv), expressly records that the subject plot was mortgaged
with HMDA and that the complainant, being fully aware of the said fact,
voluntarily entered into the transaction. Consequently, the allegation
that the petitioner dishonestly induced the complainant to purchase a
mortgaged plot is wholly untenable. It was further contended that the
dispute arises purely out of the terms and conditions of the Agreement
of Sale and is essentially contractual and civil in nature. According to
the petitioner, the essential ingredients of the offences of cheating and
criminal breach of trust are conspicuously absent, as there was neither
any fraudulent or dishonest intention at the inception of the transaction
nor any entrustment of property followed by dishonest
misappropriation. It was also submitted that the allegation of criminal
intimidation is vague and unsupported by any material.
4.2. Learned counsel further submitted that, except for payment of
the advance amount, the de facto complainant failed to pay the balance
sale consideration, resulting in the termination of the agreement. It was
pointed out that respondent No.2 had addressed a representation
dated 18.03.2019 to the petitioner expressly acknowledging that the
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property purchased was mortgaged in favour of HMDA, and that the
present complaint came to be lodged nearly three months thereafter. It
was also submitted that the complainant had already invoked the civil
jurisdiction by instituting O.S. No.249 of 2020 before the competent
Civil Court seeking specific performance of the very same Agreement
of Sale, which, according to the petitioner, clearly demonstrates that
the dispute is essentially civil in nature.
4.3. It was, therefore, argued that the criminal proceedings have
been initiated only with a view to exert pressure upon the petitioner by
giving a criminal colour to a purely civil dispute. Since the allegations in
the charge sheet, even if accepted in their entirety, do not constitute the
offences alleged, it was contended that the continuation of the criminal
proceedings would amount to an abuse of the process of law. The
petitioner, therefore, seeks quashing of the proceedings in the
Calendar Case by invoking the inherent jurisdiction of this Court.
5. Learned counsel for respondent No.2 and the learned Additional
Public Prosecutor opposed the petition. They submitted that the
complaint and the material collected during investigation prima facie
disclose that the accused induced the de facto complainant to
purchase a plot already mortgaged with HMDA and received part of the
sale consideration. According to them, the investigation has yielded
material supporting the allegations constituting the offences of cheating
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and criminal breach of trust, and the factual issues arising therefrom
can only be adjudicated upon during trial. It was, therefore, contended
that interference at this stage would prejudice both the de facto
complainant and the prosecution, and the petition is liable to be
dismissed.
6. I have carefully considered the submissions and perused the
material available on record.
7. A careful perusal of the charge sheet and the statements of the
witnesses reveals that the de facto complainant entered into an
Agreement of Sale dated 15.07.2017 with M/s. Suchir India Infratech
Pvt. Ltd., represented by the petitioner, for the purchase of Plot No.395
for a total sale consideration of Rs.16,82,100/-, whereunder she paid
an advance sale consideration of Rs.3,10,000/-. The gravamen of the
prosecution case is that, subsequent to the execution of the Agreement
of Sale, the complainant came to know that the subject plot had
already been mortgaged in favour of HMDA. The statements of the de
facto complainant and L.W.2 further disclose that they approached the
accused requesting either allotment of an alternative plot or execution
of the sale deed after resolving the issue relating to the mortgage.
According to the prosecution, the accused declined to allot an
alternative plot, failed to execute the sale deed, and, when questioned,
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abused the complainant and her husband and threatened them with
dire consequences.
8. The principal question that falls for consideration is whether the
aforesaid allegations, even if accepted in their entirety, satisfy the
essential ingredients of the offences punishable under Sections 406,
9. To constitute an offence of cheating punishable under Section
420 IPC, it must be established that the accused had a fraudulent or
dishonest intention at the very inception of the transaction, by which
the complainant was induced to deliver property or to act to her
detriment. The dishonest intention must exist at the time the
representation is made; a subsequent failure to honour a contractual
obligation, by itself, does not amount to cheating. Unless the
prosecution material discloses that the accused had no intention to
perform the promise from the very beginning and had induced the
complainant by deception, the offence of cheating is not attracted.
10. Likewise, to constitute an offence of criminal breach of trust
under Sections 405 and 406 IPC, the prosecution must establish (i)
entrustment of property or dominion over property to the accused, and
(ii) dishonest misappropriation, conversion, use or disposal of such
property in violation of any legal contract or direction of law.
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Entrustment is the very foundation of the offence, and in its absence
the offence under Section 406 IPC cannot be sustained.
11. The distinction between a mere breach of contract and the
offence of cheating is no longer res integra. In Hridaya Ranjan Prasad
Verma v. State of Bihar, (2000) 4 SCC 168, the Hon’ble Supreme Court
held that the determining factor is the intention of the accused at the
time of making the promise. It was categorically observed that every
breach of contract would not constitute cheating unless fraudulent or
dishonest intention existed at the inception of the transaction. The
subsequent failure to fulfil a promise, without more, gives rise only to
civil consequences and not criminal liability.
12. In the present case, the allegations relate to payment of
advance sale consideration under an Agreement of Sale and the
alleged failure of the accused to complete the transaction by executing
the sale deed. The charge sheet does not disclose any material
indicating entrustment of property in the legal sense contemplated
under Section 405 IPC, nor does it attribute any act of dishonest
misappropriation or conversion of entrusted property by the petitioner.
Consequently, the foundational ingredients necessary to constitute the
offence of criminal breach of trust are conspicuously absent.
13. The Hon’ble Supreme Court has repeatedly cautioned against
converting purely civil disputes into criminal prosecutions. In Indian Oil
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Corporation v. NEPC India Ltd., (2006) 6 SCC 736, the Court observed
that while a set of facts may give rise to both civil and criminal liability,
criminal law cannot be permitted to be used as an instrument of
harassment or for exerting pressure in matters essentially arising out of
contractual obligations. The Court emphasized that a purely civil
dispute should not be given the colour of a criminal offence merely to
coerce a party into settlement. The same principle was reiterated in
VESA Holdings (P) Ltd. v. State of Kerala, (2015) 8 SCC 293, wherein
the Supreme Court held that every breach of contract would not
amount to cheating unless the prosecution establishes that fraudulent
and dishonest intention existed from the very inception of the
transaction. Mere non-performance of contractual obligations or failure
to fulfil promises, without proof of initial deception, cannot attract
criminal prosecution under Section 420 IPC.
14. Equally, the allegation relating to criminal intimidation does not
appear to satisfy the requirements of Section 503 IPC. Criminal
intimidation postulates a threat made with the intention of causing
alarm to the victim or compelling the victim to do or omit any act which
he or she is not legally bound to do or omit. A bald or omnibus
allegation that the accused abused or threatened the complainant,
without specifying the nature of the threat, the words uttered, the
circumstances in which the threat was extended, or the intention to
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cause alarm, would not ordinarily satisfy the statutory ingredients of the
offence. The allegations in the present case are general in nature and
lack the particulars necessary to prima facie constitute the offence of
criminal intimidation.
15. The scope of the inherent jurisdiction of this Court under Section
482 of the CrPC (corresponding to Section 528 of the Bharatiya
Nagarik Suraksha Sanhita, 2023) is well settled. Such jurisdiction is
intended to prevent abuse of the process of the Court and to secure
the ends of justice. Though the power is to be exercised sparingly and
with circumspection, the Court would be justified in quashing criminal
proceedings where continuation thereof would amount to abuse of the
process of law. In State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC
335, the Hon’ble Supreme Court illustratively enumerated the
categories of cases where exercise of inherent jurisdiction would be
warranted. One such category is where the allegations made in the
complaint or the charge sheet, even if taken at their face value and
accepted in their entirety, do not prima facie constitute any offence
against the accused. The said principle continues to guide the exercise
of jurisdiction under Section 482 Cr.P.C.
16. Applying the aforesaid settled principles to the facts of the
present case, this Court finds that the material collected during
investigation predominantly discloses a contractual transaction arising
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out of an Agreement of Sale. Significantly, the Agreement itself prima
facie indicates that the complainant was aware that the subject
property stood mortgaged with HMDA. The complainant has also
chosen to pursue the civil remedy by instituting O.S. No.249 of 2020
seeking specific performance of the very same Agreement of Sale. The
institution of the civil suit, though not by itself a ground for quashing
criminal proceedings, is nevertheless a relevant circumstance while
examining whether the criminal prosecution is founded upon the
essential ingredients of the alleged offences or is merely an attempt to
impart a criminal complexion to a contractual dispute.
17. Viewed in the above perspective, the allegations in the charge
sheet do not disclose the existence of fraudulent or dishonest intention
on the part of the petitioner at the inception of the transaction, nor do
they disclose entrustment of property followed by dishonest
misappropriation so as to attract Sections 420 and 406 IPC. Equally,
the allegations regarding criminal intimidation are vague and bereft of
material particulars necessary to constitute an offence under Section
506 IPC.
18. In the considered opinion of this Court, permitting the
prosecution to continue in the absence of the foundational ingredients
of the alleged offences would amount to allowing the criminal process
to be employed for enforcing contractual obligations, which is
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impermissible in law. Such continuation would therefore constitute an
abuse of the process of the Court, warranting exercise of the inherent
jurisdiction of this Court to secure the ends of justice.
19. Accordingly, the Criminal Petition is allowed. Consequently the
proceedings against the petitioner/Accused No.1 in C.C. No.2364 of
2020 pending on the file of the XVII Additional Metropolitan Magistrate
at Malkajgiri, are hereby quashed.
Miscellaneous applications pending, if any, shall stand closed.
_______________
Date: 17.07.2026 N.TUKARAMJI, J
MRKR
