Telangana High Court
M/S Dodla Dairy Limited vs The State Of Telengana on 11 April, 2025
THE HONOURABLE SRI JUSTICE K.SURENDER
CRIMINAL PETITION No. 7471 OF 2019
O R D E R:
This Criminal Petition is filed under Section 482 of the Code
of Criminal Procedure, 1973 (for short ‘Cr.P.C.’) by the
petitioner/Complainant, questioning the orders of the trial Court
and the Appellate Revision Court in dismissing the private
complaint filed by the petitioner herein against the
respondent/accused.
2. A private complaint was filed by the petitioner herein to refer
the case for the purpose of investigation. The learned III Additional
Chief Metropolitan Magistrate, Hyderabad, recorded the statement
of the person representing the complainant company as PW.1.
According to the case of the complainant, the respondent/accused
approached the complainant and offered their lands for sale. After
entering into a contract dated 06.04.2013, they took Rs.50 lakhs
towards advance. However, the issue was dragged on without
registering the land. When the complainant insisted on the return
of the amount, a cheque for Rs.50 lakhs was issued by the
accused. When the said cheque was presented for clearance, the
cheque was returned unpaid. In fact, the agreement was for
purchase of 50 acres of land at the rate of Rs.12,75,000/- per
acre.
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3. The learned Magistrate found that the transaction pertains
to a sale, and that the complainant ought to have approached the
Civil Court by filing a suit for specific performance, if the
complainant had the resources to pay the amounts covered by the
contract. It was further observed that there was no intention to
cheat in the present circumstances of the case, and it is a clear
case of breach of contract. The criminal prosecution cannot be
permitted since the dispute is purely civil in nature. The said
order, dismissing the complaint filed by the complainant, was
passed on 07.08.2018 in S.R.No.5101/2018.
4. Aggrieved by the said order passed by the learned
Magistrate, the complainant approached the Sessions Court by
filing Criminal Revision Petition No.270 of 2018.
5. The learned Sessions Judge considered the revision
application and found that the complainant, except stating that
the accused approached them with a criminal intent, had not set
forth any circumstances before the Court to infer any dishonest
intention. Further, in the complaint, there was no mention about
any kind of inducement by the accused, except that a
Memorandum of Understanding was entered into between the
complainant and the accused. Further, the learned Sessions
Judge found that there is no averment in the complaint that the
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alleged threat by the accused caused any kind of alarm to attract
an offence under Sections 406 and 506 of the Indian Penal Code.
6. The learned Sessions Judge further found that it was explicit
from the transactions and the Memorandum of Understanding
that the case is purely civil in nature, and that any failure on the
part of the accused to abide by any of the conditions in the
Memorandum of Understanding ought to have been addressed by
the complainant before a Civil Court. The learned Sessions Judge
stated that the trial Court had rightly dismissed the complaint.
7. The complaint was filed on the allegation of committing the
offences under Sections 406, 409, 420, and 506 of the Indian
Penal Code.
8. The Honourable Supreme Court, in S.K.Alagh v. State of
Uttar Pradesh and others 1, held as follows:
“18. Ingredients of the offence under Section 406 are:
“(1) a person should have been entrusted with property, or
entrusted
with dominion over property;
(2) that person should dishonestly misappropriate or convert to his
own use that property, or dishonestly use or dispose of that
property
or wilfully suffer any other person to do so;
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(2008) 5 SCC 662
4(3) that such misappropriation, conversion, use or disposal should
be in violation of any direction of law prescribing the mode in which
such trust is to be discharged, or of any legal contract which the
person has made, touching the discharge of such trust.”
9. The Honourable Supreme Court, in N.Raghavender v.
State of Andhra Pradesh, CBI 2, held that:
“Ingredients necessary to prove a charge under Section
409IPC
45. Section 409 IPC pertains to criminal breach of trust by a
public servant or a banker, in respect of the property
entrusted to him. The onus is on the prosecution to prove that
the accused, a public servant or a banker was entrusted with
the property which he is duly bound to account for and that
he has committed criminal breach of trust. (See Sadhupati
Nageswara Rao v. State of A.P. [Sadhupati Nageswara
Rao v. State of A.P., (2012) 8 SCC 547 : (2012) 3 SCC (Cri)
979 : (2012) 2 SCC (L&S) 638] )
46. The entrustment of public property and dishonest
misappropriation or use thereof in the manner illustrated
under Section 405 are a sine qua non for making an offence
punishable under Section 409IPC. The expression “criminal
breach of trust” is defined under Section 405IPC which
provides, inter alia, that whoever being in any manner
entrusted with property or with any dominion over a property,
dishonestly misappropriates or converts to his own use that
property, or dishonestly uses or disposes of that property
contrary to law, or in violation of any law prescribing the
mode in which such trust is to be discharged, or contravenes2
(2021) 18 Supreme Court Cases 70
5any legal contract, express or implied, etc. shall be held to
have committed criminal breach of trust. Hence, to attract
Section 405IPC, the following ingredients must be satisfied:
46.1. Entrusting any person with property or with any
dominion over property.
46.2. That person has dishonestly misappropriated or
converted that property to his own use.
46.3. Or that person is dishonestly using or disposing of that
property or wilfully suffering any other person so to do in
violation of any direction of law or a legal contract.
47. It ought to be noted that the crucial word used in Section
405IPC is “dishonestly” and therefore, it pre-supposes the
existence of mens rea. In other words, mere retention of
property entrusted to a person without any misappropriation
cannot fall within the ambit of criminal breach of trust. Unless
there is some actual use by the accused in violation of law or
contract, coupled with dishonest intention, there is no criminal
breach of trust. The second significant expression is
“misappropriates” which means improperly setting apart for
ones use and to the exclusion of the owner.
48. No sooner are the two fundamental ingredients of
“criminal breach of trust” within the meaning of Section
405IPC proved, and if such criminal breach is caused by a
public servant or a banker, merchant or agent, the said
offence of criminal breach of trust is punishable under Section
409IPC, for which it is essential to prove that:
(i) The accused must be a public servant or a banker,
merchant or agent;
(ii) He/She must have been entrusted, in such capacity, with
property; and
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(iii) He/She must have committed breach of trust in respect of
such property.
49. Accordingly, unless it is proved that the accused, a public
servant or a banker, etc. was “entrusted” with the property
which he is duty-bound to account for and that such a person
has committed criminal breach of trust, Section 409IPC may
not be attracted.”
10. The Honourable Supreme Court, in A.M.Mohan v. The
State rep. by SHO and others 3, held as follows:
“18. Section 420 of the Penal Code reads thus:
“420. Cheating and dishonestly inducing delivery of
property.–Whoever cheats and thereby dishonestly
induces the person deceived to deliver any property to
any person, or to make, alter or destroy the whole or any
part of a valuable security, or anything which is signed or
sealed, and which is capable of being converted into a
valuable security, shall be punished with imprisonment of
either description for a term which may extend to seven
years, and shall also be liable to fine.”
19. The ingredients to constitute an offence under Section
420 are as follows:
19.1. A person must commit the offence of cheating under
Section 415; and
19.2. The person cheated must be dishonestly induced to
(a) deliver property to any person; or
(b) make, alter or destroy valuable security or anything
signed or sealed and capable of being converted into
valuable security.
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2024 SCC OnLine SC 339
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20. Cheating is an essential ingredient for an act to
constitute an offence under Section 420.”
11. The Honourable Supreme Court, in Madhushree Datta v.
The State of Karnataka and others 4, held that:
“33. This brings us to the offence under Section 506 of the IPC,
which the High Court has found to be prima facie disclosed
against the appellants. Section 506 of the IPC prescribes the
punishment for the offence of criminal intimidation, while
Section 503 defines the offence of criminal intimidation.
34. This Court had the occasion to examine the ingredients of
Sections 503 and 506 of the IPC in Manik Taneja v. State of
Karnataka16, where it was observed as follows:
“11. xxxxxxxxxxxx A reading of the definition of ‘criminal
intimidation’ would indicate that there must be an act of
threatening to another person, of causing an injury to the
person, reputation, or property of the person threatened, or to
the person in whom the threatened person is interested and
the threat must be with the intent to cause alarm to the person
threatened or it must be to do any act which he is not legally
bound to do or omit to do an act which he is legally entitled to
do.”
12. In the entire complaint filed, there is nothing for this Court
to infer that there was any kind of misrepresentation or any
deceptive practices at the inception of the transaction, when there
was an agreement between the complainant and the accused for
the transaction of sale of land.
4
2025 SCC OnLine SC 165
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13. A Memorandum of Understanding was entered into between
the accused and the complainant for purchase of 50 Acres of land
situated at Gudrampally village of Chityal Mandal, for an amount
of Rs.12,75,000/- per acre. An amount of Rs.50 lakhs was paid,
and the Memorandum of Understanding entered into between the
complainant and the accused was revoked by the complainant,
who then sought return of the Rs.50 lakhs paid as advance. The
termination letter of the Memorandum of Understanding was also
addressed to the accused. The cheque issued towards repayment
of Rs.50 lakhs was returned for the reason of ‘drawer’s signature
differs’. For the said reason, the criminal complaint was filed.
14. In the entire complaint, except the transaction of entering
into a Memorandum of Understanding and thereafter paying an
amount of Rs.50 lakhs, there is no averment to suggest that the
accused entertained any intention to cheat the complainant. The
mere cancellation of the Memorandum of Understanding between
the parties, by itself, would not mean that the accused intended to
cheat the complainant/petitioner from the inception of the
transaction. What is required to substantiate the offence of
cheating is the deceit played by a person at the inception of the
transaction. In fact, the Memorandum of Understanding was
cancelled by the complainant. It is not the case of the complainant
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that the lands were not available or that the accused refused to
provide the lands as sought by the complainant. As rightly found
by the Courts below, the transactions between the complainant
and the accused are purely civil in nature.
15. For the aforesaid reasons, Criminal Petition is dismissed.
Miscellaneous Petitions, pending if any, shall stand closed.
__________________
K.SURENDER, J
Date: 11.04.2025
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THE HONOURABLE SRI JUSTICE K.SURENDER
CRIMINAL PETITION No. 7471 OF 2019
Dt. 11.04.2025
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