Supreme Court quashes FIR in land-sale dispute, holds ingredients of cheating and criminal breach not made out

A bench of Justices Sudhanshu Dhulia and Ahsanuddin Amanullah heard the appeal by four family members against a Karnataka High Court order that refused to quash an FIR arising from an agreement to sell and allied transactions in respect of land in Bhoopasandra, Bengaluru. The appeal challenged the High Court’s dismissal of a criminal petition under Section 482 CrPC against registration of FIR Crime No.260/2023, which alleged offences under Sections 405, 406, 415, 417, 418, 420, 504, 506, 384 and 120B read with 34 IPC.

The Court allowed the appeal and quashed the FIR, the chargesheet dated 28.08.2024 and the cognizance order dated 30.08.2024 insofar as they related to the appellants. The Court held that the criminal ingredients necessary to sustain charges of cheating (Section 420) and criminal breach of trust (Section 406) were not made out on the material placed before it and that, on the face of the complaint, there was no prima facie criminality warranting continuance of the prosecution against the appellants. The Court emphasised procedural requirements in private complaints, noting that the guidelines in Priyanka Srivastava were mandatory but prospective and that defects were "curable" if complied with before any substantive order. The Court, in its reasoning, observed: “Thus, when from the own pleadings of the complainant, it emerges that possession of the subject property was never given to the complainant and rather, stipulation was made for such possession being handed over after execution of the Sale Deed, Section 420 of the IPC would not be attracted, regard being had to the definition in Section 415 of the IPC.”

Background The dispute arose from an Agreement to Sell (ATS) and a General Power of Attorney (GPA) dated 30.11.2015 executed by members of one family in respect of a parcel of land (Sy. Nos.20 and 21, Bhoopasandra). The complainant, who claimed to be a nominee of a third party who had earlier been in possession, alleged that he spent time and money clearing title issues and that after the land became marketable he was induced to enter the ATS and paid consideration; the vendors later revoked the GPA, executed a release deed and a gift deed, and refused to transfer title. The complainant filed a private complaint (PCR) under Section 200 CrPC; the Magistrate referred the matter to police under Section 156(3) CrPC and FIR No.260/2023 was registered. A civil suit for specific performance and declaratory relief was pending.

The appellants contended before the Supreme Court that essential ingredients of cheating and criminal breach of trust were absent because (i) there was no dishonest inducement at the inception of the ATS, (ii) possession was not handed over to the complainant and the ATS contemplated handing over possession only after execution of the sale deed, and (iii) the disputes were essentially civil in nature. They relied on precedents including Onkar Nath Mishra, Delhi Race Club (1940) Ltd. and G. Sagar Suri to argue that simultaneous invocation of Sections 406 and 420 could not be sustained and that the FIR should be quashed. The complainant and State urged that prima facie offences were disclosed and investigation had produced material, leading to filing of the chargesheet and cognizance.

The Court inspected the statutory ingredients of Sections 405, 415 and 420 IPC and found that the appellants were owners of the property and were not persons “entrusted” with it in the sense contemplated by Section 405/406. The Court held that the complainant’s own pleadings undermined any claim of inducement at the inception and that Section 420 could not be attracted where possession was to be delivered only upon execution of the sale deed. The Court noted precedent distinguishing the offences but observed that where the essential criminal ingredients were absent, continuation of prosecution would amount to an abuse of process. The Court quashed the FIR and related orders against the appellants, extended parity relief to a co-accused not before the appeal, and directed that no third-party rights be created over the subject property until the Supreme Court decided pending Special Leave Petitions filed by the Bangalore Development Authority. The Court permitted the civil suit to proceed subject to any orders in the connected SLPs.

Case Details: Case No.: 2025 INSC 917 (Criminal Appeal No. — of 2025; SLP (Criminal) No.8626 of 2024) Case Title: S. N. Vijayalakshmi & Ors. v State of Karnataka & Anr. Appearances: For the Petitioner(s): Senior counsel and advocates (as per record) For the Respondent(s): Senior counsel and advocates for State of Karnataka and for respondent No.2 (as per record)