Radheyshyam & Ors. v. State of Rajasthan & Anr, 2024 (595)
Facts: This case arises from an Agreement to Sell dated June 29, 2020, between the appellants and the complainant for a property in Rajgarh, Rajasthan, for ₹5.11 crores. The complainant paid an advance of ₹11 lakh, consisting of ₹5 lakh in cash and ₹6 lakh via cheque. According to the agreement, ₹1 crore was to be paid by September 30, 2020, with the remaining ₹4 crore to follow over the next fifteen months. However, the sale was not executed as agreed. On May 24, 2022, the complainant filed an FIR, claiming that despite paying ₹1 crore, the appellants refused to execute the property registry, alleging dishonest intentions and collusion with the appellants’ brother. The FIR noted that the appellants openly rejected requests to execute the registry. In June 2023, the complainant filed a civil suit for specific performance based on the same agreement, which remains pending.
Issue: Does mere non-performance of an Agreement to Sell constitute the offences of cheating and criminal breach of trust?
Observation: The Supreme Court observed that non-performance of an Agreement to Sell alone does not amount to cheating or criminal breach of trust. It quashed the criminal case against the appellants, finding that the complaint lacked the necessary elements to constitute these offences under Sections 420 and 406 of the IPC. The Court noted that there was no evidence the appellants deceived the complainant into the agreement. It concluded that the FIR appeared to be an attempt by the complainant to misuse the criminal justice system to pressure the appellants into compliance or extract money. Given that the complainant had already pursued a civil suit for specific performance, the Court ruled that criminal proceedings could not continue. The Supreme Court allowed the appeal, set aside the High Court’s order, and quashed the FIR, clarifying that its decision would not impact the ongoing civil suit, which would be decided on its merits based on trial evidence.
