In Brief
Appellants, directors of a real estate company, entered into a Joint Development Agreement with Respondent to develop a residential property, with a Memorandum of Understanding authorising the company to sell certain flats as payment adjustment for Respondent's loan. A dispute arose over whether the company sold flats in excess of its authority. Respondent filed a criminal complaint alleging cheating and criminal breach of trust. The High Court refused to quash the FIR. The Supreme Court held that the absence of dishonest intent at the inception of the transaction meant the dispute was essentially contractual, not criminal. The essential ingredients of Sections 406, 419, and 420 IPC were not prima facie established. The Court quashed the criminal proceedings, holding that criminal law must not be weaponised to transform civil disputes into prosecutions merely for tactical advantage.
The lawyer headnote and full judgment text are available to registered users.