Offences Of 'Cheating' & 'Criminal Breach Of Trust'Cannot Co-Exist On Same Allegations:Supreme Court

🚨 Big Legal Update from the Supreme Court of India! 🚨
In Arshad Neyaz Khan v. State of Jharkhand & Another (2025 INSC 1151), the Court clarified a crucial principle: a simple breach of contract does not amount to cheating or criminal breach of trust.

📝 Case Background

Property Sale Agreement dated 16 February 2013 worth ₹43,00,000

Buyer paid ₹20,00,000 as advance

Sale not completed → Complaint filed after 8 years (2021) under IPC Sections 406, 420 & 120B

Jharkhand High Court allowed criminal proceedings → Seller appealed in the Supreme Court

⚖️ Key Supreme Court Findings

✅ No Cheating (IPC 420): No evidence of dishonest intent at the start of the agreement
✅ No Criminal Breach of Trust (IPC 406): No entrustment or misappropriation proven
✅ Cheating vs. Breach of Trust are Antithetical: Both cannot apply on the same facts
✅ Civil vs. Criminal Law: Contract disputes belong in civil courts, not criminal trials
✅ Delay & Misuse of Law: 8-year delay showed mala fide intent to harass

🏛️ Final Verdict

A Bench of Justices B.V. Nagarathna & R. Mahadevan quashed the FIR and proceedings, calling them an abuse of criminal law meant to settle a civil dispute.

📌 Why This Matters

This judgment protects citizens from misuse of criminal provisions in business & property disputes. It reinforces the principle that not every failed contract is a crime.

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