Supreme Court: a genuine civil dispute cannot be prosecuted as cheating merely by filing an FIR

Quashing an FIR for cheating and forgery under Sections 420, 423 and 120-B of the Indian Penal Code against a power-of-attorney holder for a group of landowners, the Supreme Court (Justices Satish Chandra Sharma and Nongmeikapam Kotiswar Singh) held that an essentially civil dispute over a land sale cannot be dressed up as a criminal offence. The complainant had an earlier agreement to purchase the land, which lapsed; the landowners then sold the property to another buyer through the appellant, their power-of-attorney holder. The Karnataka High Court had already quashed identical charges against the landowners themselves on the ground that no case of cheating was made out, but had refused to quash the same charges against their power-of-attorney holder.

The Supreme Court held that her legal position was no different from that of the landowners she represented, and that the essential ingredient of cheating — a deceptive act inducing someone to part with property or money — was entirely absent from the facts. It held this was a classic case of giving a purely civil dispute, over a failed agreement to sell, the colour of a criminal offence, and extended the quashing already granted to the landowners to her as well.