The Jharkhand High Court has clarified that impersonation to induce financial investment, coupled with non-return of funds, constitutes cheating under Section 420 IPC even if the transaction initially appears contractual. The Court dismissed a petition seeking quashment of FIR and cognizance, emphasizing that fraudulent intent at the inception of the transaction, not mere breach of contract, triggers criminal liability.
Background & Facts
The Dispute
The petitioner, Anupam Pandey, aged 45, is accused of impersonating himself as a contractor to deceive the informant into transferring Rs. 53,14,318/- to his bank account and other accounts as directed by him. The petitioner falsely represented that investing this amount would yield a 20% profit. Only Rs. 7,60,000/- was returned, leaving the informant defrauded of Rs. 74,51,483/-. The petitioner is not a licensed or registered contractor.
Key Facts
- The informant transferred funds between October 2023 and January 2024 based on the petitioner’s representations
- The petitioner claimed to be a contractor with access to lucrative investment opportunities
- No legitimate business or investment activity was conducted by the petitioner
- The petitioner retained the majority of funds without providing any return or account of usage
- The informant filed a written complaint on 15.03.2024
Procedural History
- 15.03.2024: Informant filed written complaint with Godda (Town) Police Station
- 18.03.2024: Godda (Town) P.S. Case No. 118 of 2024 registered under Sections 406 and 420 IPC
- 31.12.2025: Charge Sheet No. 349 of 2025 submitted by police after investigation
- 22.01.2026: Learned Chief Judicial Magistrate, Godda, took cognizance under G.R. Case No. 99 of 2026
- 10.02.2026: Petitioner filed this Criminal Miscellaneous Petition under Section 528 of the B.N.S.S., 2023
- 11.05.2026: Hearing concluded before the Jharkhand High Court
The Parties' Positions
Petitioner’s Claim: The transaction was a civil breach of contract. No fraudulent intent existed at inception. Relied on Rikhab Birani & Another v. State of Uttar Pradesh & Another (2025 INSC 512) and Sarabjit Kaur v. State of Punjab (2023) 5 SCC 360 to argue that criminal liability requires dishonesty from the outset.
State’s Response: The petitioner deliberately misrepresented his identity as a contractor to gain trust. The deception was systemic and intentional from the first transaction. The petitioner is absconding and has not appeared before the trial court despite cognizance being taken.
Relief Sought
The petitioner seeks quashing of:
- Godda (Town) P.S. Case No. 118 of 2024
- Charge Sheet No. 349 of 2025
- Cognizance order dated 22.01.2026
- All proceedings under Sections 406 and 420 IPC
The Legal Issue
Whether the alleged deception by impersonating a contractor to induce financial investment, followed by non-return of funds, constitutes cheating under Section 420 IPC at the inception of the transaction, thereby justifying continuation of criminal proceedings despite reliance on judgments distinguishing breach of contract from criminal fraud.
Arguments Presented
For the Petitioner
The petitioner’s counsel contended that the transaction was essentially a civil dispute arising from failure to deliver promised returns. Relying on Rikhab Birani & Another v. State of Uttar Pradesh & Another and Sarabjit Kaur v. State of Punjab, he argued that criminal liability under Section 420 IPC requires proof of fraudulent or dishonest intention existing at the very beginning of the transaction. Since the petitioner had no prior criminal record and the arrangement was framed as an investment opportunity, the absence of initial dishonesty negates the essential ingredient of cheating. The matter, he submitted, should be resolved through civil remedies.
For the Respondent
The Public Prosecutor countered that the petitioner’s conduct was not a mere breach of promise but a deliberate act of impersonation. The petitioner, knowing he was not a contractor, falsely represented himself as one to gain the informant’s trust. The pattern of fund transfers to multiple accounts, the absence of any investment activity, and the petitioner’s subsequent refusal to return funds or communicate with the informant demonstrated a premeditated scheme. The State emphasized that the Magistrate’s cognizance was based on a detailed police report and that the petitioner’s absconding behavior precluded any premature quashment.
The Court's Analysis
The Court examined the nature of the deception alleged and its timing. It noted that the petitioner’s representation as a contractor was not a mere exaggeration but a false identity assumed to induce financial transactions. The Court distinguished Rikhab Birani and Sarabjit Kaur, observing that those cases involved parties who entered into agreements with genuine intent, later failing to perform due to unforeseen circumstances. In contrast, here, the petitioner’s identity was fabricated from the outset.
"There is direct and specific allegation against the petitioner of playing deception since the beginning of the transaction between the parties by impersonating himself as a contractor though, in fact, the petitioner is not a contractor and the petitioner by so deceiving the informant, has induced the informant so deceived to part with huge amounts of money."
The Court further relied on State of Gujarat v. Girish Radhakrishnan Varde (2014) 3 SCC 659 to affirm that a Magistrate cannot alter the charges at the cognizance stage, but this does not preclude the Court from assessing whether the allegations, as presented in the FIR and charge sheet, disclose a prima facie case. The Court held that the allegations, if proven, satisfy the ingredients of Section 420 IPC - deception, dishonest inducement, and delivery of property with intent to defraud.
The Court also noted the petitioner’s non-cooperation and absence from proceedings, which undermined any claim of good faith. The Court emphasized that quashment under Section 528 of the B.N.S.S., 2023 is an extraordinary remedy, not to be granted at the threshold when the allegations, if accepted, constitute a serious criminal offense.
The Verdict
The petition was dismissed. The Jharkhand High Court held that the allegations disclose a prima facie case of cheating under Section 420 IPC and criminal breach of trust under Section 406 IPC. The cognizance order dated 22.01.2026 and all proceedings arising from Godda (Town) P.S. Case No. 118 of 2024 are permitted to continue. The petitioner is directed to appear before the trial court within 14 days of this order. No costs were awarded.
What This Means For Similar Cases
Deception at Inception Is Criminal, Not Civil
- Practitioners must distinguish between a genuine commercial dispute and a fraudulent impersonation scheme
- If a party falsely represents identity, qualifications, or capacity to induce payment, it triggers Section 420 IPC regardless of subsequent performance
- Civil remedies cannot be invoked to shield conduct that is inherently dishonest from the outset
Absconding Accused Cannot Seek Quashment at Threshold
- Courts will not entertain quashment petitions when the accused is deliberately avoiding trial
- Non-appearance undermines claims of good faith and supports inference of guilt
- The burden shifts to the accused to demonstrate absence of criminal intent before the trial court, not at the quashment stage
Magistrate’s Cognizance Is Not a Barrier to Prosecution
- Even if the charge sheet omits certain sections, the Magistrate’s cognizance based on the police report is valid if the allegations disclose an offense
- Quashment under Section 528 B.N.S.S., 2023 is not a substitute for trial
- Allegations of deception must be tested through evidence, not dismissed on preliminary arguments
