#Section 406 IPC

Advance under an agreement to sell is not 'entrustment' for criminal breach of trust (Section 406 IPC), and refusal to execute the sale deed lacks dishonest intent for cheating (Section 420 IPC) absent fraud at inception. The ruling bars criminalising civil property disputes without proof of dishonest intent from the outset, protecting parties from misuse of criminal process.

The Patna High Court held that where money is paid for an illegal purpose (securing govt jobs), there is no entrustment under Section 406 IPC, so no criminal breach of trust exists. It quashed the cognizance order, calling the prosecution mala fide, protecting persons accused of cheating in job schemes from unfounded charges.

The Gujarat High Court ruled Sections 406 and 420 IPC are mutually exclusive per Delhi Race Club (2024), quashing the FIR against two accused for vague, non-specific allegations. Omnibus family-dispute claims lacking intentional insult to provoke breach of peace also fail to attract Section 504 IPC.

The Andhra Pradesh High Court ruled that a consensual relationship, even if predicated on a false promise of marriage, does not automatically constitute criminal cheating under Section 417 IPC. The court emphasized that dishonest intent must be proven from the inception of the relationship to sustain charges, setting a precedent for quashing FIRs lacking such evidence.

The Jharkhand High Court has clarified that financial default alone cannot trigger criminal liability under Sections 420 and 406 IPC; prosecution requires proof of fraudulent intent at the time the loan was obtained. This ruling shields honest borrowers from weaponized criminal complaints and reinforces the boundary between civil debt disputes and criminal fraud.

Punjab & Haryana High Court holds that anticipatory bail cannot be denied merely for alleged non-cooperation if the accused complies with lawful investigation queries without self-incriminating. Custodial interrogation for recovery alone is insufficient grounds for denial, reinforcing the principle that pre-trial incarceration requires stronger justification than procedural non-compliance.

Patna High Court grants pre-arrest bail in cheque bounce cases where the underlying dispute is purely civil, holding that prosecution under Sections 406, 420 IPC and Section 138 NI Act cannot sustain without criminal intent. The ruling mandates mediation for such disputes, curbing abuse of criminal process for debt recovery.

Bombay High Court reinforces that civil recovery disputes cannot be converted into criminal proceedings without concrete evidence of fraud. The ruling protects financial institutions and officials from malicious prosecution based on unverified allegations, setting a precedent for FIR quashing under BNSS.

Allahabad High Court reiterated that Section 406 IPC mandates proof of both entrustment of property and subsequent misappropriation for a conviction. Mere concealment of loan arrears without evidence of entrustment does not constitute criminal breach of trust, setting aside the trial court’s discharge rejection.

Allahabad High Court rules that mere lending of money, even for a plot purchase, does not constitute 'entrustment' under Section 406 IPC unless fiduciary obligations or contractual terms are established. The judgment clarifies the distinction between civil lending and criminal breach of trust, protecting lenders from frivolous criminal proceedings.

The Bombay High Court has held that mere failure to remit proceeds from a commercial sale, even with dishonored cheques and disputed invoices, cannot trigger criminal liability under Section 406 IPC absent clear evidence of entrustment and initial dishonest intent. This ruling shields bona fide traders from criminalization of civil disputes, reinforcing the boundary between contractual breaches and criminal misappropriation.

The Andhra Pradesh High Court ruled that police cannot register an FIR or coerce statements without adhering to principles of natural justice and procedural fairness. The court closed the writ petition after finding the FIR was falsely registered, reinforcing that investigative authorities must comply with legal safeguards to prevent misuse of power.

The Jharkhand High Court ruled that a property purchaser cannot be held liable under Sections 420 or 406 IPC if there is no allegation of deception, forgery, or entrustment. The decision clarifies that criminal liability requires active dishonest intent, not merely purchasing from a non-owner, protecting bona fide buyers from frivolous criminal proceedings.

Madhya Pradesh High Court rules that cheating under Section 420 IPC and criminal breach of trust under Section 406 IPC are mutually exclusive offences and cannot be concurrently sustained. The court acquitted the accused of Section 406, emphasizing that employment fraud involving monetary deception falls squarely under Section 420 IPC alone, impacting future prosecutions in similar cases.

Bombay High Court Nagpur Bench rules that a partner’s unauthorized disposal of partnership property for personal use constitutes criminal breach of trust under Section 406 IPC, even if the assets are jointly owned. The judgment clarifies that partnership agreements do not shield dishonest misappropriation from criminal liability, impacting co-venturers and investors in joint enterprises.