Criminal Breach Of Trust And Cheating Cannot Co-Exist On Same Facts: Orissa High Court

The Orissa High Court has reiterated that the offences of 'criminal breach of trust' and 'cheating' cannot co-exist in a given case based on same set of facts, since in the offence of cheating, criminal intention is necessary at the time of making false and misleading representation but in the offence of criminal breach of trust, there may not be any prior criminal intention, which begins with lawful entrustment and is later misappropriated.While setting aside an order passed by a JMFC taking cognizance of both the aforesaid offences simultaneously, the Bench of Justice Radha Krishna Pattanaik held –“On a bare reading of the impugned order as at Annexure-4, the Court finds that there has been no such discussion by the learned court below, rather, the Court finds the order on dated 29th August, 2025 to be a cryptic one. It appears that the learned court below has not properly considered the materials on record along with a chargesheet to reach at a definite conclusion as to which of the two offences have been committed by the petitioner.”An FIR was registered against the petitioner under Sections 316(5) (criminal breach of trust) and 318(4) (cheating) of the Bharatiya Nyaya Sanhita (BNS) on the allegation of misappropriation of an amount to the tune of Rs. 70 lakhs. Upon submission of charge-sheet, the JMFC, Digapahandi took cognizance of both the offences by an order dated 29.08.2025. The petitioner filed this revision petition assailing the order of cognizance mainly on the ground that the Magistrate erred in taking cognizance for both the offences simultaneously, as they cannot co-exist. Advocate Sailaza Nandan Das, appearing for the petitioner, relied upon the recent judgments of the Apex Court in the cases of Delhi Race Club (1940) Ltd. & Ors v. State of Uttar Pradesh & Anr., 2024 LiveLaw (SC) 603 and Arshad Neyaz Khan v. State of Jharkhand & Ors., 2025 LiveLaw (SC) 950 to amplify the above position of law.In Delhi Race Club (supra), a Bench led by Justice Jamshed Burjor Pardiwala explained the distinction between the criminal breach of trust and cheating, and reasoned why both the offences cannot co-exist. It held as follows –"There is a distinction between criminal breach of trust and cheating. For cheating, criminal intention is necessary at the time of making a false or misleading representation i.e., since inception. In criminal breach of trust, mere proof of entrustment is sufficient. Thus, in case of criminal breach of trust, the offender is lawfully entrusted with the property, and he dishonestly misappropriated the same. Whereas, in case of cheating, the offender fraudulently or dishonestly induces a person by deceiving him to deliver any property. In such a situation, both the offences cannot co-exist simultaneously."Similarly, in Arshad Neyaz Khan (supra) the top Court ingeminated the position of law clarified in Delhi Race Club i.e. both the aforesaid offences are antithetical to each other and cannot therefore be invoked simultaneously. It held –“For cheating, criminal intention is necessary at the time of making false or misleading representation i.e. since inception. In criminal breach of trust, mere proof of entrustment is sufficient. Thus, in case of criminal breach of trust, the offender is lawfully entrusted with the property, and he dishonestly misappropriates the same. Whereas, in case of cheating, the offender fraudulently or dishonestly induces a person by deceiving him to deliver a property. In such a situation, both offences cannot co-exist simultaneously. Consequently, the complaint cannot contain both the offences that are independent and distinct. The said offences cannot co-exist simultaneously in the same set of facts as they are antithetical to each other.”Taking note of the lucent rulings of the highest Court, Justice Pattanaik was of the view that the concerned Magistrate failed to discuss the materials available on record alongside the charge-sheet in order to come to a conclusion as to which of the two offences prima facie seems to have been committed by the petitioner. He found the cognizance order to be “cryptic”. “In other words, it can be said that there has been no judicial application of mind by the learned court below, hence, the decision as per Annexure-4 needs a revisit keeping in view the settled position of law and the citations referred hereinbefore. So, the conclusion of the Court is that the impugned order dated 29th August, 2025 at Annexure-4 cannot be upheld and therefore, it shall have to be set at naught with the direction as hereinbelow.”Accordingly, the impugned order was set aside with a direction to the JMFC to reconsider the available materials for taking fresh cognizance and to pass a reasoned order keeping in view the observations made and the settled legal position of law discussed in the instant order.Case Title: Priyam Pratham Sabat v. State of Odisha Case No: CRLREV No. 961 of 2025Date of Order: December 15, 2025Counsel for the Petitioner:...

Criminal Breach Of Trust And Cheating Cannot Co-Exist On Same Facts: Orissa High Court

Jyoti Prakash Dutta

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