The Patna High Court has held that failure to pay the balance sale consideration under an agreement cannot by itself constitute cheating unless dishonest or fraudulent intention existed when the promise was made.

A Single Judge Bench of Justice Alok Kumar Pandey observed that such intention cannot be presumed merely because a party subsequently failed to keep its promise.

The case arose from a land transaction in which the complainant had entered into an agreement with the accused for purchase of land. According to the complainant, the accused later sought registration of the entire parcel of land in their favour and agreed to pay for the additional land at the same rate.

The land was subsequently registered in favour of the accused. The complainant alleged that while ₹1.80 crore was paid towards the transaction, the balance amount of ₹90.20 lakh remained unpaid despite repeated demands. A criminal complaint was thereafter filed alleging, among other offences, criminal breach of trust and cheating under Sections 406 and 420 of the Indian Penal Code.

The Judicial Magistrate dismissed the complaint under Section 203 of the Code of Criminal Procedure. The revisional court upheld the order, treating the dispute as one arising from a money claim under an agreement. Before the High Court, the petitioner argued that the accused had secured registration of the land on the assurance that the entire consideration would be paid, but later failed to pay the outstanding amount. It was argued that their conduct amounted to cheating and criminal breach of trust.

The High Court was not persuaded. It noted that for an offence of cheating, the dishonest intention must exist at the inception of the transaction. A later failure to honour a promise was not sufficient to presume such intention. The Court observed:

“To hold a person guilty of cheating it is necessary to show that he had a fraudulent or dishonest intention at the time of making the promise. From his mere failure to subsequently keep a promise, one cannot presume that he all along had a culpable intention to break the promise from the beginning.”

The Court also found that the criminal complaint had effectively been filed to enforce the agreement between the parties. It held that the basic ingredients necessary to make out an offence of cheating were absent.

The High Court accordingly declined to interfere with the orders dismissing the criminal complaint.

Case Title: Yogesh Kumar Singh v. State of Bihar and Ors.

Case Number: CRIMINAL MISCELLANEOUS No. 5203 of 2025

Appearance: Mr. Prabhakar Singh, Mr. Sumit Kumar, Ms. Ritika Kumari and Mr. Anubhav Vatsa, Advocates, for the Petitioner; Dr. Mrityunjaya Kr. Gautam, A.P.P., for the State.

Click Here To Read/Download Order