CHHOTELAL GAUTAMversusSTATE OF U.P. AND ANOTHER

         HIGH COURT OF JUDICATURE AT ALLAHABAD

           APPLICATION U/S 528 BNSS No. - 18410 of 2026

Chhotelal Gautam
                                                              .....Applicant(s)
                                   Versus
State of U.P. and Another
                                                                  .....Opposite
                                                                        Party(s)

Counsel for Applicant(s)      : Himanshu Kushawaha, Santosh Kumar
                                Rai
Counsel for Opposite Party(s) : G.A.

Court No. - 77
                 HON'BLE SAURABH SRIVASTAVA, J.

1. Heard learned counsel for applicant and learned AGA for the State.


2. Present application has been preferred with the prayer to quash the
chargesheet dated 21.04.2018 and cognizance/summoning order dated
31.07.2018 as well as entire proceedings of Case No.958 of 2018 (State Vs.
Chhotelal Gautam and others), arising out of Case Crime no. 198 of 2014,
under Sections 419, 420, 406 IPC, P.S.- Bhelupur, District Varanasi,
pending in the court of learned Judicial Magistrate, Court No.2, Varanasi.
Further prayer to quash order dated 08.01.2026 passed by learned Judicial
Magistrate, Court No.2, Varanasi whereby discharge application preferred at
the behest of applicant was rejected.


3. Learned counsel appearing on behalf of applicant has challenged the
impugned chargesheet along with impugned orders and entire proceedings of
the present case precisely on the ground that Sections 420 and 406 IPC
cannot go together in the same breath as per the proposition of law settled by
Hon'ble Supreme Court in the case of Delhi Race Club (1940) Ltd. and
others vs. State of Uttar Pradesh and another reported in 2024 10 SCC
690. The relevant portion of the said judgment is being reproduced
hereinbelow:-


     "38. In our view, the plain reading of the complaint fails to spell
     out any of the aforesaid ingredients noted above. We may only
     say, with a view to clear a serious misconception of law in the
     mind of the police as well as the courts below, that if it is a case
     of the complainant that offence of criminal breach of trust as
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                               2

     defined under Section 405 IPC, punishable under Section 406
     IPC, is committed by the accused, then in the same breath it
     cannot be said that the accused has also committed the offence of
     cheating as defined and explained in Section 415 IPC, punishable
     under Section 420 IPC.

     41. The distinction between mere breach of contract and the
     offence of criminal breach of trust and cheating is a fine one. In
     case of cheating, the intention of the accused at the time of
     inducement should be looked into which may be judged by a
     subsequent conduct, but for this, the subsequent conduct is not
     the sole test. Mere breach of contract cannot give rise to a
     criminal prosecution for cheating unless fraudulent or dishonest
     intention is shown right from the beginning of the transaction i.e.
     the time when the offence is said to have been committed.
     Therefore, it is this intention, which is the gist of the offence.

     43. 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.

     55. It is high time that the police officers across the country are
     imparted proper training in law so as to understand the fine
     distinction between the offence of cheating vis-vis criminal
     breach of trust. Both offences are independent and distinct. The
     two offences cannot coexist simultaneously in the same set of
     facts. They are antithetical to each other. The two provisions of
     IPC (now BNS, 2023) are not twins that they cannot survive
     without each other."

4. On the other hand, learned A.G.A. has vehemently opposed the prayer
sought through the instant application but unable to dispute the settled
proposition of law as relied upon by the learned counsel appearing for
applicant.
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                                    5. Since the arguments as advanced on behalf of learned counsel for
                                    applicant, are based on legal issue, no notice is required to be issued to
                                    opposite party no.2.


                                    6. After hearing the learned counsel for the parties, going through the record
                                    of the case and the judgment of the Hon'ble Supreme Court rendered in the
                                    case of Delhi Race Club (Supra), it is crystal clear that both the sections i.e.
                                    Sections 420 and 406 IPC cannot go in the same breath and as such, order of
                                    rejecting discharge application dated 08.01.2026 passed by learned Judicial
                                    Magistrate, Court No.2, Varanasi inCase No.958 of 2018 (State Vs.
                                    Chhotelal Gautam and others), arising out of Case Crime no. 198 of 2014,
                                    under Sections 419, 420, 406 IPC, P.S.- Bhelupur, District Varanasi, is set
                                    aside. Matter is hereby remitted back to learned court concerned for passing
                                    fresh order over discharge application preferred at the behest of applicant, if
                                    charges have not been framed till today, in light of the proposition of law
                                    settled by Hon'ble Supreme Court in the case of Delhi Race Club (supra).


                                    7. Accordingly, the instant application stands allowed in part.

                                    May 5, 2026
                                    Vivek Kr.
                                                                                         (Saurabh Srivastava,J.)




Digitally signed by :-
VIVEK KUMAR
High Court of Judicature at Allahabad