SURJEET VARMAversusSTATE OF U.P. AND ANOTHER

         HIGH COURT OF JUDICATURE AT ALLAHABAD
                 APPLICATION U/S 528 BNSS No. - 5552 of 2026

Surjeet Varma
                                                             .....Applicant(s)
                                   Versus

State of U.P. and Another
                                                                .....Opposite
                                                                      Party(s)

Counsel for Applicant(s)                    :   Brijesh Kumar Yadava
Counsel for Opposite Party(s)               :   G.A.

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

1. Supplementary affidavit filed by the applicant is taken on record.

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

3. Present application has been preferred with the prayer to quash the
chargesheet dated 30.12.2017 and cognizance/summoning order dated
25.11.2021 as well as entire proceedings of Case No.6363 of 2021 (State
Vs. Surjeet Verma and others), arising out of Case Crime No.0108 of
2017, under Sections 406 and 420 of IPC, P.S.- Kotwali, Orai, District
Jalaun, pending in the court of learned Chief Judicial Magistrate, Jalaun at
Orai.

4. Learned counsel appearing on behalf of applicant has challenged the
impugned chargesheet along with cognizance/summoning order 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
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case of the complainant that offence of criminal breach of trust
as 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."
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                                    5. 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.

                                    6. 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.

                                    7. 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, cognizance/summoning order dated 25.11.2021 is
                                    liable to be set aside. Although judgment of Hon'ble Supreme Court
                                    rendered in the case of Delhi Race Club (Supra) has been passed on
                                    23.08.2024 and cognizance of offence in the present case, has been taken
                                    on dated 25.11.2021 and as per the judgment rendered by Hon'ble the
                                    Apex Court in the case of Kanishk Sinha and another Vs. The State of
                                    West Bengal and another [2025 SCC Online SC 443], the judgment of
                                    Hon'ble the Apex Court will always be retrospective in nature unless the
                                    judgment itself specifically states that the judgment will operate
                                    prospectively.

                                    8. In view thereof, cognizance/summoning order dated 25.11.2021 passed
                                    in Case No.6363 of 2021 (State Vs. Surjeet Verma and others), arising out
                                    of Case Crime No.0108 of 2017, under Sections 406 and 420 of IPC,
                                    P.S.- Kotwali, Orai, District Jalaun, pending in the court of learned Chief
                                    Judicial Magistrate, Jalaun at Orai, is set aside. Matter is hereby remitted
                                    back to learned court concerned for passing fresh order of taking
                                    cognizance of offence, if required, in light of the proposition of law
                                    settled by Hon'ble Supreme Court in the case of Delhi Race Club
                                    (supra).

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

                                    April 20, 2026
                                    Ashish/-

                                                                                       (Saurabh Srivastava,J.)




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