In a noteworthy ruling, the Allahabad High Court has observed that charges of cheating and criminal breach of trust cannot simultaneously be made out on the same set of facts. This decision was delivered by Justice Saurabh Shyam Shamshery while hearing Application U/S 482 No. – 4769 of 2024, filed by Priyanka Gupta and Rahul Gupta.
The applicants sought to quash the summoning order dated July 1, 2023, issued in Complaint Case No. 215 of 2020 (Smt. Shweta Gupta Vs. Rahul Gupta and others) under Sections 420 (cheating), 406 (criminal breach of trust), and 120-B (criminal conspiracy) of the Indian Penal Code (IPC).
Background of the Case
The case originated from a complaint filed by Smt. Shweta Gupta, the wife of Rahul Gupta, one of the applicants. She alleged that her husband and sister-in-law, Priyanka Gupta, conspired to cheat her out of ₹1,18,000. According to the complaint, Priyanka, who was employed as a bank manager, withdrew the money from Shweta’s bank account without her authorization. It was further alleged that ₹70,000 of this amount was transferred to Priyanka’s account.
The complainant argued that her husband, Rahul Gupta, had linked her bank account with his email and phone number to ensure she did not receive any transaction alerts. The alleged fraud came to light when Shweta checked her bank account details on February 17, 2019.
Legal Issues and Observations of the Court
The court was faced with determining whether the offences of cheating (Section 420 IPC) and criminal breach of trust (Section 406 IPC) could be simultaneously sustained on the same facts. Justice Shamshery, after considering the evidence and legal arguments, held that these two offences could not coexist based on the same set of facts.
The court referenced a recent Supreme Court ruling in Delhi Race Club (1940) Ltd. & Ors. Vs. State of Uttar Pradesh & Anr. (Criminal Appeal No. 3114 of 2024), which emphasized the distinct elements required to constitute the offences of cheating and criminal breach of trust. The Supreme Court noted:
“It is indeed very sad to note that even after these many years, the courts have not been able to understand the fine distinction between criminal breach of trust and cheating… The magistrate must carefully apply its mind to ascertain whether the allegations, as stated, genuinely constitute these specific offences.”
Justice Shamshery applied this rationale and concluded that both offences could not be made out on the same set of facts in the present case. He stated:
“On the same set of facts, offence under Section 420 and 406 I.P.C. may not be simultaneously made out… There was neither any ‘entrustment’ nor an allegation of ‘dishonest misappropriation’ in violation of any ‘direction of law’ or ‘any legal contract’.”
Court’s Decision
The court upheld the summoning order under Sections 420 (cheating) and 120-B (criminal conspiracy) IPC, stating that there was sufficient evidence to proceed against the applicants for these charges. However, the court set aside the charges under Section 406 (criminal breach of trust) IPC, ruling that the essential elements to constitute this offence were absent in this case.
The court also highlighted that the internal bank inquiry, which found no wrongdoing on the part of Priyanka Gupta, did not preclude criminal proceedings on the same allegations, as the standards of proof differ between internal inquiries and criminal cases.
