Dishonest intention at inception is essential for cheating; mere breach of an agreement to sell is a civil dispute.

Cheating allegations arising from an agreement to sell require proof of dishonest intention at the inception of the transaction; absent such material, the dispute remains civil and a mere failure to execute the sale deed or refund money does not by itself attract criminal liability. Where the first complaint sought refund and later complaints added allegations against the accused, the record did not support fraudulent intent from the beginning. The Supreme Court therefore treated the criminal process as an improper tool in a contractual dispute and quashed the FIR and consequential proceedings.

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Issues: Whether the FIR alleging cheating, criminal conspiracy, and criminal intimidation arising out of an agreement to sell was liable to be quashed on the ground that the dispute was civil in nature and no dishonest intention at the inception of the transaction was shown.

Analysis: The agreement to sell, the repeated complaints, and the absence of any civil proceedings for specific performance or refund showed that the dispute essentially concerned non-execution of the sale deed and recovery of money. The allegations against the appellant were introduced only in later complaints, while the first complaint was directed against other persons and sought refund of the amount paid. The material did not show fraudulent or dishonest intention from the beginning of the transaction, which is essential for cheating. A mere breach of contract or failure to complete the sale deed does not by itself constitute a criminal offence, and criminal process cannot be used to pressurise a party in a civil dispute.

Conclusion: The FIR and all consequential proceedings were liable to be quashed, and the appeal succeeded.

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