Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 26.10.2026
Bombay HC: Criminal Proceedings Cannot Be Used to Settle Purely Civil Disputes
This Short Article has been prepared & written by Advocate Madhumita Jha. The views expressed are based on her interpretation of the law. She can be reached at her email id jhamadhumita27@gmail.com .
The Bombay High Court has quashed criminal proceedings against M/s. Akansha Developers, holding that the dispute over an Aundh redevelopment project was fundamentally civil and did not disclose a prima facie case of cheating or criminal breach of trust.
Background of the dispute
The case arose from a redevelopment arrangement involving properties bearing CTS Nos. 773, 774, 776 and 784 at Mouje Aundh, Taluka Haveli, Pune. The complainant claimed ownership rights in the ancestral properties and asserted that CTS No. 784 had been purchased by his grandfather through a registered sale deed dated 6 May 1955.
The parties had entrusted development of the property to M/s. Akansha Developers. Under the development arrangement, the developer was to carry out the project and provide compensation along with an allotted flat and shop. A dispute later emerged over the inclusion of CTS No. 784 in the project. The complainant contended that certain family members had no right, title or possession authorising them to execute a development agreement concerning that parcel.
Criminal complaint and earlier proceedings
In 2012, the complainant initiated RCC No. 581 of 2012 before the Judicial Magistrate First Class, Pune, alleging offences including cheating, breach of trust and other provisions of the Indian Penal Code.
The Magistrate issued process on 9 August 2012 for offences under Sections 403, 406, 420, 423, 504 and 506 read with Section 34 of the IPC. Other allegations, including those under Sections 404, 426, 447 and conspiracy-related provisions, were rejected on the ground that no offence was made out. A revision challenge before the Sessions Court was dismissed on 28 October 2014.
Akansha Developers then approached the Bombay High Court seeking to quash the remaining criminal proceedings.
Developerβs case: a contractual dispute already addressed in civil court
The developer argued that the same dispute had already been the subject of civil proceedings since 2009. According to the developer, the civil suit was decreed on 27 April 2012, before the criminal complaint was filed, and the complaint was therefore a retaliatory attempt to reopen issues already considered in the civil litigation.
It was also submitted that the development agreement and power of attorney authorised the developer to undertake the project and negotiate matters connected with possession of CTS No. 784. The developer maintained that it remained willing to provide the complainantβs earmarked flat and shop.
The civil court had concluded that cancellation of the development agreement was not appropriate because the project had been completed, the agreement had been acted upon and third-party rights had crystallised. Instead, it awarded damages of Rs. 5 lakh to the complainant. The decree was under challenge in a first appeal.
Complainantβs allegations
The complainant opposed the petition, alleging that CTS No. 784 was not covered by an earlier civil decree and that the family members who executed the development agreement lacked ownership rights in that property. It was alleged that the developer acted in concert with them, incorporated the disputed parcel into the larger project and failed to pay amounts promised under the development agreement.
High Courtβs reasoning
Justice Milind N. Jadhav held that the partiesβ rights and obligations were governed by executed and registered documents, including the development agreement, power of attorney and revenue records. The Court noted that the civil court had already ruled that the development agreement could not be cancelled, while the complainantβs appeal against that decision remained pending.
The Court found that the dispute was amenable to civil adjudication and that parallel criminal proceedings could not be sustained on the same facts without a prima facie showing of criminal intent. It specifically held that there was no element of cheating in the circumstances of the case.
The judgment also observed that, once allegations under certain related provisions had not been made out, the cheating charge under Section 420 was unsustainable on the facts presented.
Outcome
By its judgment dated 22 October 2026, the Bombay High Court quashed the Sessions Courtβs order of 28 October 2014 and set aside the Magistrateβs order issuing process dated 9 August 2012. The writ petition filed by M/s. Akansha Developers was allowed.
Key legal takeaway
The decision reinforces that a property-development dispute governed by contractual and title documents will ordinarily remain a civil matter. Criminal proceedings for cheating or breach of trust require clear, prima facie allegations of criminal intent; they cannot be used merely because a party disputes contractual performance or property entitlements already being litigated before a civil court.
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Source: Bombay High Court
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