Vandana Jain & Ors. v. State of Uttar Pradesh & Ors.

 Criminal proceedings cannot be sustained where a joint venture dispute is purely civil and lacks dishonest intention at inception.

Background

The appellants entered into a Joint Venture Agreement (JVA) dated 16.08.2010 with Respondent No. 2 for development of land at Kanpur. A security amount of ₹1 crore was paid under Clause 5 of the JVA. The project did not materialize. In 2021, an FIR was lodged under ss. 406, 420, 467, 468, 471 IPC, alleging false representation of title, suppression of litigation, non-refund of security money, and forgery. The High Court dismissed the quashing petition in limine.

Issues Framed

  1. Whether the allegations in the FIR disclose commission of cognizable offences under ss. 406, 420, 467, 468, 471 IPC.
  2. Whether the dispute is essentially civil in nature arising from the JVA.

Court’s Reasoning

1. Scope of Quashing

The Court reiterated that while FIR allegations are ordinarily taken at face value, where the dispute is “essentially of a civil nature,” the Court must assess whether it has been given a “cloak of criminal offence”.

2. Alleged False Representation (Cheating – s. 420 IPC)

The JVA contained no statement that no litigation was pending. It only assured absence of attachment or restraint orders and provided indemnity for title defects. No allegation demonstrated that these representations were false. Absence of dishonest intention at inception negated cheating.

3. Non-Refund of Security (Criminal Breach of Trust – s. 406 IPC)

Clause 5 made the security deposit adjustable against the first party’s share; it was not refundable. Non-refund therefore did not constitute criminal breach of trust.

4. Forgery Allegation (ss. 467, 468, 471 IPC)

A Tehsildar’s letter allegedly untraceable after a decade was relied upon to allege forgery. The Court held that mere non-traceability does not render a document forged. Forgery requires making a “false document” within s. 464 IPC, which was not alleged.

5. Delay and Nature of Dispute

The FIR was lodged 11 years after the JVA. Such delay indicated a contractual dispute, not criminal intent.

Decision / Disposition

Appeal allowed. High Court order set aside. FIR and all consequential proceedings quashed.

Ratio

Where a joint venture dispute arises from contractual obligations and the FIR does not disclose dishonest intention at inception or making of a “false document” within s. 464 IPC, continuation of proceedings under ss. 406, 420, 467, 468, 471 IPC amounts to abuse of process.

Case Details

Citation: 2026 INSC 192
Decided on: 25 February 2026
Case Title: Vandana Jain & Ors. v. State of Uttar Pradesh & Ors.
Court: Supreme Court of India
Bench: Pamidighantam Sri Narasimha, J.; Manoj Misra, J.

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