New Delhi: A Delhi court has declined to interfere with cheating and criminal conspiracy proceedings against M3M India Pvt Ltd, its subsidiary companies and several individuals in a Gurugram land dispute, allowing the criminal case to proceed on allegations that the agreed consideration for a land exchange was not paid.
The court upheld the cognisance for cheating under Section 420 IPC and criminal conspiracy and common intention under Sections 120B and 34 IPC, respectively, leaving the accused at liberty to raise their submissions before the magistrate at the stage of consideration of charges.
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Principal District and Sessions Judge Anju Bajaj Chandna, however, set aside the cognisance taken for criminal breach of trust under Section 406 of the Indian Penal Code (IPC), holding that the essential ingredients of the offence, particularly entrustment of property, were not made out.
The court passed the order on October 17 while disposing of two revision petitions challenging the January 31, 2026, order of the Chief Judicial Magistrate, which had taken cognisance of the offences on the basis of a police chargesheet.
The sessions court directed the magistrate to proceed expeditiously with the case under Sections 420, 120B and 34 IPC and directed the parties to appear before the Chief Judicial Magistrate on October 27, 2026.
The case stems from an FIR registered on a complaint by MGF Developments Ltd, which alleged that the accused obtained rights over land in Chauma, Gurugram, through exchange deeds and assurances that the agreed monetary consideration would be paid.
According to the prosecution, the transaction involved the exchange of the Chauma land for land in Mohammadpur Gujar, Gurugram, along with an additional monetary consideration. The complainant alleged that post-dated cheques issued towards the payment were dishonoured despite repeated assurances and replacement of the instruments.
It was further alleged that the accused companies got the land mutated in their favour and applied for a licence to develop a residential project without fulfilling the payment obligations. MGF Developments claimed that it suffered substantial financial losses as a result.
Examining the allegations in the FIR, chargesheet and witness statements, the court observed that criminal breach of trust requires entrustment of property or dominion over it, followed by dishonest misappropriation or use in violation of law or a legal contract.
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The court noted that the prosecution's case was that the land had been transferred through formal exchange deeds against consideration, rather than entrusted to the accused on account of trust or faith.
"Even if all the allegations contained in the first information report are taken at its face value and accepted, even then, they do not constitute the offence of criminal breach of trust qua the petitioners," the court observed.
Relying on the Supreme Court's judgment in Delhi Race Club (1940) Ltd. v. State of Uttar Pradesh, the court explained the distinction between cheating and criminal breach of trust, noting that the two offences have different essential ingredients. It consequently held that the cognisance order was not sustainable to the extent it concerned Section 406 IPC.
The accused had argued that the dispute was essentially civil and commercial in nature, arising from contractual obligations under the exchange deeds. They also questioned MGF Developments' locus standi to lodge the complaint, contending that the exchange deeds had been executed between the land-owning companies and the M3M entities.
The defence further relied on the civil litigation between the parties and the deposit of consideration, including interest, in court, arguing that the payment dispute had been addressed.
However, the Sessions Court declined to examine these contentions in detail at the revision stage. It observed that the scope of revisional jurisdiction did not permit a detailed assessment of evidence or a determination of the questions concerning the complainant's locus standi and the civil or criminal nature of the dispute without their consideration by the court of first instance.
The court said that at the stage of taking cognisance, the magistrate is required to determine whether sufficient grounds exist to proceed and is not expected to undertake a detailed evaluation of the evidence or the likelihood of conviction.
It observed that the accused had raised important points in their favour, but said the appropriate stage to consider them would be when the magistrate hears both sides on the question of framing charges or discharge. The court clarified that the merits of the evidence could not be examined in detail at this preliminary stage.
The court directed the parties, including Basant Bansal, Roop Kumar Bansal and Pankaj Bansal, to appear before the Chief Judicial Magistrate at Tis Hazari Courts on October 27, 2026. It also directed the magistrate to proceed expeditiously with the case concerning the allegations of cheating and criminal conspiracy.
Senior advocate Jagdeep Sharma, along with advocates Vijay Aggarwal, Siddharth Bhardwaj and Sarthak Anand, appeared for the revisionists.
Senior advocate Tanveer Ahmed Mir appeared for MGF Developments Ltd, along with advocates Yudhister Singh, Prabhav Ralli, Yash Datt, Mohsin Khan, Deeya Mittal and Dev Vrat Arya.
The revision petitions were filed by M3M India Pvt Ltd, Starcity Realtech Pvt Ltd, Cosmo Probuild Pvt Ltd, Surya Propcorn Pvt Ltd and Neer Builders Pvt Ltd, along with several individuals, including Basant Bansal, Roop Kumar Bansal and Pankaj Bansal.