1. This Criminal Petition has been filed by the petitioners/accused Nos.2 to 4 seeking to quash the proceedings in F.I.R. No.52 of 2026 on the file of Economic Offences Wing Police Station, Cyberabad, for the offences punishable under Sections 420, 406, 467, 468, 471 and 120b r/w 34 of the Indian Penal Code, 1860 (for short ‘the IPC).

2. Brief facts of the case:

               2.1 On 18.05.2026 Mr. Venkata Ravi Teja Manyam, Managing Partner of JSS Ventures, before the EOW Police Station, Cyberabad, lodged a complaint stating that accused No.1, who was appointed as CEO of JSS Ventures, for purchasing the lands on behalf of JSS Ventures and he was never authorized to sell, transfer, alienate or register any property in his favour or in favour of any third parties. The petitioners were engaged only as agents/brokers for procurement of lands situated in Sy.Nos.101, 102, 103, 104, 106, 107, 108 and 109 of Sangareddy Town on behalf of JSS Ventures. Initially, the accused persons approached Mr.Atluri Venkata Jithendra claiming that they had already invested Rs.10 Crores approximately towards the lands covered by the said survey numbers and produced purported Agreements of Sale and payment receipts allegedly executed by the land owners. Believing their words, Mr.Atluri Venkata Jithendra agreed to invest nearly Rs.25 Crores on the assurance that the lands would ultimately be registered in his favour. Subsequently, JSS Ventures was constituted to acquire the land and the investment made by Jithendra was treated as investment in the said partnership firm. Thereafter, substantial amounts were transferred by Mr.Atluri Venkata Jithendra and Mrs. B.Sri Bhavani Borra, on behalf of JSS Ventures, to the accused persons for making payments to various land owners in connection with acquisition of lands in the above survey numbers. However, the accused persons, in furtherance of common conspiracy, made only partial payments to certain land owners and misappropriated huge sums entrusted to them by creating false Agreements of Sale and payment receipts, and created false records showing payment of full sale consideration to the land owners. Accused No.1, without authorization from JSS Ventures, registered Ac.2.05 guntas of land in the names of petitioners and thereafter, through the mediators namely Mr.Sarath Nallamothu and Mr. Pradeep Nagothu, a fresh MOU was executed wherein the accused have agreed to re-register the entire extent of land in favour of JSS Ventures. However, only Ac.1-16 guntas was re-registered and the remaining Ac.0-19 guntas still continues in the names of the accused persons. The total amount misappropriated by the accused persons with their fraudulent acts is approximately Rs.5,52,00,000/-. Based on the said complaint, Crime No. 52 of 2026 was registered against the petitioners and accused No.1 for the said offences.

3. Heard Mr. Kanakaiah Jalli, learned Senior Counsel, representing Mr. Narendar Jalli, learned counsel for the petitioners, Mr.Sricharan Telaprolu, learned counsel appearing on behalf of respondent No.2 through video conference, and Mrs.S.Madhavi, learned Assistant Public Prosecutor for respondent No.1-State.

4. Submissions of learned Senior Counsel for the petitioners:

               4.1 Learned Senior Counsel submitted that the petitioners have not committed any offence and they have been falsely implicated in the present crime by making false allegations against them. Even according to the complaint, the nature of allegations levelled against the petitioners are purely civil in nature and the ingredients of the offences under Sections 420, 406, 467, 468, 471 and 120b of the IPC are not attracted. He further submitted that the petitioners have not fabricated or forged any document as alleged in the complaint and there is no dishonest intention on their part to cheat respondent No.2 or JSS Ventures.

               4.2 He further submitted that Atluri Venkata Jitendra and petitioner No.1 have entered into MOU on 23.02.2023. Subsequently Atluri Venkata Jitendra was entered into JSS Ventures firm as a Partner. Thereafter, respondent No.2, who is one of the partners of JSS Ventures, and petitioner Nos.2 to 4 and Atluri Venkata Jitendra have entered into Memorandum of Understanding (MOU) on 15.05.2024 in respect of the transactions of the property as mentioned in the complaint. In the said MOU, an arbitration clause was incorporated. As per Clause 18 of the MOU, dated 15.05.2024, if any dispute arises between the parties, they have to dissolve the disputes through arbitration. Respondent No.2, without invoking Clause 18 of the MOU seeking to refer the disputes to the Arbitrator, has filed the present complaint by giving it a criminal colour and the same is not permitted under law.

               4.3 He further submitted that petitioners had already executed Sale Deeds in respect of Ac.1-16 guntas in favour of JSS Ventures on 20.06.2024 and petitioner No.1 also executed another Sale Deed vide document No.271 of 2024 on 29.02.2024. Hence, the allegations levelled in the complaint that as per the fresh MOU, dated 15.05.2024, the petitioners have not re-registered the entire extent of land i.e. Ac.2-05 guntas and only registered Ac.1-16 guntas and the remaining Ac.0-19 guntas is still continued in the names of accused persons, is not true and correct and respondent No.2 has made bald allegations against the petitioners and the same is contrary to the material on record.

               4.4 He further submitted that the petitioners have paid the entire amount to the land owners and the Agreements of Sale dated 03.10.2023 and other payment receipts were obtained from the land owners and the same are genuine one and that the petitioners have not fabricated any document including the Agreements of Sale and payment receipts as alleged in the complaint. Hence, the ingredients of the offences under Sections 467, 468 and 471 of IPC are not attracted.

               4.5 He also submitted that the petitioners had paid the entire amount, which was received from the partners of the JSS Ventures, to the respective land owners of the land covered by Sy.Nos.102/E, 103/2, 107, 111 and 112, by way of Bank transactions as well as cash and to prove the same, the petitioners have filed bank statements. There is no dishonest intention on their part to deceive respondent No.2 or partners of the JSS Ventures and the ingredients of the offences under Sections 406 and 420 of the IPC are not attracted. He further submitted that JSS Ventures has given authorization to accused No.1 to execute all the necessary documents in relation to the land in Sy.Nos.101, 102, 103, 104, 106, 107, 108 and 109 of Sangareddy Village, Mandal and District. Pursuant to the said authorization only, accused No.1 had executed the document in favour of petitioner No.1/accused No.2. Hence, there is no conspiracy between petitioner No.1 and accused No.1 as alleged in the complaint and the ingredients of the offences under Sections 406, 420 and 120b of the IPC are not attracted.

               4.6 He further submitted that on 15.05.2024, the petitioners, JSS Ventures and Sharat Nalamothu have entered into Arbitration Agreement. In the said Agreement, JSS Ventures and the petitioners have mutually agreed and appointed Sharat Nalamothu as an arbitrator pursuant to the MOU, dated 15.05.2024, and he is also a signatory to the said MOU as a witness. Petitioner Nos.1 and 2 have submitted representation to Sharat Nalamothu on 16.05.2024 stating that they are ready and willing to dissolve the disputes, which arises between JSS Ventures represented by Manyam Loka Venkata Raja Ravi Teja and others, amicably through him, and the nature of disputes raised by them are purely civil and contractual nature. In the said representation, several facts were brought to the notice of the Arbitrator by petitioner Nos.1 and 2. Petitioner Nos.1 and 2 have got issued legal notice through their counsel to JSS Ventures and others on 13.05.2025. Respondent No.2 had approached the Deputy Superintendent of Police (D.S.P.) on 16.05.2025 and made a complaint against the petitioners. Pursuant to the same, the office of the Deputy Superintendent of Police called the petitioners and they appeared before him and submitted representation to the D.S.P. and also sent through registered post on 16.05.2025 by bringing all the facts. The said D.S.P. after going through the same, dropped the action stating that the dispute raised by respondent No.2 against the petitioners is civil in nature. Thereafter, respondent No.2 lodged the present complaint by making omnibus allegations. The allegations levelled in the complaint are civil in nature and respondent No.2 ought to have invoked the arbitration clause, on the other hand, filed the present complaint for penal offences and the same is not permitted under law. Hence, continuation of the proceedings against the petitioners is a clear abuse of the process of law.

               4.7 In support of his contention, learned Senior Counsel relied upon the following judgments of the Hon’ble Apex Court;               i) Anukul Singh v. State of Uttar Pradesh and another((2025) SSC Online SC 2060);

               ii) Vandala Jain and others v. The State of Uttar Pradesh and others((2026) SCC Online SC 309); and

               iii) Rikhab Birani and another v. State of Uttar Pradesh and another((2025) SCC Online SC 823)

5. Submissions of the learned counsel for respondent No.2:

               5.1 Per contra, learned counsel submitted that respondent No.2 is the partner of JSS Ventures and the JSS Ventures has given authorization to accused No.1, who is discharging his services as a Chief Executive Officer of the said firm for limited purpose, to represent the firm and to execute all the necessary documents in relation to the registration of the land covered by Sy.Nos.101, 102, 103, 104, 106, 107, 108 and 109 of Sangareddy Village, Mandal and District in favour of JSS Ventures only and the JSS Ventures has not given any authorization to accused No.1 to execute any sale deeds to any other individuals. The petitioners were engaged only as agents/brokers for procurement of lands situated in Sy.Nos.101, 102, 103, 104, 106, 107, 108 and 109 of Sangareddy Village, Mandal and District on behalf of JSS Ventures. Accused No.1 and the petitioners, in furtherance of conspiracy and with a dishonest intention to cheat JSS Ventures and its partners, have produced fabricated Agreements of Sale and payment receipts and received huge amount from the partners of JSS Ventures and also JSS Ventures by way of bank transactions as well as cash, and misappropriated huge amounts and they have not paid the said amount to the land owners, on the other hand, produced fake and fabricated receipts, as if they paid the said amount to the land owners. The land owners specifically informed respondent No.2 and JSS Ventures that they had not received the entire sale consideration and the petitioners and accused No.1 had paid only a small portion thereof, and further informed to JSS Ventures that they had not executed the alleged Agreements of Sale produced by the petitioners and accused No.1.

               5.2 He further submitted that accused No.1 without having any manner of right, executed the Sale Deed to an extent of Ac.2-05 guntas in the month of month of March, 2024 in favour of petitioner No.1 with a dishonest intention and induced JSS Ventures. At that stage, the petitioners and JSS Ventures have entered into fresh MOU on 15.05.2024. However, the petitioners have re-registered only Ac.1-16 guntas and the remaining Ac.0-19 guntas is still continuing in the name of accused persons. There is specific allegation levelled in the complaint that the petitioners have misappropriated more than Rs.5,52,00,000/-. Hence, the ingredients of the offences under Sections 420, 406, 467, 468, 471 and 120b r/w 34 of the IPC are attracted.

               5.3 He also submitted that the petitioners have approached this Court and filed Crl.P. No.8126 of 2026 seeking anticipatory bail and the same was withdrawn by them. He further submitted that the existing arbitration clause does not bar to prosecute the petitioners for the penal offences. The arbitration clause specifically envisages that if any dispute arising out of the MOU, the parties have to invoke the arbitration clause. Whereas in the present complaint, respondent No.2 specifically stated that the petitioners and accused No.1, with a conspiracy, created and fabricated Agreements of Sale and payment receipts and misappropriated huge amounts of JSS Ventures and other partners. Hence, the petitioners are not entitled to seek for quashing the proceedings and the same is liable to be dismissed.

6. Submissions of the learned Assistant Public Prosecutor for respondent No.1-State:

               6.1 Learned Assistant Public Prosecutor submitted that there are specific allegations levelled in the complaint against the petitioners and the same are required investigation. The Investigating Officer recorded the statement of LW.1 and the investigation is under 11 progress. Hence, the petitioners are not entitled to seek for quashing the proceedings at the threshold.

7. Reply submissions of the learned Senior Counsel for the petitioners:

               7.1 Learned Senior Counsel, by way of reply, submitted that mere withdrawal of an anticipatory bail application does not bar the petitioners from seeking quashing of the proceedings, as both are different and distinct.

Analysis:

8. Having considered the rival submissions made by the respective parties and upon perusal of the material available on record, it reveals that respondent No.2/de-facto complainant is the Managing Partner of JSS Ventures, which is a partnership firm registered under the Indian Partnership Act, 1932 bearing registration No.509 of 2023. The JSS Ventures is having partners namely, Borra Ram Mohan Rao, D.Anil Kumar and Manyam Loka Venkata Raja Ravi Teja. In the said firm, accused No.1 is discharging his duties as a Chief Executive Officer and the said firm had given authorization to him on 20.03.2023 to represent the firm and to execute all the necessary documents in relation to the registration of the land situated in Sy.Nos.101, 102, 103, 104, 106, 107, 108 and 109 of Sangareddy Village, Mandal and District in favour of JSS Ventures. Respondent No.2 in his complaint stated that the petitioners were engaged as agents/brokers for procurement of lands situated in the above said survey numbers on behalf of JSS Ventures and also stated that initially they had approached one Atluri Venkata Jithendra claiming that they have already invested approximately Rs.10 Crores towards the lands covered in the above said survey numbers and produced the purported Agreements of Sale and payment of receipts allegedly executed by the land owners. Believing their words, Atluri Venkata Jithendra agreed to invest Rs.25 Crores on the assurance that the lands would ultimately be registered in his favour. Subsequently, JSS Ventures was constituted to acquire the land in the above said survey numbers and the amount paid by Atluri Venkata Jithendra was treated as investment into the partnership firm i.e. JSS Ventures. Thereafter, substantial amounts were transferred by Atluri Venkata Jithendra and Mrs. B.Sri Bhavani Borra, on behalf of accused No.1 and the petitioners, for making payments to various land owners in connection with acquisition of lands in the above mentioned survey numbers.

9. The record further reveals that there are specific allegations levelled in the complaint that the petitioners and accused No.1 misappropriated huge amount of Rs.5.52 Crores, the petitioners furnished false Agreement of Sale dated 03.10.2023 in respect of the land to an extent of Ac.0-36 guntas in Sy.No.102/E, and induced the JSS Ventures to pay Rs.55 lakhs through bank transfer while additionally collecting Rs.85,62,500/- in cash allegedly for land owner in cash. On thorough enquiry, respondent No.2 came to know that the agreement produced by the petitioners was fabricated and the land owner had received only partial amount and also there is another allegation that the petitioners and other accused collected an amount of Rs.20 lakhs from JSS Ventures through bank transfer and Rs.30 lakhs cash as a token amount for the land owner namely Begari Sangitha in respect of her amount for the land in Sy.No.103/2, Rs.30 lakhs for Pujari Ambadas relating to the land in Sy.No.107, and Rs.50 lakhs for R.Nagi Reddy relating to the land in Sy.Nos.111 and 112. However, the petitioners and accused No.1 have not produced valid receipts or proof of payments. On enquiry, it reveals that substantial amount was not paid to the concerned land owners. Whether the Agreements of Sale produced by the petitioners and accused No.1 pertaining to the land covered by Sy.Nos.102/E, 103/2, 107, 111 and 112, and payment of receipts before respondent No.2 and JSS Ventures are genuine or not; and Whether the amounts received from JSS Ventures and its partners, were paid to the land owners or not; and Whether the petitioners and accused No.1 have misappropriated huge amount to a tune of Rs.5.52 Crores, as alleged in the complaint or not; are disputed questions of fact and the same can be revealed during the course of investigation, especially the investigation is at the threshold, and the same cannot be adjudicated and decided by this Court while exercising the powers conferred under the provisions of Section 528 of the BNSS.

10. Insofar as the contention raised by the learned Senior Counsel that respondent No.2 without invoking the arbitration clause as enumerated in MOU dated 15.05.2024, filed the present complaint by giving it a criminal colour is concerned, it is relevant to extract clause 18 of the MOU, which reads as under:

               “18. The Disputes if any arises out of this MOU, the same shall be settled through Arbitration under the provisions of Arbitration and Conciliation Act, 1996 by appointing a Sole Arbitrator upon mutual consent. The Venue of Arbitration shall be at Hyderabad only and the language of Arbitration shall be in English.”

11. A perusal of the above said clause, it reveals that in the event of any dispute arises out of the MOU, the same shall be settled through Arbitration. According to respondent No.2, the petitioners and accused No.1 have received huge amounts from the JSS Ventures and its partners for procuring the lands in Sy.Nos.101, 102, 103, 104, 106, 107, 108 and 109 in the name of JSS Ventures and they have misappropriated huge amount and created forged and fabricated Agreements of Sale and payment receipts, as if they paid the entire amount to the land owners and land owners have executed the documents. These allegations prima facie disclose a cognizable offence. Hence, the contention raised by the learned Senior Counsel for the petitioners that respondent No.2 initiated criminal proceedings without invoking arbitration clause as available under MOU dated 15.05.2024, is not tenable under law.

12. It is very much relevant to mention that in Priti Saraf and others v. State (NCT of Delhi) and others(2021(2) ALT (Crl.) 18 (SC)), the Hon’ble Supreme Court reaffirmed that the existence of an arbitration clause or the initiation of arbitral proceedings does not bar or nullify criminal prosecution if the allegations disclose the commission of an offence. Referring to Trisuns Chemical Industry v. Rajesh Agarwal and Ors((1999) 8 SCC 686), the Court held that arbitration is a civil remedy for contractual breaches and cannot substitute or override the criminal process where the acts complained of constitute offences under law. An arbitrator has no jurisdiction to try criminal charges, even if they arise out of the same transaction. The Court emphasized that investigation and criminal proceedings should not be pre-empted or quashed merely because an arbitration mechanism exists, except in rare cases where the complaint is patently frivolous or malicious. It further observed that the High Court had erred in failing to consider the charge-sheet on record before concluding that no prima facie offence was made out, noting that such issues can only be properly assessed during trial.

13. In Anukul Singh (supra) Hon’ble Supreme Court held that the inherent power of the High Court under Section 482 Cr.P.C. is extraordinary and must be exercised sparingly. While such power may be invoked to prevent abuse of process or where a purely civil dispute has been given a criminal colour, it cannot be exercised where the allegations disclose cognizable offences and involve disputed questions of fact requiring adjudication, the matter must ordinarily proceed to trail.

14. In Vandana Jain and others (supra) Hon’ble Supreme Court, held that a mere breach of contractual obligations or non-fulfilment of the terms of an agreement would not, by itself, attract criminal liability. For an offence of cheating to be made out, there must be material to indicate that the accused harboured a dishonest or fraudulent intention from the very inception of the transaction. Where the dispute essentially arises out of contractual terms and the allegations pertain to non-performance of obligations, the appropriate remedy ordinarily lies in the civil forum. It was also held that a substantial and unexplained delay in initiating criminal proceedings, without any contemporaneous circumstances suggestive of fraudulent intent, is a relevant factor in determining whether a purely civil dispute has been given a criminal colour.

15. In Rikhab Birani and Another (supra) Hon’ble Supreme Court reiterated that a dispute arising out of contractual obligations or breach of the terms of an agreement, being essentially civil in nature, cannot be converted into a criminal prosecution merely to exert pressure upon the opposite party. The Court held that criminal law cannot be employed as a mechanism for enforcing contractual rights or recovering money and that, in the absence of allegations disclosing fraudulent or dishonest intention at the inception of the transaction, continuation of criminal proceedings would amount to an abuse of the process of law.

16. The judgments relied upon by the learned Senior Counsel appearing for the petitioners are not applicable to the facts and circumstances of the present case, on the ground that in the case on hand, the petitioners and accused No.1 with a dishonest intention and in furtherance of conspiracy, made only partial payments to some of the land owners and misappropriated the amounts, which were transferred by the JSS Ventures and other partners. The petitioners and accused No.1 to conceal their illegal acts, fabricated false Agreements of Sale and forged payment receipts. The said allegations prima facie disclose cognizable offence and the same is required investigation.

17. It is also relevant to mention that in State of Haryana and others v. Bhajan Lal(1992 Supp (1) SCC 335), the Hon’ble Supreme Court delineated the limited scope of the High Court’s jurisdiction under Article 226 of the Constitution of India and Section 482 Cr.P.C. to quash criminal proceedings, holding that such power may be exercised only in exceptional cases where the allegations, even if taken at face value, do not disclose any offence, are inherently improbable, legally barred, or manifestly mala fide, while cautioning that the categories so enumerated are illustrative and the power must be exercised sparingly.

18. The above said principles were reiterated in Neeharika Infrastructure (P) Ltd. v. State of Maharashtra and others(AIR 2021 Supreme Court 1918), wherein it was emphasised that the police have a statutory right and duty to investigate cognizable offences and that Courts should not interdict investigation at the threshold unless no cognizable offence is disclosed on a plain reading of the FIR; the FIR is not expected to be an encyclopedia of all facts, and criminal proceedings ought not to be scuttled at their nascent stage. In the present case, the allegations made in the complaint prima facie disclose cognizable offences, and as the investigation is still in progress, the petitioners are not entitled to seek quashing of the proceedings at the threshold.

19. It is already stated supra that there are specific allegations levelled in the complaint that the amount received by the petitioners and accused No.1 from respondent No.2, JSS Ventures and other partners for the purpose of procuring the land in Sy.Nos.101, 102, 103, 104, 106, 107, 108 and 109 and they have misappropriated huge amounts and created forged and fabricated Agreements of Sale and payment receipts. These allegations prima facie disclose cognizable offences and this Court is of the considered view that the petitioners are not entitled to seek for quashing the proceedings at the threshold and this case is not comes within the ambit of rarest of rare case to exercise the powers conferred under Section 528 of the BNSS.

20. For the foregoing reasons as well as the precedent decisions, this Court does not find any ground to quash the proceedings against the petitioners in Crime No.52 of 2026 on the file of Economic Offences Wing Police Station, Cyberabad, at this stage, especially the investigation is under progress.

21. In the result, the criminal petition is dismissed.

Miscellaneous applications, pending if any, shall stand closed.