1. The Criminal Petition has been filed under Sections 480 and 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (for brevity ‘the BNSS’), seeking to enlarge the Petitioner/Accused No.4 on bail in Crime No.103 of 2025 of Nagayalanka Police Station, Krishna District, registered against the Petitioner/Accused No.4 herein for the offence punishable under Sections 409 and 420 read with 34 of the Indian Penal Code, 1860 (for brevity ‘the IPC’).

2. The learned counsel for the petitioner submits that the petitioner is innocent. She was falsely implicated in this case. She is a law-abiding citizen. She has not committed any offence. She has got fixed abode. She would abide by any condition which this Court deems fit to enlarge her on bail, and it is urged to allow the petition.

3. Per contra, Ms.P.Akhila Naidu, the learned Assistant Public Prosecutor submits that a total amount of Rs.59.17 lakhs was swindled by all the accused, including the petitioner. An amount of Rs.8,95,561/- was transferred to the personal account of the petitioner by Accused No.3. From the personal account of the petitioner, a sum of Rs.4,00,000/- was thereafter transferred to the account of Accused No.3. It is therefore urged to dismiss the petition, as the investigation is at progressive stage.

4. Heard the learned counsel for the Petitioner and the learned Assistant Public Prosecutor. Perused the record.

5. On perusal of the record, the petitioner is a female aged about 26 years. She is an outsourcing employee working at the MPDO office, Nagayalanka. The petitioner has been suffering from kidney infection disease. An amount of Rs.8,95,561/- was transferred to the personal account of the petitioner/Accused No.4. From the personal account of the petitioner, an amount of Rs.4,00,000/- was transferred to the account of Accused No.3. The allegation against the petitioner is that she committed offences under Sections 409 and 420 read with Section 34 of ‘the IPC’.

6. The Hon’ble Apex Court in Delhi Race Club (1940) Ltd. v. State of U.P.,( (2024) 10 SCC 690)at paragraph Nos.44 & 49 held as under:

                  “44. At the most, the Court of the Additional Chief Judicial Magistrate could have issued process for the offence punishable under Section 420 IPC i.e. cheating but in any circumstances no case of criminal breach of trust is made out. The reason being that indisputably there is no entrustment of any property in the case at hand. It is not even the case of the complainant that any property was lawfully entrusted to the appellants and that the same has been dishonestly misappropriated. The case of the complainant is plain and simple. He says that the price of the goods sold by him has not been paid. Once there is a sale, Section 406 IPC goes out of picture. According to the complainant, the invoices raised by him were not cleared. No case worth the name of cheating is also made out.

                  49. From the aforesaid, there is no manner of any doubt whatsoever that in case of sale of goods, the property passes to the purchaser from the seller when the goods are delivered. Once the property in the goods passes to the purchaser, it cannot be said that the purchaser was entrusted with the property of the seller. Without entrustment of property, there cannot be any criminal breach of trust. Thus, prosecution of cases on charge of criminal breach of trust, for failure to pay the consideration amount in case of sale of goods is flawed to the core. There can be civil remedy for the non-payment of the consideration amount, but no criminal case will be maintainable for it. [See : Lalit Chaturvedi v. State of U.P. [Lalit Chaturvedi v. State of U.P., (2024) 12 SCC 483 : 2024 SCC OnLine SC 171] and Mideast Integrated Steels Ltd. v. State of Jharkhand [Mideast Integrated Steels Ltd. v. State of Jharkhand, 2023 SCC OnLineJhar 301”

7. The Hon’ble Apex Court in Arshad Neyaz Khan v. State of Jharkhand(2025 SCC OnLine SC 2058), at paragraph No.21 held as under:

                  “21. Furthermore, it is pertinent to mention that if it is the case of the complainant/respondent No. 2 that the offence of criminal breach of trust as defined under Section 405 IPC, punishable under Section 406 IPC, is committed by the accused, then in the same breath it cannot be said that the accused has also committed the offence of cheating as defined in Section 415, punishable under Section 420 IPC. This Court in Delhi Race Club (1940) Limited v. State of Uttar Pradesh, (2024) 10 SCC 690 observed that there is a distinction between criminal breach of trust and cheating. For cheating, criminal intention is necessary at the time of making false or misleading representation i.e. since inception. In criminal breach of trust, mere proof of entrustment is sufficient. Thus, in case of criminal breach of trust, the offender is lawfully entrusted with the property, and he dishonestly misappropriates the same. Whereas, in case of cheating, the offender fraudulently or dishonestly induces a person by deceiving him to deliver a property. In such a situation, both offences cannot co-exist simultaneously. Consequently, the complaint cannot contain both the offences that are independent and distinct. The said offences cannot co-exist simultaneously in the same set of facts as they are antithetical to each other.”

8. Section 406 of ‘the I.P.C.,’ deals with criminal breach of trust, which presupposes lawful entrustment of property followed by dishonest misappropriation or conversion. In contrast, Section 420 of ‘the I.P.C.,’ addresses cheating and dishonestly inducing delivery of property, which requires deception at the inception of the transaction. Thus, while Section 406 of ‘the I.P.C.,’ arises from a breach of an existing fiduciary relationship, Section 420 of ‘the I.P.C.,’is predicated upon fraudulent inducement at the very outset. The two offences, therefore, operate in distinct spheres.

9. So far, 12 witnesses have been examined, all are material and official witnesses. The petitioner is a permanent resident of Yadlanka Village, Avanigadda Mandal, Krishna District. She has got fixed abode. The petitioner was arrested on 24.11.2025. He has been in judicial custody for the past 53 days. Based on the complaint lodged by the Mandal Administrative Officer, Nagayalanka that an amount of Rs.59.17 lakhs was misappropriated, the police have registered the F.I.R. The main allegations are against Accused Nos.1 and 3, who are said to have infringed the norms and transferred the amounts to third-party accounts instead of the contractors’ accounts. No police custody was ordered pursuant to an application filed by the prosecution, and it appears that no application is presently pending before the jurisdictional Magistrate for grant of police custody.

10. Considering the facts and circumstances of the case, the nature and gravity of allegations levelled against the Petitioner/Accused No.4 and the alleged role played by the petitioner, this Court is inclined to enlarge the Petitioner/Accused No.4 on bail.

11. In the result, the Criminal Petition is allowed with the following stringent conditions:

                  i. The Petitioner/Accused No.4 shall be enlarged on bail subject to her executing bond for a sum of Rs.25,000/- (Rupees Twenty Five Thousand only), with two sureties each for the like sum to the satisfaction of the learned Additional Judicial First Class Magistrate, Avanigadda.

                  ii. The Petitioner/Accused No.4 shall appear before the Station House Officer concerned, on every Saturday in between 10:00 am and 05:00 pm, till filing of the charge sheet.

                  iii. The Petitioner/Accused No.4 shall not commit or indulge in commission of any offence in future.

                  iv. The Petitioner/Accused No.4 shall not, directly or indirectly, make any inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him/her from disclosing such facts to the Court.

                  v. The Petitioner/Accused No.4 shall cooperate with the investigating officer in further investigation of the case and shall make herself available for interrogation by the investigating officer as and when required.

12. In the result, the Criminal Petition is allowed.