Delhi Court Allows Cheating Case Against M3M to Proceed in ₹450-Crore Land Dispute

Delhi Court Allows Cheating Case Against M3M to Proceed in ₹450-Crore Land Dispute

A Delhi sessions court has allowed cheating and criminal conspiracy proceedings against M3M India Pvt Ltd, its group companies and promoters to continue in a Gurugram land dispute linked to about ₹450 crore. It set aside the magistrate’s cognisance of criminal breach of trust. The October 17 order does not find anyone guilty. It decides only which parts of the prosecution can go forward.

What is the M3M ₹450-crore land dispute?

MGF Developments Ltd complained that M3M group companies obtained rights over about 31 acres in Chauma village, Gurugram, without paying the full consideration agreed for a land exchange. An FIR was registered on that complaint in March 2022, and the Delhi Police Economic Offences Wing (EOW) later filed a chargesheet. The FIR puts the value of the land, and the loss it attributes to MGF, at about ₹450 crore. That figure is separate from the ₹114 crore in cash consideration that formed part of the exchange.

The rivalry between the two developers dates to 2016. Earlier reporting says it has produced complaints and investigations by the EOW, Gurugram Police and the Enforcement Directorate.

How did the land-exchange transaction unfold?

According to the prosecution, the exchange was finalised in November 2016. The Chauma land was to be exchanged for a parcel in Mohammadpur Gujar village, in the Sohna area of Gurugram, along with a payment of ₹114 crore. The accused allegedly paid about ₹16.30 crore upfront and issued post-dated cheques of roughly ₹98 crore for the balance. As the prosecution describes the arrangement, the transfer would be cancelled if the cheques were dishonoured.

The chargesheet says the cheques were replaced twice and were finally returned unpaid on March 28, 2018, because of stop-payment instructions. MGF alleges that the accused nonetheless had portions of the land mutated in their names and applied for licences to develop residential projects despite the unpaid balance. It also alleges that repeated assurances of payment were not honoured and that the accused lacked the funds to honour the cheques. These are allegations. No court has found them proved.

What did the Delhi court decide in the M3M case?

On October 17, 2026, Principal District and Sessions Judge Anju Bajaj Chandna disposed of two revision petitions against a January 31, 2026 order of the Chief Judicial Magistrate. That order had taken cognisance, meaning formal acceptance of the chargesheet to begin proceedings, under Sections 406, 420, 120B and 34 of the Indian Penal Code (IPC). The petitioners were M3M India Pvt Ltd, Starcity Realtech Pvt Ltd, Cosmo Probuild Pvt Ltd, Surya Propcorn Pvt Ltd, Neer Builders Pvt Ltd and individuals including promoters Basant Bansal, Roop Kumar Bansal and Pankaj Bansal.

The court declined to interfere with cognisance for cheating, conspiracy and common intention, and set aside cognisance for criminal breach of trust. The result is split, not a blanket endorsement of the case.

Which criminal proceedings can continue?

Three provisions remain in play: Section 420 (cheating), Section 120B (criminal conspiracy) and Section 34 (acts done in furtherance of a common intention). The sessions court directed the magistrate to proceed expeditiously on these.

The ruling comes at an early stage. The judge noted that at the cognisance stage a magistrate has to see whether sufficient grounds exist to proceed. The magistrate is not required to weigh the evidence in depth or judge the prospects of conviction. Allowing proceedings to continue is therefore not a finding of guilt.

Why was the Section 406 proceeding set aside?

Section 406 punishes criminal breach of trust. That offence requires property to have been entrusted to someone who then dishonestly misappropriated it or used it contrary to law or contract. The prosecution’s own case is that the land moved through formal exchange deeds against consideration, not as property entrusted to the accused.

The judge relied on the Supreme Court’s judgment in Delhi Race Club (1940) Ltd v State of Uttar Pradesh, which distinguishes cheating from breach of trust. Even if the FIR’s allegations were accepted as they stand, the court held, they did not make out the offence against the petitioners. The cognisance order was “not sustainable in law” to that extent.

What arguments did the accused raise?

The accused argued that the dispute is civil and commercial, arising from obligations under the exchange deeds. They challenged MGF’s standing to complain, saying the deeds were executed between the land-owning companies and M3M entities. They also pointed to pending civil litigation and said the consideration, with interest, had been deposited in court, so the payment dispute had already been addressed.

The sessions court did not rule on these points. It said revisional jurisdiction does not allow a detailed look at evidence, or a decision on standing or the nature of the dispute, that the trial court has not first considered. The accused can raise these arguments before the magistrate when charges are framed or a discharge application is heard. Senior advocate Tanveer Ahmed Mir appeared for MGF Developments. The available reports do not set out its submissions on the revision petitions in detail.

What is the background of the case?

• November 2016: The land exchange is finalised, according to the prosecution.
• March 28, 2018: The post-dated cheques are returned unpaid, according to the chargesheet.
• March 2022: An FIR is registered on MGF’s complaint.
• May 27 order, reported in June 2024: A Gurugram civil court dismisses MGF’s suit challenging a 2016 compromise decree and Lok Adalat award involving M3M entities. It holds that MGF was not a party to the agreement, was never the owner or in possession of the land, and sued too late.
• April 9, 2025: The Punjab and Haryana High Court restrains M3M from creating third-party rights over the disputed land while MGF’s appeal is pending. Earlier reporting says the land forms part of licensed areas in Sector 113, Gurugram.
• January 31, 2026: The Chief Judicial Magistrate takes cognisance of the EOW chargesheet.
• October 17, 2026: The sessions court passes the order discussed above.

The criminal proceedings do not decide ownership of the land. Civil litigation between the two groups continues.

What happens next?

All parties, including the three promoters, have been directed to appear before the Chief Judicial Magistrate at the Tis Hazari Courts on October 27, 2026. The magistrate will continue with the cheating and conspiracy case. The accused can press their civil-dispute and standing arguments when framing of charges or discharge is considered. Reports do not say whether any party will challenge the October 17 order further.