Court sets aside Section 406 charge; case remains at cognisance stage
GURUGRAM: A Delhi court has set aside the charge of criminal breach of trust under Section 406 of the Indian Penal Code in the high-profile land dispute involving real estate firm M3M and parties linked to MGF Developments, while permitting other criminal proceedings to continue, according to court records and the company statement.
The order of the Learned Principal District and Sessions Judge at Tis Hazari dated 17 October 2026 found that even if the allegations in the First Information Report (FIR) were accepted at face value, the offence under Section 406 was not made out. The court’s observations left the broader litigation landscape unchanged on other counts, and earlier reporting on 25 October had said the court declined to interfere with cheating and criminal conspiracy proceedings against M3M India Pvt Ltd, its subsidiaries, and several individuals associated with the dispute.
Company response frames matter as commercial dispute
M3M issued an official statement on Monday, asserting that the Delhi order should not be read as a setback for the company and that it has full faith in the judicial process. The firm noted that the Section 406 charge was one of the principal allegations made by MGF Developments and emphasised that the order did not make adverse findings against M3M on the remaining allegations.
"That is not what the order says," the company said, responding to media characterisations that portrayed the ruling as a setback.
The statement added that the appropriate forum to decide factual disputes on the remaining allegations is the Learned Magistrate when charge or discharge is considered, and noted that no charge has been framed and no trial ordered so far, leaving the case at the cognisance stage.
Key factual points and practical implications for Gurugram
- The court set aside the Section 406 criminal breach of trust charge but did not stay other criminal proceedings such as allegations of cheating and criminal conspiracy.
- M3M says exchange deeds in question were executed between land‑owning companies of Emaar and its group companies, not with MGF Developments.
- The agreed consideration, including interest, has been deposited in court pursuant to pending civil proceedings between the parties.
| Item | Court finding / company position |
|---|---|
| Section 406 IPC (criminal breach of trust) | Set aside by Delhi court |
| Cheating / criminal conspiracy | Proceedings allowed to continue against M3M and others |
| Stage of case | Cognisance stage; no charge framed, no trial ordered |
For Gurugram residents and property purchasers, the ruling is significant because it narrows one criminal allegation but leaves alive others that could shape civil remedies, title clarity and developer accountability. By highlighting that the exchange deeds were executed between Emaar group companies and that the contractual consideration has been deposited in court under pending civil litigation, M3M sought to underline the commercial and contractual dimensions of the dispute rather than a criminal culpability narrative.
This distinction between commercial and criminal characterisation matters for local stakeholders: civil courts typically focus on contract enforcement, monetary relief and title disputes, while criminal proceedings can affect the reputational and operational standing of developers and linked individuals. M3M’s statement said it intends to present these facts before the Learned Magistrate and will pursue all available legal remedies.
Local buyers who have been monitoring the case for clarity on possession, title and refunds should note that while one criminal count has been set aside, the broader legal processes remain active. Developers, litigants and courts will now proceed to the cognisance stage where magistrates will consider whether charges should be framed. Any future orders on charge framing, trial commencement or civil adjudication will further determine practical outcomes for projects and purchasers in Gurugram.
The company reiterated cooperation with the judicial process and its confidence in legal adjudication. The matter continues to unfold in multiple forums, with both criminal and civil dimensions pending before courts in Delhi and elsewhere.
