Section 406 PPC: Supreme Court Says Mentioning “Amanat” in an FIR Isn’t Enough (2026 SCMR 1379)

By author Published October 8, 2026 Criminal Law

Writing the word “Amanat” in an FIR does not turn a money dispute into a crime under Section 406 PPC. On 28 January 2026, the Supreme Court of Pakistan quashed an FIR against a Lahore property dealer and held that criminal breach of trust needs real entrustment and dishonest misappropriation, not a label. The judgment is reported as 2026 SCMR 1379 (Liaqat Ali v. The State).

If you’ve ever paid an advance for a house, a shop or a mortgage and watched the deal collapse, you know the instinct: go to the police, call it Amanat, file a 406. This judgment explains why that route is likely to fail, and it shows the accused exactly how to get such an FIR thrown out.

Key takeaways

• The word “Amanat” in an FIR does not, by itself, attract Section 406 PPC.
• Advance money paid under a property or mortgage agreement is a contractual matter for the civil court.
• An accused need not first apply under Section 249-A Cr.P.C. when there is no probability of conviction.
• The Supreme Court can convert a pre-arrest bail petition into a quashment petition under Article 187 of the Constitution.

Liaqat Ali v. The State: the facts behind 2026 SCMR 1379

Here’s the story the complainant told the police. On 17 July 2025, Liaqat Ali, a property dealer, showed him a house owned by Mohsin Irfan (the co-accused). The agreed price for mortgaging the house was Rs. 1,200,000. The complainant paid Rs. 700,000 as advance.

Then nothing. Possession never came. The excuse was that the paint work wasn’t finished, and the complainant was told his money was lying with them “as Amanat”. Two months later he had neither the house nor his money, so he lodged an FIR under Section 406 PPC.

Liaqat Ali first sought pre-arrest bail under Section 498 Cr.P.C. The Additional Sessions Judge, Lahore refused it on 09.12.2025, and the Lahore High Court refused it again on 06.01.2026. He then went to the Supreme Court, and his counsel argued something bolder than bail: the FIR itself should go, because no offence was made out at all.

The FIR’s own contents gave the game away. A written mortgage agreement had been signed between the parties, and Rs. 500,000 was still unpaid by the complainant. The accused said the complainant broke the deal by not paying that balance in time. The State said the complainant was ready to pay. That is a classic contract dispute.

Does the word “Amanat” in an FIR attract Section 406 PPC?

No. The Supreme Court held in 2026 SCMR 1379 that merely mentioning “Amanat” (trust) in an FIR does not attract Section 406 PPC if the offence is not otherwise made out. The prosecution must show the ingredients of Section 405 PPC: property entrusted to the accused, and its dishonest misappropriation or use against the terms of that trust.

The Additional Prosecutor General built his whole case on that one word. The complainant had written “Amanat”, so 406 applied. The bench disagreed and called the point well settled.

What Section 405 and Section 406 PPC actually require

Section 405 of the Pakistan Penal Code defines criminal breach of trust, and Section 406 punishes it with imprisonment of up to seven years, or fine, or both. Strip the definition to its working parts and you get two things the complainant must show:

• Entrustment. The accused was entrusted with property, or with dominion over it.
• Dishonest misappropriation. The accused dishonestly took it for himself, or used or disposed of it against a direction of law or a contract that told him how the trust was to be discharged.

The court found neither. No trust was created, and nothing specified how any such trust was to be discharged. The Rs. 700,000 was an advance under a mortgage deal. Money handed over as part payment of a price isn’t held “in trust” for the payer. It belongs to the deal.

(A quick aside for non-lawyers: “mortgage” here is the local practice of giving cash against possession of a house, often called rehn or girvi. The legal point doesn’t change.)

This is the same line our White Collar Crimes practice draws every week: a broken promise about money is not automatically a crime.

Civil dispute or criminal offence? The court’s test

The bench asked a practical question: what is this dispute really about? The answer was the written mortgage agreement. One side said the complainant failed to pay the remaining Rs. 500,000 on time. The other said he was ready to pay. Deciding who broke the agreement is the job of a civil court in a suit for specific performance or recovery, not of the police.

The court went further. It found that the criminal machinery had been set in motion mala fide, to blackmail and pressurise the accused, by dressing a civil dispute up as a crime. That finding is what made quashment the right remedy here rather than bail.

Precedents the Supreme Court relied on

The bench didn’t invent anything new. It applied a line of cases going back almost 50 years, and three of them read like earlier drafts of this FIR.

Notice the pattern. In three of these cases the complainant also added Section 420 PPC (cheating) to make the FIR look heavier. It didn’t help. Courts look at the transaction, not the sections typed at the top of the FIR.

The pledged-jewellery case is the one I point sceptical clients to. Even there, where the accused physically held the complainant’s gold, the court still found a contract and sent the parties to the civil court. If that fails as criminal breach of trust, an advance on a property deal has a much harder road.

Must the accused go to the trial court under Section 249-A Cr.P.C. first?

Not when there is no probability of conviction. The prosecution argued that Liaqat Ali should first seek acquittal under Section 249-A Cr.P.C. before the trial court. The Supreme Court said that on these facts, sending him back would itself be an abuse of the process of law and of the court.

This is the part of the judgment practitioners will quote most. The usual objection to quashment petitions is “go to the trial court, the remedy exists”. Here the bench relied on Miraj Khan (2000 SCMR 122), where a High Court quashment under Section 561-A Cr.P.C. was upheld without any 249-A application. If the FIR can’t end in a conviction, making the accused sit through investigation, challan and trial just to ask for acquittal serves nobody. (For what happens to an accused before that stage, see our guide on remand rules for the accused.)

Can a pre-arrest bail petition be converted into a quashment petition?

Yes. Liaqat Ali came to the Supreme Court asking only for pre-arrest bail. Because the record showed no criminal offence at all, the bench held there was no bar to treating the petition as one for quashment of the FIR, following The State through D.G. ANF Rawalpindi v. Muhammad Saleem Khan (2011 SCMR 863).

The power came from Article 187 of the Constitution, which lets the Supreme Court issue any direction needed to do complete justice (our Constitutional law page covers these powers). The court converted the petition into an appeal, allowed it, and set aside both bail-refusal orders: the Additional Sessions Judge’s of 09.12.2025 and the Lahore High Court’s of 06.01.2026. FIR No. 3299 of PS Islampura was quashed outright.

For the accused, that’s the difference between “you won’t be arrested for now” and “there is no case”.

What this Section 406 PPC judgment means for you

If an FIR has been registered against you

Read the FIR line by line and ask whether money moved under a deal: a sale, a mortgage, an investment, a business partnership. If it did, and the complaint is really that the deal wasn’t completed, 2026 SCMR 1379 is your strongest authority.

• Get a certified copy of the FIR and every agreement, receipt and message about the deal.
• Apply for pre-arrest bail first if arrest is a real risk; it protects you while the bigger argument is heard.
• Argue in the same petition that the ingredients of Section 405 PPC are missing, and ask for quashment, citing this case with Miraj Khan and Umair Aslam.
• Don’t accept the “go file 249-A first” objection without a fight. This judgment answers it directly.

A criminal lawyer in Lahore can usually tell within one reading of the FIR whether a quashment argument is realistic.

If you paid money and the deal fell through

This is the less welcome half. A 406 FIR might feel like faster pressure, but if the money was an advance under an agreement, the case is likely to be quashed and you’ll have lost months. File a suit for specific performance or a suit for recovery instead, with help from our civil law team or our Contract & Performance lawyers, and keep your agreement and payment proof safe.

A criminal case can still be right where the facts support it. If someone took your property only to keep it safe, or to use it in one fixed way, and then sold or spent it dishonestly, that is entrustment. The judgment doesn’t close that door. It closes the door on calling an ordinary advance “Amanat”.

And before the next deal, get the agreement written properly. Clear payment, possession and refund clauses, prepared through professional drafting of legal documents, prevent most of these disputes.

If you’re a lawyer drafting or opposing these petitions

The useful line from paragraph 7 is short: no trust was created, and nothing specified how it was to be discharged. Map your facts against those two gaps. And look for the written agreement; once one exists, the court’s instinct is to send the parties to the civil court. For another recent superior-court ruling we’ve broken down, see our Lahore High Court judgment analysis.

Frequently asked questions about Section 406 PPC

What is Section 406 PPC?

Section 406 of the Pakistan Penal Code, 1860 punishes criminal breach of trust as defined in Section 405 PPC. The punishment is imprisonment of up to seven years, or fine, or both. It applies when property is entrusted to someone who dishonestly misappropriates it or uses it against the terms of the trust.

Is advance money in a property deal criminal breach of trust?

Usually not. Money paid as an advance under a sale or mortgage agreement creates a contractual liability, as the Supreme Court held in 2026 SCMR 1379 and earlier in Umair Aslam (2014 PCr.LJ 1305). The remedy is a civil suit for recovery or specific performance.

Can the Supreme Court quash an FIR in a bail matter?

Yes. Where no offence is made out, the Supreme Court can convert a bail petition into a quashment petition and quash the FIR under Article 187 of the Constitution, as it did in Liaqat Ali v. The State.

Must I file under Section 249-A Cr.P.C. before seeking quashment?

Not when there is no probability of conviction. The Supreme Court said in 2026 SCMR 1379 that sending the accused to the trial court in such a case would itself be an abuse of the process of law and the court.

Which court decides who broke a property agreement?

The civil court. The Supreme Court said the question of which party failed to perform the mortgage agreement belongs there, through a suit for specific performance or recovery, not in a criminal trial.

The bottom line on Section 406 PPC and Amanat

2026 SCMR 1379 puts a short rule on record: a word in the FIR doesn’t make a crime. Section 406 PPC needs entrustment and dishonest misappropriation, and a broken property deal with a written agreement is a civil dispute. When the facts show no chance of conviction, the accused doesn’t have to wait for trial, and the Supreme Court can quash the FIR even in a bail petition.

Facing a 406 FIR over a business or property deal, or deciding whether to file one? Book a free consultation with Lawyer Services Pakistan, call +92-300-4966006, or message us on WhatsApp. Our office is at Office-214, Arooj Centre, Fareed Court Road, Lahore.

Source: Liaqat Ali v. The State through PG Punjab and another, 2026 SCMR 1379 (Supreme Court of Pakistan, decided 28.01.2026). Statute text: Pakistan Code.

Disclaimer: This article explains a reported judgment for general information. It isn’t legal advice for your case and does not create a lawyer-client relationship. Speak to a qualified advocate about your facts.

About the author

Advocate Hafiz Arslan Gujjar practises criminal and civil law in Lahore with Lawyer Services Pakistan, handling bail, quashment of FIRs and property-related disputes before the Sessions Courts and the Lahore High Court. He writes on recent Supreme Court and Lahore High Court judgments for the firm’s legal blog.

This article is general information about the law in Pakistan, not legal advice for your situation.