Smt Asha J Mandalapu And Another v. M/.S Shanta Sriram Constructions Pvt Ltd And Another
THE HON'BLE SRI JUSTICE M.SATYANARAYANA MURTHY CRIMINAL PETITION NO.11039 OF 2017 ORDER:
This criminal petition is filed under Section 482 Cr.P.C to quash the proceedings in F.I.R.No.559 of 2017 dated 17.10.2017 on the file of Gachibowli Police Station, Cyberabad, at the threshold of the investigation.
The facts of the case in nut-shell are that, the first respondent along with other associates purchased 10,043 sq.yds of land situated in Sy.No.126(P), Gachibowli, Serilingampally Mandal, Ranga Reddy District. The entire land of 10,043 sq.yds was entrusted for common development by other associates under various Registered Development Agreement-cum-GPA's to the first respondent. Thus, the first respondent company is not only owner of the land, but also developer of the entire land to an extent of 10,043 sq.yds. The first respondent obtained sanction from GHMC for construction of 3 cellars for parking, ground + upper floors vide proceedings No.6/104/BP/WZ/447/08 dated 23.08.2008.
While so, the petitioners purchased an undivided share to an extent of 3766 sq.yds with proposed built up area of 1,50,000 sq.ft out of 1,043 sq.yds of land in Sy.No.126(P). The first respondent executed registered sale deed Document No.6464/2011 dated 02.07.2011 conveying an extent of undivided share of 3766 sq.yds with proposed built up area of 1,50,000 sq.ft out of 1,043 sq.yds. Subsequently, the first respondent and the petitioners entered into Construction agreement on 30.07.2011. The actual understanding was to sell the constructed premises @ Rs.3,833/- per sq.ft including the cost of construction work with built-up area of 1,50,000 sq.ft + cellar for parking are of 20,000 sq.ft with undivided share of land to an extent of 3766 sq.yds
out of the totoal land of 10,043 sq.yds and the petitioners shall pay the cost of construction work regularly to facilitate the first respondent to complete the construction work effectively and hand over the physical possession of the constructed area of the property as per schedule and the petitioners shall not cause any breach of contract. The construction agreement further speaks that the petitioners shall pay all the sums payable before obtaining possession of the property to be developed by the first respondent. The first respondent constructed the complex into two Blocks i.e Block-A as SS Tech Park and Block-B as PSR Prime Towers and the entire construction of Block-B was supervised by the petitioners.
It is submitted in the report that, the first respondent could not progress the work as per schedule, due to the breaches committed by the petitioners time and again by defaulting the payable sums and in view of the delays in paying the agreed amount, the first respondent sustained heavy loss due to hike in price of construction material. At this juncture, the petitioners pleaded the first respondent with paucity of funds and requested the first respondent to raise funds from the bank. Accordingly, the first respondent by using goodwill, got sanctioned a loan of Rs.10 crores and secured over draft of Rs.20 crores from Andhra Bank, R.P. Road Branch, Secunderabad. The property of undivided share purchased under sale deed bearing document no.6464/2011 dated 02.07.2011 was subjected to mortgage as security for obtaining loans.
However, the petitioners failed to pay the EMIs and monthly interest to Andhra Bank. The total cost of the property to be constructed and handed over to the petitioners, as per the understanding was Rs.57,49,50,000/- and the petitioners have paid Rs.22,70,00,000/- prior to registration of undivided share of 3766 sq.yds and subsequently, after registration, they paid Rs.17,38,00,000/-, in all amounting to Rs.40,08,00,000/-.
Further, the first respondent obtained sanction plan for construction of commercial complex for 10043 sq. yds prior to execution of sale deed in favour of Smt. Asha Jyothi Mandalapu/first petitioner/A-1 to an extent of 3766 undivided share in the year 2011. The first respondent divided the entire 10043 sq. yds. into 2 Blocks, Block B covering your undivided share of 3766 sq. yds and Block-A as SS Techpark. While marking pits and laying pillars, the area around 780 sq. yds were inadvertently covered in Block-B (PSR Prime Towers) thereby the plinth area of the PSR Prime Towers increased from 1,50,000 sq. ft. to 1,73,000 sq. ft. Thus, the first respondent/company and others as stated supra alone are entitled to the excess area of 23,000 sq.ft. constructed in block B known as PSR Prime Towers.
In view of breaches committed by the petitioners time and again the first respondent gave them opportunity and entered MOU dt. 21.10.2015 with them wherein the petitioners have agreed to pay Rs. 5,75,00,000/- towards the costs of 15,000 sq. ft. out of 23,000 sq. of the constructed in Block-B known as PSR Prime Towers. As per the terms of the said MOU dt. 30.1.2017 if the petitioners fail to pay the amount due to the first respondent and associates, they should forgo their right and interest over the property up to the balance amounts payable to respondents and first respondent is entitled to calculate the area @ Rs. 4,000 per sq.ft. for such amount due. Further first respondent and associates had given amount Rs. 78,25,000/- and Rs. 25,00,000/- in total Rs.
1,03,25,000/- to them out of the part payments made to the first respondent and associates, for their family requirements and adjustments in order to maintain good business relation. The said person have agreed to pay an amount of Rs. 4,13,00,000/- (Rs. 2.85 Cr + 1.15 Cr + 0.13 Cr as mentioned in MOU) towards interest for the delay in payment of amounts.
petitioners have not paid the amounts due to the respondents amounting to Rs. 28,32,75,000/- (Rs. 57.495 Cr + 5.75 Cr + 1.0325 Cr + 4.13 Cr - 40.08 Cr) the respondents are entitled to 70,819 sq.ft. in the Block-B (@ 4000/- Per Sq ft on Rs. 28.3275 Cr) and the first respondent and associates are also entitled to retain 8000 sq. ft. in the Block-B (PSR Prime Towers) i.e. over and above 1,65,000 Sq.ft. (1,73,000 - 1,50,000 - 15,000 sq.ft.) It is submitted that the first respondent and associates have complied with all the terms mentioned in Sale Deed, Construction agreement, MOUs and it is the petitioners persons who violated the terms of the said deeds with an ulterior motive to cause hardship to the first respondent and associates.
It is stated in the report that, by violating the terms of sale deed for the undivided share area of 3766 sq. yds. out of 10043 sq. yds, construction agreement and MOUs, the petitioners executed and registered the sale deeds in favour of their parties in Block-B (PSR Prime Towers) and illegally trespassed into the portion of completed/constructed area of the first petitioner. It is alleged that, in view of defaulting the payments as agreed upon, the first respondent has not delivered the possession of the Block-B (PSR Prime Towers) after completion of construction work to the petitioners. The petitioners with malafide intention without paying the amount due to respondent no.
1 illegally trespassed into the part of Block-B (PSR Prime Tower property) and sold the above said property in favour of the their parties by illegally trespassing into area of property of the first respondent. It is alleged that the petitioners also mortgaged portions of the Block-B (PSR Prime Towers) and obtained loans from various banks by suppressing real facts and also without the knowledge and consent of the first respondent. Further, the petitioners also illegally let-out the ground and first floor to M/s.
Talent Sprint Pvt. Ltd. and thereby receiving Rs. 13,54,120/- per month towards rent. The execution of sale deeds, mortgage deeds and leasing the property without making the payment of amount due to the first respondent, illegally trespassed into portions of PSR Prime property and committed breach of trust by the petitioners, also committed offences like cheating, criminal breach of trust and criminal trespass of property, amounts to criminal offence, and therefore, the petitioners are liable for punishment for the offences punishable under Sections 406,420,447,506 r/w 34 IPC.
It is alleged in the report that, the first respondent has been in possession of the remaining area, after execution of sale deeds by the petitioners in favour of the third parties as mentioned above in PSR Prime Towers by engaging security persons around the clock and in order to prevent further damage to the property in PSR Prime Towers, the first respondent got issued legal notice dt. 12.10.2017 to the petitioners and persons who purchased the property, mortgaged by them and premises let out to third parties to come forward for amicable settlement. Thereupon, the petitioners instead of settling the issue, on 13.10.2017 at about 3.45 P.M.
came to the PSR Prime Towers and allegedly, bent upon taking law into their hands and mustered strength by gathering 50 unsocial elements who are equipped with knives and deadly weapons and threatened the first respondent and his security not to interrupt their plan and they also warned with dire consequences, if the first respondent interferes in the process of trespass into the area in PSR Prime Towers. Apprehending danger to the lives, the first respondent lodged report with the police. Based on the allegations, the Station House Officer, Gachibowli Police Station, Cyberabad, registered crime and issued F.I.R No.
2017 against the petitioners on 17.10.2017 for the offences punishable under Sections 406,420,447,506 r/w 34 IPC.
The petitioners, who are arrayed as accused in the above crime, filed the present criminal petition, mainly on the ground that the allegations made in the F.I.R/report lodged with the police did not disclose commission of any offences punishable either under the provisions of Indian Penal Code or any other law and filing such complaint, after execution of sale deed dated 02.07.2011 in favour of the petitioners conveying an extent of undivided share of land to an extent of 3766 sq.yds out of 10043 sq.yds of land with proposed built up area of 1,50,000 sq.ft, which is part of Block-B, PSR Prime Towers is nothing but abuse of process of law and the proceedings in the above crime have to be quashed at the threshold, since the duty of the Court is to protect the rights and interests of the innocent bonafide purchasers/petitioners. It is urged that, none of the allegations made in the complaint, on its face value would constitute any of the offences mentioned supra, and prayed to quash the proceedings in F.I.R No.559 of 2017.
The first respondent filed counter admitting part of the allegations regarding offering the property to sale, being a developer and execution of document etc. It is specifically contended that the first respondent company along with its associates are the absolute owners and possessors and they are in enjoyment of the land to an extent of 10,043 sq.yds in Sy.No.126(P) situated at Gachibowli, Serilingampally Mandal, Ranga Reddy District. The associates of the first respondent entrusted their respective lands for common development to the first respondent in 2006. Thus, the first respondent is not only one of the owners of the land but also developer of the entire land to an extent of 10043 sq.yds in Sy.No.126 (P). The 1st
respondent after entrustment of the land approached the concern competent authority ie., The Zonal Commissioner, West Zone, GHMC and obtained sanction vide proceedings No.6/104/BP/WZ/447/08, dated 23.8.2008 for construction of 3 cellars parking, Ground + 7 upper Floors and has commenced the construction of commercial complex and completed cellar meant for parking. However, due to adverse market, 1st respondent temporarily slowdown the construction activity.
It is stated in the counter that, the petitioners being wife and husband approached the 1st respondent to purchase 1,50,000 sq. ft. @ Rs.3833/- per sq. ft. of constructed area in the combined sanction with undivided share of the land of 3766 sq. yds. out of 10043 sq. yds. After deliberations without entering into any agreement, the petitioners have paid about Rs. 2,70,00,000/- to the 1st respondent. The 1st respondent felt happy that the petitioners are good customers, who are NRI's, in view of paying huge amount as an advance without any agreement. Thereafter they disappeared and came back after lapse of several years in 2011 with a request to register undivided share of 3766 sq. yds.out of 10043 sq. yds. The 1st respondent and others being law abiding citizen without raising any objection executed registered sale deed doc.No.
6464/2011, dt. 2.7.2011 without receiving any consideration to an extent of undivided share of land admeasuring 3766 sq. yds. out of 10043 sq. yds. of combined sanction. The 1st respondent already obtained sanction for construction of commercial complex and commenced the work, as such the possession was with the 1st respondent covered by the said sale deed as a developer. Subsequently a formal construction agreement was entered in between the petitioner and the respondent No.1 on 30.7.
covered by her sale deed. The said property virtually became part and parcel of sanctioned plan obtained by the 1st respondent. It is further contended in the counter that, though combined layout was obtained for entire 10043 sq. yds., at the request of the petitioners desire, the construction was made into two blocks namely A & B. A Block was named as S.S.Techpark and the B block as PSR Prime Tower. P.S.R. Prime Tower is covered by the area sold to the 1st petitioner. While making pits and laying pillars, the area of around 780 sq. yds.in excess of 3766 sq. yds.were inadvertently covered in block B (PSR Prime Towers), thereby the constructed area of the PSR Prime Towers increased from 1,50,000 to 1,73,000 sq. ft. Thus, the extra constructed area of 23,000 sq. ft. the 1st respondent alone is entitled to enjoy absolutely.
Further, Clause No. 7 (c) of the said agreement speaks that Immediately after the said commercial building is ready and fit for habitation ( and in this regard the decision of the Architect shall be final and binding the second party shall serve a notice on the first party and within 14 days from the date of such notice (hereinafter called the date of possession) the first party shall take over possession of the said commercial building upon making payment of the amount due to the second party under this agreement and Clause No. 7 (d) mandated that the second party on completion of the construction of commercial building as per the sanction plans shall obtain the Final Completion/Occupancy Certificate from the sanctioning authority. Due to non payment of the agreed sum the 1st respondent did not deliver the possession as agreed upon. The petitioners illegally trespassed into some portion of PSR Prime Towers and sold such illegally occupied property to third parties. The 1st respondent after noticing illegal activity of the petitioners, felt that if Occupancy Certificate is obtained
and handed over possession to the petitioners they would occupy entire area of PSR Prime Towers illegally without settling account and it would create much inconvenience to him as such he withheld in approaching the concern authorities to obtain the Occupancy Certificate. Being the developer, the 1st respondent is bound to get Occupancy Certificate provided the 1st petitioner is settles amounts and area to be transferred in favour of the 1st respondent as agreed upon.
It is contended in the counter that, the 1st petitioner failed to pay the sale consideration as agreed upon with a plea of paucity of funds, approached the 1st respondent and pleaded that she was not having money to comply with the terms and requested the 1st respondent to obtain loan from any bank and she was prepared to offer her sale deed Doc.No. 6464/2011 as a security and further agreed to pay EMIs on the loan amount. The 1st respondent agreed to accommodate the petitioner No.1 accordingly, as a result of the same, the petitioner No.1 and the 1st respondent entered into MOU dt. 28.4.2012 incorporating terms. The 1st respondent with its efforts got sanctioned term loan of Rs. Ten Crores another loan of Rs. Twenty Crores in Andhra Bank, Secunderabad branch. The 1st petitioner deposited her sale deed Doc.No.
6464/2011 with the bank and the 1st respondent deposited title deeds of his own property and his wife property along with other properties, created mortgage by deposit of title deeds. The 1st petitioner though agreed to pay EMI's did not keep up her promise. The bank started threatening to put the properties offered as security, to auction to realise the loan amount. As a result, the 1st respondent though drew amounts from bank, was forced to pay EMI's to the bank from the drawn loan amounts.
construction work did not progress as expected. Thus, the 1st petitioner has become defaulter in making the payments as agreed. It is further contended that, again the petitioners approached with different proposal to purchase 15,000 sq. ft. @ Rs. 3833/- per sq. ft. as per old rate out of 23,000 sq. ft. constructed by the 1st respondent in PSR Prime Towers and pay the sale consideration. The 1st respondent considering the request of the petitioners entered into another MOU dt. 21.10.2015. In the said MOU it was agreed by the 1st petitioner that the 1st respondent constructed more than 1,50,000 sq. ft. in PSR Prime Towers. The 1st petitioner as per the terms of the MOU dt. 21.10.2015, has agreed to purchase 15,000/- sq. ft. @ Rs. 3833/- amounting to Rs. 5,75,00,000/-. However, the petitioner No.
1 failed to fulfil the terms incorporated in the said MOU also. While things stood thus, the petitioners came up with new proposal that the 1st petitioner would pay the amount on or before the end of June, 2017, failing to pay the due amount as per the new proposal, the 1st petitioner shall transfer rights in PSR Prime Towers up to the balance amounts payable at Rs. 4,000/- per sq. ft. at base price to the 1st respondent. The 1st respondent with a view to complete the transaction of sale of 1,50,000/- sq. ft. amicably entered into MOU dt. 30.1.2017. In spite of giving several opportunities the 1st petitioner failed to comply with the terms of MOU dt. 30.1.2017. Thus, on all occasions the 1st petitioner violated the terms of construction agreement, all MOUs.
It is submitted that though the 1st respondent was always cooperating with the 1st petitioner by signing as witness to mortgage deed, but the 2nd petitioner always misguided her who is in noble profession and poisoned her mind. The 2nd respondent is adopting dubious methods to put the 1st respondent in irksome position by
creating differences. The petitioners taking advantage of extending cooperation, time and again, in order to complete the transaction smoothly, the petitioners in collusion with each other criminally trespassed into the PSR Prime Towers and illegally executed and registered several sale deeds, mortgages, lease deeds in favour of third parties without settling the accounts with the 1st respondent. Because of regular interference by the 2nd petitioner the 1st respondent withheld the Occupancy Certificate in obtaining from the concerned authority till the illegal activities of the petitioners are stopped and the dispute is settled as per the eligibility. The 1st respondent as such did not deliver the physical possession of the constructed area of PSR Prime Towers till date to the 1st petitioner.
In view of non compliance of terms of formal construction agreement and MOUs the 1st respondent got issued legal notice dt. 12.10.2017 bringing to the notice of the petitioners that out of sale consideration of 1,65,000 sq. ft. @ Rs. 3833/- per sq. ft. amounting to Rs. 63,24,50,000/- ( Rs. 57.496 Cr. + 5.75 Cr.) amount given for adjustments is Rs. 1,03,25,000 agreed interest payable to the bank is Rs. 4,13,00,000/-, total amounting to Rs. 68,40,75,000/- and the 1st petitioner has paid Rs. 22,70,00,000/- + 17,38,00,000/- in all amounting to Rs. 40,08,00,000.- and the balance consideration payable is Rs. 28,32,75,000/-. As per the MOU dt. 30.1.
2017 and the understanding with the 1st respondent shall clear the due amount by the end of June, 2017 and if fail to pay the amount due, the 1st respondent, the 1st petitioner shall forgo her right over the property up to the balance amount payable to the 1st respondent by calculating the area @ Rs. 4,000/- per sq. ft. In view of non-payment of amount due, the 1st respondent is entitled to adjust the outstanding amount of Rs. 28,32,75,000/- @ Rs.4,000/- per sq. ft.
70,819 sq. ft. Apart from this area, the 1st respondent is also entitled to 8000 sq. ft. in PSR Prime Towers which is constructed by the 1st respondent beyond 1,65,000 sq. ft. in the said complex. Thus, the 1st respondent is entitled to 78,819 sq. ft. of constructed area in PSR Prime Towers. Though notice was served on the others, but the petitioners unclaimed the notice sent by registered post and the same were returned to the 1st respondent. The terms of notice were not complied with. It is submitted that the sale deed doc.No. 6464/2011 of 1st petitioner was mortgaged with Andhra Bank and the same is lying in the bank even today. The possession is with the 1st respondent. The 1st petitioner suppressing the said factual scenario, executed and registered sale deeds, mortgage deeds and lease deed with third parties and enjoying the fruits without settling the accounts of the 1st respondent. Thus, the petitioners cheated the 1st respondent and Andhra Bank by their illegal acts.
It is submitted that the petitioners adopted methods to harass 1st respondent. The petitioners instead of settling the issue, on 13.10.2017, at about 3.45 P.M. came to the PSR Prime Towers and they are bent upon taking law into their hands and mustered strength by gathering unsocial elements who are armed with knives and deadly weapons, threatened the 1st petitioner, his staff and security not to interrupt with their plan and they also warned with dire consequences, if the 1st respondent and his men obstructs them from trespassing into area under the domain of the 1st respondent in PSR Prime Towers. They are in large number about 50, as such apprehending danger to lives and property, the 1st respondent lodged complaint with the police, Gachibowli on 14.10.2017. Since there was no response from the police on the complaint of the 1st respondent, he moved with the superior officers of police Department then the case was registered in
Crime No. 559/2017, showing the date of complaint as 17.10.2017 under the sections 420, 447,306, 506 R/W sec. 34 of IPC. The petitioners having come to know about a crime was registered against them, the 2nd petitioner as a counter blast lodged a false complaint in P.S. Gachibowli on 18.10.2018. The petitioners approached the Court by suppressing material facts and sought for quashment of the F.I.R in Crime No.559 of 2017 for the offences punishable under Sections 420, 447,306, 506 r/w sec. 34 of IPC, without any basis, with a view to gain wrongfully and cause loss to the first respondent. It is submitted that, the petitioners are not entitled to claim any relief in the present petition under Section 482 Cr.P.C, as the complaint prima facie disclosed commission of cognizable offences punishable under Sections 420, 447,306, 506 r/w Sec. 34 of IPC and prayed for dismissal of the criminal petition.
During hearing, learned counsel for the petitioners Sri Anand Kumar Kapoor would contend that, when the first respondent executed a registered sale deed in favour of the petitioners conveying an undivided share to an extent of 3766 sq.yds with proposed built up area of 1,50,000 sq.ft out of 1,043 sq.yds of land in Sy.No.126(P), the petitioners became owners of the property i.e., undivided share and thereby, question of trespassing into their own property does not arise. Even if, for any reason, the petitioners violated the terms of the construction agreement, the remedy available to him is elsewhere, but not in criminal case, since, the breach of agreement would not constitute criminal offences. At the same time, failure to discharge debt due to the bank also would not constitute any offence and therefore, none of the allegations made in the report lodged with the police, which is the subject matter of F.I.R No.559 of 2017 would
constitute no offence, muchless offences punishable under Sections 420,447,306,506 r/w 34 IPC.
Learned counsel for the petitioners placed reliance on the judgments of the Supreme Court in Ajay Mitra v. State of M.P. and others1 and Robert John D'Souza and others v. Stephen V. Gomes and another2 to contend that the allegations made in the complaint would not constitute offences punishable under Sections 420,447,306,506 r/w 34 IPC.
Learned counsel for the petitioners further contended that, the occupation of their own property by the petitioners would not constitute an offence punishable under Section 447 IPC and he would draw the attention of this Court to various allegations made in the complaint and entering into possession of the property would not constitute an offence punishable under Section 447 IPC and requested this Court to quash the proceedings in Crime No.559 of 2017 on the file of Gachibowli Police Station, Cybeerabad. Whereas, the learned counsel for the first respondent/complainant would contend that, failure to repay the loan to the Andhra Bank arranged by the first respondent as agreed, but would constitute an offence punishable under Section 420 IPC.
At the same time, occupying excess are of construction by the first respondent to an extent of 23,000 sq.ft in Block-B (PSR Prime Towers) by the petitioners when occupancy certificate is not produced by the first respondent, the petitioners along with 50 persons armed with deadly weapons under the threat and danger to life of the first respondent and security men would constitute offences punishable under Sections 447 & 406 IPC.
1 (2003) 3 Supreme Court Cases 11 2 (2015) 9 Supreme Court Cases 96
Since the allegations made in F.I.R on its face value, if taken as true, would constitute offences punishable under Sections 420,447,306,506 r/w 34 IPC, the proceedings cannot be quashed and prayed for dismissal of the criminal petition, while permitting the Station House Officer, Gachibowli Police Station to investigate into the crime.
Point for Consideration:
Considering rival contentions and perusing the material available on record, the point that arose for consideration is: "Whether the acts of the petitioners in occupying the property they purchased under registered sale deed dated 02.07.2011, after completion of construction as per the construction agreement dated 30.07.2011 would constitute offences punishable under Sections 406,420,447 & 506 r/w 34 IPC. If not, whether the proceedings in Crime No.559 of 2017 on the file of Gachibowli Police Station, Cyberabad, are liable to be quashed.?" P O I N T:
Purchase of the property by the petitioners to an extent of 1,50,000 sq.ft in Block-B (PSR Prime Towers) is not in dispute and payment of part consideration is also not in dispute. The first respondent/complainant admittedly executed a registered sale deed in favour of the petitioners conveying an extent of 1,50,000 sq.ft built up area.
In the complaint dated 17.10.2017 itself, the first respondent/complainant narrated various facts. In paragraph no.3 of the complaint, it is specifically alleged that the petitioners approached the first respondent/complainant to purchase undivided share to an extent of 3766 sq.yds with proposed built up area of 1,50,000 sq.ft out of 10043 sq.yds of land in Sy.No.126 (P). Accordingly, the petitioners executed registered sale deed doc No.6464/2011 dated 02.07.2011
conveying an undivided share of an extent of 3766 sq.yds out of 10043 sq.yds of land with proposed built-up area of 1,50,000 sq.ft. Thus, this admission in paragraph 3 of the complaint is suffice to conclude that the first respondent/complainant sold the property under registered sale deed dated 02.07.2011. When the first respondent/complainant executed a registered sale deed conveying undivided share of 3766 sq.yds and 1,50,000 sq.ft of built-up area under a registered sale deed, the purchasers became owners of the property from the date of purchase i.e. 02.07.2011, as the petitioners became owners of the property as on the date of lodging the report with police. Further allegations made in paragraph of the first respondent/complaint entered into construction agreement dated 30.07.
2011, but the actual understanding was to sell the constructed premises @ 3833 per sq.ft, including the costs of construction work with built-up are of 1,50,000 sq.ft + cellar for parking area of 20,000 sq.yds with undivided share of land to an extent of 3766 sq.yds out of the total land of 10,043 sq.yds and that they shall pay the cost of construction work regularly to facilitate the first respondent to complete the construction work effectively and hand over the physical possession of the constructed area of the property as per schedule and they shall not cause any breach of contract. The main grievance of the first respondent is that, the total cost of the property was Rs.57,49,50,000/- and the petitioners paid only Rs.22,70,00,000/- prior to registration of undivided share of 3766 sq.
yds and subsequently after construction agreement, the petitioners paid Rs.17,38,00,000/-, in all amounting to Rs.40,08,00,000/-, till the date of lodging the complaint. The total value of the property is Rs.57,49,50,000/-. Thus, the value of the property comes to Rs.
Rs.17,41,50,000/-. Therefore, the said non-payment, if any, towards cost of construction under the construction agreement would give rise to a civil liability, but not a criminal offence. In paragraph 7 of the complaint itself, specific allegations were made regarding payment of Rs.78,25,000/- and Rs.25,00,000/-, in total Rs.1,03,25,000/- to the petitioners out of the part payments for their family requirements and adjustments in order to maintain good business relation. The petitioners have agreed to pay an amount of Rs.4,13,00,000/- as mentioned in MOU, towards interest for the delay in payment of amount. Even if the allegations made in the complaint are true on its face value, failure to pay balance of sale consideration, as agreed under the construction agreement would not constitute an offence punishable under Section 420 IPC and at best, it would amount to breach of agreement for which the remedy available to the first respondent is elsewhere i.e. in Civil Court, but not in Criminal Court.
'Cheating'
Learned counsel for the petitioners while raising several contentions, mainly on the ground that the allegations made in the complaint, even if taken on their face value, as true, it would not constitute an offence and placed reliance on the judgment of the Supreme Court in Ajay Mitra1 case and Robert John D'Souza2 case. In Ajay Mitra1 case, the Supreme Court in paragraphs 16,17,19 & 20 of the judgment clearly drawn distinction between 'cheating' and 'breach of agreement'. In the facts of the above judgment, Accused No.1 entered into an agreement with complainant authorising the latter to manufacture and sell certain specified beverages under trademark owned by the former for 5 years, whereafter either party
could terminate the agreement by giving 12 months notice to the other party, but subsequently, another company having purchased the trademarks from A-1, the agreement with the complainant was assigned to that company under information to the complainant. The Supreme Court held that when that company gave 12 months notice to the complainant before expiry of the period of 5 years to terminate the agreement, offence under Section 420 s not made out in absence of mens rea. The Apex Court further held that, a guilty intention is an essential ingredient of the offence of cheating. In other words mens rea on the part of the accused must be established before he can be convicted of an offence of cheating. In order to constitute the offence of cheating, the intention to deceive should be in exercise at the time when the inducement was offered.
Unless the complaint showed that the accused had dishonest or fraudulent intention at the time the complainant parted with the money, it would not amount to an offence under Section 420 IPC and it may only amount to breach of contract. In the facts of the case also, sale deed was executed conveying undivided share to an extent of 3766 sq.yds with proposed built up area of 1,50,00,000. When a sale deed was executed in favour of the petitioners by the first respondent/complainant, the petitioners would become absolute owners of the property. But, if for any reason, the sale consideration was not paid as agreed either under sale deed or under construction agreement, the remedy is otherwise.
In case of non-payment of sale consideration, under this registered sale deed, the petitioners will have a right of charge over the property by proceeding in a civil court for recovery of unpaid sale consideration, if any.
nothing but an arm twisting method. When a civil dispute is given a colour of criminal offence, the Court can exercise its jurisdiction under Section 482 Cr.P.C and quash the proceedings. In paragraph 8 of the judgment in G. Sagar Suri and another v. State of U.P. and others3 the Supreme Court held that jurisdiction under Section 482 of the Code has to be exercised with great care. In exercise of its jurisdiction, High Court is not to examine the matter superficially. It is to be seen if a matter, which is essentially of civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing process a criminal court has to exercise a great deal of caution. For the accused it is a serious matter.
The Apex Court has laid certain principles on the basis of which High Court is to exercise its jurisdiction under Section 482 of the Code, Jurisdiction- under this Section has to be exercised to prevent abuse of the process of any Court or otherwise to secure the ends of justice. In Ajay Mitra1 case, the Supreme Court, after placing relying on Hari Prasad Chamaria v. Bishun Kumar Surekha4 and State of W.B v. Swapan Kumar Guha5 concluded that such breach of agreement for use of trademark do not constitue an offence punishable under Section 420 IPC.
In paragraph 12 of the judgment in Robert John D'Souza2 case, the Supreme Court, by relying on the judgments in Suresh v. Mahadevappa Shivappa Danannava6 and Inder Mohan Goswami v. State of Uttaranchal7 held that, when the allegations made in the complaint would not constitute an offence and satisfying the 3 (2000) 2 Supreme Court Cases 636 4 (1973) 2 SCC 823 5 (1982) 1 SCC 561 6 (2005) 3 SCC 670 7 (2007) 12 SCC 1
requirements, the Court can exercise its inherent jurisdiction and quash the proceedings.
Section 420 deals with cheating and dishonestly inducing delivery of property. To punish an offender under Section 420 of I.P.C, there must be cheating and dishonest inductment for delivery of property. The word 'cheating' is defined under Section 415 I.P.C as "whoever by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to "cheat"". The explanation annexed to Section 415 I.P.C further says that a dishonest concealment of facts is a deception within the meaning of Section 415 I.P.C.
The essential ingredients to constitute the offence of cheating are:
(i) There should be fraudulent or dishonest inducement of a person by deceiving him;
(ii) (a) The person so deceived should be induced to deliver any property to any person, or to consent that any person shall retain any property; or (b) The person so deceived should be intentionally induced to do or omit to do anything which he would not do or omit if he were not so deceived; and (iii) In cases covered by (ii) (b), the act or omission should be one which causes or is likely to cause damage or harm to the person induced in body, mind, reputation or property.
In V.Y.Jose v. State of Gujarat8 the Apex Court laid down following ingredients to constitute cheating. "An offence of cheating cannot be said to have been made out unless the following ingredients are satisfied: (i) deception of a person either by making a false or misleading representation or by other action or omission; (ii) fraudulently or dishonestly inducing any person to deliver any property; or (iii) To consent that any person shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit.
For the purpose of constituting an offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. Even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in absence of a culpable intention at the time of making initial promise being absent, no offence under Section 420 of the Indian Penal Code can be said to have been made out.
An offence of cheating may consist of two classes of cases:
(1) where the complainant has been induced fraudulently or dishonestly. Such is not the case here;
(2) When by reason of such deception, the complainant has not done or omitted to do anything which he would not do or omit to do if he was not deceived or induced by the accused."
Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is the time when the offence is said to have been committed.
In determining the question it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time to inducement which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test. Mere 8 (2009) 3 SCC 78
breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is the time when the offence is said to have been committed. Therefore it is the intention which is the gist of the offence. To hold a person guilty of cheating it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise. (vide Hridaya Ranjan Prasad Verma v. State of Bihar9) Turning to the facts of the present case, the petitioners failed to pay the amount, as agreed under construction agreement and covered by MOU. If, really, there was an agreement for payment of amount, the petitioners are entitled to enforce the agreement for recovery of amount by approaching the competent Court.
Instead of approaching the competent Court, the first respondent/complainant resorted to a criminal litigation, giving colour of criminal offence to the civil litigation and when a civil litigation is given colour of criminal offence, the Court can exercise its inherent jurisdiction under Section 482 Cr.P.C and quash the proceedings.
The allegations made in the complaint are suffice to hold that the petitioners did commit no offence prima facie punishable under Section 420 IPC, except, alleged breach of contract or promise. But, instead of approaching the competent civil court, conveniently, the first respondent lodged a report with the police, as an abuse of process of the Court by giving colour of criminal offence to the civil litigation. In such case, this Court can exercise its inherent jurisdiction under Section 482 Cr.P.C and quash the proceedings. 9 (2000) 4 SCC 168
'Criminal breach of trust"
The other offence allegedly committed by the petitioners is punishable under Section 406 IPC. From the facts narrated above, the petitioners are the purchasers of the property of undivided share to an extent of 3766 sq.yds out of 10043 sq.yds and became owners of the property and also entered into construction agreement. Therefore, the relationship between the petitioners and the first respondent/ complainant is 'promisee' and 'promisor'. In such case, the question of entrustment of any property or valuable security and conversion of the same for the benefit of the petitioners would not arise.
Section 406 IPC deals with punishment for criminal breach of trust and Section 405 IPC defines criminal breach of trust as, whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express, or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits "criminal breach of trust." A similar question came up in Indian Oil Corporation v. NEPC India Ltd.
a) a person should have been entrusted with property; or entrusted with dominion over property;
b) that person should dishonestly misappropriate or convert to his own use that property, or dishonestly use or dispose of that property or willfully suffer any other person to do so; c) that such misappropriation, conversion, use or disposal should be in violation of any direction of law prescribing the mode in 10 (2006) 6 SCC 736
which such trust is to be discharge, or of any legal contract which the person has made, touching the discharge of such trust. The following the examples (which include illustrations under Section 405 where there is 'entrustment': (i) Án 'Executor' of a will, with reference to the estate of the deceased bequeathed to legatees.
(ii) A 'Guardian' with reference to a property of a minor or person of unsound mind.
(iii) A 'Trustee' holding a property in trust, with reference to the beneficiary. (iv) A 'Warehouse Keeper' with reference to the goods stored by a depositor. (v) A carrier with reference to goods entrusted for transport belonging to the consignor/consignee.
(vi) A servant or agent with reference to the property of the master or principal. (vii) A pledge with reference to the goods pledged by the owner/borrower. (viii) A debtor, with reference to a property held in trust on behalf of the creditor in whose favour he has executed a deed of pledge-cum-trust (Under such a deed, the owner pledges his movable property, generally vehicle/machinery to the creditor, thereby delivering possession of the movable property to the creditor and the creditor in turn delivers back the pledged movable property to the debtor, to be held in trust and operated by the debtor)." (emphasis supplied) To constitute an offence of criminal breach of trust, it is essential that the prosecution must prove first of all that the accused was entrusted with some property or with any dominion or power over it.
It has to be established further that in respect of the property so entrusted, there was dishonest misappropriation or dishonest conversion or dishonest use or disposal in violation of a direction of law or legal contract, by the accused himself or by someone else which he willingly suffered to do.
benefit. (vide Chellor Mankkal Narayan Ittiravi Nambudiri v. State of Travancore, Cochin11) If this principle is applied to the present facts of the case, the petitioners are only the owners of an extent of 3766 sq.yds which they purchased out of an extent of 10043 sq.yds by virtue of purchase under registered sale deed dated 6464/2011 dated 02.07.2011. The question of entrustment of any property to the petitioners does not arise and it was never the case of the first respondent/complainant that he entrusted any property to the petitioners to use the same in a particular manner and violated such direction. When the petitioners themselves are the owners of the property, the question of entrustment would not arise and violation of terms of appropriation rules of such property also would not arise. The petitioners purchased the property and enjoyed the same as per their wish. Enjoyment of the property or dealing with the property in the manner they like would not constitute an offence punishable under Section 406 IPC.
Apart from that, in Robert John D'Souza2 case, an identical question came up for consideration and the Apex Court, by relying on the judgment in Ram Narayan Popli v. CBI12 and State of Gujarat v. Jaswantlal Nathalal13 held that, to constitute an offence punishable Under Section 406 Indian Penal Code, the essential ingredient is the "entrustment" of the property. In the said case, the complaint filed by the complainant nowhere discloses that the land in question purchased in the year 1978 was entrusted to the Society for the benefit of others. It is only after entrustment is shown, it can be said that there was criminal breach of trust.
11 AIR 1953 SC 478 12 (2003) 3 SCC 641 13 AIR 1968 SC 700
In Ram Narayan Popli11 case, the Supreme Court has explained that, the term "entrustment" is not necessarily a term of law. It may have different implications in different contexts. In its most general signification all it imports is the handing over possession for some purpose which may not imply the conferring of any proprietary right at all. Similarly, in Jaswantlal Nathalal13 case, the Supreme Court observed that mere transaction of sale cannot amount to an entrustment.
If the principles laid down in the above judgment are applied to the present facts of the case, when the proprietary right was conferred on the petitioners by executing sale deed and raised construction under the agreement for construction, the petitioners became owners of the property and such delivery of possession under the registered sale deed would not constitute entrustment to make the petitioners liable to be punishable under Section 406 IPC prima facie. Applying the principles to the present facts of the case, the petitioners who purchased the property under registered sale deed became the owners and they are not liable to be proceeded for the offence, even if the petitioners dealt with the property by sale or otherwise, but not third parties.
Therefore, there are absolutely no allegations and material to prove entrustment of property for the benefit of third parties or for benefit of the first respondent/complainant prima facie, and it is difficult to conclude that there is a prima facie material to proceed against these petitioners for the offence punishable under Section 406 IPC.
'Criminal Trespass'
The other offence allegedly committed by the petitioners is punishable under Section 447 IPC i.e 'Criminal Trespass'. The specific
allegation made against these petitioners is that, the first respondent agreed to construct 1,50,000 sq.ft and entered into construction agreement which is referred in the earlier paragraphs, but constructed 20,000 in excess of agreed construction and that the respondent is the owner of the excess area of construction, thereby, he is entitled to continue in possession. Apart from that, though the first respondent agreed to raise construction by entering into construction agreement, he was only a developer and for convenience, a construction agreement was entered into by the first respondent. It is an admitted fact that the first respondent executed a registered sale deed conveying an extent of 3776 sq.yds out of 10043 sq.yds and later, entered into an agreement for construction.
Accordingly, the first respondent constructed in excess area of 20,000. Occupancy certificate was not obtained by the first respondent, as the petitioners did not pay balance of sale consideration agreed to be paid for both 3776 sq.yds and construction work. In the absence of delivery of possession to these petitioners by the first respondent, their entry into possession of the property amounts to criminal trespass, which is punishable under Section 447 IPC.
The word 'criminal trespass' is defined under Section 441 IPC. According to it, whoever enters into or upon property in the possession of another with intent to commit an offence or to intimidate, insult or annoy any person in possession of such property or having lawfully entered into or upon such property, unlawfully remains therewith intent thereby to intimidate, insult or annoy any such person, or with intent to commit an offence is said to commit "criminal trespass".
A trespass becomes a criminal trespass if it is with an intention to annoy or to do something illegal. (vide Noorul Huda Maqbool Ahmed vs. Ram Deo Tyagi & Ors14).
To constitute an offence of 'criminal trespass', as defined under Section 441 IPC, there must be an unlawful entry upon property in possession of another with intent to commit an offence or to intimidate, insult or annoy any person who is in possession of the property. In the present facts of the case, the petitioners are the owners of the undivided share to an extent of 3766 sq.yds and the first respondent allegedly delivered possession of the property to the petitioners by executing registered sale deed dated 02.07.2011. Thereafter, the petitioners and the first respondent entered into construction agreement for construction of building in premises they purchased, which is known as B-Block PSR Prime Towers for commercial purpose.
It is the case of the first respondent that the excess area was covered by the construction for which the petitioners have to pay the amount i.e. cost of the construction as agreed under MOU. No doubt, as seen from the MOU, the first respondent raised a construction covering the excess area and the petitioners agreed to pay value of the excess area constructed. But, the petitioners did not keep up their promise and however, entered into possession of the same. It is not the case of the petitioners that the area is covered by extent other than the area purchased by the petitioners. If the construction is raised within the extent of 3776, raising of construction within the area would not confer any right or title or interest over the property i.e. excess area covered by 20,000 sq.ft.
agreement, the entry of the petitioners into their property would not constitute an offence punishable under Section 447 IPC. Learned counsel for the petitioners would draw the attention of this Court to the judgment of the Apex Court in Gorige Pentaiah v. State of Andhra Pradesh15. In the facts of the above judgment, the appellant aggrieved by registration of the criminal case, invoked inherent powers of the court by filing a petition under Section 482 of Code of Criminal Procedure before the High Court for quashing of the proceedings emanating from Crime No. 281 of 2004 Police Station Uppal, Hyderabad. The High Court, by impugned judgment dated 19.9.2006, dismissed the said petition. Crime was registered against the petitioner therein for the offences punishable under Sections 447, 427, 506 IPC.
While deciding the dispute between the parties, the Court observed that, when respondent No. 3 therein was not even in possession of the land in question, the allegation made in the complaint, that the appellant therein demolished the wall on 14.6.2004, could not arise. The allegations are totally baseless and without any foundation. On the face of it, it looks that the criminal complaint filed by the respondent No. 3 was totally false and frivolous. The complaint was filed with an oblique motive. In this view of the matter, charges under Sections 427 and 447 IPC are also wholly illegal and unsustainable in law.
In the present facts of the case also, the first respondent having sold an extent of 3776 sq.yds and executed sale deed and entered into construction agreement on 02.07.2011 and later the MOU allegedly entered by the respondent would clinchingly show that the first respondent raised construction in the undivided share of land sold to the petitioners. The construction whatever raised in the land sold to 15 (2008) 12 Supreme Court Cases 531
them belong to the petitioners, but not to the first respondent. At best, he is entitled to recover the amounts due under the contract and nonpayment of amount covered by either construction agreement or MOU and entering into their property by the petitioners purchased under registered sale deed and constructed under the construction agreement by the first respondent would not constitute an offence punishable under Section 447 IPC. Apart from that, the petitioners were not supposed to be in possession of the property, except for execution of the work in the land sold to the petitioners would not amount to possession of the property.
Therefore, the petitioners prima facie did not trespass into the land belonging to any of the person with an intent to commit criminal offence or to intimidate, insult or annoy any person who is in possession of the property. Since the complaint is bereft of those requirements regarding entering into the property belonging to the first respondent, with an intent to commit criminal offence or to intimidate, insult or annoy any person in possession of such property, the proceedings against these petitioners for the offence punishable under Section 447 IPC are baseless and without any foundation and the complaint filed by the first respondent is totally frivolous and the first respondent lodged report as an abuse of process of the Court.
'Criminal Intimidation'
The other offence alleged committed by the petitioners is that the petitioners mustered with 50 persons came to the property and threatened the guard with dire consequences and on coming to know about the incident, the first respondent came to the property and he was threatened with dire consequences and all the persons were armed with deadly weapons. Therefore, the act of the petitioners would
fall within the definition of criminal intimidation vide Section 503 IPC and liable for punishment for the offence punishable under Section 506 IPC. The petitioners totally denied the alleged criminal intimidation.
Section 506 IPC deals with punishment for Criminal Intimidation and Section 503 IPC defined criminal intimidation as follows: "Whoever threatens another with any injury to his person, reputation or property, or to the person or reputation of any one in whom that person is interested, with intent to cause alarm to that person, or to cause that person to do any act which he is not legally bound to do, or to omit to do any act which that person is legally entitled to do, as the means of avoiding the execution of such threats, commits criminal intimidation." Here, the allegations made that the petitioners along with 50 persons came to the schedule property and threatened the first respondent/complainant and the guard who is posted at the venture with dire consequences. But that by itself is not sufficient to constitute an offence.
Learned counsel for the petitioners while contending that the act allegedly committed by the petitioners would not constitute an offence would draw attention of this Court to Gorige Pentaiah15 case (referred supra), where the Apex Court had an occasion to discuss the scope of Section 503 IPC. In the facts of the case, there were two suits pending by the date of alleged incident. Despite it, the case was registered against the person who obtained an injunction somehow to force him to bring to the terms of the respondent. But the Court did not law down any specific law. Moreover, in Manik Taneja and another v.
person, reputation, or property of the person threatened, or to the person in whom the threatened person is interested and the threat must be with the intent to cause alarm to the person threatened or it must be to do any act which he is not legally bound to do or omit to do an act which he is legally entitled to do. In the facts of the above judgment, the allegation is that the Appellants have abused the complainant and obstructed the second Respondent from discharging his public duties and spoiled the integrity of the second Respondent. It is the intention of the accused that has to be considered in deciding as to whether what he has stated comes within the meaning of "Criminal intimidation". The threat must be with intention to cause alarm to the complainant to cause that person to do or omit to do any work.
Mere expression of any words without any intention to cause alarm would not be sufficient to bring within the ambit of this section. But material has to be placed on record to show that the intention is to cause alarm to the complainant. From the facts and circumstances of the case, it appears that there was no intention on the part of the Appellants to cause alarm in the mind of the second Respondent, causing obstruction in discharge of his duty.
The Supreme Court observed that in exercise of its jurisdiction Under Section 482 Code of Criminal Procedure, the Court should be extremely cautious to interfere with the investigation or trial of a criminal case and should not stall the investigation, save except when it is convinced beyond any manner of doubt that the FIR does not disclose commission of offence and that continuance of the criminal prosecution would amount to abuse of process of the court.
From the law declared by the Apex Court in Gorige Pentaiah15 and Manik Taneja16 cases, there must be an allegation that, with an intention to cause alarm or annoyance to the person in possession.
Such act done by the petitioners would fall within the definition of criminal intimidation as defined under Section 503 IPC punishable under Section 506 IPC. Here, in this case, there is nothing to show that there was no allegation specifically that the petitioners along with other persons committed any act with an intention to cause alarm or annoyance to the person in possession of the property. In fact, none are presumed to be in possession of the property and, it was not the case of the first respondent that he is in possession of the property. When he is not in possession of the property and the petitioners are the owners of the property, entering into their own premises and if any obstruction is made, they can remove the obstruction and they can enter into the property. Such act would not attract the offence punishable under Section 506 IPC.
The main endeavour of the learned counsel for the petitioner is that a civil dispute cannot be given colour of criminal offence and if any such colour is given, it would amount to abuse of process of this Court. Whereas, the learned counsel for the first respondent contended that when the allegations made in the complaint would disclose prima facie cause of cognizable offence, the police are competent to register a crime and proceed to investigate into the offence after issuing F.I.R and when the complaint disclosed an allegation to constitute any cognizable offence, the proceedings cannot be quashed at the threshold, as it amounts to killing a still-born child. As discussed above, the allegations made in the report lodged with the police would not constitute an offence punishable under Sections 406,420,447 & 506 r/w 34 IPC, but, at best may give rise to civil liability and the first respondent may proceed against the petitioners before the civil court for appropriate relief, subject tot permissibility under law. When civil dispute is given colour of criminal
offence, the Court can exercise inherent jurisdiction under Section 482 Cr.P.C. The power under Section 482 Cr.P.C is limited and the Court can exercise such power in rarest of the rare cases, to give effect to the orders passed under the Code or to prevent abuse of process of the Court or to secure ends of justice.
In State of Haryana v. Bhajan Lal17 this Court considered in detail the provisions of Section 482 and the power of the High Court to quash criminal proceedings or FIR. This Court summarized the legal position by laying down the following guidelines to be followed by High Courts in exercise of their inherent powers to quash a criminal complaint:
(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.
(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.
(3) Where the allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.
(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non- cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.
(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.
17 1992 Supp. (1) SCC 335
(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.
The guidelines laid down by the Apex Court made it clear that, when the allegations made in the F.I.R or charge sheet, on its face value would not constitute an offence, the Court can exercise its inherent jurisdiction and quash the proceedings. Similarly, when the complaint was lodged as an abuse of process of the court, the Court can exercise its inherent jurisdiction and quash the proceedings. In R.P. Kapur v. State of Punjab18, the Apex Court held as follows:
(i) Where institution/continuance of criminal proceedings against an accused may amount to the abuse of the process of the court or that the quashing of the impugned proceedings would secure the ends of justice; (ii) where it manifestly appears that there is a legal bar against the institution or continuance of the said proceeding, e.g. want of sanction;
(iii) where the allegations in the First Information Report or the complaint taken at their face value and accepted in their entirety, do not constitute the offence alleged; and (iv) where the allegations constitute an offence alleged but there is either no legal evidence adduced or evidence adduced clearly or manifestly fails to prove the charge.
In State of Karnataka v. L. Muniswamy and Ors.19, the Supreme Court while considering scope and jurisdiction of the High Courts under Section 482 Cr.P.C, has held as under: 18 AIR 1960 SC 866
"In the exercise of this wholesome power, the High Court is entitled to quash a proceeding if it comes to the conclusion that allowing the proceeding to continue would be an abuse of the process of the Court or that the ends of justice require that the proceeding ought to be quashed. The saving of the High Court's inherent powers, both in civil and criminal matters is designed to achieve a salutary public purpose which is that a court proceeding ought not to be permitted to degenerate into a weapon of harassment or persecution. In a criminal case, the veiled object behind a lame prosecution, the very nature of the material on which the structure of the prosecution rests and the like would justify the High Court in quashing the proceeding in the interest of justice.
The ends of justice are higher than the ends of mere law though justice has got to be administered according to laws made by the legislature. The compelling necessity for making these observations is that without a proper realisation of the object and purpose of the provision which seeks to save the inherent powers of the High Court to do justice between the State and its subjects it would be impossible to appreciate the width and contours of that salient jurisdiction." Learned counsel for the petitioners contended that the Court can exercise inherent power under Section 482 Cr.P.C or under Article 226 of the Constitution of India and the Court can exercise inherent jurisdiction in rarest of the rare cases. Then, what is rarest of the rare cases is again a question to be decided.
In Som Mittal v. Government of Karnataka20, the Apex Court held that, when the words 'rarest of rare cases' are used after the words 'sparingly and with circumspection' while describing the scope of Section 482, those words merely emphasize and reiterate what is intended to be conveyed by the words 'sparingly and with circumspection'. They mean that the power under Section 482 to quash proceedings should not be used mechanically or routinely, but with care and caution, only when a clear case for quashing is made out and failure to interfere would lead to a miscarriage of justice. The expression "rarest of rare cases" is not used in the sense in which it is used with reference to punishment for offences under Section 302 IPC, but to emphasize that the power under Section 482 Cr.P.C. to quash the FIR or criminal proceedings should be used sparingly and with 19 AIR 1977 SC 1489 20 (2008) 3 Supreme Court Cases 574
circumspection. Judgments are not to be construed as statutes. Nor words or phrases in judgments to be interpreted like provisions of a statute. Some words used in a judgment should be read and understood contextually and are not intended to be taken literally. Many a time a Judge uses a phrase or expression with the intention of emphasizing a point or accentuating a principle or even by way of a flourish of writing style. Ratio decidendi of a judgment is not to be discerned from a stray word or phrase read in isolation. In view of the law declared by the Apex Court in the above judgment, the words 'rarest of the rare cases' used in many of the judgments cannot be imported to the proceedings under Section 482 Cr.P.C, like imposing punishment for the offence punishable under Section 302 IPC.
If, such interpretation to the words used in the judgment is given, the Court need not record its finding that it is rarest of the rare cases. The allegations made in the F.I.R did not disclose commission of any offences punishable under Sections 406,420,447 & 506 r/w 34 IPC, this Court can exercise its inherent jurisdiction and quash proceedings and more particularly, a civil dispute is converted into a criminal offence as an arm twisting method to bring the petitioners to the terms of the first respondent. In Joseph Salvaraja v. State of Gujarat21, Uma Shankar Gopalika v.
State of Bihar22 and Goriege Pentaiah case, the Supreme Court made clear in all the above three judgments that, when a civil litigation is given a colour of criminal offence, the Court can exercise its inherent power and quash the proceedings and also observed that, when the matter appears to be purely civil in nature. There appears to be no cheating or a dishonest inducement for the delivery of property or breach of trust by the Appellant.
FIR is an abuse of process of law. The purely civil dispute, is sought to be given a colour of a criminal offence to wreak vengeance against the Appellant. It does not meet the strict standard of proof required to sustain a criminal accusation.
The Supreme Court further held that, it is necessary to draw a distinction between civil wrong and criminal wrong as has been succinctly held by the Apex Court in Devendra v. State of U.P23, that, a distinction must be made between a civil wrong and a criminal wrong. When dispute between the parties constitute only a civil wrong and not a criminal wrong, the courts would not permit a person to be harassed although no case for taking cognizance of the offence has been made out.
In view of the settled law declared by the Courts referred supra, the proceedings initiated against these petitioners are nothing but abuse of process of the Court. Then, again, the question what is abuse of process of Court comes up.
In Chandran Ranaswami v. K.C. Palanisamy & others24, the Supreme relied on the judgment in Hui Chi-Ming vs. The Queen25, wherein, the Privy Council defined the word "abuse of process" as something so unfair and wrong with the prosecution that the court should not allow a prosecutor to proceed with what is, in all other respects, a perfectly supportable case. In the same judgment, the Supreme Court relied on Zandu Pharmaceutical Works Ltd. and Others vs. Mohd. Sharaful Haque and Another26 and observed that, it would be an abuse of process of the court to allow any action which would result in injustice and prevent promotion of justice. In exercise of the powers, court would be justified to quash any proceeding if it 23 2009 (7) SCC 495 24 (2013) 6 SCC740 25 [(1992) 1 AC 34 (PC)] 26 (2005) 1 SCC 122
finds that initiation/continuance of it amounts to abuse of the process of court or quashing of these proceedings would otherwise serve the ends of justice. When no offence is disclosed by the complaint, the court may examine the question of fact. When a complaint is sought to be quashed, it is permissible to look into the materials to assess what the complainant has alleged and whether any offence is made out even if the allegations are accepted in toto.
In Regina v. Lincoln27 also, the Queens Bench Division held as follows:
"The basis that one is looking for is that this application to the justice on 29th October was an abuse of process of the law. That means it is alleged that it was something done which was quite inconsistent with the intention of Parliament: that it was using a section of an Act of Parliament for a purpose which Parliament had never intended it to be used for and it was deliberately so used with a view to frustrating the true will of Parliament as expressed in the Act."
I view of the definition of 'abuse of process of the court' in the judgments referred supra, the Legislative intention is to punish the person who committed offences under penal provisions, but the abuse of the same by artistic drafting of a complaint without annexing of any iota of evidence would amount to abuse of process of the Court, since driving of an accused by issuing summons to face criminal prosecution is a serious matter of concern and it would not only disrepute his name, fame and esteem, but also cause both mental and physical trauma, which cannot be compensated by granting any amount of damages. If, such abuse of process is encouraged by the Courts, certainly, it would amount to failure of justice. Therefore, when the Court finds that report was lodged with the police and the police issued F.I.R and started investigating the offences, the Court shall exercise its inherent jurisdiction and quash the proceedings. 27 (1976) 1 All. E.R 490
It is also contended that, when the allegations made in the complaint are improbable to the natural circumstances, the Court can quash the proceedings. Even in guideline no.5 of the judgment in State of Haryana v. Bhajan Lal28, the Supreme Court held that, where the allegations made in the F.I.R/charge sheet are so absurd and inherently improbable to the natural circumstances, the Court can exercise its inherent jurisdiction, the Court can quash the proceedings at the threshold.
Learned counsel for the petitioners would draw attention of this Court to the judgment in Ramesh Rajagopal v. Devi Polymers Private Limited29, wherein, the Supreme Court held with regard to improbability that, the appellant therein is guilty of an offence under the concerned section are inherently improbable and there is no sufficient ground of proceedings against the accused. The proceedings have been initiated against the appellant as a part of an ongoing dispute between the parties and seem to be due to a private and personal grudge, the Court can quash the proceedings and the Apex Court relied on the guidelines in Bhajan Lal's case. Turning to the facts of the present case, the petitioners became the owners under sale deed dated 02.07.2011 and entered into construction agreement and paid substantial amount towards construction works.
Even otherwise, when the petitioners purchased a property to an extent of 3766 sq.yds, they became absolute owners of the property and possession of the property was also delivered under the sale deed. In such case, the petitioners are entitled to continue in possession as lawful owners and construction, if any, raised in excess of the contractual extent, the petitioners are the owners of that property also.
recover the price of the excess constructed area, but he is not entitled to initiate criminal prosecution against the petitioners and it is an improbable circumstance and this Court can exercise inherent jurisdiction under Section 482 Cr.P.C, in view of the law declared in the catena of perspective pronouncements referred supra. Viewed from any angle, the proceedings initiated against the petitioners by the first respondent by lodging a report with the police is nothing but converting the civil litigation into criminal, by abuse of process of the Court and in view of the law declared by the Courts consistently in various judgments referred above, the proceedings in F.I.R.No.559 of 2017 dated 17.10.2017 on the file of Gachibowli Police Station, Cyberabad, are liable to be quashed. In the result, the criminal petition is allowed by quashing the proceedings in F.I.R.No.559 of 2017 dated 17.10.2017 on the file of Gachibowli Police Station, Cyberabad.
However, this order will not preclude the first respondent/complainant to redress his grievance before the competent forum.
Consequently, miscellaneous applications pending if any, shall stand closed. No costs.
__________________________________________ JUSTICE M. SATYANARAYANA MURTHY Date: 15.02.2018 SP