Research › Search › Judgment

Madras High Court · body

2014 DIGILAW 1758 (MAD)

A. Gurusamy v. M. Singamuthu

2014-06-27

T.S.SIVAGNANAM

body2014
Judgment : 1. The complainant in a private complaint is the petitioner. In this Revision Petition filed under Section 397 and 401 Cr.P.C., challenge is made to the order dated 08.04.2008 in M.P.No.1853 of 2008 passed by the XXIII Metropolitan Magistrate, Saidapet, Chennai-15 dismissing the private complaint filed by the petitioner. The respondents were shown as the accused in the private complaint, wherein, the petitioner made a prayer to take the complaint on the file alleging that the respondents/accused committed an offence punishable under Sections 403, 406, 420, 423, 506(ii) read with Sections 34 and 109 IPC. 2. The case of the complainant is that he is the owner of the property at K.K.Nagar, having purchased the same by a Registered Sale Deed dated 20.01.1988 and he constructed a superstructure by availing house building advance from his employer- Tamil Nadu Housing Board and created mortgage in favour of the Board to secure the loan. The mortgage was duly registered in Document No.1304/1989. It is further stated that the complainant borrowed a sum of Rs.3.25 lakhs from the first respondent/first accused on various dates. 3. It is further stated that the petitioner had divorced his wife and during 1994; he was transferred to Villupuram; at that stage, the first accused demanded for repayment of the money; therefore, the complainant on 25.05.1995 executed an agreement to sell the property, agreeing to sell the property for total consideration of Rs.4,75,000/-and the loan amount of Rs.3,25,000/- to be treated as advance. In terms of the agreement, the first accused undertook to discharge the mortgage loan to Tamil Nadu Housing Board and the balance amount of Rs.1,50,000/-to be paid to the complainant. Taking advantage of the strained relationship between the complainant and his divorced wife, it is stated that the first accused demanded handing over of the possession of the property and though the divorced wife of the complainant was in possession of the property, in the agreement, there was recital that the possession was handed over to the first accused. On the date, when the agreement for sale was entered into, a Power of Attorney was executed by the complainant in favour of the second accused/wife of the first accused. In the recitals in the said Power of Attorney, it is stated as if the possession was handed over to the second accused. 4. On the date, when the agreement for sale was entered into, a Power of Attorney was executed by the complainant in favour of the second accused/wife of the first accused. In the recitals in the said Power of Attorney, it is stated as if the possession was handed over to the second accused. 4. It is the case of the complainant that General Power of Attorney was given only as security for the loan of Rs.3,25,000/-. It is further stated that there was a specific understanding that the Power of Attorney would be acted only if the divorced wife of the complainant created any problem. It is stated that as against the decree of divorce, the wife filed C.M.A.No.3865/2005 before this Court, which is stated to have been pending at the time of filing of the private complaint. 5. Even prior to this, the divorced wife of the complainant filed a suit in O.S.No.4123/1995 before the City Civil Court, Chennai, praying for decree for permanent injunction, wherein, the first and second accused were also impleaded as defendants. The first accused filed O.S.No.4320/1995 before the City Civil Court for a decree for mandatory injunction to direct the divorced wife of the complainant to deliver vacant possession of the property as per the agreement for sale. It is stated that the suit was not filed for any specific performance of the agreement for sale. As the complainant cooperated with the first accused/plaintiff, O.S.No.4320/1995 was decreed on 28.10.2004. The first accused filed E.P.No.568/2005 and took possession of the property through Court and delivery was recorded on 27.06.2006. It is stated that the second accused, the Power of Attorney Holder, the wife of the first accused did not exercise her right under the Power of Attorney at that stage. 6. It is the further case of the complainant that the first accused did not discharge the mortgage loan as per the undertaking and he agreed to pay the market price of the year 2006, if the complainant discharges the mortgage loan in full from his own money. Therefore, it is stated that the complainant utilising his own money discharged the mortgage and the discharge receipt was registered on 04.10.2006. It is further stated that the first accused was present at the time of discharge and he was one of the attesting witnesses of the registered discharge receipt given by the Tamil Nadu Housing Board. Therefore, it is stated that the complainant utilising his own money discharged the mortgage and the discharge receipt was registered on 04.10.2006. It is further stated that the first accused was present at the time of discharge and he was one of the attesting witnesses of the registered discharge receipt given by the Tamil Nadu Housing Board. It is further stated that the first accused requested three months time to pay at the market rate. Further he did not keep up his word and when the petitioner approached, the second accused is stated to have behaved in a indifferent manner; therefore, the complainant cancelled the Power of Attorney granted to the second accused by cancellation deed dated 25.01.2007. Thereafter, he applied for the Encumbrance Certificate and was shocked to know that on 20.12.2006, a sale deed has been executed by the second accused as Power Agent in favour of the third accused, the son of the Accused Nos.1 and 2 by Registered Sale Deed bearing Document No.3636/2006 for a sale consideration of Rs.11,00,000/-. It is further stated that the sale deed did not refer to agreement of sale executed in favour of the first accused, the undertaking to discharge the mortgage loan and such other matters. Further, it is submitted that at the time when the Sale Deed was executed in favour of the third accused, the complainant was very much available in Chennai and there is no necessity for the second accused to act on behalf of the complainant. Further, it is stated that the sale deed executed in favour of the third accused (son of the first and second accused) is a sham and nominal document and is void ab initio. 7. In order to protect his rights, the complainant is said to have filed a suit in C.S.No.403 of 2007 to declare the Sale Deed dated 20.12.2006 as null and void. A written statement was filed by the first accused stating that the entire consideration of Rs.4,50,000/- was paid. It is stated that the first accused did not discharge the mortgage loan, did not pay the amount and in any event, if the first and second accused received Rs.11,00,000/- from the third accused, the same ought to have been paid to the complainant, as the second accused is said to have acted as Power of Attorney of the complainant. It is stated that the first accused did not discharge the mortgage loan, did not pay the amount and in any event, if the first and second accused received Rs.11,00,000/- from the third accused, the same ought to have been paid to the complainant, as the second accused is said to have acted as Power of Attorney of the complainant. Therefore, it is stated that there was dishonest intention and fraud played and the sale deed executed in favour of the third accused is a void document. In this regard, the complainant gave a written complaint before the Commissioner of Police, Egmore on 25.06.2007 and it is stated that the police did not conduct any enquiry, therefore, the complainant approached this Court by filing Crl.O.P.No.32587/2007 for a direction to register a case and in the mean time, the Commissioner of Police reported that the matter was closed as a civil dispute; recording the same, the Crl.O.P., was dismissed giving liberty to the complainant to move the competent court. It is stated that the copy of the closure report of the police was not furnished to him and therefore, he issued legal notice and thereafter filed Crl.O.P.No.2118 of 2008 to provide a copy of the closure report dated 28.09.2007 to enable the complainant to proceed against the accused before the competent court. This Court, by order dated 01.02.2008 dismissed the Crl.O.P., holding that the report was not necessary to file the complaint before the competent criminal court. Thus, the private complaint was filed on 19.03.2008 by the complainant against the respondents/accused 1 and 2 for the alleged offences under Sections 403, 406, 420, 423 and 506(ii) read with Sections 34 and 109 IPC and under Sections 405, 415, 420, 423, 503 and 506(ii) read with Sections 34 and 109 of IPC against the third accused and under Sections 423, 506(ii) read with Section 34 of IPC., against the fourth accused. 8. Before the trial Court, the complainant examined himself. The Court below, after narrating the entire facts as mentioned in the complaint framed the question as follows:- “Whether on the facts mentioned in the complaint, whether a prima facie case is made out against the accused?” 9. 8. Before the trial Court, the complainant examined himself. The Court below, after narrating the entire facts as mentioned in the complaint framed the question as follows:- “Whether on the facts mentioned in the complaint, whether a prima facie case is made out against the accused?” 9. The Court below proceeded on the basis that the complainant executed the Power of Attorney in favour of the second accused, he has admitted the execution of such Power of Attorney and that Power of Attorney was utilised by the second accused to execute the sale deed in favour of the third accused and therefore, the matter is entirely of civil nature and prima facie, no criminal offence is made out and accordingly, dismissed the private complaint by order dated 08.04.2008. Challenging the same, the present Revision is filed. 10. Mr.S.Baskaran, learned counsel for the petitioner, after elaborately referring to the entire facts, the relevant details of which have been mentioned in the preceding paragraphs, submitted that the court below failed to consider that fraud has been played by the accused by utilising the Power of Attorney, after the complainant discharged the mortgage with the Housing Board and the entire facts and circumstances would clearly reveal that there was no necessity to utilise the Power of Attorney and the same was not done by the second accused earlier, even after securing the decree and obtaining possession of the flat through Court and thus, the sale deed executed in favour of the third accused is a void document and the same has been made only to defeat the rights of the petitioner. 11. It is further submitted that the Court below did not advert into the question that if the second accused was acting as a Power Agent, then, she is bound to render accounts and whatever amounts which have been collected by the Power Agent has to flow back to the Principal. Further, the learned counsel submitted that it is not always the case that merely because a civil suit is pending, the jurisdiction of the criminal court would be ousted. Further, the learned counsel submitted that it is not always the case that merely because a civil suit is pending, the jurisdiction of the criminal court would be ousted. It is therefore submitted that the Court below failed to take into consideration that Accused Nos.1 and 2 played fraud on the petitioner; they abused confidence reposed on them and on surreptitiously executing the sale deed in favour of the son, it is not stated as to how the amount of Rs.11,00,000/-was paid by the purchaser, the son who was a teenager without any known source of income; further, the non-mentioning about the agreement for sale executed by the petitioner in favour of the first accused would go to show that the accused 1 to 3 have committed the criminal offence, therefore, the Court below erred in dismissing the complaint at the threshold. 12. In support of his contention, learned counsel for the petitioner placed reliance on the decision in the case of Firm Mathra Das Jagan Nath Vs. Firm Jiwan Mal Gian Chand reported in AIR 1928 Lahore 196 as regards the role of a Power Agent and submitted that in terms of the said decision, the Power Agent will not be permitted to enter into any transaction in which his personal interest conflicts with his duty towards his Principal, except with the consent of the latter. 13. Learned counsel for the petitioner further placed reliance on the decision of the Supreme Court in the case of Bhatori Vs. Ram Piari reported in AIR 1996 Supreme Court 2754 and submitted that it was also the case where the Power of Attorney in favour of the appellant therein was utilised by playing fraud upon the appellant. Power of Attorney executed by the appellant was utilised for transferring the land in the name of the Power Agent wife was held to be the case of fraud. 14. Further, the learned counsel placed reliance on the decision of the Honourable Supreme Court in the case of Rashida Kamaluddin Syed and Another Vs. Shaikh Saheblal Mardan (dead) through LRS and another reported in (2007) 3 SCC 548 and submitted that if a civil suit is pending, an appropriate order will be passed by the competent court, but, however does not mean if the accused has committed any offence, jurisdiction of the criminal court will be ousted. 15. Shaikh Saheblal Mardan (dead) through LRS and another reported in (2007) 3 SCC 548 and submitted that if a civil suit is pending, an appropriate order will be passed by the competent court, but, however does not mean if the accused has committed any offence, jurisdiction of the criminal court will be ousted. 15. Mr.P.Sesubalan Raja, learned counsel for respondents 1 to 3/accused 1 to 3 contended that the court below took into consideration the entire facts and after thoroughly analysing the facts, concluded that the matter is of purely civil in nature. The learned counsel referred to various documents, which were filed by the petitioner in his typed set of papers and that all refers to the discharge receipt dated 20.09.2006 and it is further submitted that the first accused is a witness to the said document and the case of the first accused itself is that he discharged the mortgage loan and that is why he was taken to Sub-Registrar Office while executing the discharge receipt and hence, the sale deed executed in favour of the third accused is a valid document and already, the complainant has filed a civil suit before this Court to set aside the sale in which the accused has filed a written statement and thereafter, the complainant proceeded parallely before the criminal forum, which cannot be done. Therefore, it is submitted that the impugned order passed by the Court below is perfectly valid and fully justified. 16. The learned counsel for the respondents placed reliance on the decision of the Honourable Supreme Court in the case of Rashmi Jain Vs. State of U.P., & Another reported in and submitted that the mere breach of contract cannot result in a penal offence of breach of trust and it cannot give rise to criminal prosecution of cheating and therefore, it is submitted that the Revision Petition is liable to be dismissed. 17. Heard the learned counsel for the petitioner and carefully perused the materials placed on record. 18. The challenge in this Revision is as against the dismissal of the private complaint filed by the petitioner/complainant for various criminal offences against the respondents/accused. The only ground on which the lower court dismissed the private complaint is by observing that there is no criminal offence, prima facie made out and the matter is purely of civil nature. 19. 18. The challenge in this Revision is as against the dismissal of the private complaint filed by the petitioner/complainant for various criminal offences against the respondents/accused. The only ground on which the lower court dismissed the private complaint is by observing that there is no criminal offence, prima facie made out and the matter is purely of civil nature. 19. In the preceding paragraphs, the averments stated by the complainant and the defence raised by the respondents have been elaborately set out and hence, there is no need for repeating it over over again. The facts that the agreement of sale was entered into between the complainant and the first accused is not in dispute. The execution of Power of Attorney in favour of the second accused by the complainant is also not in dispute. The criminal offence alleged to have been committed as stated by the complainant is that the second accused fraudulently utilised the Power of Attorney and executed a sale deed representing the complainant as the vendor and conveyed the property to the third accused/son of the first and second accused. The sale consideration reflected in the document is Rs.11,00,000/-. The terms of payment has not been mentioned and even assuming Rs.11,00,000/-was paid by the third accused, who was a teenager, the complainant being Principal of the Power Agent, was bound to render all accounts and pay the amount to the complainant/Principal. 20. The second aspect posed by the complainant is that his marriage with his wife ended in a divorce, who appears to have been in possession of the property, which the complainant agreed to sell to the first accused. The divorced wife filed a suit against the complainant as well as the accused and obtained an order of permanent injunction not to vacate her without following due process of law. The first and second accused filed a suit for mandatory injunction for recovery of possession in the suit. The complainant was the defendant and he supported the case of the plaintiff and helped them to secure a decree which was executed by filing execution petition and possession was obtained through court. This according to the complainant was for retrieving the property from the clutches of his divorced wife, who was in possession of the property. The complainant was the defendant and he supported the case of the plaintiff and helped them to secure a decree which was executed by filing execution petition and possession was obtained through court. This according to the complainant was for retrieving the property from the clutches of his divorced wife, who was in possession of the property. By efflux of time, there was demand of more sale consideration ended in filing of civil suit in C.S.No.403 of 2007. The averments made in paragraph 7 of the written statement is that when the first accused was prepared to pay in thousands, the avaricious petitioner demanded lakhs of rupees for which the first accused refused and it resulted in the filing of the suit. Thus, there was demand of payment of additional consideration that which was agreed to in the agreement of sale dated 25.05.1995. 21. The further case of the complainant is that though under the agreement of sale, the first accused undertook to discharge the mortgage of the complainant with his employer Housing Board, subsequently, he failed to keep up the promise and agreed to pay full sale consideration if the complainant himself clears the mortgage. 22. It is the further case of the complainant that he cleared the mortgage by paying his own money and the first accused is the witness to the said document. Therefore, it is the case of the complainant that if the first accused wanted to exercise his right under the agreement and utilised the power granted in favour of the wife/second accused, he could have very well done such an exercise even at that point of time. Therefore, it is stated that after the mortgage was cleared, accused 1 and 2 have created a fraudulent transaction transferring it to their own son, who was a teenager. Thus, considering all these facts, it cannot be stated that the matter is purely of civil nature. 23. It is indisputably true that the matter relates to a property, but the case pleaded by the complainant is that it flows out of other criminal allegations, which is stated to be prima facie made out. Though an observation is made out by the Court below that criminal allegation prima facie is not made out as against the accused is an incorrect finding, mere pendency of the civil suit is not a bar for entertaining a criminal complaint. Though an observation is made out by the Court below that criminal allegation prima facie is not made out as against the accused is an incorrect finding, mere pendency of the civil suit is not a bar for entertaining a criminal complaint. When an accused is alleged to have committed a criminal offence and in such an event, both the proceedings are separate and independent and one cannot abate and defeat other as referred to in the case of Rashida Kamaluddin Syed and another Vs. Shaikh Saheblal Mardan (supra). 24. The case of the complainant is that the Power of Attorney agent, the second accused abused the confidence reposed on her and misused the Power of Attorney. In this regard, reliance was placed on the decision in the case of Firm Mathra Das Jagan Nath Vs. Firn Jiwan Mal Gian Chand (supra) wherein, it is held that in a fiduciary relationship towards his principal, his position is one involving confidence and in the discharge of his duties; he must act with good faith to Principal and he should not in any way abuse the confidence reposed on him; he is bound to use his best endeavours to promote his interests of the person who was employed him; he will not be permitted to enter into any transaction in which his personal interest conflicts with his duty towards his principal, except with the consent of the latter, given after all the material circumstances and the exact nature and extent of the interest of the agent have been fully disposed to him. 25. Therefore, the learned counsel for the petitioner would emphasise that utilising the Power of Attorney, the second respondent could not have executed a sale deed in favour of his teenage son, who had no known source of income at the relevant time and therefore, it is a clear criminal offence. 26. The learned counsel for the respondents/accused, by placing reliance on the decision of the Honourable Supreme Court in the case of Rashmi Jain Vs. 26. The learned counsel for the respondents/accused, by placing reliance on the decision of the Honourable Supreme Court in the case of Rashmi Jain Vs. State of U.P. And Another (supra) submitted that every breach of trust may not result in a penal offence, of criminal breach of trust and unless there is evidence of a mental act of fraudulent misappropriation; an act of breach of trust involves a civil wrong in respect of which the person wronged may seek his redress for damages in a Civil Court but a breach of trust with mens rea gives rise to a criminal prosecution as well. It is to be noted that the Honourable Supreme Court, while laying down the said principle observed that every breach of trust may not result in a penal offence of criminal breach of trust unless there is evidence of a mental act of fraudulent misappropriation when the breach of trust involves a civil wrong in respect of which with mens rea gives rise to a criminal prosecution. 27. These aspects cannot be examined at this stage since the complaint was thrown out at the very threshold solely on the ground that the complainant had executed the Power of Attorney in favour of the second accused and that she was entitled to deal based on the Power of Attorney; on the utilisation of the said Power of Attorney, sale deed was executed in favour of the third accused. Other attending circumstances as pleaded by the complainant, mens rea said to have been involved were not gone into by the Court below. Therefore, the decision relied on by the learned counsel for the respondents/accused cannot be pressed into service at this stage of the matter, when the complaint has been rejected at the threshold, being purely of civil nature. 28. For all the reasons set out above, the petitioner is entitled to succeed in the Criminal Revision Case. Accordingly, the Criminal Revision is allowed. The impugned order dated 08.04.2008 passed by the Court of XXIII Metropolitan Magistrate, Saidapet, Chennai, in M.P.No.1853 of 2008 is set aside. The trial court is directed to issue notice to the respondents/accused and proceed in accordance with law.