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Karnataka High Court · body

2019 DIGILAW 1591 (KAR)

C. N. Dilip v. State Of Karnataka

2019-07-05

JOHN MICHAEL CUNHA

body2019
JUDGMENT : John Michael Cunha, J. Heard learned Senior Counsel appearing for petitioner and learned Addl. SPP appearing for respondent No.1. Counsel for respondent No.2 is absent and has not addressed any argument. 2. An agreement was entered into between M/s.Prestige Lake View, Project by Prestige Shelters Private Limited as vendors in favour of Mrs.R.Lakshmi respondent No.2 herein (hereinafter referred to as the "complainant"), on 28.01.2005, whereby the aforesaid vendor namely "M/s.Prestige Lake View, Project by Prestige Shelters Private Limited" agreed to sell one residential plot formed in Prestige Lake View, measuring 1200 sq.ft., of the dimension of 30' x 40', for a total sale consideration of Rs.1,50,000/-. As per the terms of the said agreement, on completion of the scheme, the site was agreed to be registered in favour of respondent No.2. The terms of the said agreement having not been adhered to, the second respondent filed a complaint before respondent No.1 Kalasipalya Police, alleging that, by playing fraud and deception, complainant was made to part huge amounts in installments and the vendors failed to transfer the site to the complainant. Based on this complaint, FIR in Crime No.39/2015 was registered against five accused persons. The petitioner herein is shown as accused No.2 as Director of M/s.Prestige Shelters Private Limited. 3. Learned Senior Counsel for petitioner submitted that, the dispute between the parties is purely civil in nature, arising out of a written contract of sale. In respect of breach of the terms of said agreement, petitioner himself had approached the District Legal Services Authority, Bangalore. As per section 22(c) of Legal Services Authority Act 1987, pre-litigation conciliation had commenced and a notice in this regard was issued to respondent No.2 on 20.12.2014. After receipt of the said notice, instant complaint has been filed only to compel and coerce the petitioner to agree to the illegal terms of the complainant. The allegations made in the complaint do not disclose elements of cheating or fraudulent intention or deception on the part of the petitioner. The dispute between the parties is purely civil in nature. The criminal process invoked by the respondent No.2/complainant is mala fide and an abuse of process of court and therefore, FIR registered against petitioner is liable to be quashed. The dispute between the parties is purely civil in nature. The criminal process invoked by the respondent No.2/complainant is mala fide and an abuse of process of court and therefore, FIR registered against petitioner is liable to be quashed. In support of his submissions, learned Senior Counsel has placed reliance on the decisions of the Hon'ble Supreme Court in the case of ANIL MAHAJAN vs. BHOR INDUSTRIES LTD. & Another, (2005) 10 SCC 228 , BINOD KUMAR & Others vs. STATE OF BIHAR & Another, (2014) 10 SCC 663 and INDER MOHAN GOSWAMI & Another vs. STATE OF UTTARANCHAL & Others, (2007) 12 SCC 1 . 4. Repelling the contentions, learned Addl. SPP appearing for respondent No.1 State has argued in support of the impugned action, contending that the allegations made in the complaint prima facie disclose the elements of cheating and deception right from inception, making out the offences alleged in the FIR. Pendency of civil proceedings do not debar the criminal court from taking cognizance into the matter when criminal offences are made out. The allegations made in the complaint prima facie disclose commission of criminal offence and having regard to the nature of these allegations, the matter requires to be investigated and hence, there is no reason to quash the proceedings. 5. Considered the rival submissions and perused the records. Insofar as the proposition of law is concerned, there can be no dispute that when the allegations disclose a civil dispute, the recourse to criminal process would be an abuse of process of court. But in the instant case, the allegations made in the complaint, in my view, clearly make out the ingredients of the offences of cheating and conspiracy, as alleged in the complaint. 6. As already stated above, respondent No.2/complainant has entered into an agreement to purchase a site in the Layout and Township to be formed and developed by "M/s.Prestige Lake View, Project by Prestige Shelters Private Limited". There is no dispute that, pursuant to the said agreement, accused named in the FIR have received amount in installments from time to time, but failed to register the site in favour of the complainant, which indicates that, right from the inception, accused had no intention to transfer the sites to purchasers. The very description of the vendor in the agreement lead to suspect the genuineness of the transaction. The very description of the vendor in the agreement lead to suspect the genuineness of the transaction. The vendor in the agreement is described as "M/s.Prestige Lake View, Project by Prestige Shelters Private Limited". It is not forthcoming from the said recitals as to whether the vendors were a company or an individual. The material on record indicate that petitioner herein was actively involved in the said project. There are clear allegations that petitioner herein received consideration from complainant. The material on record indicates that petitioner had approached the District Legal Services Authority, Bangalore in the year 2014. As per the complainant, the project was required to be completed within two years from 2014. The agreement does not contain any clause with regard to the time for completion of the project which again suggest the ingredients of cheating. The very fact that, for more than 14 years, no sites were transferred in the name of purchaser itself indicates that the intention of the accused was only to induce the complainant to part with valuable consideration. These facts squarely fall within the definition of section 420 of IPC. 7. The Hon'ble Supreme Court in the case of M/s.Indian Oil Corporation vs. M/s.NEPC India Ltd., & Others, (2006) 6 SCC 736 ), has held as under: 32. The essential ingredients of the offence of 'cheating' are : (i) deception of a person either by making a false or misleading representation or by other action or omission (ii) fraudulent or dishonest inducement of that person to either deliver any property or to consent to the retention thereof by any person or to intentionally induce that person 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. Further, the Hon'ble Supreme Court has referred to the observations made in Hridaya Ranjan Prasad Verma vs. State of Bihar, (2000) 4 SCC 168 ) and extracted the same in para 35 of its judgment, which reads as under: 35. In Hridaya Ranjan Prasad Verma (supra), this Court held : "14. On a reading of the section it is manifest that in the definition there are set forth two separate classes of acts which the person deceived may be induced to do. In Hridaya Ranjan Prasad Verma (supra), this Court held : "14. On a reading of the section it is manifest that in the definition there are set forth two separate classes of acts which the person deceived may be induced to do. In the first place he may be induced fraudulently or dishonestly to deliver any property to any person. The second class of acts set forth in the section is the doing or omitting to do anything which the person deceived would not do or omit to do if he were not so deceived. In the first class of cases the inducing must be fraudulent or dishonest. In the second class of acts, the inducing must be intentional but not fraudulent or dishonest. 15. 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 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. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed." 8. As the material on record clearly indicate that, on the false promise of transferring a site, respondent was induced to part with amount from time to time, the ingredients of section 420 of IPC squarely get attracted to the facts of this case. As such, there is a clear case for investigation into the alleged offence. Hence, I am unable to accept the submissions of the learned Senior Counsel appearing for the petitioner that the dispute between the parties is purely civil in nature. 9. It is trite law that availability of civil remedy cannot be a ground for quashing of criminal prosecution. As such, there is a clear case for investigation into the alleged offence. Hence, I am unable to accept the submissions of the learned Senior Counsel appearing for the petitioner that the dispute between the parties is purely civil in nature. 9. It is trite law that availability of civil remedy cannot be a ground for quashing of criminal prosecution. As held in M/s.Indian Oil Corporation (supra); "the test is whether the allegations in the complaint disclose a criminal offence or not". 10. Learned Senior Counsel for petitioner has referred to the admission made in the legal notice dated 10.7.2014 (Annexure-'E') issued by respondent No.2, wherein the accused were called upon to execute the sale deed in terms of the aforesaid agreement or to pay damages/compensation of Rs.100 lakhs within 15 days from the date of receipt of legal notice. 11. The above statement does not take the case out of the purview of section 420 IPC. It only demonstrates the helplessness of respondent No.2 on account of the conduct of the accused. These facts, in my view, fortify the allegations made in the complaint. 12. Likewise the submission of the learned counsels that in the said legal notice, respondent No.2 has come forward to pay the balance amount, and therefore there is no reason to investigate into alleged complaint also does not merit acceptance. If the petitioner had no intention to cheat and make unlawful gain at the expense of the complainant, petitioner would have accepted the balance consideration and register the site in the name of the complainant rather than driving her to take recourse to legal action. All these circumstances therefore call for thorough investigation into the shoddy transaction entered into by the petitioner. In the light of these discussions, I do not find any justifiable reason to quash the impugned proceedings. Accordingly, the petition fails and the same is dismissed. In view of dismissal of petition, I.A.No.1/2018 does not survive for consideration and it is also dismissed.