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2020 DIGILAW 1827 (KAR)

N. Krishnappa v. S. Ramachandra

2020-09-22

ASHOK G.NIJAGANNAVAR

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JUDGMENT Ashok G Nijagannavar, J. - The petitioners have sought for quashing the order of taking cognizance dated 21.01.2011 passed in C.C. No.2109/2011 (P.C.R. No.15056/2009) by the Chief Metropolitan Magistrate Court, Bengaluru, for the offence punishable under Section 420 IPC. 2. The facts leading to the petition are that on the private complaint filed by the respondent complainant, the learned Magistrate took cognizance and referred the matter to the police for investigation under Section 156(3) of Cr.P.C and submit report. In pursuance of the said order the police have registered the case at P.S. Crime No.28/2010 for the offence punishable under Sections 143, 420 read with Section 149 of IPC against accused Nos.1 to 12. After completion of the investigation the police have submitted the charge sheet which is registered as C.C. No.2109/2011. 3. Heard learned counsel for the petitioners, learned counsel for respondent No.1 complainant and the learned High Court Government Pleader appearing for respondent No.2 State. 4. The learned counsel for the petitioners has challenged the impugned order mainly on two grounds: (i) The learned Magistrate had no jurisdiction to entertain the private complaint as the disputed transaction pertaining to the land does not come within the jurisdiction of the said Court. (ii) The dispute is of civil nature. Thus there is no criminality involved in the said transaction. 5. Further it is submitted that the alleged breach of contractual obligation will not amount to criminal offence. The private complaint was filed only with an intention to harass the petitioners. The proceedings initiated against these petitioners and other accused is nothing but abuse of process of law. In support of the said contention the learned counsel for the petitioners has relied on the following decisions : 1. ( R Leelavathi Vs. State Of Karnataka,2018 3 LAW(KAR) 59 ) 2. ( Satishchandra Ratanlal Shah Vs. State of Gujarath & another, (2019) 3 SCC(Cri) 697 ) 3. Medmeme LLC and others Vs. M/s. Ihorse BPO Solutions P. Ltd., (2017) AIR SC 3656 6. Learned counsel appearing for the respondent No.2 sought for the time to make submission. The said prayer is rejected as there are no valid grounds for granting time. 7. State of Gujarath & another, (2019) 3 SCC(Cri) 697 ) 3. Medmeme LLC and others Vs. M/s. Ihorse BPO Solutions P. Ltd., (2017) AIR SC 3656 6. Learned counsel appearing for the respondent No.2 sought for the time to make submission. The said prayer is rejected as there are no valid grounds for granting time. 7. The learned High Court Government Pleader submitted that there are allegations in the private complaint that the petitioners have failed to execute the sale deed in pursuance of the agreement of sale and have also committed default in repayment of the earnest money received by them, thereby they have committed the offence punishable under Section 420 IPC. 8. The averments made in the private complaint are that the petitioners had executed an agreement of sale by receiving earnest money of Rs.1,50,000/- (Rupees One Lakh Fifty Thousand only), but thereafter they have failed to perform their part of the obligation. Hence, the acts of accused Nos.1 to 12 attract the ingredients of offence punishable under Section 420 IPC. It is pertinent to note that the respondent No.2 complainant Ramachandra who had filed the private complaint had also filed original suit against the petitioners in O.S. No.8876/2010 before the XLI Additional City Civil Judge, Bengaluru (CCH 42) for recovery of the earnest money of Rs.1,50,000/- (Rupees One Lakh Fifty Thousand only) from the defendants (petitioners No.1 to 6 herein) along with interest at the rate of 18% p.a. The said suit was dismissed on the ground that the XLI Addl. City Civil Judge, Bengaluru, had no territorial jurisdiction to try the case as the transaction with regard to the subject matter of the property was not within the jurisdiction of the said Court. Thus, it is evident that even the C.M.M. Court, Bengaluru, had no jurisdiction to entertain the private complaint filed by the respondent No.1 complainant. 9. The next question that arises for consideration is, whether the wrongful acts alleged to have been done attract the ingredients of Section 420 of IPC or is it a dispute of civil nature? 10. The charge under Section 415 punishable under Section 420 IPC in the context of the contracts or agreements of sale, the distinction between mere breach of contract and cheating would depend on the fraudulent inducement and mens rea. 10. The charge under Section 415 punishable under Section 420 IPC in the context of the contracts or agreements of sale, the distinction between mere breach of contract and cheating would depend on the fraudulent inducement and mens rea. In the case on hand, the averments made in the complaint and pleadings in O.S. No.8876/2010 filed by the respondent No.1 complainant clearly goes to show that he has filed the suit for recovery of the earnest money which was dismissed on the ground that the alleged transaction has not taken place within the jurisdiction of the said Court. Mere inability of the petitioners to return the earnest money cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction or subsequent to the transaction. 11. In a decision relied on by the learned counsel for the petitioners SATISH CHANDRA RATANLAL SHAH VS. STATE OF GUJARAT AND ANOTHER, (2019) 3 SCC(Cri) 697 the Hon'ble Supreme Court has observed that in number of cases the Supreme Court has cautioned against criminalizing the civil disputes, such as breach of contractual obligations (referred to Gyan Singh vs. State of Punjab) the legislature intended to criminalize only those breach which are accompanied by fraudulent, dishonest or deceptive inducements which resulted in involuntary, inefficient transfers under Section 415 IPC. 12. In view of the principles enunciated in the aforesaid decision, mere contractual obligation between the parties will not give rise to a criminal offence. Even in the present case as could be seen from the averments made in the complaint and pleadings in O.S. No.8876/2010 filed by the respondent No.1 complainant, there are no specific allegations that defendants have tried to sell the property by making use of false records or they have cheated the complainant by selling the said land to others. It is only said that the defendants have attempted to sell the lands to others, therefore, he has sought for recovery of the earnest money. It is not the case of the respondentcomplainant that he was induced by the petitioner to enter into such a contract with dishonest intention. At any rate these allegations do not make out a prima facie case that the defendants had dishonest intention to cheat the complainant. 13. It is not the case of the respondentcomplainant that he was induced by the petitioner to enter into such a contract with dishonest intention. At any rate these allegations do not make out a prima facie case that the defendants had dishonest intention to cheat the complainant. 13. Even if all material facts are taken on the face value, no such dishonest representation or inducement could be found or inferred. This Court is of the firm conclusion that the transaction between the petitioners and respondent complainant is only a civil dispute. No suspicion of any nature was shown or even alleged of criminal intention to commit the offence. Hence the initiation of the criminal proceedings is nothing but abuse of process of law. Under these circumstances, the criminal proceedings initiated by the complainant cannot be sustained in law. Accordingly, this Court proceed to pass the following ORDER (i) This criminal petition filed under Section 482 Cr.P.C. is allowed. (ii) The order of taking cognizance dated 21.01.2011 passed in C.C. No.2109/2011 (P.C.R. No.15056/2009) by the Chief Metropolitan Magistrate Court, Bengaluru, for the offence punishable under Section 420 IPC initiated against the petitioners accused is hereby quashed.