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2025 DIGILAW 1544 (TS)

Mohammad M. Khalid, HYD v. P. P. , Hyd

2025-11-18

J.SREENIVAS RAO

body2025
ORDER : J. SREENIVAS RAO, J. This Criminal Petition has been filed under Section 482 of the Code of Criminal Procedure, 1973 (for short, ‘Cr.P.C.’) by the petitioners, who are arrayed as accused Nos.1 to 3, seeking to quash the proceedings in Crime No.160 of 2014 of Habeebnagar Police Station, Hyderabad, registered for the offences punishable under Sections 406 and 420 r/w 34 of the INDIAN PENAL CODE , 1860 (for short ‘IPC’). 2. Heard Sri D.Prakash Reddy, learned Senior Counsel, representing Ms. Vladimeer Khatoon, learned counsel for the petitioners, Sri S.Someshwar Rao, learned counsel for respondent No.2/de facto complainant and Sri M.Vivekananda Reddy, learned Assistant Public Prosecutor, appearing on behalf of respondent No.1-State. 3. Brief facts of the case: 3.1. The Respondent No.2 has filed private complaint on 25.06.2014, on the file of XVI Additional Chief Metropolitan Magistrate at Nampally, Hyderabad, stating that respondent No.2 and the petitioners are the absolute owners and possessors of house property bearing Nos.11-3-848/1 to 5, situated at New Mallepally, Hyderabad, purchased under a registered Sale Deed vide Document bearing No. 529 of 2005 for a total consideration of Rs.50,00,000/-. Subsequently, the petitioners and respondent No.2 entered into a Development Agreement-cum-Irrevocable General Power of Attorney, dated 29.12.2005, registered as Document No. 4433 of 2005 before the Sub-Registrar, Golconda, and Hyderabad, agreeing to develop the said property and share the built-up area in the ratio of 40:60 between the petitioners and respondent No.2 respectively. Respondent No.2, in addition to the initial payment of Rs.40,00,000/- made at the time of purchase, and continued to pay amounts from time to time and paid a total sum of Rs.1,68,00,000/- to the petitioners towards the purchase of their 40% share, and valid receipts were issued by them acknowledging the same. As the petitioners were residing in the USA, they executed a General Power of Attorney (for short ‘GPA’), dated 20.01.2007, in favour of respondent No.2, authorizing him to sell their 40% share of the developed property. Acting upon the said GPA, respondent No.2 sold several flats to various purchasers and presented the sale deeds for registration before the Sub-Registrar, Golconda. However, the Sub-Registrar refused to register the sale deeds on the ground that the GPA had been cancelled by the petitioners, which is illegal and void, as the said GPA was irrevocable. 3.2. Acting upon the said GPA, respondent No.2 sold several flats to various purchasers and presented the sale deeds for registration before the Sub-Registrar, Golconda. However, the Sub-Registrar refused to register the sale deeds on the ground that the GPA had been cancelled by the petitioners, which is illegal and void, as the said GPA was irrevocable. 3.2. Respondent No.2 further averred that the petitioners, with dishonest intention, have cheated and caused wrongful loss to him, and therefore, respondent No.2 filed the present complaint seeking action against the petitioners for offences punishable under Sections 406 , 420, and 204 read with Section 34 of the IPC. Based on the said complaint, the learned Magistrate referred the same to the Station House Officer, Habeebnagar Police Station, Hyderabad, for investigation under Section 156(3) Cr.P.C. and in turn, the said complaint was registered as Crime No.160 of 2014 for the offences punishable under Sections 406 and 420 r/w 34 of IPC. 4. Submissions of learned Senior Counsel appearing on behalf of the petitioners: 4.1 Learned Senior Counsel submitted that the petitioners have not committed any offence and they were falsely implicated in this crime. The nature of allegations levelled against the petitioners in the complaint is purely civil in nature. To resolve the civil disputes, respondent No.2 lodged a private complaint against the petitioners by making false allegations. Even according to the allegations made in the complaint, the ingredients for the offences under Sections 406 and 420 of IPC are not attracted against the petitioners. 4.2 He further submitted that the petitioner No.1 filed a complaint against respondent No.2 and other accused for the offences punishable under Sections 406 , 474, 420, 477 r/w 120-B and 506 of IPC. Based on the said complaint, Crime No.66 of 2009 was registered by the Station House Officer, Habeebnagar Police Station and the Investigating Officer, after conducting investigation, filed a final report closing the complaint as it is civil in nature. Aggrieved by the same, petitioner No.1 filed protest petition and the trial Court after following the procedure and recording the statement, taken cognizance and issued summons in C.C. No.530 of 2012 and the learned XVI Additional Chief Metropolitan Magistrate, Hyderabad, convicted respondent No.2 for the offence under Section 420 r/w 511 of IPC through judgment, dated 22.01.2025. Aggrieved by the same, petitioner No.1 filed protest petition and the trial Court after following the procedure and recording the statement, taken cognizance and issued summons in C.C. No.530 of 2012 and the learned XVI Additional Chief Metropolitan Magistrate, Hyderabad, convicted respondent No.2 for the offence under Section 420 r/w 511 of IPC through judgment, dated 22.01.2025. Aggrieved by the same, respondent No.2 filed Criminal Appeal before the learned Sessions Court and the petitioner No.1 also filed Criminal Appeal and the same are pending. Respondent No.2 filed the present complaint on 25.06.2014 as a counter blast and the learned Magistrate without taking into consideration the above said facts simply referred the matter to the police for investigation and accordingly, police registered the crime and the same is contrary to law. 4.3 He further submitted that respondent No.2 suppressed the factum of pendency of the criminal and civil cases between the parties, in the present complaint. He further submitted that in respect of the same allegations, civil disputes are pending between the parties and the same has to be adjudicated and decided in the civil proceedings. Respondent No.2 by giving criminal colour to civil disputes lodged the present complaint against the petitioners and the same is not permitted under law. Especially civil cases are pending between the petitioners and respondent No.2 before the competent civil Court and also before this Court in CCCA No.93 and 94 of 2007. Hence, continuation of the proceedings in Crime No.160 of 2014 against the petitioners is the clear abuse of process of law and the same is liable to be quashed. 5. Submission of learned counsel for respondent No.2: 5.1 Per contra, learned counsel appearing on behalf of respondent No.2 vehemently contended that the petitioners entered into a Development Agreement-cum-GPA with respondent No.2. According to the Development Agreement, respondent No.2 is entitled for 60% share and the petitioners are entitled for 40% share. Respondent No.2 had developed the property. The petitioners requested him to sold their 40% share on the ground that no purchasers are coming forward to purchase from them. Accordingly, they executed GPA, dated 20.01.2007, in favour of respondent No.2 and in turn he paid huge amount of Rs.1.68 Crores to them. Subsequently, the petitioners cancelled the GPA intentionally and issued notice to the Sub-Registrar not to entertain any transaction in respect of the said properties. Accordingly, they executed GPA, dated 20.01.2007, in favour of respondent No.2 and in turn he paid huge amount of Rs.1.68 Crores to them. Subsequently, the petitioners cancelled the GPA intentionally and issued notice to the Sub-Registrar not to entertain any transaction in respect of the said properties. Pursuant to the same, Sub-Registrar refused to register Sale Deed. Questioning the same, respondent No.2 filed Writ Petition No.20787 of 2010 and the same is pending before this Court. 5.2 He further submitted that from the very inception there was a dishonest intention on the part of the petitioners to cheat respondent No.2. Respondent No.2 entrusted a huge amount of Rs.1.68 Crores to the petitioners, and the petitioners executed GPA in respect of their share and thereafter, they intentionally cancelled the GPA. There are specific allegations levelled against the petitioners and that the offences under Sections 406 and 420 of IPC are attracted, especially on the ground that the F.I.R. is not an encyclopaedia. He also submits that merely because not mentioning about the pendency of civil cases in the complaint, the petitioners are not entitled to seek quashing of the proceedings. Whether the allegations levelled against the petitioners are true or not, will be revealed during the course of investigation. 5.3 In support of his contention, he relied upon the judgment of the Hon’ble Apex Court in M/s Neeharika Infrastructure Private Limited vs. State of Maharashtra and others , AIR 2021 SUPREME COURT 1918. Analysis: 6. Having considered the rival submissions made by the respective parties and after perusal of the material available on record, it reveals that respondent No.2 lodged a private complaint invoking the provisions under Section 200 Cr.P.C. on 25.06.2014, wherein he made allegations that he presented the Sale Deed before the Sub-Registrar, Golconda, Hyderabad, as G.P.A. holder of petitioner Nos.1 and 2. Although the Sub-Registrar accepted the execution and received the full registration charges including stamp duty, he kept the registration pending and later refused to register the documents. On enquiry, it is revealed that the G.P.A. dated 20.01.2007, executed by petitioner Nos.1 and 2 in his favour, had been cancelled for 40% share based on a notice given by the petitioners to the Sub-Registrar. Questioning the same, respondent No.2 filed W.P. No. 20787 of 2010 and the same is pending before this Court. 7. On enquiry, it is revealed that the G.P.A. dated 20.01.2007, executed by petitioner Nos.1 and 2 in his favour, had been cancelled for 40% share based on a notice given by the petitioners to the Sub-Registrar. Questioning the same, respondent No.2 filed W.P. No. 20787 of 2010 and the same is pending before this Court. 7. The record discloses that the petitioners and respondent No.2 have entered into Development Agreement on 26.11.2005 in respect of their properties for development and construction of apartments. As per the said agreement, petitioners are entitled for 40% share and respondent No.2 is entitled for 60% share. Thereafter, petitioners have executed GPA in favour of respondent No.2 on 20.01.2007 authorizing him to deal with their 40% share. Respondent No.2 had made specific allegations against the petitioners that he has entrusted huge amount of Rs.1.68 Crores pursuant to GPA dated 20.01.2007 in respect of their share, subsequently, they cancelled the GPA intentionally and issued notice to the Sub-Registrar stating that not to entertain any transaction in respect of their 40% share and there is a dishonest intention on their part from the date of inception. 8. It is relevant to mention that whether there is any dishonest intention on the part of the petitioners while cancelling GPA or not and whether the amount of Rs.1.68 Crores was given to the petitioners in respect of their 40% share by respondent No.2 pursuant to the GPA, dated 20.01.2007, are disputed facts and the same have to be revealed during the course of investigation only. 9. Insofar as the contention raised by the learned Senior Counsel for the petitioners that the nature of allegations is civil in nature and civil cases are pending between the parties and therefore, initiation of the criminal proceedings is the clear abuse of process of law, is concerned, there are specific allegations levelled against the petitioners that there is a dishonest intention on their part from the date of inception. It is trite law that mere pendency of the civil cases is not a ground to seek quashing of the crime, especially allegations made in the complaint about dishonest intention and mischief. 10. It is trite law that mere pendency of the civil cases is not a ground to seek quashing of the crime, especially allegations made in the complaint about dishonest intention and mischief. 10. It is relevant to mention that in K.Jagadish v. Udaya Kumar G.S. , (2020) 14 SCC 552 , the Hon’ble Apex Court has reaffirmed the well-settled principle that the same set of facts may give rise to both civil and criminal proceedings, and that availing civil remedy does not bar the initiation of criminal prosecution. The Court relied heavily on precedents like Kamaladevi Agarwal v. State of W.B. , (2002)1 SCC 555 and Trisuns Chemical Industry v. Rajesh Agarwal , (1999) 8 SCC 686 , to reiterate that criminal proceedings cannot be quashed merely because a civil dispute is also pending between the parties. In Kamaladevi Agarwal, it was categorically held that the pendency of civil proceedings does not justify quashing criminal proceedings, especially where the allegations disclose a prima facie criminal offence. The Court observed that many acts of cheating occur in the context of commercial or financial transactions, and such a “civil profile” does not strip the act of its “criminal outfit.” Similarly in S.N. Vijayalakshmi v. State of Karnataka , 2025 SCC OnLine SC 1575 , the Hon’ble Apex Court has reiterated the same principle, stating that civil and criminal proceedings may, in law, proceed simultaneously, a criminal prosecution can be sustained only where there is a clear presence of criminal intent at the inception of the transaction. 11. In Neeharika Infrastructure Pvt. Ltd. supra, the Hon’ble Supreme Court reaffirmed that while exercising powers under Section 482 Cr.P.C. or Article 226 of the Constitution, High Courts must exercise extreme caution and restraint, as the power to interfere with criminal proceedings or investigations is to be used only in exceptional cases. The Court held that the investigation of cognizable offences lies exclusively within the domain of the police, and judicial interference at the stage of investigation should be avoided unless there is a clear case of abuse of process or manifest injustice. Blanket interim orders such as “no coercive steps to be taken” were held to be impermissible, as they impede the lawful exercise of the investigating agency’s statutory duties. 12. Blanket interim orders such as “no coercive steps to be taken” were held to be impermissible, as they impede the lawful exercise of the investigating agency’s statutory duties. 12. This principle was earlier articulated in State of Haryana v. Bhajan Lal , (1992) Supp(1) SCC 335 where the Hon’ble Supreme Court emphasized that the inherent power under Section 482 Cr.P.C. to quash an FIR must be exercised sparingly, with great care, and only in the rarest of rare cases where the allegations do not disclose any offence. The Hon’ble Supreme Court cautioned that such extraordinary jurisdiction should never be invoked to stifle a legitimate investigation or to test the truthfulness of the allegations at a preliminary stage. It was further clarified that an FIR need not contain exhaustive details; it merely sets the criminal law in motion and empowers the police to investigate and gather material to determine the veracity of the complaint. The present case does not fall under the ambit of rarest of the rare case, as there are specific allegations levelled against the petitioners. 13. For the foregoing reasons as well as the principles laid down by the Hon’ble Apex Court supra, this Court does not find any ground to quash the proceedings in Crime No.160 of 2014 against accused Nos.1 to 3. However, taking into consideration the peculiar facts and circumstances of the cases and the offences levelled against the petitioners under Sections 406 and 420 of IPC are punishable with an imprisonment up to seven years, the Investigating Officer is directed to scrupulously follow the procedure contemplated under Section 41-A of the CRIMINAL PROCEDURE CODE , 1973/ Section 35 (3) of the Bharatiya Nyaya Suraksha Sanhita, 2023 and the guidelines issued by the Apex Court in Arnesh Kumar Vs. State of Bihar , (2014) 8 SCC 273 The petitioners are entitled to submit their statements or reply by enclosing all the documents before the Investigating Officer. 14. Accordingly, the criminal petition is disposed of. It is made clear that any of the observations made in this order are confined for the purpose of deciding this case only. As a sequel thereto, miscellaneous applications, if any, pending in this petition stand closed.