Crl.A.@ SLP(Crl.)Nos.6115-6117/2017

                   REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NOS.1573-1575 OF 2019 [Arising out of S.L.P.(Crl.)Nos.6115-6117 of 2017]

Dr. Lakshman        ... Appellant

Versus

The State of Karnataka & Ors. Etc. ... Respondents

J U D G M E N T

R. Subhash Reddy, J.

1. Leave granted.

2. These criminal appeals are filed by the complainant,

aggrieved by the judgment and order dated 28th April, 2017

passed by the High Court of Karnataka at Bengaluru in Crl.P

Nos.2383 of 2017, 7976 of 2013 and 7161 of 2016.  By the

aforesaid order, the High Court has allowed the petitions

filed  by  the  respondents-accused  under  Section  482  of

Cr.P.C. and quashed the complaint bearing P.C.R. No.12317 of

2013  filed  before  the  IV  ACMM,  Bangalore,  and  complaint

bearing P.C.R. No.14420 of 2015, filed before the VIII ACMM,

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Bengaluru, as well as the order dated 27th November, 2015

(wrongly mentioned as 27th July, 2015) passed by the VIII

ACMM, Bengaluru, in P.C.R.No.14420 of 2015, directing the

Sanjaya Nagara Police Station to investigate the matter.

3. The appellant herein has filed complaint on 29th April,

2013 before the Chief Metropolitan Magistrate, Bangalore,

which is registered as P.C.R. No.12317 of 2013 against the

accused A1 to A5, namely (1) M/s. Pramila Santhosh Land

Developers and Builders Pvt. Ltd., (2) D.T. Santhosh (3)

D.C. Thamanna (4) Smt. K.G. Pramila and (5) M/s. Sri Sai

Developers for the alleged offences under Sections 403, 406,

420,  506(B)  of  the  Indian  Penal  Code.  There  is  also  a

susequent complaint by the same complainant on 27th November,

2015 which is registered as P.C.R. No.14420 of 2015, which

is subseqently numbered as CC No.54 of 2016 (after filing of

the  chargesheet  dated  22nd December,  2015)  against  the

accused  therein  namely  (1)  M/s.  Pramila  Santhosh  Land

Developers and Builders Pvt Ltd. (2) D.T. Santhosh and (3)

Smt. K.G. Pramila for the alleged offences under Sections

417, 418, 420, 422, 120(B) read with Section 34 of IPC and

for offences under the Prevention of Money Laundering Act.  

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4. The first complaint dated 29th April, 2013 was filed

alleging that the respondents-accused made a representation

that they are owners and are absolutely seized and possessed

of land at Ballur village, Attibele Hobli, Anekal Taluk and

promised  to  procure  an  extent  of  70  acres  of  land  and

entered into an agreement with the appellant-complainant on

26th September, 2012 and received an amount of Rs.9 crores

(Rupees Nine crores) by way of cheques and demand drafts. It

is alleged that the extent and survey nos. of land mentioned

in the Schedule appended to the Memorandum of Understanding

(MOU) were to be procured in favour of the complainant. It

was further pleaded that there were two cheques issued by

the accused as security for the amount of advance paid by

the  appellant-complainant.  It  was  the  case  of  the

complainant  that  subsequent  to  agreement  dated  26th

September, 2012, the respondents-accused having failed to

perform the contract in terms of agreement, have entered

into another MOU on 8th November, 2012, representing that

they are in possession of 70 acres of agricultural land and

30 acres of converted land and they promised to transfer

such land in favour of the appellant. To the MOU dated 8th

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November, 2012 M/s. Sri Sai Developers was added as a party.

As per the complaint, there is also a Schedule indicating

the survey nos. and extent of lands to the second MOU.  In

the complaint filed on 29th April, 2013 it was alleged that

though the respondents have already sold the land covered by

Survey Nos.115 and 117 to M/s. Sri Sai Developers on 7th

June,  2012,  with  a  dishonest  intention  respondents  have

played fraud and cheated the appellant by receiving huge sum

of Rs.9 Crores (Rupees Nine crores), by including the lands

covered by Survey Nos.115 and 117 also. Further alleging

that when the demand was made to comply with the terms of

the  contract,  the  respondents  have  threatened  the

complainant,  as  such  the  respondents  are  liable  to  be

punished for offences under Sections 403, 406, 420, 506(B)

of IPC.

5. Further  alleging  that  after  filing  of  the  first

criminal  complaint,  the  respondents  have  threatened  and

pressurised  the  appellant  and  the  second  complaint  was

filed.  In the second complaint, it was alleged that one of

the accused, by name, D.C. Thamanna also gave an undertaking

in writing  stating that from 16th May, 2013 onwards they

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would start registering the sale deeds but they failed to do

so.  It was further alleged that instead of abiding by such

undertaking,  the  appellant  was  forced  to  enter  into  an

addendum dated 30th May 2013.  In the second complaint, it is

alleged that all the accused have told the appellant that

lands bearing Survey Nos.115 and 117 are not available for

sale, as such they will compensate in other lands and made a

request  to  become  confirming  party  to  sale  deed  dated

6.7.2013 executed in favour of the trust. It is stated in

the complaint that though the purchaser of the lands covered

by Survey nos.115 and 117 was not known to the appellant, he

was made to sign the sale deed as a confirming party which

is also a conspiracy of all the accused to avoid performance

of  the  contract  entered  into  by  the  accused  with  the

appellant and to retain the amount of Rs.9 crores (Rupees

Nine crores) with them illegally. In the second complaint,

it  was  further  the  case  of  the  appellant  that  when  the

cheques, which were given by the accused as security, were

presented, it was learnt that the account of which cheques

were  issued  was  closed  even  prior  to  entering  into  the

agreement dated 26.9.2012.  Alleging that there is a fraud,

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cheating and conspiracy, it is pleaded that the respondents

are liable to be prosecuted for the offences under Sections

417, 418, 420, 422 and 120(B) read with Section 34, IPC and

the provisions of Prevention of Money Laundering Act.

6. At this stage, it is to be noticed that in the second

complaint, after investigation, chargesheet is also filed

and C.C. is numbered.

7. The High Court has allowed the petitions filed under

Section 482, Cr.P.C. by the respondents-accused mainly on

the ground that in view of the agreement entered into on

08.11.2012, there is a novation of the contract between the

parties.   Further  the  High  Court  has  disbelieved  the

Schedule to the MOU dated 08.11.2012 on the ground that the

additional pages were not paginated.  Further on the grounds

that  the  appellant  has  already  filed  a  civil  suit  for

recovery of advance paid by him for a sum of Rs.9 crores

(Rupees Nine crores) and the appellant has filed complaint

for offence under Section 138 of the Negotiable Instruments

Act, 1881, the appellant has joined in the sale deed for

lands covered by Survey Nos.115 and 117 of Ballur Village,

has allowed the petitions and quashed the proceedings.

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8. Having heard Sri Arun Joshi, learned counsel for the

appellant and Sri R. Basant, learned senior counsel assisted

by Mr. Anand Sanjay M. Nuli, Advocate, appearing for the

respondents, we have perused the impugned order passed by

the High Court and other materials placed on record.

9. It  is  not  seriously  disputed  by  the  parties  with

regard to the entering of the agreements for procuring the

land in favour of the appellant in Ballur Village, Anekal

Taluk,  Bangalore  Urban  District  and  respondents  have

received the amount of Rs.9 crores by way of demand drafts

and cheques.  It is the specific case of the appellant that

there are schedules mentioned to the agreements as per which

respondents  have  agreed  to  procure  the  land  covered  by

Survey Nos.115 and 117 of Ballur Village apart from other

lands.   In  a  petition  under  Section  482,  Cr.P.C.  it  is

fairly well settled that it is not permissible for the High

Court to record any findings, wherever there are factual

disputes.  Merely on the ground that there is no pagination

in  the  Schedule,  the  High  Court  has  disbelieved  such

Schedule to the Agreements.  It is the specific case of the

appellant that the lands covered by Survey Nos.115 and 117

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of  Ballur  Village  were  sold  even  prior  to  the  first

agreement,  as  such  respondents  have  committed  an  act  of

cheating.  It is also the specific case of the appellant

that two cheques were issued by respondents-accused by way

of security for the amount of Rs.9 crores which is advance

but the account of such cheques was closed even prior to

entering into the Agreement itself.  The second complaint

filed  by  the  appellant  is  self-explanatory  and  he  is

forcefully made to sign the sale deed which were executed

subsequently for the lands covered by Survey Nos.115 and 117

of Ballur Village.  Mere filing of the suits for recovery of

the money and complaint filed under Section 138 of the N.I.

Act by itself is no ground to quash the proceedings in the

complaints filed by the appellant herein.  When cheating and

criminal conspiracy  are alleged  against the  accused, for

advancing a huge sum of Rs.9 crores, it is a matter which is

to be tried, but at the same time the High Court has entered

into the disputed area, at the stage of considering the

petitions filed under Section 482, Cr.P.C.  It is fairly

well settled that power under Section 482 Cr.P.C. is to be

exercised sparingly when the case is not made out for the

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offences alleged on the reading of the complaint itself or

in cases where such complaint is filed by way of abuse of

the process.  Whether any Schedules were appended to the

agreement or not, a finding is required to be recorded after

full fledged trial.  Further, as the contract is for the

purpose of procuring the land, as such the same is of civil

nature, as held by the High Court, is also no ground for

quashing.  Though the contract is of civil nature, if there

is an element of cheating and fraud it is always open for a

party in a  contract, to prosecute the other side for the

offences  alleged.   Equally,  mere  filing  of  a  suit  or

complaint filed under Section 138 of the N.I. Act, 1881 by

itself  is  no  ground  to  quash  the  proceedings.   While

considering the petition under Section 482 of Cr.P.C., we

are of the view that the High Court also committed an error

that there is a novation of the contract in view of the

subsequent agreement entered into on 08.11.2012.  Whether

there is novation of contract or not and the effect of such

entering into the contract is a matter which is required to

be  considered  only  after  trial  but  not  at  the  stage  of

considering the application under Section 482, Cr.P.C.

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10. Learned senior counsel Sri R. Basant appearing for the

accused, in support of his case, relied on the judgment of

this Court in the case of S.W. Palanitkar and Ors. vs. State

of  Bihar  and  Anr.1 and  submitted  that  every  breach  of

contract may not result in a penal offence, but in the very

same judgment, this Court has held that breach of trust with

mens rea gives rise to a criminal prosecution as well.  In a

given case, whether there is any mens rea on the part of the

accused  or  not  is  a  matter  which  is  required  to  be

considered having regard to the facts and circumstances of

the case and contents of the complaint etc.  In the case on

hand, it is clearly alleged that even before entering into

the agreement dated 26.09.2012, lands were already sold to

third party, which were agreed to be procured in favour of

the appellant.  Not only that, it is the specific allegation

of  the  complainant  that  the  cheques  were  issued  towards

security from the account which was also closed much earlier

to  the  date  of  Agreement  itself.   Learned  counsel  also

relied on judgment in the case of  Anil Mahajan vs.  Bhor

Industries Ltd. and Anr.2 but in the very same judgment it

1 (2002) 1 SCC 241 2 (2005) 10 SCC 228

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is  also  held  that  where  there  exists  a  fraudulent  and

dishonest intention at the time of the commission of the

offence,  law  permits  the  victim  to  proceed  against  the

wrongdoer for having committed an offence of criminal breach

of trust or cheating.  In another case relied on by the

learned counsel, viz.,  Inder Mohan Goswami and Anr. vs.

State of Uttaranchal and Ors.3 this Court has reiterated the

scope of power of the High Court under Section 482 Cr.P.C.

Having regard to the facts of the case, we are of the view

that the said judgments relied on by the learned counsel

would not support the case of the respondents.  It is also

to be noticed that in the complaint filed in P.C.R.No.14420

of 2015, investigation has been completed and chargesheet

was also filed on 22nd December 2015.

11. For the aforesaid reasons, we are of the view that the

High Court has committed an error in allowing the petitions

filed under Section 482, Cr.P.C. by the respondents-accused.

Accordingly, these criminal appeals are allowed and impugned

common order dated 28.4.2017 passed by the High Court of

Karnataka at Bengaluru is set aside. It is made clear that

the findings recorded in this judgment are confined only for

3 2007 (12) Scale 15

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these  appeals  and  the  same  cannot  be  construed  as  an

expression  of opinion on merits of the matter and it is

open for the trial court to proceed in accordance with law

and decide the complaints on their own merits.   

.................... J. [R.Banumathi]

.................... J. [R. Subhash Reddy]

New Delhi;

October 17, 2019

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