Karnataka High Court
R Leelavathi vs State Of Karnataka on 1 March, 2018
Author: R.B Budihal
Bench: R.B Budihal
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 1ST DAY OF MARCH, 2018
BEFORE
THE HON'BLE MR. JUSTICE BUDIHAL R.B.
CRIMINAL PETITION No.76/2018
BETWEEN:
1. R. LEELAVATHI,
D/O R. RAMU
AGED ABOUT 50 YEARS
R/A C-54A, 1ST FLOOR, 3RD CROSS,
8TH MAIN, VASANTHANAGAR,
BANGALORE-560 052. ... PETITIONER
(BY SRI VIRUPAKSHAIAH P. H., ADVOCATE)
AND:
1. STATE OF KARNATAKA
REPRESENTED BY STATION HOUSE OFFICER,
HIGH GROUNDS POLICE STATION,
BANGALORE-560052.
BY SPECIAL PUBLIC PROSECUTOR,
HIGH COURT OF KARNATAKA
BENGALURU-560 001.
2. ANJALI DEVI CALLUMALIGE,
W/O LATE C. V. RAMESH,
AGED ABOUT 56 YEARS,
R/A NO.50/2, VIJAYALAKSHMI NILAYA,
3RD CROSS, G BLOCK
SAHAKARANAGAR,
BANGALORE-560092. ... RESPONDENTS
(BY SRI S. RACHAIAH, HCGP FOR R1;
2
SRI PRADEEP H.S., ADVOCATE FOR R2)
****
THIS CRIMINAL PETITION IS FILED UNDER
SECTION 482 CR.P.C. PRAYING TO QUASH THE FIR IN
CRIME NO.196/2017 VIDE ANNEXURE J AND ENTIRE
PROCEEDINGS IN P.C.R.NO.12572/2017 ON THE FILE
OF 4TH ADDITIONAL CHIEF METROPOLITAN
MAGISTRATE, BANGALORE FOR THE OFFENCES P/U/S
406,415,420 OF IPC VIDE ANNEXURE H.
THIS PETITION COMING ON FOR ADMISSION THIS
DAY, THE COURT MADE THE FOLLOWING :
ORDER
This petition is filed by petitioner-accused under Section 482 Cr.P.C. praying Court to quash the proceedings registered in FIR crime No.196/2017 vide Annexure-J and the entire proceedings in P.C.R. No.12572/2017 on the file of the 4th Additional Chief Metropolitan Magistrate, Bengaluru for the offences punishable under Sections 406, 415 and 420 of IPC produced vide Annexure-H.
2. Brief facts of the case are that the petitioner herein is the absolute owner of vacant residential site 3 bearing No.20, BBMP Katha No.832/52/9/20, situated at Thindlu Village, Yelahanka Hobli, Bangalore North Taluk measuring East to West: 65+37/2 feet and North to South: 50 feet in all measuring 2,550 Sq. feet. Originally, the said property was acquired by the mother of the petitioner Smt. Thulasamma through Sale Deed dated 29.01.2003 registered in the office of Sub-Registrar, Yelahanka, Bangalore, from its previous owner B. Rudrappa. The mother of the petitioner bequeathed the property in favour of the petitioner through a will dated 21.03.2009 registered in the Office of the Sub-Registrar, Peenya, Bangalore. After the death of Thulasamma, the property has devolved on the petitioner. The sale Deed dated 29.01.2003 is herewith produced and marked as per Annexure-A. The copy of Will dated 21.03.2009 is produced and marked as per Annexure-C. The petitioner herein having offered to sell the said property, the 2nd respondent herein came forward to purchase the same for a total sale consideration Rs.1,15,00,000/- (Rupees One Crore Fifteen Lakh Only). After negotiations, an Agreement of Sale was entered into between the petitioner 4 and the 2nd respondent on 05.10.2015 in respect of the said property. On the date of execution of the sale Agreement, a sum of Rs.30,00,000/- (Rupees Thirty Lakh Only) was paid in favour of the petitioner herein by the 2nd respondent herein and it was agreed that the sale deed would be executed within a period of three months. Prior to entering into sale agreement dated 05.10.2015, the 2nd respondent had obtained a legal opinion regarding the title of the petitioner in respect of the property in question. A legal opinion dated 05.10.2015 was issued by one S.K. Nagaraj, Advocate opining that the petitioner has got good, valid marketable title and interest over the property in question. The Legal Opinion dated 05.10.2015 is herewith produced and marked as per Annexure-D. The sale agreement dated 05.10.2015 is produced and marked as per Annexure-E. After the execution of the said sale agreement, the 2nd Respondent herein did not comply with the terms and conditions of the sale agreement towards execution of the sale deed in respect of the property in question. The 2nd respondent herein making false and frivolous allegations against the 5 petitioner herein filed complaint bearing PCR No.12572/2017 on the filed of IV Additional Chief Metropolitan Magistrate, Bangalore under Section 200 of Cr.P.C. for the alleged offences punishable under Sections 406, 415 and 420 of Indian Penal Code on 14.09.2017 and has sought a direction to refer the case for investigation under Section 156(3) of Cr.P.C. The Complaint is produced and marked as per Annexure-G. Learned Magistrate on 13.10.2017 passed an order and referred the complaint for investigation under Section 156(3) of Cr.P.C. to the 1st respondent police to conduct an investigation and file a report. The order sheet in PCR No.12572/2017 is herewith produced and marked as per Annexure-H.
3. Heard learned counsel for the petitioner- accused, learned counsel for respondent No.2- complainant so also learned HCGP appearing for respondent No.1-State.
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4. Learned counsel appearing for the petitioner- accused made submission that looking to very complaint averments, no offences can be made out against the petitioner herein. Nowhere in the complaint, it is stated that the petitioner herein with criminal intention not to execute the sale deed in favour of the 2nd respondent- complainant, is dragging on or postponing the matter. The learned counsel submitted that so far as the title of the petitioner is concerned, the documents clearly go to show that the petitioner is having the valid title to the property. Hence, the transaction between the petitioner and respondent No.2-complainant is purely civil in nature. No criminality is involved in the said transaction and the breach of contractual obligation will not give rise to the criminal offence. Hence, it is the contention of the learned counsel that false complaint has been filed by the complainant with intention to harass the petitioner herein. Accordingly, the learned counsel submitted to allow the petition by quashing the proceedings. In support of his contentions, learned counsel for the petitioner has relied upon the following three decisions: 7
1. Dalip Kaur & Ors vs Jagnar Singh & Anr reported in (2009) 14 SCC 696
2. All Cargo Movers (India) Pvt. Ltd. & Ors Vs. Dhanesh Badarmal Jain & Anr.
reported in (2007)14 SCC 776
3. Mrs. Priyanka Srivasatav and Another vs. State of U.P. and Others reported in AIR 2015 SC 1758.
5. Per contra, learned counsel appearing for respondent No.2-complainant made submission that title to the property though it is stated that the petitioner is having right and title, but permission from the competent authority was not at all obtained for the purpose of executing the sale deed in favour of respondent No.2. The complainant is parted with the huge amount of Rs.35.00 lakh. Therefore, with intention to unnecessarily prolonging the matter, the petitioner herein is going on postponing the same with intention that the said agreement of sale should not be completed and the sale deed should not be registered in favour of respondent No.2-complainant. The learned counsel further submitted that as per the contents of very complaint, there is a clear 8 allegation in para No.5 regarding permission from the BBMP Lake Development Authority etc. It is also contended that the said contention of the complainant was upheld by the Lake Development Authority of BBMP. Therefore, that itself clearly goes to show that the title to the property was not clear and therefore, the petitioner- accused has cheated the complainant by entering into the said agreement of sale and inducing the complainant to part with the huge amount of Rs.35.00 lakh. Hence, the learned counsel submitted that initiation of criminal proceeding is maintainable and there is no merit in the petition and it is not the case for quashing the proceedings by invoking Section 482 of Cr.P.C.
In support of his contentions, learned counsel for respondent No.2-complainant has relied upon the decision of the Hon'ble Apex Court HDFC SECURITIES LTD. & ORS. VS. STATE OF MAHARASHTRA & ANR reported in 2017(1) SCC 640.
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6. Learned HCGP appearing for respondent No.1- State made submission that looking to the materials placed on record, they will make out a case for the alleged offence. In this regard, objection was raised by the Lake Development Authority of BBMP. Hence, this itself clearly goes to show that the petitioner herein was not having a clear title to the property. Therefore, unless and until, there is permission by the Lake Development Authority of BBMP, the petitioner is not able to execute the registered sale deed in favour of the intending purchaser i.e., the respondent No.2-complainant herein. Hence, the learned HCGP made submission that there is prima facie case about the alleged offence against the petitioner-accused. Accordingly, he submitted to reject the petition.
7. I have perused the grounds urged in the petition, contents of the private complaint lodged by the respondent No.2-complainant in PCR No.12572/2017 and also the other documents produced by the petitioner- accused, copy of the sale deed, khatha certificate, legal 10 notice, legal opinion, agreement of sale and the other documents.
8. The averments in the complaint would show that the petitioner-accused has cheated respondent No.2- complainant by not executing the registered sale deed. Even when the complainant requested the petitioner- accused at least to return the advance amount of Rs.35.00 lakh with interest at 24% p.a. with damages of Rs.5.00 lakh, that was also not done by the petitioner herein. Hence, it is the case of the complainant that the petitioner herein has cheated him by entering into the said false agreement of sale. Therefore, he requested to take action against the petitioner for alleged offence.
Para No.3 of the agreement of sale, reads as under:
" 3. The Purchaser has agreed to obtain the Absolute Sale Deed in her name or in the name of her nominees within Three (3) months from today subject to the Vendor furnishing Khatha Certificate, Khatha Extract showing the name of the vendor and other documents as mentioned in Clause-9 of this 11 agreement of Sale, upon paying the balance of sale consideration to the Vendor at the time of execution and registration of the absolute Sale Deed. "
Para No.9 of the said agreement reads as under:
" 9. The Vendor shall provide all
necessary documents of title, layout
sanctioned plan and clearances for
satisfaction plan and clearances for
satisfaction of title to the Schedule property and documents like Khatha Certificate, Khatha Extract showing the name of the Vendor etc., which are required for registration of the Sale deed. "
In this matter, let me refer to the decision of the Hon'ble Apex Court reported in 2007 (14) SCC 776. Para No.16 of the said decision reads as under:
" 16. We are of the opinion that the allegations made in the complaint petition, even if given face value and taken to be correct in its entirety, do not disclose an offence. For the said purpose, This Court may not only take into consideration the 12 admitted facts but it is also permissible to look into the pleadings of the plaintiff- respondent No.1 in the suit. No allegation whatsoever was made against the appellants herein in the notice. What was contended was negligence and/or breach of contract on the part of the carriers and their agent. Breach of contract simplicitor does not constitute an offence. For the said purpose, allegations in the complaint petition must disclose the necessary ingredients therefor. Where a civil suit is pending and the complaint petition has been filed one year after filing of the civil suit, we may for the purpose of finding out as to whether the said allegations are prima facie cannot notice the correspondences exchanged by the parties and other admitted documents. It is one thing to say that the Court at this juncture would not consider the defence of the accused but it is another thing to say that for exercising the inherent jurisdiction of this Court, it is impermissible also to look to the admitted documents. Criminal proceedings should not be encouraged, when it is found to be mala fide or otherwise an abuse of the 13 process of the Court. Superior Courts while exercising this power should also strive to serve the ends of justice. "
In this paragraph, it is observed by Their Lordships that what was contended was negligence and/or breach of contract on the part of the carriers and their agent. Breach of contract simpliciter does not constitute an offence. For the said purpose, the allegations in the complaint petition must disclose the necessary ingredients therefor.
In another decision reported in (2009)14 SCC 696, the Hon'ble Supreme Court has held as under:
" 8. Sections 405 and 415 of the Indian Penal Code defining criminal breach of trust' and `cheating' respectively read as under "405 - Criminal breach of trust.-Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of 14 law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits "criminal breach of trust".
"415. Cheating--Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived 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, is said to `cheat'."
An offence of cheating would be constituted when the accused has fraudulent or dishonest intention at the time of making promise or representation. A pure and simple breach of contract does not constitute an offence of cheating. "
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In para No.10 of the said decision, it is further observed by Their Lordships as under:
" 10. The High Court, therefore, should have posed a question as to whether any act of inducement on the part of the appellant has been raised by the second respondent and whether the appellant had an intention to cheat him from the very inception. If the dispute between the parties was essentially a civil dispute resulting from a breach of contract on the part of the appellants by non- refunding the amount of advance the same would not constitute an offence of cheating. Similar is the legal position in respect of an offence of criminal breach of trust having regard to its definition contained in Section 405 of the Indian Penal Code. {See Ajay Mitra v. State of M.P.} "
9. Therefore, looking to the principles enunciated in the said decision, mere contractual obligation between parties will not give raise to constitute criminal offence. Coming to the case on hand, the agreement of sale was 16 entered into and as per clause 13 of the said agreement of sale, the vendor has agreed to handover the original documents pertaining to schedule property at the time of execution and registration of the sale deed. Apart from that, it is not the case of the complainant that he insisted for execution of the registered sale deed from the petitioner by issuing any legal notice within a period agreed i.e., 3 months in between the parties under agreement of sale. But, without seeking specific enforcement of agreement of sale from the petitioner for execution of the registration of sale deed, the complainant alleged to have made a request to the petitioner-accused to refund the consideration of Rs.35.00 lakh together with interest 24% p.a. and also the damages of Rs.5.00 lakh. Therefore, this itself clearly goes to show that the complainant himself was not willing to bring suit for enforcement of terms of agreement.
10. So far as the legal title of the petitioner is concerned, the petitioner has produced copy of the sale deed to show that the property is standing in her name 17 and the copy of the deed of Will dated 21.3.2009 wherein Smt. Thulasamma wife of late Ramu executed a Will bequeathing property in favour of the petitioner herein. The document Annexure-C is the certificate dated 18.1.2016 issued by BBMP wherein katha was entered in the name of R. Leelavathi, the petitioner herein. Further, legal opinion was given by one advocate Sri S.K. Nagaraj in respect of title of the petitioner. At that time, the documents mentioned at Sl. Nos.1 to 8 were furnished and looking to the said documents, the said advocate has opined to the effect that after perusing the aforesaid documents, he is of the considered opinion that Smt. R Leelavathy, daughter of late R Ramu has got good, valid and reliable title in respect of the property in question subject to obtaining the mentioned additional documents. Therefore, this legal opinion by advocate after referring to the document at Sl. Nos.1 to 8 of the opinion, makes it clear that such opinion was conveyed to respondent No.2- complainant regarding the petitioner having good title to the property. Considering this, ultimately, an agreement of sale was entered into between the parties. 18
11. Learned counsel for the petitioner has also relied upon the decision of the Hon'ble Supreme Court in case of MRS. PRIYANKA SRIVASATAV AND ANOTHER VS. STATE OF U.P AND OTHERS reported in AIR 2015 SC 1758. Relying upon the said decision, it is the contention of the learned counsel for the petitioner- accused that before invoking Section 156(3) of Cr.P.C., no affidavit was filed by respondent No.2-complainant before the Magistrate Court. Therefore, without filing such affidavit and without verification of the contents of the complaint, referring the matter to the police for investigation, is not in accordance with law.
12. I have also perused the decision relied upon by respondent No.2 complainant reported in (2017)1 SCC 640, wherein it is held that challenge was premature and High Court thus rightly dismissed the writ petitions challenging the order passed under Section 156(3) of Cr.P.C. Further observation of Their Lordships in said decision at Synopsis (b) reads as under: 19
" Criminal Procedure Code, 1973 - Ss.190(1)(b), 154, 156(3), 173 and 204 - police case - Stage of cognizance therein - arises only after investigation report is filed before the Magistrate concerned."
Referring to the said decision and also making submission by the learned counsel for the respondent-complainant that in the complaint itself, it is made clear that there is no clearance from the Lake Development Authority of BBMP. Therefore, the complainant has not kept up promise that he will furnish all the necessary documents to the respondent-complainant. Therefore, on the basis of this, it is contended by the respondent complainant that there is cheating by the accused and the commission of the alleged offence as alleged in the complaint. When the title deeds of the petitioner herein are produced before the learned advocate for the purpose of furnishing opinion, it was opined by the learned advocate that the petitioner has good title. It further goes to show that the petitioner never refused to execute the registered sale deed. On the other hand, as I have already observed above, it is the 20 complainant who has not come forward to get it registered in his favour by paying the remaining consideration to the petitioner accused. Therefore, considering the entire material and the legal position involved in the case even if the contention of the complainant-respondent No.2 is accepted that there is breach of contractual obligation simpliciter as per the dictum of the Hon'ble Apex Court, breach of contractual obligation simpliciter will not constitute criminal offence.
13. Therefore, looking to the materials placed on record, according to me, the case is purely of a civil in nature. Hence the criminal proceedings cannot sustain against the petitioner-accused. This aspect has been completely overlooked by the Court below while taking cognizance of the offence. Hence, the petitioner has made out the case by invoking Section 482 of Cr.P.C. for quashing the proceedings. The initiation of criminal proceedings in this case is the abuse of process of law. 21
The petition is therefore allowed. The criminal proceedings initiated against the petitioner-accused are hereby quashed.
Sd/-
JUDGE Cs/-
Ct-Pr/-