Karnataka High Court
Sri. Yusuf Shariff vs State Of Karnataka on 5 September, 2022
Author: Suraj Govindaraj
Bench: Suraj Govindaraj
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CRL.P No. 4736 of 2019
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 5TH DAY OF SEPTEMBER, 2022
BEFORE
THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ
CRIMINAL PETITION NO. 4736 OF 2019
BETWEEN:
SRI. YUSUF SHARIFF
S/O LATE DASTAGIRI SHARIFF
AGED ABOUT 54 YEARS
R/AT NO.22/1, MILLERS TANK ROAD
VASANTH NAGAR, BENGALURU-560052
PROPRIETOR OF M/S UMRAH DEVELOPERS
...PETITIONER
(BY SRI. TOMY SEBASTIAN, SR. COUNSEL A/W
SRI. S. BALAKRISHNAN, ADVOCATE-PH)
AND:
1. STATE OF KARNATAKA
BY JAYANAGAR POLICE STATION
BENGALURU
REP. BY SPP
HIGH COURT OF KARNATAKA
Digitally signed BENGALURU-560001
by POORNIMA
SHIVANNA
Location: HIGH 2. NAVEED MOHAMMED
COURT OF
KARNATAKA PROPRIETOR
M/S J. SONS DEVELOPERS
NO.1184, 35TH C CROSS,
4TH 'T' BLOCK, JAYANAGAR
BENGALURU-560041
... RESPONDENTS
(BY SRI.MAHESH SHETTY, HCGP FOR R1-PH;
SRI. ARAVIND KAMATH, SR. COUNSEL FOR
SRI. ANAND MUTTALLI, ADVOCATE FOR R2-PH)
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CRL.P No. 4736 of 2019
THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF
CR.P.C, PRAYING TO WHEREFORE, THE PETITIONER HUMBLY PRAY
THAT THIS HON'BLE COURT MAY BE PLEASED TO QUASH THE FIR IN
CRIME NO.73/2019 FOR THE OFFENCE PUNISHABLE UNDER SECTION
406 AND 420 OF IPC, ON THE FILE OF JAYANAGAR POLICE STATION,
BENGALURU, PENDING ON THE FILE OF THE HON'BLE IV ACMM AT
BENGALURU, PRODUCED HEREWITH AS ANNEXURE-A IN THE ENDS
OF THE JUSTICE.
THIS CRIMINAL PETITION COMING ON FOR ADMISSION AND
HAVING BEEN RESERVED FOR ORDERS ON 22.08.2022, THIS DAY,
THE COURT PRONOUNCED THE FOLLOWING:
ORDER
1. The petitioner is before this Court seeking for the following reliefs:
" Wherefore, the petitioner humbly pray that this hon'ble court may be pleased to quash the FIR in Crime No. 73/2019 for the offence punishable under section 406 and 420 of IPC, on the file of Jayanagar Police Station, Bengaluru, pending on the file of the Hon'ble IV ACMM at Bengaluru, produced herewith as Annexure-A."
2. Crime No.73/2019 was registered on 06.04.2019 by Jayanagar Police Station on the basis of an FIR submitted by the second respondent on 06.04.2019. 2.1 The second respondent-Developer in the said complaint dated 06.04.2019 had alleged that -3- CRL.P No. 4736 of 2019 the second respondent and the petitioner- owner of the properties had entered into various Joint Development Agreements under which there were various payments which were made by the second respondent as the developer to the petitioner owner of the property as also there were agreements between the parties as regards the development of the same.
2.2 It is contended that there were two different Joint Development Agreements which were entered into; one in respect of the property at Doddabettahalli village, Yelahanka Hobli, Bengaluru North (Additional) Taluk; second as regards the property at Harapanahalli, Jigani Hobli, Anekal Taluk. As regards the third property situate at Doddanagamangala village, though amount has been paid, Joint -4- CRL.P No. 4736 of 2019 Development Agreement and the General Power of Attorney were yet to be executed. 2.3 In the complaint it was alleged that it is by virtue of the payments made by the complainant that the petitioner has purchased the properties. Though various obligations were to be discharged by the petitioner - land owner, the same were not discharged and as such, the respondent - developer took up those obligations to obtain necessary permissions and sanctions from the various authorities and when the property was made fit for development, it is at that stage that the complainant has issued a termination notice terminating the Joint Development Agreements and the General Power of Attorney. This was done knowing fully well that the respondent has carried out various activities under the said Joint Development Agreements and the General -5- CRL.P No. 4736 of 2019 Power of Attorney by expending huge amounts of money and knowing fully well that the properties were fit for development. 2.4 The petitioner has sought cancellation of the Joint Development Agreements and the General Power of Attorney in order to get full benefit of the land and the efforts put in by the second respondent.
2.5 It is further alleged that the petitioner always had the intention of doing so inasmuch as the petitioner has resorted to similar false promise of executing the Joint Development Agreements with various developers and as such the petitioner is a habitual offender and a person who is dangerous to the society.
2.6 It is on that basis that the second respondent has requested the first respondent to take necessary action and in furtherance thereof, -6- CRL.P No. 4736 of 2019 Crime No.73/2019 was registered for offences punishable under Sections 406 and 420 of the Indian Penal Code, 1860 on 06.04.2019. 2.7 It is aggrieved by the registration of the complaint by the Jayanagar Police Station and the investigation proposed to be carried thereon that the petitioner is before this Court.
3. Sri Tomy Sebastian, learned Senior Counsel for the petitioner would submit that:
3.1. The dispute between the petitioner and the second respondent is purely civil in nature inasmuch as it arises out of the Joint Development agreements entered into between the parties on 16.10.2012 and 22.08.2013. 3.2. Insofar as the allegation of the respondent, if any, relating to the breach of the Joint Development Agreements, criminal proceedings cannot be initiated and it ought to be civil -7- CRL.P No. 4736 of 2019 proceedings. Once earlier, the respondent had, on account of certain disputes between the parties, invoked the arbitration clause which was part of the Joint Development Agreement dated 16.10.2012 and had appointed an arbitrator where the arbitrator had passed an award dated 17.10.2018 directing the petitioner herein to execute a supplemental Joint Development Agreement/ Area Allocation Agreement as agreed upon between the parties.
3.3. The respondent having approached the arbitrator on earlier occasion indicates that the dispute between the parties is civil in nature and now a criminal twist is being given by virtue of the complaint filed on 06.04.2019 which is not permissible.
3.4. As regards the factual aspects and on merits, he submits that the allegations made in the -8- CRL.P No. 4736 of 2019 complaint are completely false inasmuch as the property taxes were to be paid post the execution of the Joint Development Agreement by the developer and as such the petitioner has not breached any terms of the agreement. 3.5. The purchase of the property made by the petitioner was from and out of his own funds and not from the funds of the respondent inasmuch as on the date of the execution of the Joint Development Agreement, the petitioner had already purchased the property and hence the question of the respondent complaining that the property was purchased by the petitioner from and out of the funds made available by the respondent is a complete false statement. 3.6. He again reiterates that the petitioner had waited for a long period of time for the respondent to commence and complete the construction. It is only on account of the -9- CRL.P No. 4736 of 2019 respondent not having commenced and completed the construction that the petitioner had issued a notice on 29.03.2019 pointing out various breaches committed by the respondent and had called upon the respondent to take return of the refundable security deposit or in the alternative to purchase the entire land as per the prevailing market rate, with the refundable deposit being treated as part of the consideration or thirdly to purchase the land to the extent of the amount advanced by the respondent to the petitioner.
3.7. The complaint is only as a counterblast to the termination notice issued by the petitioner, there is no truth in the complaint, there are no criminal acts which are made out and as such, the petitioner need not be put to the ignominy of investigation on a false complaint.
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CRL.P No. 4736 of 2019
4. Per contra, Sri Aravind Kamath, learned Senior Counsel appearing for the respondent - complainant would submit that:
4.1. The petitioner is a habitual offender and a rowdy sheet has been opened insofar as the petitioner is concerned on account of various complaints which have been filed by the developers who are similarly situate as that of the respondent inasmuch as there are nearly 11 complaints which have been registered in various police stations where similar allegations as that made by the respondent have been made against the petitioner.
4.2. The petitioner had entered into various Joint Development Agreements with various developers as regards the lands belonging to the petitioner situate in various parts of the city of Bengaluru and otherwise wherein after said developer had processed the documentation
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and obtained sanctions and permissions, the petitioner had cancelled the said Joint Development Agreements resulting in similar complaints as that filed by the respondent being filed against the petitioner. 4.3. The petitioner had filed a writ petition in WP No.19815/2019 against the respondent and two other developers challenging the registration of Crime Nos.108/2019, 111/2019 and 73/2019 registered by the Jayanagar Police Station against the petitioner.
4.4. The subject matter of the said writ petition are the Joint Development Agreements entered into between the petitioner and the second respondent and the Joint Development Agreement entered into by the petitioner with M/s Nirman Shelters Private Limited.
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CRL.P No. 4736 of 20194.5. During the pendency of the said writ petition, the present Criminal Petition under section 482 CrPC was filed. The same being pointed out when W.P.No.19815/2019 was taken up, the petitioner withdrew the said petition by fling a memo dated 11.06.2019.
4.6. He therefore submits that the present petition which had been filed at that relevant point of time when the writ petition was filed is an abuse of process of Court and establishes the conduct on the part of the petitioner disentitling inequitable relief in favour of the petitioner. 4.7. The manner in which criminal complaints have been filed against the petitioner establishes the common motive on the part of the petitioner which reinforces the allegations made by the respondent that the petitioner always had an intention to cheat the second respondent.
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CRL.P No. 4736 of 20194.8. It is on that basis that the inducements were made by the petitioner to the second respondent, requiring the second respondent to act in a manner that normally he would not have done. The respondent on payment of huge amount of money to the petitioner obtained various permissions and sanctions from the various authorities and had commenced the construction in the belief that the respondent would be able to harness the property which is the subject matter of the Joint Development Agreement in order to earn profits. 4.9. The Joint Development Agreements do not envisage any cut off date by which development is to be completed and therefore reliance now placed by the petitioner on the so called delay which is attributable to the petitioner himself for terminating the Joint Development Agreement and the General
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CRL.P No. 4736 of 2019Power of Attorney reeks of mala fides on the part of the petitioner and the ever present intention on part to the petitioner to cheat the second respondent.
4.10. The petitioner has made out enough and sufficient grounds requiring investigation to be carried out in respect of the allegations made by the second respondent. As such he submits that this Court ought not scuttle the proceedings so that truth would come out and which would not cause any harm to the petitioner inasmuch as the petitioner can place all material before the Investigating Officer. 4.11. In this regard he places reliance on the decision of the apex court in the case of Hridaya Ranjan Prasad Verma vs. State of Bihar and another [(2000)4 SCC 168], more particularly Paragraphs 12 and 13 thereof, which are reproduced for easy reference:
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"12. On a reading of the complaint, portions of which have been extracted earlier, it is clear that the main offence alleged to have been committed by the appellants is "cheating"
punishable under Section 420 IPC.
13. Cheating is defined in Section 415 of the Code as:
"415. 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'.
Explanation.--A dishonest concealment of facts is a deception within the meaning of this section."
The section requires--
(1) deception of any person;
(2)(a) fraudulently or dishonestly inducing that person
(i) to deliver any property to any person, or
(ii) to consent that any person shall retain any property; or
(b) intentionally inducing 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."
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CRL.P No. 4736 of 20197.1. He relies upon a decision of the apex Court in the case of Niharika Infrastructure Private Limited vs. State of Maharashtra and others [AIR 2021 SC 1918], more particularly Paragraph-10, which is reproduced for easy reference :
"10. From the aforesaid decisions of this Court, right from the decision of the Privy Council in the case of Khawaja Nazir Ahmad (supra), the following principles of law emerge:
i) Police has the statutory right and duty under the relevant provisions of the Code of Criminal Procedure contained in Chapter XIV of the Code to investigate into cognizable offences;
ii) Courts would not thwart any investigation into the cognizable offences;
iii) However, in cases where no cognizable offence or offence of any kind is disclosed in the first information report the Court will not permit an investigation to go on;
iv) The power of quashing should be exercised sparingly with circumspection, in the 'rarest of rare cases'. (The rarest of rare cases standard in its application for quashing under Section 482 Cr.P.C. is not to be confused with the norm which has been formulated in the context of the death penalty, as explained previously by this Court);
v) While examining an FIR/complaint, quashing of which is sought, the court cannot embark upon an enquiry as to the reliability or
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CRL.P No. 4736 of 2019genuineness or otherwise of the allegations made in the FIR/complaint;
vi) Criminal proceedings ought not to be scuttled at the initial stage;
vii) Quashing of a complaint/FIR should be an exception and a rarity than an ordinary rule;
viii) Ordinarily, the courts are barred from usurping the jurisdiction of the police, since the two organs of the State operate in two specific spheres of activities. The inherent power of the court is, however, recognised to secure the ends of justice or prevent the above of the process by Section 482 Cr.P.C.
ix) The functions of the judiciary and the police are complementary, not overlapping;
x) Save in exceptional cases where non- interference would result in miscarriage of justice, the Court and the judicial process should not interfere at the stage of investigation of offences;
xi) Extraordinary and inherent powers of the Court do not confer an arbitrary jurisdiction on the Court to act according to its whims or caprice;
xii) The first information report is not an encyclopaedia which must disclose all facts and details relating to the offence reported. Therefore, when the investigation by the police is in progress, the court should not go into the merits of the allegations in the FIR. Police must be permitted to complete the investigation. It would be premature to pronounce the conclusion based on hazy facts that the complaint/FIR does not deserve to be investigated or that it amounts to abuse of process of law. During or after investigation, if the investigating officer finds that there is no substance in the application made by the
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CRL.P No. 4736 of 2019complainant, the investigating officer may file an appropriate report/summary before the learned Magistrate which may be considered by the learned Magistrate in accordance with the known procedure;
xiii) The power under Section 482 Cr.P.C. is very wide, but conferment of wide power requires the court to be cautious. It casts an onerous and more diligent duty on the court;
xiv) However, at the same time, the court, if it thinks fit, regard being had to the parameters of quashing and the self-restraint imposed by law, more particularly the parameters laid down by this Court in the cases of R.P. Kapur (supra) and Bhajan Lal (supra), has the jurisdiction to quash the FIR/complaint; and
xv) When a prayer for quashing the FIR is made by the alleged accused, the court when it exercises the power under Section 482 Cr.P.C., only has to consider whether or not the allegations in the FIR disclose the commission of a cognizable offence and is not required to consider on merits whether the allegations make out a cognizable offence or not and the court has to permit the investigating agency/police to investigate the allegations in the FIR."
7.2. He relies upon the decision of the apex Court in the case of Indian Oil Corporation vs. NEPC India Limited and others [(2006)6 SCC 736], more particularly Para 11 and 12 thereof, which are reproduced hereinbelow for easy reference:
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"11. The High Court by a common judgment dated 23-3-2001 allowed both the petitions and quashed the two complaints. It accepted the second ground urged by the respondents herein, but rejected the first ground. The said order of the High Court is under challenge in these appeals. On the rival contentions urged, the following points arise for consideration:
(i) Whether existence or availment of civil remedy in respect of disputes arising from breach of contract, bars remedy under criminal law?
(ii) Whether the allegations in the complaint, if accepted on face value, constitute any offence under Sections 378, 403, 405, 415 or 425 IPC?
Re: Point (i)
12. The principles relating to exercise of jurisdiction under Section 482 of the Code of Criminal Procedure to quash complaints and criminal proceedings have been stated and reiterated by this Court in several decisions. To mention a few--Madhavrao Jiwajirao Scindia v. Sambhajirao Chandrojirao Angre, State of Haryana v. Bhajan Lal, Rupan Deol Bajaj v. Kanwar Pal Singh Gill Central Bureau of Investigation v. Duncans Agro Industries Ltd., State of Bihar v. Rajendra Agrawalla, Rajesh Bajaj v. State NCT of Delhi Medchl Chemicals & Pharma (P) Ltd. v. Biological E. Ltd. , Hridaya Ranjan Prasad Verma v. State of Bihar, M. Krishnan v. Vijay Singh and Zandu Pharmaceutical Works Ltd. v. Mohd. Sharaful Haque. The principles, relevant to our purpose are:
(i) A complaint can be quashed where the allegations made in the complaint, even if
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they are taken at their face value and accepted in their entirety, do not prima facie constitute any offence or make out the case alleged against the accused. For this purpose, the complaint has to be examined as a whole, but without examining the merits of the allegations. Neither a detailed inquiry nor a meticulous analysis of the material nor an assessment of the reliability or genuineness of the allegations in the complaint, is warranted while examining prayer for quashing of a complaint.
(ii) A complaint may also be quashed where it is a clear abuse of the process of the court, as when the criminal proceeding is found to have been initiated with mala fides/malice for wreaking vengeance or to cause harm, or where the allegations are absurd and inherently improbable.
(iii) The power to quash shall not, however, be used to stifle or scuttle a legitimate prosecution. The power should be used sparingly and with abundant caution.
(iv) The complaint is not required to verbatim reproduce the legal ingredients of the offence alleged. If the necessary factual foundation is laid in the complaint, merely on the ground that a few ingredients have not been stated in detail, the proceedings should not be quashed. Quashing of the complaint is warranted only where the complaint is so bereft of even the basic facts which are absolutely necessary for making out the offence.
(v) A given set of facts may make out: (a) purely a civil wrong; or (b) purely a criminal offence; or (c) a civil wrong as also a criminal offence. A commercial transaction or a contractual dispute, apart from furnishing a cause of action for
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CRL.P No. 4736 of 2019seeking remedy in civil law, may also involve a criminal offence. As the nature and scope of a civil proceeding are different from a criminal proceeding, the mere fact that the complaint relates to a commercial transaction or breach of contract, for which a civil remedy is available or has been availed, is not by itself a ground to quash the criminal proceedings. The test is whether the allegations in the complaint disclose a criminal offence or not." 7.3. Relying upon the same, he submits that this Court ought not to examine whether there is in fact an offence made out requiring investigation. The said function is required to be left to the Police. The functioning of the Judiciary and the Police being complementary and not overlapping, after the investigation is completed, the truth would come out and as such criminal procedure ought not to be scuttled at the initial stage. He further submits even if there is a remedy available in respect of any breach of contract, the same would not bar the exercise of a criminal remedy inasmuch as if there is any offence, which has been
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CRL.P No. 4736 of 2019committed, then the person aggrieved could always file a criminal complaint as also exercise his remedies in civil law for breach of contract. On these grounds he submits that the petition is required to be dismissed.
8. Heard Sri Tomy Sebastian, learned Senior Counsel for the petitioner and Sri Aravind Kamath, learned Senior Counsel appearing for the respondent - complainant. Perused papers.
9. The points that would arise for determination before this Court are:
1. Whether the allegations made in the complaint sought to be quashed are only civil disputes?
2. Whether at this stage, it can be said that the allegations made in the complaint do not give rise to any criminal offence?
3. What order?
10. I answer the above points as under:
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11. Answer to Point No.1: Whether the allegations made in the complaint sought to be quashed are only civil disputes?
11.1. Admittedly, there are two different Joint Development Agreements which were entered into between the petitioner and the complainant; one for the property situate at Doddabettahalli and the other situated at Harapanahalli. As regards the third property, no agreement has been entered into. 11.2. Admittedly, under those agreements, huge sums of payments have been made. Admittedly the petitioner has cancelled the agreements. 11.3. The contention of Sri Tomy Sebastian, learned Senior Counsel is that due to non-performance by the complainant, the agreements came to be terminated.
11.4. The contention of Sri Aravind Kamath, learned Senior Counsel is that after the complainant had complied with and made good the
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CRL.P No. 4736 of 2019deficiencies in the property, which was in fact the duty of the petitioner, the petitioner in order to obtain the benefit has terminated the agreements and the further allegation is that the petitioner always had the intention to make use of the complainant to set right all the defects in the property and thereafter terminate the agreement and derive the benefit. 11.5. It is the further contention that the petitioner has indulged in similar such actions resulting in nearly eight complaints having been filed, the details thereof having been produced hereinabove.
11.6. A perusal of the Joint Development Agreement also give rise to an interesting background. Insofar as the Joint Development Agreement dated 16.10.2012 it is contended that the petitioner had participated in public auction held on 13.12.2008 and was the highest bidder
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CRL.P No. 4736 of 2019in respect of Sy.No.1, Block Nos.3,6 and 8 measuring 8 acres 7 guntas. The details of the location of the property have not been given. However, it is stated that when the possession was required to be given to the petitioner, the villagers raised objection and as such, the said land was not given. But on a representation being made by the petitioner to Government for sanction of alternate land, 8 acres 6 guntas in Sy.No.1 and 1 gunta in Sy.No.55 of the government land situate at Doddabettahalli village, was sold in favour of the petitioner. It is rather shocking as to how an alternate land like that could be sold in favour of the petitioner when the petitioner was only entitled to the auctioned land.
11.7. A perusal of the Joint Development Agreement also indicates that there is no time period prescribed in the Joint Development Agreement
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CRL.P No. 4736 of 2019for completion of the construction since the land was handed over "as is where is basis"
with the developer namely, the complainant being required to take all permissions and sanctions necessary. There is no power which has been reserved for the owner namely, the petitioner to terminate the agreement. 11.8. In that background, I am of the considered view that there is some credence and merit in the submissions made by Sri Aravind Kamath, learned Senior Counsel for the complainant that the termination is only to cheat the developer, of course the same would have to be established during the course of investigation and/or trial.
11.9. Even as regards the second Joint Development Agreement dated 22.08.2013 as regards Harapanahalli land neither there is a time period prescribed nor a right to terminate the
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agreement reserved in favour of the land owner i.e., the petitioner and as such, the argument of Sri Aravind Kamath would equally apply to the second agreement.
12. ANSWER TO POINT NO.2: Whether at this stage, it can be said that the allegations made in the complaint do not give rise to any criminal offence?
12.1. As held by Hon'ble apex Court in Niharika Infrastructure Private Limited (supra) it is in rare cases, that this Court ought to exercise extraordinary powers under Section 482 of the CrPC, if this Court were to come to the conclusion that the continuation of the criminal proceedings would be an abuse and order that there are no criminal offences made out in the complaint that the proceedings could be quashed.
12.2. In the present case, I am unable to come to a conclusion that there is no criminal offence
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CRL.P No. 4736 of 2019which has been made out on an ex facie reading of the documents presented. The present proceedings having been filed seeking for quashing of the FIR prior to investigation being completed, in my opinion, does not merit consideration.
13. Answer to Point No.3: What order?
13.1. As such, I pass the following:
ORDER i. The petition is dismissed.
ii. Liberty is however reserved to the petitioner to approach this Court after completion of investigation in the event of a charge sheet is filed, which shall be considered by this Court on merits if grounds are made out.
Sd/-
JUDGE nv