Punjab-Haryana High Court
Ashok Kumar Jhalani & Ors vs The State Of Haryana & Ors on 16 August, 2013
Author: Ritu Bahri
Bench: Ritu Bahri
Crl. Misc. No.M-13540 of 2010 -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
Crl. Misc. No.M-13540 of 2010
Date of decision: August 16, 2013
Ashok Kumar Jhalani & Ors. ... Petitioners
vs.
The State of Haryana & Ors.
.... Respondents
CORAM: HON'BLE MS. JUSTICE RITU BAHRI Present:- Mr. SS Narula, Advocate, for the petitioners.
Mr. C.S. Bakshi, Addl. A.G., Haryana.
Mr. BS Jaswal, Advocate, for the complainant.
Ritu Bahri, J This petition is for quashing of FIR No.132 dated 22.4.2005 under Sections 406/419/420/467/468/471/170/120-B IPC, registered at Police Station, Sector 7, Faridabad, along with challan report and the order framing charge/chargesheet dated 19.11.2009 passed by the JMIC, Faridabad as well as the order dated 16.3.2010, passed by the Additional Sessions Judge, Faridabad.
On 27.5.1987, there was an agreement to sell between the petitioner-company M/s Jhalani Tools India Pvt. Ltd. and respondent No.2- Shiv Kumar Sharma along with his partner respondent No.3- Ramesh Chand Aggarwal (Annexure P-5). The petitioner-seller had agreed to sell a land measuring 6912 sq. ft. situated in NIT Faridabad for a total sale consideration of Rs.8,00,000/-. Rs.80000/- were paid as earnest money and the remaining amount was to be paid within 180 days from the date of Crl. Misc. No.M-13540 of 2010 -2- agreement to sell. The payment was to be made as per the conditions mentioned in 'Annexure-A'.
A complaint (Annexure P-1) in the year 2005 was filed in the Court of Illaqa Magistrate, Faridabad alleging that as per receipt dated 9.12.1993, the remaining amount of sale consideration i.e. Rs.7,50,000/- was paid by Shiv Kumar Sharma, but the possession was never delivered to him. It is specifically alleged in the complaint that the complainant-Shiv Kumar Sharma had asked all the directors of petitioner-company to get the sale deed executed in his favour in respect of land measuring 3456 sq.ft. for his share, which was not executed. The sale deed of the share of other co- sharer Ramesh Chander Aggarwal was executed by the petitioners and with regard to sale deed, the land of the complainant measuring 34.56 sq. ft. is not being carried out. The land of the petitioners/accused was under the lien and charge of Haryana Government and they had cheated the complainant by entering into agreement to sell without clear title. The petitioners had no land and the directors of the petitioner-Company for disposing of the land had executed general power of attorneys in favour of Bir Singh, S/o Chiranji, Bijender Singh, S/o Sodan Singh, Harish Chander, S/o Kanhaya Lal, Shish Ram, S/o Phool Chand and Ramesh Chand S/o Ram Narayan. The petitioners had cheated the complainant. FIR (Annexure P-2) was registered on 22.4.2005. After registration of FIR, charges were framed under Sections 406/420/120-B IPC vide order dated 19.11.2009 by JMIC, Faridabad. On revision, the Additional Sessions Judge, Faridabad, vide order dated 16.3.2010 set aside the order qua framing of charge under Section 406 IPC. However, charges under Sections 420/120-B IPC were maintained.
Crl. Misc. No.M-13540 of 2010 -3-
Learned counsel for the petitioners is seeking quashing of FIR with all consequent proceedings on the following grounds:-
1. That there is an inordinate delay in filing the criminal complaint for breach of agreement to sell dated 27.5.1987 (Annexure P-5).
As per the said agreement, the important conditions are as under:-
"3. That the seller has assured the purchasers that they are the lawful owners of the land in question and the competent to sell the land to the purchasers, subject to the conditions mentioned in Appendix "A" attach to this agreement. The seller has further assured the purchaser that the said property has been shown in its balance sheet and the return submitted it to the Income Tax Officer for the financial year 1986.
6. That the seller shall arrange for the necessary Income Tax clearance to enable the registration of the sale deed(s) for the said land. All other permissions and clearances, if any, required shall be arranged by the seller or the buyer as per the conditions of Annexure 'A'.
10. That if, inspite of the purchasers fulfilling all his obligations as provided herein above, the seller backs out of the transaction and/or refuses or fails to give possession or to execute the sale deed(s) as provided herein above, then the purchaser shall be entitled to the damages of 30% of the earnest money."
The relevant conditions mentioned in Annexure 'A' are as under:-
"12. Any other permission required for the use of the land including sub-division will be responsibilites of the purchaser with appropriate Government authorities.
13. The District Collector of Faridabad made a proclamation on 4th January, vide proclamation RC/5027/G-3/86/469-74. The necessary permission to Crl. Misc. No.M-13540 of 2010 -4- sell this strip of land marked red in the drawing will be taken by the Purchaser from the District Collector within 90 days of the agreement to sell."
A careful reading of the conditions, makes it clear that if the purchaser i.e. complainant fulfils all his obligations and despite that seller i.e. petitioners backs out of the transaction and/or refuses or fails to give possession or to execute the sale deed(s) as provided herein above, then the purchaser-complainant shall be entitled to the damages of 30% of the earnest money. However, as per the conditions in Annexure 'A', it was the purchaser who take necessary permission from the District Collector by proclamation RC/5027/G-3/86/469-74.
A bare reading of the conditions shows that the purchaser was bound to get the permission for sale of the land from the District Collector and if the seller backs out of the transaction and/or refuses or fails to give possession or to execute the sale deed(s) as provided herein above, then the purchaser shall be entitled to the damages of 30% of the earnest money. After this agreement to sell, letter dated 9.12.1993 was issued informing the complainant that they have received Rs.7,50,000/- from him and vacant possession has been given of the land measuring 6912 sq. ft. At this stage, reference can be made to a complaint made by the complainant Shiv Kumar (Annexure P-9) dated 21.11.2004 for registration of a case against the petitioners. In this complaint, it is admitted that Rs.7,20,000/- were paid to the Director P.C. Jhalani and receipt was given on 9.12.1993(Annexure P-
8). However, in the complaint, specifically reference is made to land measuring 3456 sq. ft., which fell in the share of complainant-Shiv Kumar Sharma and for which the sale consideration was Rs.4.00 lacs. and the petitioners had refused to execute the sale did in his favour. He admits in Crl. Misc. No.M-13540 of 2010 -5- the complaint that sale deed of the other co-sharer Ramesh Chander Aggarwal has been executed in respect of land measuring 3456 sq. ft. It is part execution of the agreement to sell, which was being sought. The complaint relates to part execution of agreement to sell dated 27.5.1987. Hence, as per the agreed conditions between the parties, the complainant was entitled to 30% damages of the earnest money if the seller does not carry out his part of the contract. Since half of the contract had been executed by transferring the possession of land in favour of Ramesh Chand Aggarwal, the complainant has to explain the reasons for filing a complaint in the year 2005, once the payment had been made by him on 9.12.1993.
Learned counsel for respondent No.2 has argued that the petitioners have not been fair that after receiving Rs.8.00 lacs, they had executed half of the agreement to sell in favour of Ramesh Chand Aggarwal and have been defrauding the execution qua the complainant since 1993. On query made by Court, he admitted that no civil proceedings were initiated against the petitioners for recovery of the damages as contemplated in condition No.10 of agreement to sell. At this stage, FIR registered after gap of 17 years on account or part breach of agreement to sell dated 27.5.1987 suffers from inordinate delay of 17 years. Reference can be made to a judgment passed by this Court in Crl. Misc. No.24101-M of 2005 (Manisha Goyal Vs. State of Punjab) decided on 26.9.2005 and the judment of the Hon'ble Supreme Court in 2007(3) RCR (Criminal) 649, Kheta Ram Vs. State of Haryana, where pursuant to agreement to sell dated 10.10.1990, an FIR was instituted after 16 years i.e. in the year 2007. The FIR was quashed on the ground that the complainant had not instituted any civil proceedings qua breach of the contract. He had maintained to get the Crl. Misc. No.M-13540 of 2010 -6- criminal proceedings initiated after a gap of 16 years and therefore, continuance of criminal proceedings were held to be an abuse of process of the Court. The FIR was quashed while exercising powers under Section 482 Cr.P.C.
The abovestated judgments are admittedly applied to the facts of the present case, as in the present case, the agreement to sell was executed in the year 1987 and the criminal complaint was made in the year 2005, after a gap of almost 18 years. The complainant admits that he has not taken any civil proceedings against amount of Rs.4.00 lacs. , which he had paid qua 3456 sq. ft. of land. Hence the present proceedings initiated after a gap of 18 years are liable to be quashed.
2. On the question that the essential ingredients under Section 420 IPC are not made out as the complainant admits that as per the agreement dated 27.5.1987, half of the agreement to sell had been executed in favour of Ramesh Chand Aggarwal with regard to land 3456 sq. ft. The complainant had made a complaint (Annexure P-9) on 21.11.2004, where he admitted that pursuant to the agreement dated 27.5.1987, the petitioners had executed sale in favour of one of the co-sharer Ramesh Chand Aggarwal qua 3456 sq. ft. of land and regarding the other half share of the complainant-Shiv Kumar Sharma, they were declining the execution of agreement to sell. Once the complainant himself admits that half of the agreement had been executed, the essential ingredients of Sections 415 & 420 IPC are not made out in the complaint. Section 420 IPC reads as under:-
"Cheating and dishonesty inducing delivery of property:- Whoever cheats and thereby dishonestly induces the person deceived to deliver any Crl. Misc. No.M-13540 of 2010 -7- property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine."
If the petitioners right from the inception of the agreement to sell had any intention to cheat, they would not have executed half of the agreement qua Ramesh Chand Aggarwal. More so, as per the conditions of agreement to sell, in case, the seller did not comply with the agreed terms and conditions, the purchaser could recover the damages of 30% from the seller. Reference can be made at this stage to the judgment of Coordinate Bench in Manisha Goel(supra). While quashing of FIR under Sections 406415/420 IPC for violation of agreement to sell it was observed as under:-
13. An agreement to sell requires the proposed vendor to deliver property to the proposed vendee on payment of an agreed consideration, by executing a sale deed on the date mutually fixed. Violation of an agreement to sell, in the facts and circumstances of the present case, in my considered opinion, discloses a civil dispute. By merely stating that the petitioner refused to execute a sale-deed and/or return the money, would not convert this purely civil dispute into a criminal offence. A perusal of FIR, as also the reply filed, does not disclose criminal culpability. Section 406 of the IPC provides for punishment for misappropriation. The failure to return earnest money, in the facts and circumstances of the present case, cannot be termed as "misappropriation"
as defined under Section 405 of the IPC. In so far as Crl. Misc. No.M-13540 of 2010 -8- Section 420 of the IPC is concerned, the ingredients of Section 415 of the IPC that constitute an offence, under Section 420 of the IPC are missing. For a person to cheat, dishonest intention, must arise at the inception of the transaction. The ingredients of offences of cheating and/or misappropriation, set down by the Hon'ble Supreme Court, in the judgments, referred to herein before are singularly missing in the present case. In the case in hand, the FIR does not disclose any facts that would lead to a prima facie conclusion that the petitioner harboured a dishonest intention at the inception of the transaction, or in any manner committed an offence of criminal breach of trust."
The Hon'ble Supreme Court in AIR 2000 Supreme Court 2341, Hridaya Ranjan Pd. Verma and others Vs. State of Bihar and another, has held that mere breach of contract or agreement to sell cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction. Relevant para 16 reads as under:-
"Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is the time when the offence is said to have been committed. Therefore, it is the intention which is the gist of the offence. To hold a person guilty of cheating it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed."
The Hon'ble Supreme Court judgment in 2007(4) RCR (Criminal) 870, B. Suresh Yadav Vs.Sharifa Bee & Anr., has held that Crl. Misc. No.M-13540 of 2010 -9- criminal proceedings are not short cut of other remedies available in law to get the agreement to sell executed. In paragarph 13 of the said judgment the Court has observed as under:-
"13. For the purpose of establishing the offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation."
Applying the above stated ratio of judgments to the facts of the present case, it is not disputed between the parties that the petitioner had executed part of the agreement dated 27.5.1987, as per the complaint given to the police on 24.11.2004 (Annexure P-9). Once this fact is not disputed between the parties, the obvious conclusion is that the petitioners did not carry any dishonest intention at the inception of entering into agreement to sell in the year 1987. In the Annexure 'A', as per the condition No.13 that it will be purchaser who will get the requisite clearance certificate from the District Collector who will issue proclamation. It will also a case to show that the complainant was well aware that the property in question could not be sold without the clearance certificate given by the District Collector. The company had executed general power of attorney in favour of some of the purchasers as is evident from Annexure P-7 collectively. In view of the judgments passed by the Hon'ble Supreme Court, the complainant in the present case has not been able to show any ingredients of Section 420 IPC qua the petitioners in executing agreement to sell. It is a case of best of recovery of earnest money of Rs.4.00 lacs which the complainant had paid qua the Govenrment land which was to be executed in favour of the complainant. Instead of filing a civil proceeding, he has initiated criminal proceedings after an inordinate delay of 18 years.
Crl. Misc. No.M-13540 of 2010 -10-
Since essential ingredients of Sections 415/420 IPC are not made out in continuance of agreement to sell, learned counsel for the complainant has finally argued that after framing of the charges, the petitioners had availed the remedy of filing a revision before the Additional Sessions Judge. Consequently, second revision under Section 397(3) Cr.P.C is not maintainable in view of judgment in 1993(1) RCR (Criminal) 696, Dharampal Vs. Ramshri. On the other hand, the Hon'ble Supreme Court in AIR 1997 Supreme Court 987 (1), Krishnan and another Vs. Krishnaveni and another, has held that there is no prohibition under Section 397(3) Cr.P.C. to exercise inherent powers and supervisory powers under Sections 482 & 483 Cr.P.C., but this power has to be exercised only to circumvent the situation where continuance of criminal proceedings would amount to abuse of process of the Court. In paragarphs 8 & 9 observed as under:-
"8. The object of Section 483 and the purpose behind conferring the revisional power under section 397 read with section 401 upon the High court is to invest continuous supervisory jurisdiction so as to prevent miscarriage of justice or to correct irregularity of the procedure or to meet out justice. In addition, the inherent power of the High Court is preserved by Section 482. The Power of the High Court, therefore, is very wide. However , High Court must exercise such power sparingly and cautiously when the Sessions judge has simultaneously exercised revisional power under Section 397 (1). However, when the High Court notices that there has been failure of justice or misuse of judicial mechanism or procedure, sentence or order is not correct, it is but the salutary duty of the High Court to prevent the abuse of the Crl. Misc. No.M-13540 of 2010 -11- process or miscarriage of justice or to correct irregularities/incorrectness committed by inferior criminal court in its juridical process or illegality of sentence or order.
9. The inherent power of the High Court is not one conferred by the code but one which the high Court already has in it and which is preserved by the Code, the object of Section 397 (3) is to put a bar on simultaneous revisional applications to the High Court and the Court of Sessions so as to prevent unnecessary delay and multiplicity of proceedings. As seen, under sub-section (3) of Section 397 revisional jurisdiction can be invoked by" any person" but the code has not defined the word 'person', However, under section 11 of the IPC, 'person' includes any Company or Association or body of persons, whether incorporated or not. The word 'person' would, therefore include not only the natural person but also juridical person in whatever form designated and whether incorporated or not. By implication the State stands excluded from the purview of the word 'person' for the purposes of limiting its right to avail the revisional power of the High Court under Section 397 (1) of the code for the reason that the Sate, being the prosecutor of the offender, is enjoined to conduct prosecution on behalf of the society and to take such remedial steps as it deems proper. The object behind criminal law is to maintain law, public order, stability as also peace and progress in the society, Generally, Private complaints under section 202 of the Code are laid in respect of non-cognizance offences or when it is found that police has failed to perform its duty under Chapter XII of Code or to report as mistake of fact. In view of the principle laid down in the maxim Ex debito justitiae i.e. in accordance with the requirements of justice, the prohibition under Crl. Misc. No.M-13540 of 2010 -12- section 397 (3) on revisional power given to the High Court would not apply when the State seeks revision under section 401. So the State is not prohibited to avail the revisional power of the High Court under Section 397 (1) read with section 401 of the code."
After hearing learned counsel for the parties and going through the facts of the present case, it is clear that there is an inordinate delay of almost 18 years in initiating a complaint (Annexure P-1) under Section 563 Cr.P.C before the Court of Illaqa Magistrate. The complainant has not initiated any civil proceeding to recover the amount of Rs.4.00 lacs with 30% damages of the earnest money as agreed between the parties as per the condition No. 10 of agreement to sell. Since the petitioners had complied with the part of the agreement to sell by giving possession of 3456 sq. ft land to Ramesh Chand Aggarwal, second partner of the complainant, the essential ingredients of Sections 415 & 420 IPC are not made out.
Hence, the petition is allowed and FIR No.132 dated 22.4.2005 under Sections 406/419/420/467/468/471/170/120-B IPC, registered at Police Station, Sector 7, Faridabad, and all subsequent proceedings arising therefrom along with challan report and the order framing charge/chargesheet dated 19.11.2009 passed by the JMIC, Faridabad as well as the order dated 16.3.2010, passed by the Additional Sessions Judge, Faridabad, are hereby quashed with costs of Rs.25,000/- on the complainant to be paid to the petitioner.
16.08.2013 ( RITU BAHRI )
monika JUDGE
Verma Monika
2013.08.23 10:52
I attest to the accuracy and
integrity of this document
chandigarh