Bombay High Court
Pradeep Bhupatrai Vasa vs Bombay Builders Pvt. Ltd. And Ors. on 18 December, 1985
Equivalent citations: 1987(1)BOMCR327
JUDGMENT D.N. Mehta, J.
1. The petitioner herein Pradeep Bhupatrai Vasa has filed this Criminal Revision Application impugning the Order dated 29-3-1984 passed by the learned Additional Chief Metropolitan Magistrate, 40th Court, Girgaum, Bombay, whereunder the learned Additional Chief Metropolitan Magistrate was pleased to discharge the accused.
2. Respondent No. 1 is a Private Limited Company carrying on business as Builders and Promoters of Co-operative Societies and building. Respondent No. 1 Company carried on the business of construction and sale of residential flats on ownership basis under the Maharashtra Ownership Flats (Regulation of Promotion, Construction, Sale, Management and Transfer) Act, 1963 (hereinafter referred to as "the Ownership Flats Act"). Respondent Nos. 2 to 7 were the Directors of respondent No. 1 Company at all relevant times and were incharge of and responsible for the management of respondent No. 1 Company.
3. By an agreement dated 23-6-1978 between respondent No. 1 and the petitioner, respondent No. 1 agreed to sell to the petitioner on ownership basis a flat, being Flat No. 114, on the 11th Flour of a building known as "Mahendra Towers" to be constructed by the respondents at Bomanaji Petit Road, Bombay, together with a covered car parking space, for the total price of Rs. 2,17,500/-. On 20-4-1978, the petitioner paid to the respondents a sum of Rs. 25,000/- as earnest money. Between 19-7-1978 and 26-9-1979, the petitioner paid an aggregate amount of Rs. 2,00,100/- to respondent Nos. 1 to 7, inclusive of the earnest money of Rs. 25000/-. The said payments were made by cheques and were received as the purchase price of the said flat and the car parking space. According to the petitioner, only a sum of Rs. 17,400/- remained to be paid.
4. According to the petitioner, sometime in March 1983, respondent No. 2 met the petitioner and asked him whether he would agree to surrender his right, title and interest in the said agreement in respect of the flat and the covered car parking space. Respondent No. 2 offered to repay the sum of Rs. 2,00,100/- paid by the petitioner under the said agreement and a further sum of Rs. 2,24,900/- by way of compensation aggregating Rs. 4,25,000/- by the end of February 1980. The petitioner expressed his willingness to accept the offer of respondent No. 2 provided the payment was made within the stipulated period. According to the petitioner, respondent Nos. 1 to 7 failed to make this payment within the period of three weeks as indicated by respondent No. 2. Subsequently the arrangement was considered as cancelled and withdrawn.
5. According to the petitioner, under the said agreement dated 23-6-1978 respondents Nos. 1 to 7 had agreed to deliver possession of the said flat and the car parking space to the petitioner by 30th June, 1980. Respondents Nos. 1 to 7, however, failed to deliver possession either of the flat or of the car parking space. The petitioner offered to respondents Nos. 1 to 7 to pay the balance of the purchase price at the time of delivery of possession. Respondent Nos. 1 to 7, however, gave evasive replies about handing over possession of the flat to the petitioner. Respondents Nos. 1 to 7 kept assuring the petitioner that the said flat would be delivered after the building had been completed.
6. Sometime in August 1981, the petitioner came to know that respondents Nos. 1 to 7 had sold all the flats in the said building known as "Mahendra Towers", including the flat of the petitioner and the car parking space, to the Industrial Development Bank of India (I.D.B.I). On coming to learn or this, the petitioner paid a visit to the site and found that the name of the building had been changed from "Mahendra Towers" to "I.D.B.I. Quarters". The petitioner come to learn that respondents Nos. 1 to 7 had delivered possession of the flats, including the flat of the petitioner, to the I.D.B.I.
7. Some days after his visit to the site, the petitioner went to the Office of respondent No. 1 and met respondent No. 2 there. The petitioner questioned respondent No. 2 whether Flat No. 114 sold to him as also the car parking space had been sold to the I.D.B.I. or any other person subsequent to the execution of the agreement dated 23-6-1978 with the petitioner. Respondent No. 2 inform the petitioner that respondents Nos. 1 to 7 had sold all the flats in the said building formerly known as "Mahendra Towers" to the I.D.B.I. The petitioner pointed out to respondent No. 2 that respondents Nos. 1 to 7 were not entitled to dispose of the flat and the car parking space agreed to be sold to the petitioner under the said agreement. The petitioner called upon respondent No. 2 to deliver the said flat and the car parking space to him. Respondent No. 2, however, informed the petitioner that he was not prepared to give delivery of the said flat or the parking space. Thereafter certain correspondence passed between the parties and their respective Advocates.
8. On 21-10-1981 the petitioner filed a complaint in the Court of the learned Additional Chief Metropolitan Magistrate, 14th Court, Girgaum, Bombay, from where it was transferred to the Court of the learned Additional Chief Metropolitan Magistrate, 30th Court, Girgaum, Bombay. The petitioner charged respondents Nos. 1 to 7 under section 406, 409 read with section 34 of the Indian Penal Code. In the alternative, respondent Nos. 1 to 7 were charged under section 420 read with sections 34 of the Indian Penal Code and sections 3, 4, 5 and 9 read with sections 13 and 14 of the Ownership Flats Act, 1968.
9. After the verification of the complainant, the Additional Chief Metropolitan Magistrate was pleased to issue process against respondents Nos. 1 to 7 under the same charges.
10. Respondents Nos. 1 to 7 thereafter filed a writ petition under Article 227 of the Constitution of India and under section 482 of the Code of Criminal Procedure in the High Court for quashing the proceedings and the Order directing issue of Summons on respondents Nos. 1 to 7. Later, however, respondents Nos. 1 to 7 did not press their writ petition and as a result, the said writ petition was dismissed. Thereafter the evidence of the petitioner was recorded by the learned Additional Chief Metropolitan Magistrate. After the evidence of the petitioner, the learned Additional Chief Metropolitan Magistrate heard arguments, of the learned Advocates on both sides on the issue whether there was a prima facie case to frame charges. By this Order dated 29-3-1984, the learned Additional Chief Metropolitan Magistrate was pleased to conclude that there was not sufficient evidence before the Court to frame charges and discharged the accused in that case.
11. The petitioner has now approached this Court in Revision against the said Order of the learned Additional Chief Metropolitan Magistrate to set aside the said order dated 29-3-1984 and to direct the learned Additional Chief Metropolitan Magistrate to frame appropriate charges against respondents Nos. 1 to 7.
12. Shri Gumaste, learned Counsel appearing on behalf of the petitioner, submitted that the Order of discharge dated 29-3-1984 passed by the learned Additional Chief Metropolitan Magistrate was erroneous and was based on a misinterpretation of the provisions of the law. Shri Gumaste stated that the learned Additional Chief Metropolitan Magistrate had lost sight of the fact that respondents-accused Nos. 1 to 7 had been charged for criminal breach of trust under section 409 of the Indian Penal Code and in the alternative under section 420 read with section 34 of the Indian Penal Code. Respondents-accused Nos. 1 to 7 had also been charged under sections 3, 4, 5 and 9 read with sections 13 and 14 of the Ownership Flats Act. Shri Gumaste pointed out that the learned trial Magistrate had relied on a decision of a Division Bench of this Court reported in 83 Bom.L.R. 339, wherein it was observed by Their Lordships that if an agreement between a promoter and a purchaser was not registered under the Registration Act, then such an agreement become void for all purpose under section 4 of the Ownership Flats Act. Shri Gumaste pointed out that even if the agreement was void, then it would affect only the civil rights of the parties. If the entire transaction disclosed a criminal offence or offences, then it could not be stated that the accused could not be prosecuted for those offences.
13. Shri Gumaste contended that respondents Nos. 1 and 2 as promoters of "Mahendra Towers" had agreed to construct the building and thereafter hand over the flat to the petitioner. Their wilful refusal to deliver possession of the said flat and their having sold the said flat to the I.D.B.I. in breach of the agreement, would tantamount to criminal breach of trust punishable under section 409 of Indian Penal Code. Shri Gumaste urged that a prima facie case has been made out against respondent Nos. 1 to 7 under section 409 of the Indian Penal Code and the Order of the learned trial Magistrate ought to be set aside with a direction from this Court to frame appropriate charges against respondents Nos. 1 to 7.
14. Shri Bhosale, learned Counsel appearing on behalf of respondents Nos. 1 to 7, submitted, firstly, that the provisions of section 4 of the Maharashtra Ownership Flats Act were mandatory and under section 4 an agreement between a promoter and a purchaser of a flat must be registered. If such an agreement was not registered under the Registration Act as provided by section 4, then the agreement become void for all purpose and the purchaser could claim no right under such an agreement. Shri Bhosale submitted that the learned trial Magistrate was justified in relying on the Division Bench ruling of this Court and in holding that all rights flowing under the said agreement ceased to exist and the complainant thereafter could not call upon the promoter to deliver possession of the said flat. Consequently, according to Shri Bhosale, the question of an offence of criminal breach of trust under section 409 of the Indian Penal Code or any offence under sections 3, 4, 5 and 9 of the Ownership Flats Act, did not arise. Shri Bhosale submitted that this Court ought not to interfere in its Revisional Jurisdiction with the Order passed by the learned Additional Chief Metropolitan Magistrate.
15. In order to appreciate the submissions made by learned Counsel, it will be relevant at this stage to set out the provisions of section 4 of the Ownership Flats Act. Section 4 provides :---
"4(1). Notwithstanding anything contained in any other law, a promoter who intends to construct or constructs a block or building of flats, all or some of which are to be taken or are taken on ownership basis, shall, before he accepts any sum of money as advance payment or deposit, which shall not be more than 20 percent of the sale price enter into a written agreement for sale with each of such persons who are to take or have taken such flats, and the agreement shall be registered under the Registration Act, 1908 and such agreement shall contain the prescribed particulars; and to such agreement there shall be attached, such document or copies thereof, in respect of such matters as may be prescribed."
16. The provisions of section 4 of the Ownership Flats Act were considered and interpreted by a Division Bench of this Court (Chandurkar and Bhosale, JJ.) in the case of Association of Commerce House Block Owners Ltd. v. Vishndas Samaldas, reported in 83 Bom.L.R. 330 : 1981 Bom.C.R. 716. Their Lordships observed :---
"On a careful scrutiny of the provisions of section 4 of the Ownership Flats Act, therefore, we are inclined to take the view that section 4 contains an absolute enactment which must be observed absolutely. If such absolute enactment is not obeyed, the consequence will be that the agreement between the promoter and the purchaser will be wholly invalid and altogether void creating no rights between the parties. It is no doubt true that in a given case, it will be the intending purchaser who might suffer if he connives at the failure of the promoter not to have the agreement registered, but for that, the intending purchaser will himself have to be blamed because there is enough provision in the Registration Act which will enable the intending purchaser to have the document registered.........................
Having taken the view that the provisions of section 4 are mandatory and the agreement was therefore, statutory required to be registered, the plaintiff cannot found any rights on such an agreement and the agreement must be treated as invalid and ineffective."
17. Shri Bhosale has relied on this ruling and the observations that since the agreement was not registered, the agreement had become void and, therefore, no party could claim any right therein Shri Bhosale contended that there could be no breach of trust or cheating in respect of rights which flowed from a void agreement. That being so, according to Shri Bhosale, the petitioner could not change respondents Nos. 1 to 7 either with criminal breach of trust of cheating or any of the offences under the Ownership Flats Act.
18. Now I am unable to accept this submission of Shri Bhosale. It may be that certain civil rights of the parties under the agreement which has become void may come to an end. The criminal liability of, a party, however, will not be extinguished. A criminal liability does not necessarily emerge only from an agreement, but from the entire transaction between the parties. The oral representations made by one party to another or written documents besides the agreement may amount to an offence. In a specific case the charge of cheating may depend on the transaction apart from the agreement which remained to be registered. I am, therefore, not prepared to accept the submission of Shri Bhosale that respondents Nos. 1 to 7 could not be charged with the offence of criminal breach of trust or cheating or any of the offences under the Ownership Flats Act.
19. Shri Gumaste is justified in his submission that the learned trial Magistrate was in error when he stated that the agreement pursuant to the ruling of this Court cited heretofore became "a scrape of paper."
20. Therefore, having come to the conclusion that respondents Nos. 1 to 7 could still be prosecuted for the criminal offence of breach of trust and cheating as also other offences under the Ownership Flats Act, it will now be appropriate to consider whether respondents Nos. 7 to 7 have committed any offence or offences.
21. Shri Gumaste submitted that the petitioner had entrusted a substantial amount of money to respondents Nos. 1 to 7 on the understanding that respondents Nos. 1 to 7 would construct a building consisting of residential flats and after completing the construction would hand over Flat No. 114 on the 11th floor of "Mahendra Towers" to the petitioner. Shri Gumaste stated that the refusal on the part of respondents Nos. 1 to 7 to deliver possession of the said flat after the building had been completed would amount to a criminal breach of trust. Alternatively, Shri Gumaste submitted that it could be concluded that respondents Nos. 1 to 7 had no intention of delivering possession of the said flat at the time when the petitioner handed over a sum of Rs. 2,10,000/- to them and the money had been taken from the petitioner on a misrepresentation that he would be put in possession of the said flat. If the Court arrived at that conclusion, then the offence of cheating also would be complete.
22. Shri Gumaste has cited two ruling, one of the Supreme Court and other of the Bombay High Court. In the case of M.L. Devender singh v. Syed Khaja, , it was held that a mere specification of a sum of money to be paid for breach in order to compel the performance of the contract did not by itself remove the strong presumption contemplated by the use of the words "unless and until the contrary is proved". The sufficiency or insufficiency of any evidence to remove such a presumption was a matter of evidence. It was only when payment was an alternative to carrying out the other terms of the contract that it would exclude, by the terms of the contract itself, specific performance of the contract to convey a property. The jurisdiction of the Court to decree specific relief was discretionary and ought to be exercised on sound and reasonable grounds "guided by judicial principles and capable of correction by a Court of Appeal."
23. Shri Gumaste relied on a ruling of this Court in the case of Narayan Nagorao v. Amrit Haribhau, . It was held by a learned Single Judge of this Court that the general rule of equity that if a thing was agreed to be done, the very thing ought to be done must apply even though there was a penalty annexed to secure its performance or a sum was named in the contract to be paid in case of its breach. The question which arose in such a case was the interpretation of the contract. Where there was a clause for payment of money in the event of non-performance, the Court had to determine whether it was a contract stipulating that one certain act would be done with a sum annexed to secure the performance of the very act, or it was a contract stipulating that one of two things should be done at the election of the party who had to perform it, i.e. either performance or payment in money.
24. Now the two rulings relied on by Shri Gumaste relate only to the question of the specific performance of the agreement. In this Criminal Revision Application I am not called upon to decide the question of specific performance of the agreement. That issue will be decided by the Civil Court in which a Suit has already been filed by the petitioner for the same relief. It is pertinent to point out here that respondents Nos. 1 to 7 have all along shown their willingness to refund the amount of Rs. 2,00,100/- as also damages of Rs. 2,24,900/- to the petitioner. This offer has so far been refused by the petitioner who has insisted on the delivery of the flat. It is also necessary to state here that the offer of refund of money and damages was made by respondent Nos. 1 to 7 not only after the filling of the Criminal Complaint, but prior thereto.
25. Shri Bhosale submitted that what had been entrusted to respondents Nos. 1 to 7 by the petitioner was a specific amount of money. If respondents Nos. 1 to 7 were prepared to return the amount which had been entrusted to them, then there could be no question either of breach of trust or of cheating. There is considerable substance in this submission and, as I shall point out hereafter, the offer or respondents Nos. 1 to 7 gained significance considering certain clauses of the Agreement entered into between the parties.
26. At this stage it will be pertinent to consider the consequences of an Agreement which is found to be void. Section 65 of the Indian Contract Act 1872 provides for such a contingency. Sections 65 of the Indian Contract Act is in the following terms :---
"65. When an agreement is discovered to be void, or when a Contract becomes void, any person who have received any advantage under such agreement or contract is bound to restore it, or to make compensation for it, to the person from whom he received it."
27. In the instant case, the agreement not having been registered, has become void according to the ruling of this Court in the case of The Association of Commerce House Block Owners Ltd. v. Vishandas Samaldas, 83 Bom.L.R. 339. In this eventuality, respondents Nos. 1 to 7 are obliged under the provisions of section 65 of the Indian Contract Act to return the amount which they have received from the petitioner along with a reasonable compensation.
28. It is also pertinent in this context to consider the provisions of section 8 of the Ownership Flats Act which also provides for the refund of the amount received by the promoter from the purchaser of the flat with simple interest at 9 per cent per annum from the date of the amount was received. Section 8 of the Ownership Flats Act provides :---
"8. if-
(a) the promoter fails to give possession in accordance with the terms of his agreement of a flat completed by the date specified, or any further date or dates agreed to by the parties, or
(b) the promoter for reasons beyond his control and of his agents, is unable to give possession of the flat by the date specified, or the further agreed date and a period of three months thereafter, or a further period of three months if those reasons still exists, then, in any such case, the promoter shall be liable on demand (but without prejudice to any other remedies to which he may be liable) to refund the amounts already received by him in respect of the flat (with simple interest at nine per cent per annum from the date he received the sums till the date the amounts and interest thereon is refunded), and the amounts and the interest shall be a charge on the land and the construction if any thereon in which the flat is or was to be constructed, to the extend of the amount due, but subject to any prior encumbrances."
29. Having considered the legal position of the consequences of an agreement found to be void, it will be appropriate to consider Clause 9 of the agreement dated 23-6-1978 between the petitioner and respondent No. 1 Company. Clause 9 of the said Agreement provided that the Vendors would endeavour to hand over possession of the premises by 30-6-1980 after the Municipal Completion Certificate had been issued. Clause 9 further provided that if for reasons beyond the control of the Vendors they were unable to give possession by the aforesaid date, then in that case the date would be deemed to have been extended for a further period of six months and the vendors would give notice to the purchaser to take possession of the said premises and the possession would be handed over within seven days of such notice. The Vendors were obliged to deliver possession provided all the amounts due under the said agreement, including the deposits, were paid by the Purchaser to the Vendors. Clause 9 further provided that if the Vendors failed or were unable for any reason to give possession of the said premises to the purchaser, then in that event the purchaser was entitled only to the refund of the moneys paid by him to the Vendors under the agreement together with interest at 10 per cent per annum and on the Vendors agreeing to refund the moneys together with interest therein, the purchaser had no right whatsoever to claim the said premises or to any other claim and the Vendors would be entitled to resale the premises to any person. The latter part of Clause 9 which is important for the purpose of this discussion in the following terms :---
"It is further specifically agreed between the parties hereto that in case the Vendors fail or are unable for any reason whatsoever to give possession of the said premises to the purchasers then in such event the Purchaser/s will only be entitled to the refund of the moneys paid by him/her/them to the Vendors under this agreement with interest thereon at 10% per annum on the Vendors agreeing to make payment of such refund of moneys and interest as stated above, the Purchaser/s shall have no right to claim the said premises, in any manner or to any other claim and the Vendors shall be entitled to resell the said premises to any person."
30. In view of the provisions of Clause 9 of the agreement dated 26-6-1980, the petitioner has become entitled to the refund of the moneys paid by him to the Vendors together with interest at 10 per cent per annum as stipulated. If respondents Nos. 1 to 7 have been willing to refund these moneys along with not only the interest but compensation, as stated heretofore, then I do not think it could be stated that they have committed criminal breach of trust.
31. Section 405 of the Indian Penal Code provides :---
"405. 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 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 trust'."
Therefore, once respondents Nos. 1 to 7 have shown their willingness to refund the moneys paid to them by the petitioner, it cannot be stated that respondents Nos. 1 to 7 had dishonestly used or disposed of that property in violation of any direction of law or in violation of the agreement entered into between the petitioner and respondents Nos. 1 to 7. I, therefore, do not think that the charge of criminal breach of trust under section 400 of the Indian Penal Code can be sustained on the evidence adduced by the petitioner or the documents relied on by him.
32. As far as the alternative charge under section 420 of the Indian Penal Code is concerned, the argument of Shri Gumaste is that at the time when the moneys were handed over by the petitioner to respondents Nos. 1 to 7, the latter had no intention of delivering possession of the flat. On the evidence, it is clear that after having received the moneys, respondents Nos. 1 to 7 did construct the said building previously known a "Mahendra Towers" at Bomanji Petit Road, Bombay. It was only after the construction that respondent Nos. 1 to 7 realised from the agreement and refused to deliver possession of Flat No. 114 to the petitioner. In these circumstances, I do not think that a case of cheating can stand security or can be sustained.
33. Now there is another aspect from which this matter can be viewed. The petitioner paid to respondents Nos. 1 to 7 a sum of Rs. 2,00,100/- for the express purpose of purchase of Flat No. 114 in the building known as "Mahendra Towers". Now two years after this payment during which the building had been constructed, respondents Nos. 1 to 7 refuse to deliver possession of the flat to the petitioner. In these circumstances the petitioner is entitled to claim the refund of his moneys in a civil suit. There does not appear to be any element of criminality in this transaction and the entire transaction appears to be of a civil nature.
34. In this connection, it will be relevant to cite a ruling of the Supreme Court in the case of Trilok Singh v. Satya Deo Tripathi, reported in A.I.R. 1971 S.C. 850. In that case the dispute between the parties related to the purchase of a truck by the complainant. A Hire Purchase Agreement was entered into between the respondent and the Finance Corporation which was the accused. The loan was payable in monthly instalments. According to the agreement between the parties on default of any one instalment the financier had a right to terminate the Hire Purchase Agreement even without notice and seize the truck. The complainant's case was that only a blank form was got signed by him. His further case was that on default of the third instalment, the truck was forcibly seized and removed by the accused. The respondent filed a complaint against the Appellants Accused in this connection for certain offences. After enquiry, the Magistrate directed the issue of summons. The appellant-accused moved on application under section 482 of the Code of Criminal Procedure praying that the proceedings be quashed. It was held that the proceedings initiated was clearly an abuse of the process of the Court. It was not a case where the process ought to have been directed to be issued against the accused. On the well-settled principles of law, it was a very suitable case where the criminal proceedings ought to have been quashed by the High Court in exercise of its inherent power. The dispute realised by the respondent was purely of a civil nature even assuming the facts stated by him to be substantially correct.
35. It will also be relevant at this stage to refer to the observations of the Supreme Court in the case of Mohammed Sulaiman v. Md. Ayub, . In that case 'M' hired a motor car which remained in his use for some time under a Hire Purchase Agreement and the hire charges were paid for some months. 'M' wrote a letter to the owner of the motor stating that he had purchased the motor car for Rs. 600 on condition that the same would be tried for three months and if it was found satisfactory, the money, would be paid and the purchase completed and that he had paid Rs. 620/- in all and the purchase was completed. The owner denied any such agreement as was alleged by 'M' to have been made, denied payment and filed a complaint that by writing the letter 'M' had committed criminal; breach of trust. It was contended by the owner that since 'M' had dishonestly misappropriated or had converted to his own use the motor car, he was guilty within the first part of section 405 of the Indian Penal Code. Their Lordships made the following observations :---
"Clearly section 405 contemplates something being done with respect to the property which would indicate either misappropriation or conversion or its use or disposal in violation of the contract, express or implied. But where, as in the present case, nothing was done with respect to the use of the property which was not in accordance with the hiring agreement between the parties, it cannot be said that there was misappropriation or conversion of the property or its use of disposal in violation of the contract. We are not expressing any opinion as to correctness of the case either of the appellant or of the works in this behalf. All that we emphasise is that the letter of June 8 merely raises a dispute of civil nature between the parties and there is no question of any criminal breach of trust with respect to the motor on the basis of that letter."
36. The ratio of the two decisions cited above would also apply in the instant case. The petitioner had paid a certain amount to respondent Nos. 1 of 7 for the purpose of constructing a building and thereafter delivering one flat of that building to him-on ownership basis. Respondents Nos. 1 to 7 after having constructed the said building, realised from the agreement and refused to deliver possession of the said flat to the petitioner. The provisions of Clause 9 which I have recited heretofore empowered Respondents Nos. 1 to 7 to refuse to deliver the said flat to the petitioner. Shri Gumaste has argued that Clause 9 was coercive and oppressive and that I should not take it into consideration. I do not think that I can accept such an argument or close my eyes to the clause of the agreement when parties have entered into that agreement without any demur or protest prior to coming to Court. If under the agreement respondent Nos. 1 to 7 were entitled to refuse to deliver possession, then the dispute clearly is one of civil nature and no criminality attaches to the act of Respondents Nos. 1 to 7. The learned trial Magistrate, therefore, to my mind was justified in coming to the conclusion that there was no prima facie case made out by the petitioner against the accused and dismissing the complaint on the charge of breach of trust and cheating.
37. Shri Gumaste has submitted that even if the Court came to the conclusion that there was no offence made out either under section 409 or section 420 of the Indian Penal Code. Respondents Nos. 1 to 7 had clearly committed breaches of sections 3, 4, 5 and 9 of the Ownership Flats Act. I may point out that Shri Gumaste has given up the case under section 9 of the said Act since it relates to the creation of a mortgage or charge which is not the allegation either in the complaint or in this petition. Shri Gumaste contended that there was a clear breach of the provisions of section 3(2)(f) of the Ownership Flats Act. Clause (f) of sub-section (2) of section 3 provided :---
"A promoter, who constructs or intends to construct such block or building of flats, shall---
(f) specify in writing the date by which possession of the flat is to be handed over (and he shall hand over such possession accordingly);"
38. Now, I have already pointed out that under Clause 9 of the agreement between the parties herein, respondents Nos. 1 to 7 were entitled to refuse to deliver possession of the flat to the petitioner. In view of the provisions of the agreement, I do not think that it can be stated that respondents Nos. 1 to 7 had committed any offence under Clause (f) of sub-section (2) of section 3 of the Ownership Flats Act.
39. Shri Gumaste next submitted that under section 4 of the Ownership Flats Act, the promoter was entitled to accept as advance payment or deposit only a sum upon 20 per cent of the sale price before he entered into an agreement. Shri Gumaste pointed out that the first payment of Rs. 25,000/- was made on 20-4-1978. i.e. prior to the agreement which was entered into on 23-6-1978. According to Shri Gumaste, therefore, the promoters, i.e. respondents Nos. 1 to 7 had accepted an amount which was more than 20 per cent of the purchase price. Now, it is correct that the petitioner had paid to respondents Nos. 1 to 7 a sum of Rs. 25,000/- on 20-4-1978, i.e. prior to the execution of the agreement. The purchase price however, mentioned in Clause 5 of the said agreement is Rs. 2,17,500/- Therefore, the amount of Rs. 25,000/- paid on 20-4-1978 will not be 20 per cent of the purchase price, but will be about 12 per cent. Therefore, it cannot be stated that there was any breach of the provisions of this section also.
40. Shri Gumaste also submitted that respondent Nos. 1 to 7 had committed a breach of section 5 of the Ownership Flats Act, in that they had failed to keep a separate account in a Bank of sums taken by them from the petitioner as advance or deposit. Shri Gumaste pointed out that it was admitted that no separate account in a Bank had been maintained by respondents Nos. 1 to 7 in respect of the payments made by the petitioners. Shri Bhosale pointed out that under Clause 5 of the agreement, the various payments made by the petitioner to respondents Nos. 1 to 7 had been termed as "purchase price" and in the other clause of the said agreement also the payments had been termed as "purchase price". Shri Bhosale pointed out that section 5 of the Ownership Flats Act made it obligatory to maintain a separate account in a Bank only with regard to the advance or deposit and the "purchase price" had been excluded from the scope of that section. Shri Gumaste, however contended that when the words "advance" or "deposit" had been used in section 5, it also included the "purchase price" and, therefore, respondents Nos. 1 to 7 had clearly committed the offence under that section.
41. Now, I am afraid, I cannot accept the submission of Shri Gumaste for the reason that the word used in the said section are "advance" or "deposit" and the Legislature appears to have deliberately omitted the use of the words "purchase price". Since no amount was paid as advance or deposit but the sums paid were only towards the purchase price, I do not think that the provisions of section 5 would be attracted and it cannot be stated that respondents Nos. 1 to 7 committed any breach.
42. On a consideration of the arguments advanced by learned Counsel, it appears to me that there is no prima facie case established by the petitioner to show that respondents Nos. 1 to 7 had committed an offence of criminal breach of trust or cheating under sections 409 and 420 respectively of the Indian Penal Code. There appears to be no breach of the provisions of sections 3, 4 and 5 of the Ownership Flats Act also. In these circumstances, the learned trial Magistrate was correct in coming to the conclusion that there was no ground for framing a charge against respondents Nos. 1 to 7. There appear to be no reason for interfering with the order passed by the learned Additional Chief Metropolitan Magistrate.
43. In the result, the rule is discharged.