HON'BLE SRI JUSTICE K. LAKSHMAN
CRIMINAL PETITION No.886 OF 2018
ORDER:
This Criminal Petition is filed under Section - 482 of the Code of Criminal Procedure, 1973 (for short 'Cr.P.C.') to quash the proceedings in C.C. No.1 of 2017 on the file of Additional Judicial Magistrate of First Class, Karimnagar. The petitioner herein is accused No.1 in the said C.C. The offences alleged against him are under Sections - 420 and 406 read with 34 of IPC.
2. Heard Mr. N. Avaneesh, learned counsel for the petitioner and Mr. A. Ananda Chary, learned counsel for respondent No.2 and also learned Assistant Public Prosecutor appearing on behalf of respondent No.1.
3. The allegations levelled against the petitioner herein are as follows:
i) The petitioner herein is the Managing Director of M/s.
Pravista Infra Private Limited, Durgammagadda, Karimnagar and hereinafter referred to as 'the Company';
ii) the Company has given attractive advertisement and business promotion stating that it would construct a gated community;
iii) believing the version of the Company represented by the petitioner - accused No.1 herein, son of respondent No.2 2 KL,J Crl.P. No.886 of 2018
- de facto complainant, Mr. Dr. Rendla Srinivas, entered into an agreement of sale on 28.06.2010 with accused No.1 in respect of Flat No.220 in 'B' Block with constructed area of 1575 square feet for a total consideration of Rs.18,82,500/-;
iv) son of respondent No.2 has paid 25% of the total sale consideration amounting to Rs.4,70,625/- towards part sale consideration in terms of the agreement of sale;
v) the petitioner herein agreed to complete the construction of flat within eighteen (18) months from the date of said agreement which would expire by 28.12.2011;
vi) M/s. Deewan Housing Finance Corporation (DHFC) has also sanctioned house loan to a tune of Rs.14,35,963/- for the said flat and out of which, M/s. DHFC has disbursed an amount of Rs.12,15,963/- to the Company under a tripartite agreement, dated 29.09.2010 signed by accused Nos.1 and 3;
vii) on 15.02.2011, accused Nos.1 and 3 executed a sale deed bearing registration No.1456;
viii) later, construction work was stopped in the month of February, 2011. thus, the petitioner constructed only 40% and thereafter accused No.2 became the Managing Director of the Company;
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ix) all the purchasers of flats have formed a society under the name and style 'Pravista Owners Welfare Society' and hereinafter referred to as 'Society'
x) Accused Nos.3, 4, 5, 6 and 7 being the Directors of the said Company have negotiated with the Office Bears of the said Society and accordingly entered into an agreement on 02.09.2012, wherein the Directors have agreed to return the principal amount with 2% interest per month to the purchasers including son of respondent No.2 herein;
xi) but, the Directors failed to keep up their commitment and thereby the said company represented by its Directors and accused No.1 being the Managing Director have misappropriated the funds and committed breach of trust reposed on them and thereby cheated LW.1, son of respondent No.2 (LW.2); and
xii) therefore, respondent No.2 lodged a complaint with police against the petitioner and others for taking necessary action against them in accordance with law.
4. On receipt of the complaint dated 02.05.2015, the Station House Officer, Karimnagar III Town Police Station, Karimnagar, registered a case in Crime No.88 of 2015 against the petitioner and others for the aforesaid offences. After completion of investigation, 4 KL,J Crl.P. No.886 of 2018 the police have laid charge sheet against the petitioner herein and other accused for the aforesaid offences and the same was taken on file by the learned Magistrate vide C.C. No.1 of 2017.
5. Mr. N. Avaneesh, learned counsel for the petitioner, would submit that the police have not registered any case against the Company, and in the absence of the said Company, the petitioner being the Managing Director of the said Company is not liable for any prosecution. He would further submit that respondent No.2 is not the victim and his son is the victim and, therefore, the complaint lodged by respondent No.2 against the petitioner herein is not maintainable. The allegation against the petitioner herein is that he being the Managing Director of the said Company, stopped the construction and thereby failed to complete the construction in terms of the agreement of sale dated 28.06.2010, and if at all son of respondent No.2 is aggrieved of the same, he has to avail civil remedies or he can file an application under the provisions of the Consumer Protection Act. Instead of doing so, respondent No.2, who is not a victim, lodged the complaint implicating the petitioner herein in the above crime.
6. He would further submit that the police, without considering the said aspects, registered the aforesaid crime and laid charge sheet. The contents of complaint and charge sheet lacks the ingredients of the offences alleged against the petitioner herein. The petitioner was terminated as Managing Director of the said Company on 02.11.2011 and thereafter he has nothing to do with the said Company. The said 5 KL,J Crl.P. No.886 of 2018 aspect also was not even considered by the Investigating Officer while laying charge sheet. The Company is not made as a party - accused to the aforesaid proceedings. Respondent No.2 is trying to criminalize the civil proceedings. In support of his contentions, he has placed reliance on the judgments rendered by the Hon'ble Supreme Court in Anil Mahajan v. Bhor Industries Ltd.1 and S.K. Alagh v. State of U.P.2. With the said contentions, the learned counsel sought to quash the proceedings in C.C. No.1 of 2017 against the petitioner - accused No.1.
7. Per contra, Mr. A. Ananda Chary, learned counsel for respondent No.2, would submit that the petitioner herein, accused No.1, being the Managing Director of the Company induced the son of respondent No.2 stating that they would construct gated community houses and flats and they have given attractive advertisement to attract various customers including the son of respondent No.2 herein. Respondent No.2 and his son have believed the petitioner and other Directors of the Company and accordingly agreed to purchase Flat No.220 in 'B' Block with plinth area of 1575 square feet for a total sale consideration of Rs.18,82,500/-. Accordingly, an agreement of sale dated 28.06.2010 was entered into between the son of respondent No.2 and the petitioner being the Managing Director of the Company, but the petitioner failed to complete the construction in terms of the said agreement of sale. The son of respondent No.2 has paid 25% of 1 . (2005) 10 SCC 228 2 . AIR 2008 SC 1731 6 KL,J Crl.P. No.886 of 2018 the total sale consideration amount which comes to Rs.4,70,625/- towards part payment of sale consideration. M/s. DHFC has also sanctioned Housing Loan to a tune of Rs.14,35,963/- and out of which it disbursed an amount of Rs.12,15,963/- to the said Company under a tripartite agreement dated 29.09.2010 signed by accused Nos.1 and 3. Thus, in all, LW.2, son of respondent No.2, paid an amount of Rs.16,86,588/-. Even then, the said Company represented by the petitioner herein as a Managing Director, did not complete the construction and thereby the petitioner and other Directors of the Company committed the aforesaid offences. He would further submit that there are several triable issues to be decided during the course of trial. The petitioner, instead of facing trial, filed the present petition seeking to quash the proceedings in the said C.C. which cannot be considered at this stage. As per criminal jurisprudence, anybody can set criminal law in motion. Respondent No.2 is the father of LW.1 - victim and LWs.3 and 4 are also victims. The Investigating Officer has recorded their statements. After accused No.2 taking over as Managing Director of the Company, an agreement dated 02.09.2012 was entered into between the Company represented by its Directors, Accused Nos.2 to 7 and the Office Bears of the Society, wherein the accused have agreed to return the principal amount with interest @ 2% per month, but they did not do so and thereby all the accused including the petitioner herein committed the aforesaid offences. With the said submissions, the learned counsel sought to dismiss the present criminal petition.
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8. The learned Assistant Public Prosecutor, on instructions, would submit that there are several triable issues which cannot be decided by this Court in the present petition under Section - 482 of Cr.P.C. as the same have to be decided by the trial Court after completion of full-fledged trial and finally he sought to dismiss the present petition.
9. The aforesaid submissions would reveal that the petitioner herein, accused No.1, was the Managing Director of the Company. Even according to him, he was removed from the Directorship of the said Company on 02.09.2012 itself, whereas, the agreement of sale between LW.2 and the said Company represented by the petitioner herein as the Managing Director, was entered into on 28.06.2010 in respect of Flat No.220 in 'B' Block. LW.2, son of respondent No.2, has paid 25% of the total sale consideration amounting to Rs.4,70,625/- towards advance and part payment. The said Company represented by the petitioner has agreed to complete the construction within eighteen (18) months from the date of said agreement of sale which was expired by 27.12.2011. Pursuant to a tripartite agreement dated 29.09.2010, M/s. DHFC has sanctioned housing loan of Rs.14,35,963/- and out of which, an amount of Rs.12,15,963/- had disbursed to the said Company. Thus, in all, the son of respondent No.2, has paid an amount of Rs.16,86,588/- to the said company. After removal of the petitioner herein from the said Company as the Managing Director, accused No.2 became the Managing Director of 8 KL,J Crl.P. No.886 of 2018 the said Company. The purchasers of the flats have organized and formed into a society under the name and style 'Pravista Owners Welfare Society'. Thereafter, on 02.09.2012, the Directors of the said Company including accused Nos.2 to 7 have negotiated with the Office Bears of the said Society and entered into an agreement. As per the said agreement, the accused have agreed to return the principal amount with interest @ 2% per month to the purchasers including LW.2 herein. But, the accused failed to keep up their commitment, and according to respondent No.2, accused including the petitioner herein have committed criminal breach of trust and cheating.
10. It s relevant to note that the Investigating Officer, during the course of investigation, has recorded the statements of respondent No.2, his son (LW.2), LWs.3 and 4, victims, who have paid amounts to the said company like LW.2 herein. The Investigating Officer has also recorded the statement of Auditor of the Company as LW.5, Watchman of the Company as LW.6, Manager of M/s. DHFC as LW.8 and Fire Officer as LW.9 to show that the said Company was not obtained no-objection certificate from Fire Services with regard to their construction project. Thus, considering the submissions of the above said witnesses, the Investigating Officer has laid charge sheet against the petitioner and others accused for the aforesaid offences. There are several triable issues which are mentioned below to be decided by the trial Court after full-fledged trial: 9
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(a) the petitioner - accused No.1 removed as Managing Director of the Company on 02.09.2012;
(b) accused No.2 was appointed as Managing Director of the Company;
(c) the petitioner - accused No.1 has entered into an agreement of sale dated 28.06.2010 with LW.2, son of respondent No.2 (LW.1) with the specific terms and conditions mentioned therein;
(d) the agreed period for completion of construction is 18 months which would expire by 27.12.2011;
(e) LW.2 paid 25% of the total sale consideration to the petitioner amounting to Rs.4,70,625/-;
(f) a tripartite agreement dated 29.09.2010 was signed by accused Nos.1 and 3 on behalf of the Company with M/s. DHFC and son of respondent No.2;
(g) M/s. DHFC has sanctioned housing loan of Rs.14,35,963/- and out of which, it has disbursed an amount of Rs.12,15,963/- to the petitioner's company;
(h) thus, LW.2, son of respondent No.2 herein, has paid a total amount of Rs.16,86,588/- to the Company towards advance and part payment of sale consideration;
(i) on 15.02.2011, accused Nos.1 and 3 have executed a registered sale deed bearing document No.1456 in favour of LW.2;
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(j) the Company stopped the construction in February, 2011 and thus, they have completed only 40% of the construction;
(k) an agreement dated 02.09.2012 was entered between the office bearers of the Society and the Directors of the company wherein the Directors have agreed to return the principal amount with interest @ 2% per month to the purchasers including LW.2, but they failed to keep up their promise.
Thus, the above said triable issues are to be decided only by the trial Court after completion of full-fledged trial.
11. The above said facts would also reveal that as on the date of agreement of sale dated 28.06.2010, the petitioner herein was the Managing Director of the said Company, he signed the said agreement of sale on behalf of the said Company and also received the aforesaid amount. Thus, at the inception i.e., as on the date of agreement of sale, the petitioner was Managing Director of the Company and, therefore, now he cannot claim that he has nothing to do with the said Company.
12. The defence taken by the petitioner cannot be looked into by this Court at this stage. The petitioner has to face trial and put forth his defence before the trial Court. Instead of doing so, the petitioner 11 KL,J Crl.P. No.886 of 2018 filed the present petition seeking to quash the proceedings in the aforesaid C.C. against him.
13. In this regard, it is apt to refer to the decision rendered by the Hon'ble Supreme Court in Kamal Shivaji Pokarnekar v. The State of Maharashtra3, wherein the Apex Court has categorically held that quashing criminal proceedings was called for only in a case where complaint did not disclose any offence, or was frivolous, vexatious, or oppressive. If allegations set out in complaint did not constitute offence of which cognizance had been taken by Magistrate, it was open to High Court to quash same. It was not necessary that, a meticulous analysis of case should be done before trial to find out whether case would end in conviction or acquittal. If it appeared on a reading of complaint and consideration of allegations therein, in light of the statement made on oath that the ingredients of the offence are disclosed, there would be no justification for High Court to interfere. The defences that might be available, or facts/aspects which when established during trial, might lead to acquittal, were not grounds for quashing complaint at threshold. At that stage, only question relevant was whether averments in complaint spell out ingredients of a criminal offence or not. The Court has to consider whether complaint discloses that prima facie, offences that were alleged against Respondents. Correctness or otherwise of said allegations had to be decided only in trial. At initial stage of issuance of process, it was not 3 . AIR 2019 SC 847 12 KL,J Crl.P. No.886 of 2018 open to Courts to stifle proceedings by entering into merits of the contentions made on behalf of Accused. Criminal complaints could not be quashed only on ground that, allegations made therein appear to be of a civil nature. If ingredients of offence alleged against Accused were prima facie made out in complaint, criminal proceeding shall not be interdicted.
14. In view of the aforesaid discussion and the principle laid down by the Apex Court in the above decision, the petitioner herein has failed to establish any ground for quashing the proceedings by this Court in exercise of its inherent power under Section - 482 of Cr.P.C. and, therefore, the present petition fails and is liable to be dismissed.
15. The present Criminal Petition is accordingly dismissed. As a sequel, miscellaneous petitions, if any, pending in the Criminal Petition shall stand closed.
_________________ K. LAKSHMAN, J 22nd April, 2021 Mgr