THE HONOURABLE SRI JUSTICE K.SURENDER
CRIMINAL PETITION Nos.11516 & 11766 OF 2022 COMMON ORDER:
Criminal Petition 11516 of 2022 is filed under Section 482 of the Code of Criminal Procedure, 1973 (for short 'Cr.P.C.') by the petitioner/A1 and Criminal Petition 11766 of 2022 is filed by the petitioners/A2 and A3 to quash the proceedings against them in Crime No.158 of 2022 on the file of Central Crime Station, Hyderabad. The offences alleged against the petitioners/A1 to A3 are under Sections 406, 420, r/w.34 of the Indian Penal Code.
2. Heard both sides and perused the record.
3. The Central Crime Station, Hyderabad, registered FIR against the petitioners/A1 to A3 on the basis of written complaint given by the customers of a residential building project at Ameenpur Village/Mandal, Sangareddy District. The said venture was started by Sahiti Infratech Ventures India Private Limited, situated at Road No.36, Jubilee hills. The gist of the complaint is that there was a 'Pre Launch offer' quoted by the Company and the venture was marketed from June, 2019 onwards with a Project Estimated Cost of Rs.1200 crores. More than 1800 customers booked the flats and 650 and odd customers cancelled the bookings. However, the Company was not 2 accepting the cancellation. More than 72 crores was collected from 240 customers. In the complaint it is further alleged that A1 promised to pay the amounts received towards advances after repeated requests from the customers and in fact informed about plan of action to return the amount. However, it was found that there were no permission for the said Project and the customers were cheated. On the basis of the said complaint, the Central Crime Station, registered the crime.
4. The grounds urged for quashing the proceedings are that the transactions inter-se the customers and the Project owners is purely a civil dispute arising out of contractual obligation in the process of purchasing flats in the venture floated by the petitioners. The said issues should be sorted out by the Civil Court, however to pressurize and settle civil disputes, criminal complaint is filed. Even according to the complaint there is only a delay in the execution of the project and it is not the case that the petitioners have taken the amounts and absconded. The provisions of Telangana State Protection of Depositors of Financial Establishments Act, 1999 (for short 'TSPDFE Act'.) are not at all attracted, however, the Police have deliberately included the said provisions later at the time of remanding the accused. The Company is not a financial establishment as defined under Section 2-C of the said Act and the money given towards 3 purchase of flats cannot be termed as deposits as defined in the said Act. Further, the ingredients of Section 420 of the Indian Penal Code are not made out as it is necessary to show that the intention to defraud was from the inception. In the said circumstances neither Section 406 nor 420 is made out. The criminal proceedings cannot be a weapon in the hands of complainant and since the proceedings are abuse of process of law, the same have to be quashed.
5. Learned Counsel for the petitioners relied on the following Judgments;
6. In Mitesh Kumar J. Sha v. The State of Karnataka & others 1 and G.Sagar Suri v. State of U.P.2 it was held that any effort to settle disputes, which do not involve any criminal offence, by applying pressure through criminal prosecution, should be discouraged and deprecated.
7. In Ranbeer Singh v. State of U.P.3 it was held that the High Court has to see whether the dispute of a civil nature has been given colour of criminal offence. In such a situation, the High Court should not hesitate to quash the criminal proceedings. 1 2021 SCC OnLine SC 976 2 (2000) 2 SCC 636 3 2021 SCC OnLine SC 964 4
8. In Madhavrao Jiwajirao Scindia v. Sambhajirao Chandrojirao Angre 4 it is held that the test to be applied by the Court is to see whether the uncontroverted allegations, prima facie establish the offence. The Court may while taking into consideration the special facts of a case also quash the proceedings even though it may be at a preliminary stage.
9. In Stae of Haryana v. Bhajan Lal 5 it is held that where the allegations made in the FIR or the complaint, even if they are taken at their face value and accepted in their entirety, do not prima facie constitute any offence or make out a case against the accused (or) where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused, inherent powers of the Court Section 482 of Cr.P.C. can be exercised in order to secure the ends of justice.
10. In Vesa Holdings (P) Ltd. V. State of Kerala6; Hira Lal Hari Lal Bhagwati v. CBI7 and Vijay Kumar Ghai v. State of West Bengal8 it is held that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract 4 (1988) 1 SCC 692 5 1992 Supp (1) SCC 335 6 (2015) 8 SCC 293 7 (2003) 5 SCC 257 8 (2022) 7 SCC 124 5 would amount to cheating where there was any deception played at the very inception. The real test is whether the allegations in the complaint disclose the criminal offence of cheating or not. Further, for 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. From his making failure to keep promise subsequently, such a culpable intention right at the beginning that is at the time when the promise was made cannot be presumed.
11. It is not in dispute that customers have approached the petitioners and parted with huge amounts towards payments of the flats to the Company headed by the petitioners. Whether the amounts are collected by these petitioners deliberately to cheat or otherwise cannot be decided when the investigation is still in progress. It is not in dispute that the Project was floated and certain lands were also purchased by these petitioners. Further, since the project did not start as planned, the customers were reluctant to proceed with the purchase and sought return of their advances.
12. It is not in dispute that the amounts were taken by these petitioners and the same is with the petitioners. It is not as though the project is half completed or at the advance stage of completion. 6 Several issues have lead to the present complaint. All the grounds raised by the petitioners can as well be agitated on the completion of investigation. I do not find any reasons to quash the proceedings at the initial stage of investigation. It is for the investigating Agency to draw conclusions based on the evidence collected during the course of investigation to know whether the offences as alleged in the complaint are made out or not.
13. Accordingly, the Criminal Petitions are dismissed.
Miscellaneous applications pending, if any, shall stand closed.
__________________ K.SURENDER, J Date: 27.04.2023 tk 7 THE HON'BLE SRI JUSTICE K.SURENDER CRIMINAL PETITION Nos.11516 & 11766 OF 2022 Dt. 27.04.2023 tk