HON'BLE SRI JUSTICE K.SURENDER
CRIMINAL PETITION No.2705 OF 2021
ORDER:
1. This Criminal Petition is filed to quash the proceedings against petitioners/A1 and A2 in C.C.No.684 of 2017 on the file of XVII Additional Chief Metropolitan Magistrate, Hyderabad.
2. The petitioners were charge sheeted by the Jubilee Hills Police for the offence under Sections 406, 420, 324, 506 r/w 34 of IPC.
3. Briefly, the case of the 1st respondent/complainant is that he entered into sale agreement with M/s.Vamsiram Builders, of which the 1st petitioner is the Managing Director and the 2nd petitioner is the Marketing Executive. The said agreement was entered into for the purpose of purchase of a property, which is a flat in the construction of residential complex undertaken by M/s.Vamsiram Builders. According to the 1st respondent, sale consideration of flat was Rs.2.75 Crores and another Rs.1.25 Crores were taken for interiors. However, without undertaking the interior construction, the 2 property was handed over. The 1st respondent thereafter came to know that notice was issued by the HMDA to the firm M/s.Vamsiram Builders to pay an outstanding of Rs.5.29 Crores and suppressing the same, flat was sold. To safeguard his property, the 1st respondent filed civil suit in OS No.596 of 2016 on the file of XXI Additional Chief Judge, City Civil Court, Hyderabad and obtained status quo order.
4. On 30.09.2016, a complaint was filed by the 1st respondent alleging that the said agreement of sale was entered into on 03.01.2013 for the purchase of flat No.201 in 2nd floor. However, there was a notice issued by the HMDA dated 20.09.2012 for paying an amount of Rs.5,28,69,993/-. Suppressing the said fact, agreement of sale was entered into, for which reason of misrepresentation, the 1st respondent was cheated and his acts amount to criminal misappropriation.
5. It is further alleged in the complaint that though the accused did not complete the interiors as promised, having taken Rs.1.25 Crores, the 1st respondent completed interiors by incurring expenditure separately. In the month of August, 3 2016, Gruhapravesham (housewarming ceremony) was performed. The petitioners allegedly sent some third parties to his house who informed that they wanted to buy the flat from the builder. Apprehending that the builder may sell the said flat to someone else, civil suit was filed. On 28.09.2016, while he was with some known persons, A1 came with a mob and questioned the 1st respondent as to how he obtained injunction, threatened that he would forcibly evict him from the flat and tried to hit with rod on his head. However, the persons present there prevented A1. The 1st respondent received injuries on his shoulder and leg. He was joined in Gandhi Hospital and the duty Doctor issued discharge letter dated 29.09.2016.
6. The police, having received complaint registered the same and concluded investigation finding that these petitioners are liable for the offences of criminal misappropriation, cheating, causing hurt and criminal intimidation.
7. Sri T. Pradyumnakumar Reddy, learned Senior Counsel appearing for Sri T.Anirudh Reddy, learned counsel for the 4 petitioners would submit that the case is purely civil in nature and the amounts that were paid by way of cheque was prior to the HMDA notice dated 15.06.2013. The amount of Rs.2,97,75,756/- was paid by the 1st respondent on 12.11.2012, 16.02.2013 and 14.03.2013, in three installments. The question of either cheating or criminal misappropriation does not arise since it may be breach of contract since there was no notice of the HMDA when amount was paid by 1st respondent. He relied on the judgment of Hon'ble Supreme Court in the case of Uma Shankar Gopalika v. State of Bihar and another1 and argued that breach of contract would give rise to criminal offence of cheating unless, it is shown that there was deception played at the very inception. He also relied on the judgment of Hon'ble Supreme Court in the case of G.Sagar Suri v. State of Uttar Pradesh2 in which it is observed that it is the duty and obligation of the criminal courts to assess and conclude whether prima facie 1 (2005) 10 SCC 336 2 (2000) 2 SCC 636 5 criminal case is made out and issue process. The court should be careful in issuing process when the transactions alleged are predominantly civil in nature. In the judgment of Binod Kumar v. State of Bihar3, the Hon'ble Supreme Court held that unless there is a criminal misappropriation of the property entrusted, it cannot be held that an offence under Section 406 of IPC is made out. Finally, learned Senior Counsel submits that a false case has been made up by the 1st respondent to intimidate the petitioners and no such incident happened.
8. On the other hand, it was argued on behalf of the respondents that the petitioners having knowledge about the issuance of notice of outstanding to HMDA, the property was sold to the 1st respondent and for the said reason, the petitioners have to be tried by the trial Court. The case cannot be quashed since the allegations make out prima facie case of criminal misappropriation, criminal intimidation and cheating. 3 (2014) 10 SCC 663 6
9. Having perused the record, there is a transaction of sale between M/s.Vamsiram Builders, of which the 1st petitioner is the Managing Director. It is not in dispute that the amounts were paid and it is also not in dispute that a flat was allotted to the 1st respondent after amount was paid and an agreement of sale was also entered into.
10. The basis for 1st respondent to lodge complaint for the offences of cheating, criminal misappropriation, is alleged notice of HMDA wherein the land owner and M/s.Vamsiram Builders were liable to pay dues around Rs.5.29 Crores. It is not the case of the 1st respondent that such notices which are served on the petitioners' firm or the land owner had in any way impacted the sale transaction of the 1st respondent. It is not the case that the 1st respondent was issued notice to pay any amount on failure of the outstanding amount being paid by the land owner or M/s.Vamsiram Builders. No liability is passed on to the 1st respondent in view of there being a demand of Rs.5.29 Crores by HMDA to the land owner. In the said circumstances, when there was no impact in any manner 7 or affecting the rights of the 1st respondent as a purchaser, it cannot be said that there is any criminal intent on the part of the petitioners to cheat the 1st respondent. There is neither fraudulent inducement nor any wrongful loss that has resulted due to the notice of the HMDA.
11. For the aforesaid reasons, no offence under Section 420 of IPC is made out. Further, the amounts that were paid to M/s.Vamsiram Builders were not disputed and the flat was also not sold to any third parties, as such, the question of criminal misappropriation does not arise. However, the incident happened on 28.09.2016, when allegedly the 1st petitioner went to the premises of the 1st respondent along with some other persons and assaulted him. The same cannot be determined to be a false statement made by the 1st respondent in view of the medial certificate available. Whether there was an assault or criminal intimidation are subject matters of trial to be decided after examination of the witnesses.
8
12. As far as the 2nd petitioner is concerned, there are no allegations against 2nd petitioner, who is Marketing Executive.. He was not named as the person who had assaulted the 1st respondent on the said date. For the said reason, the proceedings against 2nd petitioner are quashed. The proceedings under Sections 420 and 406 of IPC are also quashed against 1st petitioner. However, the trial Court is directed to proceed against the 1st petitioner in respect of other offense under Section 324 and 506 of the IPC in CC No.684 of 2017.
13. Accordingly, the Criminal Petition is allowed in part. As a sequel thereto, miscellaneous applications, if any, shall stand closed.
__________________ K.SURENDER, J Date: 27.01.2023 kvs 9 HON'BLE SRI JUSTICE K.SURENDER CRIMINAL PETITOIN No.2705 OF 2021 Date: 27.01.2023 kvs 10