Karnataka High Court
Jagadish K vs M Rajashekaraiah on 2 December, 2021
Bench: M.Nagaprasanna
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 2ND DAY OF DECEMBER, 2021
BEFORE
THE HON'BLE MR. JUSTICE M. NAGAPRASANNA
CRIMINAL PETITION No.7650/2018
BETWEEN
1. JAGADISH K,
S/O KARIYAPPA,
AGED ABOUT 54 YEARS,
2. SMT. CHANDRAKALA,
W/O JAGADISH,
AGED ABOUT 55 YEARS,
3. MANOHAR J.,
S/O JAGADISH,
AGED ABOUT 30 YEARS,
4. KUM. KUSUMA J.,
D/O JAGADISH K,
AGED ABOUT 26 YEARS,
PETITIONER NO.1 TO 4 ARE
R/AT NO.13/1, 3RD FLOOR, 13TH MAIN,
27TH C CROSS, JAYANAGARA, 4TH BLOCK,
BANGALORE - 560 011.
5. EERE GOWDA,
S/O LATE RACHAPPA,
AGED ABOUT 71 YEARS,
NOW R/AT SITE NO.3, SY.NO.160/3,
VISWESHARAIAH LAYOUT 5TH BLOCK,
MANGANAHALLI MAIN ROAD,
PATELLAPAP LAYOUT,
2
NEAR VISWESHWARAIAH STATUE,
ULLAL VILLGE,
YESHWANTHPURA HOBLI,
BENGALURU - 560 056.
OLD R/AT NYGERE VILLAGE,
ARAKALAGUDU TALUK,
HASSAN DISTRICT - 577 110.
6. SADANANDA,
S/O.EREGOWDA,
AGED ABOUT 40 YEARS,
HEAD CONSTABLE,
INDIRANAGARA (TRAFFIC) PS,
BANGALORE - 560 038.
... PETITIONERS
[BY SRI.RAJASHEKAR S., ADVOCATE
(PHYSICAL HEARING))
AND
1. M. RAJASHEKARAIAH,
S/O.LATE MALLAIAH,
AGED ABOUT 55 YEARS,
R/AT NO.152/5, SRI MATHA NILAYA,
1ST MAIN, PATEL MALLAPPA LAYOUT,
MANGANAHALLI MAIN ROAD, ULLAL,
BANGALORE - 560 056.
2. THE STATION HOUSE OFFICER,
BYADARAHALLI POLICE STATION,
MAGADI SUB DIVISION,
RAMANAGARA DISTRICT,
REPRESENTED BY ITS
STATE PUBLIC PROSECUTOR,
HIGH COURT BUILDING,
BANGALORE - 01.
... RESPONDENTS
SRI.R.D.RENUKARADHYA, HCGP FOR R2
(PHYSICAL HEARING);
R1 IS SERVED AND UNREPRESENTED]
3
THIS CRIMINAL PETITION IS FILED U/S.482 OF
CR.P.C PRAYING TO QUASH THE ENTIRE PROCEEDINGS
AGAINST THE PETITIONERS IN PCR.NO.547/2018
RESULTED IN REGISTERING OF FIR IN CR.NO.493/2018
OF BYADRAHALLI P.S., ON THE FILE OF THE C.J.M.,
BANGALORE RURAL DISTRICT, BANGALORE FOR THE
ALLEGED OFFENCES P/U/S 506, 504, 448, 465, 420,
120B, 417, 471, 467, 468 OF IPC.
THIS CRIMINAL PETITION COMING ON FOR
ADMISSION THIS DAY, THE COURT MADE THE
FOLLOWING:
ORDER
Petitioners - accused Nos.1 to 6 in PCR
No.547/2018 and Crime No.493/2018 pending before
the Chief Judicial Magistrate, Bangalore have filed the
present petition seeking obliteration of the proceedings
in the aforesaid Crime No.493/2018.
2. Heard Sri. Rajashekar S., learned counsel
appearing for the petitioners, Sri. R.D. Renukaradhya,
learned HCGP appearing for respondent No.2 and have
perused the material on record. Respondent No.1 -
complainant has remained unrepresented despite
service of notice.
3. Brief facts leading to the filing of the present
petition, as borne out from the pleadings, are as
follows:-
The complainant was the owner of a property in
Sy.No.160/3 measuring 22 guntas in Ullal Village and
sells the same site bearing No.3 measuring 30' x 40' to
petitioner No.2. On the sale taken place on 12.04.2000,
petitioner No.2 is in possession of the property since
then.
4. It transpires that the Bangalore Development
Authority (hereinafter referred to as 'BDA' for short)
acquired a portion of the property in Sy.No.160/3 on
18.05.2007 close to 7 years after the complainant had
sold the property. Pursuant to the acquisition, the
complainant submits a representation before the BDA
seeking denotification of 5 guntas of land, out of the
acquired portion by the BDA for his own use. The BDA
considers the same and denotifies 3 guntas of land in
favour of the complainant. It is the case of the
complainant that those 3 guntas of land that the BDA
has released in his favour is within the property
belonging to the petitioners.
5. The claim of the complainant is that, it is his
property and not the petitioners. Therefore, a squabble
between the petitioners and the complainant is with
regard to the aforesaid 3 guntas of land that was
released in favour of the complainant. Subsequent acts
of the complainant in forging signatures of the officials
of the BBMP and getting the khata transferred in his
name, resulted in a complaint being registered by
petitioner No.2 against the present complainant on
06.03.2018. The compliant registered by petitioner No.2
against the complainant reads as follows:
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6. This complaint results in registration of an
FIR against the complainant for offences punishable
under Sections 420, 471, 468, 473, 464 read with
Section 34 of the IPC and the police have filed the
charge sheet against the complainant, which is now
pending consideration before the Criminal Court in
C.C.No.57/2018. The charge sheet is filed by the police
on 17.08.2018, which is now pending consideration
before the Criminal Court in C.C.No.26498/2018 for the
aforesaid offences.
7. The complaint is registered by petitioners
No.2 against the complainant on 06.03.2018 and the
police have filed the charge sheet against the
complainant on 17.08.2018. After registering the
complaint and when the charge sheet was to be filed
against the complainant, the complainant as a
counterblast registers the subject private complaint
against the petitioners on 08.08.2018. It is these
proceedings that are called in question by the
petitioners before this Court.
8. Learned counsel appearing for the
petitioners would submit that the issue with regard to 3
guntas of land, which the complainant got back from
the hands of the BDA is infact the land belonging to the
petitioners, as the petitioners long before the
acquisition, sold the said property in favour of petitioner
No.2 and would further submit that there are about
4 civil suits either pending or disposed between the
same parties, where the subject matter is with regard to
3 guntas of land in Sy.No.160/3, which the complainant
earlier owned and had sold in favour of the petitioners.
9. Learned HCGP would however submit that it
is a matter of trial that the petitioners have to come out
clean and the Court would not interject such trial in the
facts obtaining in the case at hand.
10. I have given my anxious consideration to the
contentions of respective learned counsel and have
perused the material on record.
11. The afore-narrated facts with regard to
purchase of the property from the hands of complainant
by petitioner No.2 not being in dispute is not reiterated.
It is also not in dispute that petitioner No.2 registers a
complaint against the subject complainant on
06.03.2018 alleging that the complainant has forged the
signatures of the BBMP officials and has created certain
documents with regard to 3 guntas of land in
Sy.No.160/3 and the charge sheet is filed in the said
case against the complainant, in which, the petitioner
No.2 is the complainant. After the registration of the
complaint, the complainant files the present complaint
as a counterblast alleging the very same offences that
are alleged against the complainant in the aforesaid
proceedings.
12. It is also not in dispute that the petitioners
have filed civil suit in O.S.No.1178/2007, as the
moment property was acquired by the BDA, interference
began from the hands of the complainant. It is in that
light that the petitioners have preferred the said civil
suit for injunction against the complainant.
Subsequently, the petitioners have also filed the another
suit in O.S.No.1230/2018, in which, the complainant
has filed a counterclaim. The complainant himself had
instituted a suit in O.S.No.1241/2018 seeking
injunction against the petitioners, which came to be
withdrawn and subsequently, the complainant has
again filed a suit in O.S.No.1966/2019 seeking
declaratory rights over the entire extent that he had sold
in the year 2000 to petitioner No.2. The said suit is
pending adjudication before the competent civil court.
13. The trial Court had granted an interim order
of status quo in O.S.No.1966/2019. The order of status
quo granted in O.S.No.1966/2019 was called in
question by another purchaser from the hands of the
petitioners in M.F.A.No.984/2021. This Court disposed
the said appeal on 30.06.2021, observing as follows:
12. In view of the aforesaid facts and
circumstances, since there exits serious dispute
with regard to title and identity over the
properties involved in OS.No.1966/2019 filed by
respondent No.1, OS.No.1366/2018 filed by the
appellant and OS.No.1230/2018 filed by
respondent No.2, I am of the considered opinion
that the trial Court was fully justified in directing
the parties to maintain status quo with regard to
nature, character and possession over the suit
schedule property in OS.No.1966/2019
particularly when the said suit in
OS.No.1966/2019 was a comprehensive suit
seeking declaration of title, permanent injunction
and other reliefs filed by respondent No.1 against
both the appellant herein and respondent No.2.
13. In view of the aforesaid facts and
circumstances, I do not find any illegality or
infirmity in the impugned order warranting
interference by this Court in the present appeal
and the same is hereby dismissed.
However it is made clear that the present
order of this Court declining to interference with
the impugned order of status quo passed in
OS.No.1966/2019 shall not be construed or
treated as this Court interfering with the order
dated 02.11.2020 passed by the Principal District
Judge, Bengaluru Rural District, Bengaluru,
dismissing MA.No.64/2020 filed by respondent
No.1 against the appellant."
14. It is not in dispute civil proceedings galore
between the petitioners and the complainant and the
private complaint itself on the face of it is filed as a
counterblast after the complaint is registered by
petitioner No.2 against the complainant, which has
resulted in a charge sheet being filed by the police.
Therefore, the very initiation of such proceedings was
without doubt an act of the complainant to wreak
vengeance against the petitioners for having registered a
complaint against the complainant, which has resulted
in police filing of the charge sheet.
15. Reference being made to the judgment of the
Apex court in the case of Mitesh Kumar J. Sha v. State
of Karnataka and Others1 in the circumstance is
apposite.
"23. To simply put, what has been argued
on behalf of Respondent No. 2 is that cause of
action in civil and criminal proceedings instituted
by Respondent No. 2 are separate and
independent of each other, i.e., liability for breach
of agreement is independent of the liability for
commission of offence under sections 405 and
415 of the Penal Code, 1860. Therefore, criminal
proceedings so instituted against the Appellants
herein cannot be quashed.
2021 SCC OnLine SC 976
24. It is further contended that sale deed in
respect of 8000 sq. ft. area cannot be executed by
the Appellants as Respondent No 2 had not given
GPA to sell the said area. Therefore, the sale
made by the Appellants in excess of their
authority is unlawful and is indicative of the
criminal intent of the appellants. Moreover, the
said excess four flats sold by the Appellants,
have also been taken out of the arbitral
proceedings and therefore the Appellants herein
can place no reliance on the arbitral proceedings.
Contentions made on behalf of Respondent
No. 1-State
25. Counsel appearing for the State of
Karnataka i.e. Respondent No. 1 submits that, as
far as the argument of the Appellants that
Respondent No. 2 has merely made an attempt to
cloak a dispute of civil nature is concerned, the
High Court has held that in the instant
circumstances there being clear allegations that
the appellants had executed sale deed of the said
flats without authority, there were no grounds to
interfere with the matter. It is further submitted
that in the instant facts clear ingredients of
offences punishable under sections 406, 419 and
420 read with section 34 of Penal Code, 1860
have been made out.
Issues
26. Having perused the relevant facts and
contentions made by the Appellants and
Respondents herein in our considered opinion, the
following three key issues require determination
in the instant case:
- Whether the necessary ingredients of
offences punishable under Sections 406, 419 and
420 are prima facie made out?
- Whether sale of excess flats, even if
made, amounts to a mere breach of contract or
constitutes an offence of cheating?
- Whether the dispute is one of entirely civil
nature and therefore liable to be quashed?
Whether the necessary ingredients of
offences punishable under Sections 406, 419 and
420 are prima facie made out?
27. In order to ascertain the veracity of
contentions made by the parties herein, it is
imperative to firstly examine whether the relevant
ingredients of offences which the appellants
herein had been charged with, are prima facie
made out. The relevant sections read as
follows:--
"405. Criminal breach of trust--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 of
trust".
[Explanation [1].--A person, being an
employer [of an establishment whether exempted
under section 17 of the Employees' Provident
Funds and Miscellaneous Provisions Act, 1952
(19 of 1952), or not] who deducts the employee's
contribution from the wages payable to the
employee for credit to a Provident Fund or Family
Pension Fund established by any law for the time
being in force, shall be deemed to have been
entrusted with the amount of the contribution so
deducted by him and if he makes default in the
payment of such contribution to the said Fund in
violation of the said law, shall be deemed to have
dishonestly used the amount of the said
contribution in violation of a direction of law as
aforesaid.] [Explanation 2.--A person, being an
employer, who deducts the employees'
contribution from the wages payable to the
employee for credit to the Employees' State
Insurance Fund held and administered by the
Employees' State Insurance Corporation
established under the Employees' State Insurance
Act, 1948 (34 of 1948), shall be deemed to have
been entrusted with the amount of the
contribution so deducted by him and if he makes
default in the payment of such contribution to the
said Fund in violation of the said Act, shall be
deemed to have dishonestly used the amount of
the said contribution in violation of a direction of
law as aforesaid.]
406. Punishment for criminal breach of
trust--Whoever commits criminal breach of trust
shall be punished with imprisonment of either
description for a term which may extend to three
years, or with fine, or with both.
419. Punishment for cheating by
personation--Whoever cheats by personation
shall be punished with imprisonment of either
description for a term which may extend to three
years, or with fine, or with both.
420. Cheating and dishonestly inducing
delivery of property-- Whoever cheats and
thereby dishonestly induces the person deceived
to deliver any 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."
28. In the instant case, the complaint
levelled against the Appellants herein is one
which involves commission of offences of criminal
breach of trust and cheating. While a criminal
breach of trust as postulated under section 405 of
the Penal Code, 1860, entails misappropriation or
conversion of another's property for one's own
use, with a dishonest intention, cheating too on
the other hand as an offence defined under
section 415 of the Penal Code, 1860, involves an
ingredient of having a dishonest or fraudulent
intention which is aimed at inducing the other
party to deliver any property to a specific person.
Both the sections clearly prescribed 'dishonest
intention', as a pre-condition for even prima facie
establishing the commission of said offences.
Thus, in order to assess the relevant contentions
made by the parties herein, the question whether
actions of the Appellants were committed in
furtherance of a dishonest or fraudulent scheme
is one which requires scrutiny.
29. Coming to the facts of the case at
hands, the contested contention between the
parties is that the builder company had sold four
excess flats beyond its share, in terms of the JDA
and supplementary agreement entered into
between the parties. Respondent No. 2 contends
that builder company which was entitled to sell
only 9 flats in its favour, has instead executed
sale deed for 13 flats in total. Thus, the company
simply could not have sold the flats beyond 9
flats for which it was authorized and resultantly
cannot evade criminal liability on a mere premise
that a civil dispute is already pending between
the parties.
30. The Appellants on the other hand
contend that in terms of a subsequent MoU dated
19.02.15, it was mutually agreed between the
parties, that partial payment for a loan amount
borrowed by Respondent No. 2 from Religare
Finvest Ltd., would be paid out from the sale
proceeds of the said development project
undertaken by both the parties. Pursuant to this
MoU, the Appellants had agreed to get an NOC for
15 flats by making payment of Rs. 40,00,000/-
for each flat.
31. The key contention, and also the central
point of dispute, made by the Appellants is that, it
was specifically agreed between the parties that
the Appellants would be entitled to sell additional
flats beyond their share, as adjustments for
payment made to Religare Finvest Ltd. on behalf
of Respondent No. 2. It is further contended that
Respondent No. 2 had also agreed to execute a
ratification deed to the JDA and GPA eventually,
which would have formally authorised the
Appellants to sell additional apartments.
32. Nonetheless, the ratification deed was
never made and Respondent No. 2 subsequently
even revoked the GPA unilaterally, contending
that the terms of JDA were not followed.
33. It was only after revocation of GPA that
the company filed an application for arbitration
seeking interim orders to restrain the Respondent
No. 2 from alienating the disputed property.
Simultaneously, while this dispute was pending
adjudication before the arbitrator Respondent No.
2 filed a criminal complaint against the
Appellants.
34. At this juncture, it further becomes
pertinent to mention that eventually though both
the parties partly succeeded before the arbitrator,
in terms of their respective claims, the arbitrator
observed that GPA indeed could not have been
revoked unilaterally at the instance of
thereafter even preferred a challenge to the
award passed by the arbitrator. Moreover,
pending arbitration proceedings issue regarding
selling of excess flats at the instance of
Appellants, was also withdrawn by Respondent
No. 2 seeking liberty to pursue his claim with
regard to selling of four excess flats in pending
civil proceedings.
35. Upon a careful assessment of such
facts, by no stretch can it be concluded that the
Appellants herein have deceptively or
intentionally tried to sell excess flats if any, as
contended by Respondent No. 2. Here, it must
also be borne in mind that subsequent to the
revocation of GPA, it was the Appellants herein
who had first resorted to arbitration proceedings
on 02.03.16 for redressal of dispute between the
parties, to which Respondent No 2 had
accordingly filed his statement of objections dated
09.03.16. It was only on 29.03.16 that
Respondent No. 2 had filed the FIR in question
bearing Crime No. 185/2016 against the
who had withdrawn his prayer with respect to
selling of four excess flats by the Appellants, only
to pursue the same in civil proceedings.
36. At this stage, by placing reliance on the
judgment of this Court in Priti Saraf v. State of
NCT of Delhi (Supra) and Sri Krishna Agencies v.
State of Andhra Pradesh (Supra), it has been
further submitted by Respondent No. 2 that
Appellants cannot evade a criminal case by
merely contending that the person whose
property has been sold has filed a civil suit for
recovery of the property, or that the dispute had
been referred to arbitration.
37. Although, there is perhaps not even an
iota of doubt that a singular factual premise can
give rise to a dispute which is both, of a civil as
well as criminal nature, each of which could be
pursued regardless of the other. In the instant
case, the actual question which requires
consideration is not whether a criminal case could
be pursued in the presence of a civil suit, but
whether the relevant ingredients for a criminal
case are even prima facie made out. Relying on
the facts as discussed in previous paragraphs,
clearly no cogent case regarding a criminal
breach of trust or cheating is made out.
38. The dispute between the parties, could
at best be termed as one involving a mere breach
of contract. Now, whether and what, is the
difference between a mere breach of contract and
an offence of cheating has been discussed in the
ensuing paragraphs.
Whether sale of excess flats even if made
amounts to a mere breach of contract?
39. This Court in the case of Hridaya
Ranjan Prasad Verma v. State of Bihar6, has
observed:--
"15. ....that the distinction between mere
breach of contract and the offence of cheating is a
fine one. It depends upon the intention of the
accused at the time to inducement which may be
judged by his subsequent conduct but for this
subsequent conduct is not the sole test. 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..."
40. Applying this dictum to the instant
factual matrix where the key ingredient of having
a dishonest or fraudulent intent under sections
405, 419 and 420 is not made out, the case at
hand, in our considered opinion is a suitable case
necessitating intervention of this Court."
In the light of the afore-extracted judgment of the
Apex Court in the case of Mitesh Kumar J. Sha
(supra), wherein the Apex Court has delineated the law
with regard to a case being predominantly civil in
nature and the complaint being registered against the
accused as a counterblast or to wreak vengeance has
directed that the Court should not permit such
proceedings to continue, which would become a weapon
of harassment against the accused.
16. In the light of the law laid down by the Apex
Court in the aforesaid case, the following:
ORDER
i. Criminal Petition is allowed.
ii. The proceedings pending in PCR
No.547/2018 and Crime No.493/2018
before the Chief Judicial Magistrate,
Bangalore, stand quashed.
iii. The courts before whom the proceedings are
pending between the parties in the aforesaid
civil suits shall not be influenced by the
orders passed by this Court, as the present
order is only on consideration of the case of
the petitioners under Section 482 of Cr.P.C.
The Court shall consider the cases of the
parties to the lis independently.
Sd/-
JUDGE
SJK
