Karnataka High Court
Brigade Enterprises Limited vs State Of Karnataka on 17 October, 2022
Bench: M.Nagaprasanna
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 17TH DAY OF OCTOBER, 2022
BEFORE
THE HON'BLE MR. JUSTICE M. NAGAPRASANNA
WRIT PETITION No.14761 OF 2021 (GM-RES)
BETWEEN:
1. BRIGADE ENTERPRISES LIMITED
A COMPANY INCORPORATED UNDER
THE COMPANIES ACT, 1956 AND
HAVING ITS REGISTERED OFFICE AT
29TH AND 30TH FLOOR,
26/1, DR. RAJKUMAR ROAD,
MALLESHWARAM, RAJAJINAGAR,
BENGALURU - 560 055,
REPRESENTED BY ITS
AUTHORIZED SIGNATORY,
MR. UDAYA KUMAR. A.
2. MR. M. R. JAISHANKAR
CHAIRMAN AND MANAGING DIRECTOR,
BRIGADE ENTERPRISES LIMITED,
29TH AND 30TH FLOOR,
WORLD TRADE CENTRE,
BRIGADE GATEWAY CAMPUS,
26/1, RAJKUMAR ROAD,
MALLESHWARAM,
RAJAJINAGAR,
BENGALURU
KARNATAKA - 560 055.
3. MR.ATUL GOYAL
DIRECTOR,
BRIGADE ENTERPRISES LIMITED,
2
29TH AND 30TH FLOOR,
WORLD TRADE CENTRE,
BRIGADE GATEWAY CAMPUS,
26/1, RAJKUMAR ROAD,
MALLESHWARAM,
RAJAJINAGAR, BENGALURU
KARNATAKA - 560 055.
4. MS.ROSHIN MATHEW
DIRECTOR,
BRIGADE ENTERPRISES LIMITED,
29TH AND 30TH FLOOR,
WORLD TRADE CENTRE,
BRIGADE GATEWAY CAMPUS,
26/1, RAJKUMAR ROAD,
MALLESHWARAM, RAJAJINAGAR,
BENGALURU, KARNATAKA - 560 055.
5. MS. NIRUPA SHANKAR
DIRECTOR,
BRIGADE ENTERPRISES LIMITED,
29TH AND 30TH FLOOR,
WORLD TRADE CENTRE,
BRIGADE GATEWAY CAMPUS,
26/1, RAJKUMAR ROAD,
MALLESHWARAM, RAJAJINAGAR,
BENGALURU, KARNATAKA - 560 055.
6. MR. AMAR SHIVRAM MYSORE
DIRECTOR,
BRIGADE ENTERPRISES LIMITED,
29TH AND 30TH FLOOR,
WORLD TRADE CENTRE,
BRIGADE GATEWAY CAMPUS,
26/1, RAJKUMAR ROAD,
MALLESHWARAM,RAJAJINAGAR,
BENGALURU, KARNATAKA - 560 055.
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7. MR.PALANIMUTHU OM PRAKASH
DIRECTOR,
BRIGADE ENTERPRISES LIMITED,
29TH AND 30TH FLOOR,
WORLD TRADE CENTRE,
BRIGADE GATEWAY CAMPUS,
26/1, RAJKUMAR ROAD,
MALLESHWARAM, RAJAJINAGAR,
BENGALURU
KARNATAKA - 560 055.
8. MS. PAVITRA SHANKAR
DIRECTOR,
BRIGADE ENTERPRISES LIMITED,
29TH AND 30TH FLOOR,
WORLD TRADE CENTRE,
BRIGADE GATEWAY CAMPUS,
26/1, RAJKUMAR ROAD,
MALLESHWARAM,
RAJAJINAGAR, BENGALURU
KARNATAKA - 560 055.
... PETITIONERS
(BY SRI K.G.RAGHAVAN SR.ADVOCATE FOR
SRI ABHINAY V., ADVOCATE)
AND:
1. STATE OF KARNATAKA
THROUGH THE INSPECTOR,
BANASWADI POLICE STATION,
HRBR LAYOUT, 2ND BLOCK,
HRBR LAYOUT, KALYAN NAGAR,
BENGALURU, KARNATAKA - 560 043.
2. M/S. SURAAPANA BREWING LLP
A LIMITED LIABILITY PARTNERSHIP
SUPPOSEDLY REGISTERED UNDER
4
LIMITED LIABILITY PARTNERSHIP ACT 2008
AND HAVING ITS REGISTERED OFFICE AT
NO. 24, BENAKA COMPLEX,
3RD FLOOR, 2ND CROSS,
SIRUR PARK ROAD, SESHADRIPURAM,
BENGALURU
KARNATAKA - 560 020.
REPRESENTED BY ITS
DESIGNATED PARTNER.
3. M/S. MATEX NET PVT. LTD.,
A COMPANY INCORPORATED UNDER
THE COMPANIES ACT, 1956,
HAVING ITS REGISTERED OFFICE AT
NO.4 AND 5, 1ST CROSS,
K.R. COLONY, DOMLUR LAYOUT,
BENGALURU - 560 071.
REPRESENTED BY ITS DIRECTOR.
4. M/S. COMMUNITY INDIA HOSPITALITY
AND RESORTS PVT. LTD.,
A COMPANY INCORPORATED UNDER
THE COMPANIES ACT 2013,
HAVING ITS REGISTERED OFFICE AT
NO. 67 AND 68, BRIGADE SOLITAIRE,
RESIDENCY ROAD, BENGALURU
KARNATAKA - 560 025,
REPRESENTED BY
ITS DIRECTOR.
... RESPONDENTS
(BY SRI K.S.ABHIJITH, HCGP FOR R1;
SRI K.SHASHIKIRAN SHETTY, SR.ADVOCATE FOR
SRI PRAVEEN KUMAR HIREMATH, ADVOCATE FOR C/R-2;
NOTICE TO R-3 & 4 DISPENSED WITH V/O DATED 18/8/21)
THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE
CONSTITUTION OF INDIA READ WITH SECTION 482 OF CR.P.C.,
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PRAYING TO CALL FOR LOWER COURT RECORDS IN PCR
NO.7527/2021, PENDING BEFORE THE HONBLE 4TH ADDL. CHIEF
METROPOLITAN MAGISTRATE COURT, BENGALURU; QUASH THE
IMPUGNED COMPLAINT DTD 21.04.2021 FILED BY THE R-2 BEFORE
THE HON'BLE IV ADDL. CHIEF METROPOLITAN MAGISTRATE
COURT, BENGALURU VIDE ANNX-A AND ETC.,
THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED
FOR ORDERS ON 15.09.2022, COMING ON FOR PRONOUNCEMENT
THIS DAY, THE COURT MADE THE FOLLOWING:-
ORDER
The petitioners are before this Court calling in question
registration of crime in Crime No.361 of 2021 arising out of a
private complaint registered in P.C.R.No.7527 of 2021 before the IV
Additional Chief Metropolitan Magistrate, Bangalore.
2. Sans unnecessary details, the averments in the petition, as
borne out from the pleadings, are as follows:-
The 1st petitioner/Brigade Enterprises Limited is a Company
incorporated under the Companies Act, 1956 (hereinafter referred
to as 'the Company' for short) and is claimed to be a leading
property developer in India. The 1st petitioner further claims to
have constructed several buildings in several acres of property in
the City of Bangalore which includes lifestyle enclaves and
townships consisting of residential, retail and commercial spaces.
The 2nd petitioner is the Chairman and Managing Director of the
Company. The remaining petitioners are all Directors of the 1st
petitioner/Company. A Joint Development Agreement inter alia was
entered into which resulted in construction and development of a
multistoried commercial building in the name and style of Orion
Avenue Mall ('Mall' for short) in Site No.10/34 on Banaswadi Main
Road, Bangalore. The Mall consists of retail shops, kiosks, flea
markets, food court, multiplex and other entertainment zones
spread across 2,68,410 sq.ft.
3. The 1st petitioner after construction was looking out for
entrepreneur interested in operating and running a business of
microbrewery and casual dining/serving of food and beverages in
the Mall. In terms of the interest so generated by the Company, the
designated partners of 2nd respondent one Sri A. Srinivas Guptha,
Krishna Chaithanya along with one Mr. Prabhakar Kumar claiming
to be keen to run the business in the said Mall appeared to have
approached the 1st petitioner/Company and the 1st petitioner claims
that the 2nd respondent and others assured to abide by and fulfill all
the requirements if adequate commercial space within the Mall
would be made available with customizations, as required by them.
In terms of the negotiations, the 1st petitioner drew up a paper
work/commercial arrangement and transaction in the name and in
favour of their entity CMODA Solutions Pvt. Ltd. and later it
appears, following several rounds of discussions and negotiations
between the Company and the 2nd respondent, a registered lease
deed comes to be executed on 13-11-2019 (hereinafter referred to
'the Contract' for short).
4. The contract stipulated several covenants and initial term
of the said Contract was to be for a period of 9 years from the date
of lease commencement. First three years of the Contract was
treated to be a lock-in period by virtue of which the 2nd respondent
agreed and undertook to use the commercial space and run
microbrewery business thereon for a minimum period of three
years. It is also a covenant that in the event they fail to use the
concerned commercial space and run the microbrewery business for
a period of three years, they would pay twice the rental for the
unexpired period of the lock-in as liquidated damages. It was also
agreed that rent commencement date would be 100 days from the
date of possession or date of commencement of business. It was
also agreed to pay common area maintenance charges.
5. On an allegation that from the very beginning,
notwithstanding the fact that the 1st petitioner/Company performed
all the terms and spent over Rs.37,00,000/- to undertake works
requested by the 2nd respondent and handed over the possession of
the space on 01-09-2019, it is the 2nd respondent who refused to
perform its obligation under the contract in terms of payment that
was to be made. Monthly rental dues were not paid from 10-12-
2019 and common area maintenance charges were also not paid
which resulted in several e-mails being sent from the 1st
petitioner/Company to the 2nd respondent informing several
defaults or actions contrary to contract. In response to the mails so
sent, certain payments were made, by then the country became
engulfed with the onset of COVID-19 and lock down was imposed
by Government from March 2020. Later, it is contended that
despite lock down being lifted, there was no response from the 2nd
respondent/complainant with regard to fulfillment of the contract or
terms of the contract with regard to payment of certain amounts.
6. The 1st petitioner, claiming to be unable to tolerate the
losses, issues a letter on 23-09-2020 intimating the 2nd respondent
termination of the contract and calling upon the 2nd respondent to
pay the estimated dues of Rs.1,16,18,892/- within seven days. In
response to the said letter, the 2nd respondent sent a mail on
06-10-2020 making certain statements of failures and breaches.
Later the 1st petitioner issues another letter on 14-10-2020 calling
upon the 2nd respondent to fulfill the payment of outstanding dues.
It was replied by the 2nd respondent, which according to the
allegation, that it was not about the amount that was forthcoming.
Later, it appears, that situation warranted that the contract had to
be terminated and outstanding dues of Rs.1,16,18,892/- adjusted
in the partial security deposit amount of Rs.36,39,862/- and the
common area maintenance deposit of Rs.16,40,070/-. Since dues
remained even after the aforesaid adjustment, the 1st petitioner
allowed the Excise Authorities to take stock of liquor inventory left
behind and taken steps to auction the moveable properties like
equipment, furniture and fixtures left behind, over which it had
claimed a lien. The 1st petitioner claims that the 2nd respondent
was kept informed of these developments and had always been
demanding to pay the dues.
7. The auction of movables was conducted on 27-11-2020 by
third party e-auction agency and the bid was concluded at
Rs.51,00,000/-. On 8-12-2020 the 1st petitioner informs the 2nd
respondent that they have taken over the movables, conducted e-
auction and sold the materials despite which there were still
amounts outstanding. The 2nd respondent claims to have sought
access to the Mall and the floor which were denied by the
petitioner. On 25-12-2020 the 2nd respondent sent an e-mail to the
grievance portal complaints of the Hon'ble Prime Minister about the
illegal auction, locking and sale by the petitioner. The office of the
Hon'ble Prime Minister forwarded the complaint to the Government
of Karnataka. It is later the Commissioner of Police writes to the
DCP, Central to look into the complaint and take action. The Police
Inspector of Seshadripuram Police Station transferred the complaint
to Banaswadi Police Station. Again when no action was taken, the
2nd respondent approached the DG, IG and the Chief Secretary.
Even then, no complaint was taken by any of the Police Station.
Later a private complaint comes to be registered by the 2nd
respondent invoking Section 200 of the Cr.P.C. on 28.04.2021. On
15-07-2021 the learned Magistrate referred the matter for
investigation under Section 156(3) of the Cr.P.C. to the Station
House Officer, Banaswadi Police Station. Despite the direction by
the learned Magistrate on 15-07-2021, for close to 21 days, no FIR
was registered. Later on 06-08-2021 FIR comes to be registered
against the 1st petitioner in Crime No.361/2021 and a spot
mahazar was drawn on 10-08-2021. On registration of the crime
the petitioners have knocked the doors of this Court in the subject
petition.
8. Heard Sri K.G.Raghavan, learned senior counsel appearing
for the petitioners, Sri K.S.Abhijith, learned High Court Government
Pleader appearing for respondent No.1, Sri K.Shashikiran Shetty,
learned senior counsel appearing for respondent No.2.
9. The learned senior counsel Sri K.G.Raghavan representing
the petitioners would contend that the 1st petitioner had every right
in terms of the contract to take over the premises and it had also a
lien on the movables in the unit that was leased out to the 2nd
respondent. The termination notice had already been given on
16-10-2020 and the 2nd respondent was already before the Civil
Court seeking injunction in O.S.No.6439 of 2020 and
notwithstanding the same, the 2nd respondent has sought to set the
criminal law in motion only to arm-twist the petitioner to fall in line.
The 1st petitioner is the Company and 2nd petitioner is the Chairman
and Managing Director of the Company. Persons who are not at all
involved in the transaction are all made as accused in the
crime/proceeding, which on the face of it, is civil in nature or a
breach of contract of lease.
10. On the other hand, the learned senior counsel Sri
K.Shashikiran Shetty representing the 2nd respondent would refute
the submissions of the learned senior counsel appearing for the
petitioners to contend that pendency of civil proceedings would not
give a right to the petitioners to take over possession of the
premises and sell furniture, fixtures and other items in the premises
which was locked. The 2nd respondent had been asking access to
the Mall to settle the dues by whatever method. They were not
permitted entry into the Mall and all the communications of such
sale are made only after breaking open the premises which was still
in the possession of the 2nd respondent and those acts are contrary
to law. Therefore, the offence under Section 447 of the IPC which
deals with criminal trespass and Section 427 of the IPC which deals
with mischief are laid against the petitioners.
11. In reply, the learned senior counsel appearing for the
petitioners would contend that the complainant and others who
were signatories to the agreement have themselves accepted the
termination of lease. Once having accepted the termination of
lease nothing remained thereafter, as in terms of acceptance of
termination of lease all movables belonged to the petitioners, as
they had lien on those items, when the agreement was signed.
12. Countering this, the learned senior counsel appearing for
the 2nd respondent would submit that though the complainant has
accepted the termination of lease it does not mean that possession
is delivered and possession ought to have been taken by the
petitioners in a manner known to law. Since that has not been
done, the criminal complaint is maintainable notwithstanding the
fact that the issue arises purely out of a contract. The crime is not
registered on the basis of the prayer that is sought in the civil
proceedings but independent of civil proceedings.
13. I have given my anxious consideration to the submissions
made by the respective learned counsel and perused the material
on record.
14. The afore-narrated facts are not in dispute. The genesis of
the relationship between the 1st petitioner and the 2nd
respondent/complainant along with others is out of an agreement
that is entered into between the parties. The lease deed is entered
into on 13-11-2019. It is registered lease deed which had a lock in
period of three years. Certain conditions between the two which
form part of the lease deed are germane for consideration and they
read as follows:
"NOW THIS DEED WITNESSETH AND IT IS HEREBY AGREED
BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS:
1. DEFINITIONS
1.1 "DEED" shall mean and include the Lease Deed together the
all Annexures Schedules, Attachments, Occupiers' Agreement
and its modifications thereof.
1.2 "BUILT UP AREA" shall mean Built up area plus walls plus
column footprints covered under the Demised Premises. The
Demised Premises will have the assured Built Up efficiency of
66% in relation to the Super Built Up Area (i.e., for every
100 sq.ft. of super built up area, built up area available will
be minimum of 66 st.ft. including wall thickness. This
multiplication factor has been arrived at solely for
commercial purposes of this Lease Deed);
1.3 "COMMON AREA MAINTENANCE CHARGES (CAM
CHARGES)" is a charge applicable to the lessee's and other
occupiers of Orion Avenue Mall for the orderly operation,
maintenance, management and functioning of the Orion
Avenue Mall on CAM and applicable taxes;
1.4 "ELECTRICITY" shall mean electricity, whether generated
using DG sets or other equipment at/within Orion Avenue
Mall, or procured from the Karnataka Electricity Supply Board
or any other private city supply for the Orion Avenue Mall.
1.5 "FIRST APPOINTED DATE" shall mean the date of
"handing over the possession" of the Demised Premises by
the Lessors to the Lessee for the purposes of enabling the
Lessee to do its interior work, racking, furniture, stocking
and fit outs after the Lessors has completed the items listed
in Annexure-3 hereto which incidentally coincides with the
date of execution of the Lease Deed; First Appointed date
shall mean 1st September, 2019.
1.6 "FORCE MAJEURE EVENT" shall mean and include any of
the following events or circumstances: (a) Condemnation,
(b) storm, earthquake, hurricane, tornado, floor or other act
of God, (c) war or act of terrorism, insurrection, rebellion,
riots and other civil unrest; (d)epidemics; quarantine
restrictions or other public health restrictions; (e) tsunami;
(f) change of Government policy; (g) national crisis be it
economic or otherwise.
1.7 "HANDING OVER OF POSSESION" FOR THE PURPOSE OF
"THE FIRST APPOINTED DATE" shall mean the First
Appointed Date for all practical purposes;
1.8 "LEASE RENTAL" shall be either the monthly minimum
guaranteed rent (MAG) or the agreed percentage of share on
the Net Sales, whichever is higher, payable by the lessee to
the lessor and the additional GST and any other tax
statutorily leviable on the Lease Rental commencing from the
Lease Commencement Date, for use of the Demised
Premises to conduct commercial sales there from as provided
under Annexure-4;
1.9 "LOCK IN PERIOD" shall mean the minimum period for
which the Lessee agrees to use the Demised Premises
for the permitted business, from the commencement
date, in accordance with all the terms and conditions
of this Lease Deed, failing which twice the rental for
the balance unexpired period of lock-in period shall
have to be paid by way of liquidated damages.
1.11 "MALL MANAGEMENT COMPANY" shall mean that entity
which the Lessor may choose to appoint, nominate or assign,
at its sole discretion, to look after the property management
including the oversee any or all of the operations,
maintenance and/or management of the Orion Avenue Mall,
its plant and machinery and/or its security, services and/or
amenities, etc.,, and called as Mall Management
Company/Operator or by any other name whatsoever.
1.12 "OCCUPIER" shall mean and include a Lessee or user of any
space within the Orion Avenue Mall irrespective of the space
being used on commercial consideration or otherwise;
1.13 "ORION AVENUE MALL" shall mean the Orion Avenue
Mall/family entertainment centre consisting of Shopping
Centre, Multiplex, along with all its common areas,
staircases, terraces, roof, façade, basements, ingresses and
egresses, parking plant and machinery and other utilities, as
may be developed and/or installed on the Schedule Property;
1.14 "PERMITTGED BUSINESS" shall mean the use of the said
premises as Microbrewery and casual dining serving food and
beverages.
1.15 "PRODUCTS" Lessors hereby permits the lessee to market
and serve food and beverages from the Demised Premises.
1.16 "SUPER BUILT UP AREA" shall mean built up area plus
walls plus column footprints plus share of common areas and
amenities like corridors, lobbies, staircases, lifts, escalators,
electrical machine rooms, security room, toilets, lift machine
rooms, pump rooms, STP room, estate office or Orion
Avenue Mall etc. "DEMISED PREMISES" shall mean the
premises bearing Unit No.201-203 & 218-220 on the Second
Floor of Orion Avenue Mall, having a Super Built up area of
19,418 sq.ft. as more particularly shown in Annexure-2,
demarcated in red on the said floor plan.
1.17 "RENT COMMENCEMENT DATE/SECOND APPOINTED
DATE" shall mean 100 days from the date of possession or
first appointed date i.e., 10th December,2019 or
commencement of Permitted Business in the Demised
Premises (whichever is earlier)."
(Emphasis added)
Clause 4 of the lease deed depicts lock in and renewal and reads as
follows:
"4. LEASE PERIOD, LOCK IN & RENEWAL:
4.1 The Lessee shall run the business in the Demises Premises
for a period of 9 (nine) years from Lease Commencement
Date mentioned in this Agreement unless determined before,
in terms of this Lease Deed.
4.2 The initial 3 (three) years period shall be treated as lock in
period and shall be binding on both the parties to this Lease
deed.
4.3 After expiry of Lease Period and in the absence of any breach
by the Lessee in adherence of the terms of this ease, the
Lease Period may be renewed for a further period, on terms
and conditions as may be mutually agreed to by the Parties.
The Lessee shall communicate its desire for renewal in
writing to the Lessor, not less than 6 (six) month period to
the expiration of the Lease Period. Any such renewal shall
be recorded by way of executing a fresh agreement to that
effect. "
In terms of the lease, the premises was to be leased out for a
period of 9 years out of which three years was to be the lock in
period. Clause 17 deals with termination of lease and consequential
remedies and reads:
"17. TERMINATION OF LEASE & CONSEQUENTIAL
REMEDIES.
17.1 Termination by lapse of time. This Lease Deed shall
expire automatically after expiry of lease period as
provided under Clause-4, unless terminated earlier as
provided in this Lease Deed.
17.2 Termination by the Lessors: It is specifically made
clear to the Lessee that each and every default, breach
and/or non-compliance of any of the terms and
conditions of this Lease Deed shall be construed to be
an event of default liable for consequences of this
Lease Deed. Some of the events of defaults are
mentioned below, which are merely indicative/
illustrative and are not exhaustive.
17.2.1 If the Lessee fails to obtain and keep renewed
and in subsistence during the period of lease, all
requisite permissions, sanctions licenses from
the appropriate authorities to run the business
at the Demised Premises and/or commence the
operations by the Lease Commencement Date
after the expiry of the Fit out Period.
17.2.2. For a delay not exceeding 30 (Thirty) days after
the Lease Commencement Date, the Lessee shall
pay 1.25 times of the Lease Rental for such delay
period.
17.2.3 For a delay exceeding 30 (Thirty) days but not
exceeding 60 (Sixty) days after the Lease
Commencement Date, the Lessee shall pay 1.5
times of the Lease Rental for such delay period.
17.2.4 For a delay exceeding 60 (Sixty) days but not
exceeding 90 (ninety) days after the Lease
Commencement Date, the Lessee shall pay 2
times of the Lease rental for such delay period.
17.2.5 For a delay exceeding 90 (ninety) days after the
Lease Commencement Date, this Lease Deed
shall stand immediately and automatically
terminated without any further notice by the
Lessors and in that event, Security Deposit
amount paid shall stand forfeited by the Lessors.
17.2.6 Similarly, after commencing the operations, if at
any time during the lease period, the Lessee fails
to function continuously for a period more than
30 days for any reason including suspension,
termination of any material approvals required
for the operation of the Lessee's business save
and except Force Majeure circumstances
(renovation repairs expected), the Lessors will
have the liberty to terminate this Lease Deed by
giving 7 days' notice in writing intimating the
Lessee of the breach committed and the Lessee
has failed to remedy the breach within 7 days of
the receipt of the notice.
17.2.7 Without prejudice to Lessors right to terminate
the Lease conferred under any of the terms of
this Lease Deed, the Lessors will have the right
to terminate the lease, if
(i) Lessee fails to pay the Lease Rentals or CAM
charges or any other charges for any two months
at any time during lease; or
(ii) failure of the Lessee to use the Demised Premises for
permitted business or change in the permitted
business by the Lessee.
(iii) breach by the Lessee of any law under any State or
Central Laws, rules, regulations, directions, and
notifications applicable to Demised Premises or the
business from time to time; or
(iv) alteration/modification of the Demised Pre-mises in
contravention of the provisions of this Lease Deed; or
(v) failure by the Lessee to comply with all relevant norms
with respect to electrical safety, fire safety and any
other safety norms in contravention of Bureau of
Indian Standards Specification/Codes of Practice or
relevant international standards or as stated in the
Design Criteria Manual and Occupiers' Agree-ment
issued from time to time or what has been approved
by the Lessors in the interior fit out drawings as and
when such non-compliance is noticed by the Lessors;
or
(vi) indulgence of Lessee in any criminal act, unfair trade
practice, illegal sale, counterfeiting of any goods or
service, non-invoicing or under- invoicing falsification
of accounts or failure to observe/perform any of its
statutory obligations/liabilities in respect to its
business or staff etc.; or
(vii) failure by the Lessee to sign any documents as stated
in this Lease Deed; or
(viii) If the Lessee vacates or shuts down the Demised
Premises and is otherwise not traceable for a period of
30 (Thirty) days without notifying the Lessors and the
Lessors is satisfied that in the circumstances, the
Lessee may not return; or
(ix) Any other acts or things, Lease Deed or things which
the Lessee may commit or fail to perform in terms of
this Lease Deed including Occupiers' Agreement,
Design Criteria Manual or as demanded by the Lessors
which in the opinion of the Lessors amounts to any
event of default; or
(x) commits breach of any material terms of the
lease:
in any of the above events, the Lessors shall give a 7
days' notice in writing to the Lessee intimating the
Lessee of its failure to so pay the Lease Rentals or of
the breach committed (as the case may be) and if the
Lessee has failed to pay or remedy the breach (as the
case may) within 7 days of the receipt of the notice,
the Lease shall stand terminated and the Lessors shall
have the right to re-enter the Demised Premises
without any prejudice to the Lessor's right to claim its
dues. Upon such termination, the Lessors shall be free
to deal with the Demised Premises in any manner that
the Lessors may deem fit.
Provided however, if the lease is terminated by the
Lessors during lock in, due to the default by the Lessee
as provided above, the Lessors shall still be entitled
for twice the Lease Rentals for the balance unexpired
period of lock in. If the percentage of Net sales
Turnover is agreed to be the Lease Rentals without
reference to MMG, then highest of the Lease Rentals
paid for any of the preceding months shall be taken as
the MMG, to calculate the Lease Rentals for the
balance unexpired period of lock in. In any other case,
Lease Rentals for the balance unexpired period of lock
in or the MMG for the balance unexpired period of lock
in as agreed to shall be taken to calculate the Lease
Rental for the unexpired period of lock in. The
amounts stipulated in this clause are agreed to
between the Parties to be liquidated
damages/compensation and acceptable to them as
reasonable and fair. The Lessors shall be entitled to
recover the Lease Rentals and CAM Charges at actual
and applicable taxes in default along with penal
interest at 1.5% per month on the overdue amount
from due date till payment, by deducting from the
Refundable Security Deposit and if the Security
Deposit is insufficient in this regard, the Lessors shall
be entitled to recover the same legally by initiating
proceedings for the recovery of the same and to that
extent the Lessor shall have a lien on stocks in trade
and furniture & fixtures belonging to lessee and
available in the Demised Premises. On termination on
account of event under (viii) above, the Lessee shall
not have any right, interest or claim on the goods,
equipments, etc. lying in the Demised Premises and
Lessors shall have the right to approp0riate the same
to his benefit.
17.2.8 Further, The lessors shall also have the right to
terminate the lease forthwith, if Force Majeure
continues to exist for an uninterrupted period of 3
months or more without any contributory facts
attributable to the Lessors, and thereby First
Appointed Date gets postponed beyond three months
than as originally fixed. In such an event, the Lessors
shall be liable to return the security deposit to the
Lessee, free of interest.
17.2.9 The Lessor has the right to review the tenure at the
end of every consecutive three years, basis of the
performance of Rent and CAM paid in comparison to
the prevailing market value.
17.3 Termination by the Lessee: Notwithstanding what is
stated herein, it is agreed that the Lessee shall during
the tenure of the Lease, has the right to terminate the
said Lease without assigning any reason and by giving
6 months' prior notice in writing to the Lessors of its
intention to do so. However, in case the Lessee
terminates the said Lease during the lock in period,
the Lessee shall pay to the Lessor twice the Lease
Rentals for the unexpired period in lock in, as stated
hereinabove."
(Emphasis added)
In terms of the aforesaid clause, termination would come about if
the lessee fails to pay lease rentals or any other charges for any
two months at any time during the lease. The lease further
observed that in any of the events of termination, the lessor shall
give 7 days notice in writing to the lessee intimating the lessee of
its failure to pay the lease rentals or any of the breach committed
and if the lessee fails to pay or remedy the breach, the lessor shall
have the right to re-enter the premises without any prejudice to the
lessor's right to claim its dues and lessor shall be free to deal with
the premises in any manner it deemed fit. These were the broad
terms and conditions between the parties that are germane to be
noticed.
15. The lease was entered into between the parties with
effect from 01-09-2019 when the 2nd respondent was put into
possession and the lease deed was registered on 13-11-2019. On
10-12-2019 the 2nd respondent commenced the business in terms
of the lease. It appears that the 2nd respondent defaulted in certain
payment which led to exchange of plethora of mails between the 1st
petitioner and the 2nd respondent. By then the country was
engulfed with the onset of COVID-19 and lock-down clamped due to
the spread of pandemic. This lock down continued up to
01-09-2020 when the competent authority opined that restaurants
and hospitals could be opened with minimal capacity. By then the
default in payment of rent was committed for 8 months. This
resulted in the 1st petitioner communicating a letter on 23-09-2020
indicating the default in payment of rent and the letter to be treated
as notice of termination. The paragraphs that are germane of the
said letter are extracted hereunder for the purpose of quick
reference:
"8. In these circumstances, we hereby call upon you to
recommence the store operations immediately after
clearing the aforesaid sum of Rs.1,16,18,892/-
(Rupees One Crore Sixteen Lakhs Eighteen Thousand
Eight Hundred and Ninety Two only) on or before the
expiry of the 7th (Seventh) day from the date of receipt
of this notice as per Cl.17.2.6 and 17.2.7 of the Lease
Deed. Failure on your part to pay the aforesaid amount
of Rs.1,16,18,892/- (Rupees One Crore Sixteen Lakhs
Eighteen Thousand Eight Hundred and Ninety Two
only) on or before the expiry of the 7th (seventh) day
from the date of receipt of this notice and recommence
the store operations, shall result in automatic
termination of the lease. On such termination, you will
be liable to pay twice the lease rentals for the
reminder period of lock-in under clause 17.2.7, as you
are still under lock in period and the same shall be in
additional to the outstanding dues payable by you.
9. Further, your failure to pay dues also entitled us to re-
enter the Premises, to take possession thereof and to
deduct the due amounts from the Security Deposit
amount and CAM/caution deposit amount, and seek
the balance amount along with twice the lease rentals
for remainder period of lock in as per the terms of the
Lease Deed.
This letter may be treated as "Notice for Termination".
We trust you amicably settle the matter, by paying the
amounts as stated above."
(Emphasis added)
Yet another letter was issued by the 1st petitioner on 14-10-2020
indicating the total amount of dues to be Rs.1,16,18,892/-,
substantial amount was from February 2020 to September, 2020.
Statement of amounts due is also annexed to the letter. This is
replied to by the 2nd respondent/complainant on 16-10-2020. In the
reply the 2nd respondent admits default. The paragraphs that are
germane are extracted hereunder for the purpose of quick
reference:
"Despite our noble intention to carry on the business, which
was negated by you and you have reiterated the termination
of the lease as per notice dated 14-10-2020 and 16-10-2020
at ref.No.4 and 5 by ignoring our reply at Ref.No.3. We
being the first time entrepreneurs, have no option, but to
accept the termination and exit from your Mall with heavy
hearts. This being the case, we are ready to hand over the
keys of the leased premises to you on Monday i.e., 19-10-
2020 at 11.00 a.m. Therefore, please give us an
appointment to discuss regarding exit modality. We kindly
request you to have a look into the rental due
claims/charges and other charges shown in Annexure-I to
your Notice dated 14-10-2020 and we may be permitted to
remove all our fitments, furniture, fixture, equipments from
leased premises on or before 31-10-2020.
Therefore, please give us an appointment as stated above
and show an act of mercy that too during these
unprecedented hard times. You are aware of the effect of
Covid-19 Pandemic and consequent recession and
restrictions of business including our business.
It is pertinent to note that, we have invested a sum of
Rs.80/- lakhs towards Brewery equipments and sum of
Rs.89/- lakhs towards Kitchen equipments. We have also
taken Bar License from the original owner and for all this
apart from own earning, we have also availing loan for the
same. We are ready to handover the vacant possession of
the schedule premises by taking out of the fixtures, fittings
and equipment etc., belong to us on or before 31-10-2020,
in the alternative, if you are desirous of taking over the
leased premises along with fixtures and fittings by
compensating us by paying the cost of the set up including
equipments and other fixtures, we will be grateful to you.
We are ready for either of the options and anticipating your
favourable reply. It is pertinent to note that, we are having
equipment fixtures, fittings and other articles which are
more fully described in Annexure-I enclosed to this letter."
(Emphasis applied)
In the reply the 2nd respondent observes that despite their noble
intention to carry on the business, the petitioners have not co-
operated and termination of lease is sent by notices issued on
14-10-2020 and 16-10-2020 by ignoring their reply. They
contended that they are first time entrepreneurs and have no
option but to accept the termination and exit from the Mall with
heavy heart. The reply did not stop at that, they sought an
appointment to discuss the exit modalities. The business has
suffered due to COVID-19 was also indicated. The reply also
mentioned that they had invested Rs.80/-lakhs towards Brewery
equipments and a sum of Rs.89/- lakhs towards kitchen equipments
and the bar licence is also taken by paying huge fee. Finally it was
indicated that if the 1st petitioner is desirous of taking over the
leased premises along with fixtures and fittings by compensating
them including paying for equipments and other fixtures it would be
a great help to them. What are the fixtures, fittings and other
investments are all indicated in the alleged reply to the notice of
termination. The 1st petitioner in reply again repeated the same
swan song of default of payment in rents and not adhering to any
request thereafter. On 8-12-2020 for the first time the petitioner
communicates a letter to the 2nd respondent. The letter reads as
follows:
"Sub: Termination of lease with Surapana at Orion Mall,
Banaswadi, Bangalore.
Ref: Our Termination Notice dated 23rd September,2020
and 16th October, 2020 (Termination Notice).
1. Due to material breach of the Lease Deed, we had issued a
Termination Notice to you under clause 17.2.7 of the Lease
Deed, wherein we had called upon you to clear your
outstanding dues of Rs.1,16,18,892/- (Rupees One Crores
Sixteen Lakhs Eighteen Thousand Eight Hundred Ninety-Two
only) on or before 7 days from the date of receipt of the
notice to avoid termination. Further you have not been able
to recommence your operations from the premises from 1st
September, 2020 as per the Local Government Order in
lifting the restrictions for Pubs in Bangalore by settling your
outstanding amount since December, 2019.
2. As you neither recommenced operations nor complied
with our demands made in the Termination Notice
within the notice period, we terminated lease
forthwith and with immediate effect vide our
Termination Letter dated 16th October, 2020 and
forfeited your Security Deposit amount of
Rs.36,39,862/- (Rupees Thirty Six Lakhs Thirty Nine
Thousand Eight Hundred and Sixty Two only) (being 6
months rental) and CAM/caution deposit of
Rs.16,40,070/- (Rupees Sixteen Lakhs Forty Thousand
and Seventy only), totaling to Rs.52,79,932/- (Rupees
Fifty Two Lakhs Seventy Nine Thousand Nine Hundred
and Thirty Two only) against your dues to us
amounting to Rs.1,16,18,892 (Rupees One Crores
Sixteen Lakhs Eighteen Thousand Eight Hundred
Ninety-Two only). After such adjustment, there still
remained a balance of Rs.63,38,960/- (Rupees Sixty
Three Lakhs Thirty Eight Thousand Nine Hundred Sixty
only) to be payable by you to us. In the meanwhile,
you have also accepted the termination of lease
through your Reply dated 16.11.2020, thus enabling
us to take over possession of the leased Premises.
3. Further, to recover the balance dues, we have
exercised the lien on the Kitchen Equipment, Brewery
Equipment, furniture and fixtures and other items
available in the Premises belonging to you by
engaging a third party independent E-Auction agency
and calling for online bids.
4. This is to inform you that:
a. We have conducted E auction on 27th November,
2020 by engaging a third party independent e-
auction agency.
b. We have received 4 bids expressing interest to
purchase and of the same, highest quote is
Rs.51,10,000/- (Rupees Fifty One Lakhs Ten
Thousand only), followed by second highest at
Rs.51,00,000/- (Rupees Fifty Lakhs only). We
are in the final stage of concluding the bid with
second highest, as they have also shown interest
to take the premises on lease.
c. We have incurred a fee of Rs.90,270/- (Rupees
Ninety Thousand Two Hundred Seventy only)
towards e-auction, which is debited to your
account.
d. After setting of the above realization, your
balance dues will be Rs.13,29,230/- (Rupees
Thirteen Lakhs Twenty Nine Thousand Two
Hundred and Thirty only), more fully detained in
Annexure-A below.
5. We have written a letter to Excise Department on 2nd
November 2020 for clearing/removing of unsold liquor
stock which is still available in the Premises, pursuant
to which Excise Inspector has inspected the Premises
and taken stock of the liquor inventory available in the
Premises on 6th November, 2020. We request you to
get in touch with the Excise Department for
completing the formalities in this regard.
6. We request you to pay us the balance amounts of
Rs.13,29,230/- (Rupees Thirteen Lakhs Twenty Nine
Thousand Two Hundred and Thirty only), within 7 days
from the date of receipt of this Notice so that accounts
are closed in this regard.
This is for your information."
(Emphasis added)
It is for the first time the 2nd respondent was made known that the
Excise Department was permitted to take over the liquor that was
left in the premises. The movables were e-auctioned on 27.11.2020
by engaging third party and all the amounts that were realized were
adjusted towards default and still an amount of Rs.13,29,230/- is
remaining to be paid by the 2nd respondent. Respondent No.2
sends an e-mail asking access to the Mall and to the floor disputing
the charge of rent from December 2019 particularly from 14-03-
2020 to 31-08-2020 when the Government announced lock down
and not allowing access to the business. It was also alleged that the
1st petitioner/Company had locked the unit with separate lock and
key. The unilateral disposal of movable materials in the premises
also was objected to. However, it was also contended that there
could be mutual agreement between the two to resolve the dispute
in its entirety. This was not acceded to by the Company but
contended that there were still outstanding dues to a large
proportion. This communication was sent by the 1st petitioner/
Company on 29-12-2020 pursuant to e-mails sent by the 2nd
respondent on 8-12-2020 and 20-12-2020.
16. The 2nd respondent, alleging illegality, begins to agitate
his grievance by registering a complaint before the Department of
Administrative Reforms and Public Grievances which reaches the
portal of the Hon'ble Prime Minister on 25.12.2020. On 01.01.2021
the complaint was forwarded by the office of the Hon'ble Prime
Minister to the Under Secretary-II of the Government of Karnataka.
On 6-01-2021 the Commissioner of Police writes to the Deputy
Commissioner of Police, Central to look into the complaint of
respondent No.2 and take appropriate action. On 11-01-2021 the
Assistant Commissioner of Police, Sheshadripuram writes to the
Police Inspector/SHO of Sheshadripuram Police Station to take
action. The SHO, Sheshadripuram transfers the complaint to
Banaswadi Police Station as he had no jurisdiction. Despite the
transfer of the complaint of respondent No.2 on 26-01-2021, no
action was taken by the SHO of Banaswadi. Therefore, the 2nd
respondent approaches DG & IG on 31-01-2021 and when several
rounds of representations to the powers that be did not yield any
result, a final written complaint was attempted to be filed before
the Banaswadi Police and the Commissioner of Police. Even then no
complaint comes to be registered against the petitioner/Company.
Later, the 2nd respondent registers a private complaint on
28-04-2021 in accordance with law, as laid down by the Apex Court
in the case of PRIYANKA SRIVASTAVA v. STATE OF UTTAR
PRADESH - (2015) 6 SCC 287. On 15-07-2021 the learned
Magistrate refers the matter for investigation under Section 156(3)
of the CrPC to the Station House Officer, Banaswadi Police Station,
Despite reference being made on 15-07-2021, no crime was
registered for close to 21 days and it is only when multiple requests
were made, on 06-08-2021 FIR was registered and on 10-08-2021
mahazar was drawn up by the Police. Again the 2nd respondent
makes a complaint before the DG & IG about malpractice in the
mahazar process and seeks transfer of the case to an independent
agency. These are the links in the chain of events in the registration
of complaint on the allegation that the petitioners have trespassed
into the property with criminal intent and sold the machinery and
movables in the kitchen, the value of which according to the
complaint runs totally to Rs.1,66,00,000/-, without any intimation
to the 2nd respondent.
17. The defence of the 1st petitioner/Company, as submitted
by the learned senior counsel appearing for the petitioners, is that
the agreement provided marking of lien upon the movables inside
the premises in the event of default. The marking of lien is what
permitted the petitioners to take any action including breaking open
the lock and selling of the entire items that were inside the
premises.
18. The justification or defence of the learned senior counsel
appearing for the petitioners is, on the face of it, unacceptable for
manifold reasons. The rental dues that are assessed by the 1st
petitioner/Company are not completely endorsed by the 2nd
respondent. The 2nd respondent always pleaded that an opportunity
be given to them to sit across and talk. This is not acceded to.
Possession was not handed over by the 2nd respondent to the 1st
petitioner/Company in accordance with law. Law does not permit
breaking open the lock, selling the movables inside the premises
except in accordance with law. The case at hand depicts high and
mighty using brute force upon the 2nd respondent and breaking
open the lock, entering the premises, e-auctioning all the items in
the premises for a song and the purchaser being the sister concern
of the 1st petitioner/Company. All these would not inspire
confidence of this Court to entertain the petition or obliterate the
complaint at this stage. The crime that comes to be registered in
Crime No.361 of 2021 on 6.08.2021 is for the offences punishable
under Sections 424, 427, 120B, 149, 393, 406, 411, 447, 426 and
441 of the IPC. If the complaint so made is noticed, it does make
out the aforesaid offences.
19. The records or the communications of the 1st petitioner to
the 2nd respondent would indicate that the 1st petitioner has entered
the demised premises, sold all the items available in the premises
and made good certain money which according to the 1st petitioner,
the 2nd respondent was in due. This action that is entering into the
premises of the 2nd respondent contending the agreement saying
so, would amount to a criminal trespass, as the possession was still
with the 2nd respondent. The 2nd respondent had not handed over
possession of the premises and the 1st petitioner/Company had not
taken possession of the premises in accordance with law. Forcibly
taking possession would not amount to possession in the eye of
law. Therefore, the possession remained with the 2nd respondent. If
the possession remained with the 2nd respondent, Section 447 of
the IPC would get attracted. Section 447 of the IPC reads as
follows:
"447. Punishment for criminal trespass.--Whoever
commits criminal trespass shall be punished with imprisonment of
either description for a term which may extend to three months, or
with fine which may extend to five hundred rupees, or with both."
Section 447 of the IPC deals with punishment for criminal trespass.
The ingredients of Section 447 of the IPC are found in Section 441
of the IPC which reads as follows:
"441. Criminal trespass.--Whoever enters into or upon
property in the possession of another with intent to commit an
offence or to intimidate, insult or annoy any person in possession of
such property,
or having lawfully entered into or upon such property,
unlawfully remains there with intent thereby to intimidate, insult or
annoy any such person, or with intent to commit an offence,
is said to commit "criminal trespass"."
Section 441 directs that whoever enters into or upon property in
possession of another with intent to commit an offence would
become open to such allegation. As observed hereinabove, the
possession of the premises was still with the 2nd respondent and the
1st petitioner has entered into the possession of the 2nd respondent
without his knowledge. Whether the property belonged lawfully to
the 2nd respondent or not is not the issue for criminal trespass.
Possession is the soul of the provision. Possession admittedly in the
case at hand was legally with the 2nd respondent. Therefore, the
allegation is prima facie met.
20. The other allegation is Section 427 of the IPC. Section
427 of the IPC reads as follows:
"427. Mischief causing damage to the amount of fifty
rupees.--Whoever commits mischief and thereby causes loss or
damage to the amount of fifty rupees or upwards, shall be punished
with imprisonment of either description for a term which may
extend to two years, or with fine, or with both."
Section 427 of the IPC deals with mischief causing damage.
Section 427 of the IPC has its ingredients in Section 425 of the IPC
which reads as follows:
"425. Mischief.--Whoever, with intent to cause, or knowing
that he is likely to cause, wrongful loss or damage to the public or
to any person, causes the destruction of any property, or any such
change in any property or in the situation thereof as destroys or
diminishes its value or utility, or affects it injuriously, commits
"mischief".
Explanation 1.--It is not essential to the offence of mischief
that the offender should intend to cause loss or damage to the
owner of the property injured or destroyed. It is sufficient if he
intends to cause, or knows that he is likely to cause, wrongful loss
or damage to any person by injuring any property, whether it
belongs to that person or not.
Explanation 2.--Mischief may be committed by an act
affecting property belonging to the person who commits the act, or
to that person and others jointly."
Section 425 directs that whoever with intent to cause wrongful loss
or damage to any person or causes destruction of property is said
to be committing mischief. The facts narrated in the complaint or in
plethora of complaints made by the complainant to the powers that
be or before the learned Magistrate would clearly indicate presence
of ingredients of Section 425 of the IPC. Therefore, Section 427 of
the IPC is also prima facie met. The other offences for which the
crime is registered are all an offshoot of the aforesaid offences.
Section 424 of the IPC deals with dishonest or fraudulent removal
or concealment of property which also is prima facie met. Section
406 of the IPC is also alleged which deals with criminal breach of
trust. The criminal breach of trust, in the case at hand is prima
facie demonstrated, as the property which was leased to the 2nd
respondent was in the Mall owned by the 1st petitioner/Company
which has entered into its possession and sold all the items.
Therefore, the trust that prevailed through the agreement and
possession being with the 2nd respondent has been broken by the
Company with an intent to commit such crime, as the items are all
sold by the Company without even intimating the 2nd
respondent/complainant. Therefore, criminal breach of trust is also
prima facie met with a flavour of misappropriation of property. The
other ingredients are all offshoot of the aforesaid provisions and
need not be dealt with separately.
21. Much is submitted by the learned counsel appearing for
the petitioners that the issue is purely civil in nature or breach of
contract being given a colour of crime is unacceptable, as
notwithstanding registration of civil suit by the 2nd respondent/
complainant against the petitioners, the action of the Company, as
narrated hereinabove, sans countenance since it does not, in the
considered view of the Court, bear any sanction in law. Therefore,
the contention that a civil proceeding is given a colour of crime is
neither here nor there, as the proceeding has a flavour of both civil
and a criminal proceeding, as the complaint or the narration
hereinabove clearly makes out the one.
22. The judgment relied on by the learned senior counsel
appearing for the petitioners in the case of VILAS DEORE v.
STATE OF KARNATAKA - Criminal Petition No.4346 of 2022
decided on 15-07-2022 is inapplicable to the fact situation as the
offences therein were criminal breach of trust arising out of a
contract and criminal proceedings were instituted only for the
purpose of recovery of money from the hands of the petitioner
therein. Those are not the facts in the case at hand. Recovery of
money or otherwise is not only the allegation in the present
complaint. The allegation is acts of the Company in the premises of
the 2nd respondent. Therefore, the judgment in the case of VILAS
DEORE would lend no assistance to the learned senior counsel
appearing for the petitioners.
23. Regarding reliance placed upon other judgments by the
learned senior counsel representing the petitioners there can be no
qualm about the principles laid down by the Apex Court but those
judgments become inapplicable to the facts of the case at hand.
The Apex Court in the case of ABID v. STATE OF U.P. - (2009)
14 SCC 701 at paragraph 22 upon which reliance is placed would
itself makes the judgment inapplicable to the facts of the case. The
trespass therein was in exercise of their right of private defence and
the allegation was under Section 302 of the IPC. Those are not the
facts in the case at hand. The other judgment in the case of
KANWAL SOOD v. NAWAL KISHORE AND OTHERS - (1983) 2
SCC 25 at paragraphs 10 and 11 which is relied upon by the
learned senior counsel would again indicate that after the death of
one Mr. Sood leave and license granted by Mr. Sood came to an
end and if the complainant had stayed in the premises after the
death of Mr. Sood the possession of the complainant would be a
trespasser but every trespass does not amount to criminal trespass.
This decision again would not be applicable to the facts of the case,
as here the trespass has a flavour of criminality of the action of the
petitioners in selling away movables in the premises without
intimating it to the owner of movables. Same goes with the other
judgments relied on by the learned senior counsel for the
petitioners. Therefore, it is a matter of further proceedings, for the
petitioners to come out clean, as placing defence on the agreement
entered into between the parties and contending that in terms of
the agreement the Company could take possession of the premises
even contrary to law again sans countenance.
24. Since possession was delivered in accordance with law by
the petitioners the same has to be taken back in accordance with
law. Usage of force, breaking open the lock, entering the premises,
selling away all the movables inside the premises without even an
intimation to the owner of movables i.e., respondent No.2 herein
are all acts which would necessarily need evidence, as the flavour of
crime shrouds the action of the 1st petitioner/Company. Reference
being made to the judgments relied on by the learned senior
counsel appearing for the 2nd respondent would in the
circumstances of the case become apposite. The Apex Court in the
case of STATE OF U.P. AND OTHERS v. MAHARAJA
DHARMANDER PRASAD SINGH AND OTHERS1 has held as
follows:
"30. A lessor, with the best of title, has no right to
resume possession extra-judicially by use of force, from a
lessee, even after the expiry or earlier termination of the
lease by forfeiture or otherwise. The use of the expression
"re-entry" in the lease deed does not authorise extra-
judicial methods to resume possession. Under law, the
(1989) 2 SCC 505
possession of a lessee, even after the expiry or its earlier
termination is juridical possession and forcible
dispossession is prohibited; a lessee cannot be dispossessed
otherwise than in due course of law. In the present case, the
fact that the lessor is the State does not place it in any higher or
better position. On the contrary, it is under an additional inhibition
stemming from the requirement that all actions of Government and
governmental authorities should have a "legal pedigree". In Bishan
Das v. State of Punjab [AIR 1961 SC 1570: (1962) 2 SCR 69] this
Court said: (SCR pp. 79-80)
We must, therefore, repel the argument based on the
contention that the petitioners were trespassers and could be
removed by an executive order. The argument is not only
specious but highly dangerous by reason of its implications
and impact on law and order ...
Before we part with this case, we feel it our duty to
say that the executive action taken in this case by the State
and its officers is destructive of the basic principle of the rule
of law."
(Emphasis supplied)
The Apex Court holds that usage of expression 're-entry' in the
lease deed does not authorize extra-judicial methods to resume
possession. The Apex Court following the judgment in the case of
MAHARAJA DHARMANDER PRASAD SINGH (supra) in the case
of S.R. EJAZ v. T.N. HANDLOOM WEAVERS' COOPERATIVE
SOCIETY LIMITED2 has held as follows:
"8. In our view, if such actions by the mighty or
powerful are condoned in a democratic country, nobody
would be safe nor can the citizens protect their properties.
(2002)3 SCC 137
Law frowns upon such conduct. The court accords legitimacy
and legality only to possession taken in due course of law. If
such actions are condoned, the fundamental rights
guaranteed under the Constitution of India or the legal
rights would be given a go-by either by the authority or by
rich and influential persons or by musclemen. Law of jungle
will prevail and "might would be right" instead of "right
being might". This Court in State of U.P. v. Maharaja
Dharmander Prasad Singh [(1989) 2 SCC 505] dealt with the
provisions of the Transfer of Property Act and observed that
a lessor, with the best of title, has no right to resume
possession extrajudicially by use of force, from a lessee,
even after the expiry of earlier termination of the lease by
forfeiture or otherwise. Under law, the possession of a
lessee, even after the expiry or its earlier termination is
juridical possession and forcible dispossession is prohibited.
The Court also held that there is no question of the Government
withdrawing or appropriating to it an extrajudicial right of re-entry
and the possession of the property can be resumed by the
Government only in a manner known to or recognized by law."
(Emphasis supplied)
It becomes germane to notice the judgment of the Apex Court in
the case of LEE KUN HEE (PRESIDENT OF SAMSUNG
CORPORATION) v. STATE OF U.P.3 wherein it is held as follows:
"73. We have given our thoughtful consideration to the
last contention advanced at the hands of the learned counsel
for the appellants. We are of the considered view that in
offences of the nature contemplated under the summoning
order there can be civil liability coupled with criminal
culpability. What a party has been deprived of by an act of
cheating can be claimed through a civil action. The same
deprivation based on denial by way of deception, emerging
from an act of cheating, would also attract criminal liability.
In the course of criminal prosecution, a complainant cannot
(2012) 3 SCC 132
seek a reciprocal relief for the actions of the accused. As in
the instant case, the monetary consideration under the bill
of exchange dated 1-2-2001 cannot be claimed in the
criminal proceedings for that relief the remedy would be
only through a civil suit. It is therefore not possible for us to
accept that since a civil claim has been raised by the
complainant JCE Consultancy, based on the alleged breach
of the agreement dated 1-12-2001, it can be prevented from
initiating proceedings for penal consequences for the
alleged offences committed by the accused under the Penal
Code.
74. It would not be appropriate for us to delve into the
culpability of the appellants at the present juncture on the basis of
the factual position projected by the rival parties before us. The
culpability (if at all) would emerge only after evidence is adduced
by the rival parties before the trial court. The only conclusion that
needs to be drawn at the present juncture is that even on the basis
of the last submission canvassed on behalf of the appellants it is
not possible to quash the summoning order at this stage. In the
aforesaid view of the matter, it is left open to the appellants to
raise their objections, if they are so advised, before the trial court.
The trial court shall, as it ought to, adjudicate upon the same in
consonance with law after allowing the rival parties to lead
evidence to substantiate their respective positions."
(Emphasis supplied)
Long before the judgments so rendered by the Apex Court, this
Court in the case of S.MANOHAR v. E.K. GOVINDARAJA SETTY4
has held as follows:
"16. From what is stated hereinabove, it is clear that the
plaintiff is entitled to reasonable time to leave the premises after
the license is revoked. That would also mean that after the
expiration of the 'reasonable time', he has no right to remain in
possession. If that be so, the question for consideration is as to
whether such a person is entitled to the equitable remedy of
ILR 1994 KAR 3246
injunction. The submission made by the learned Counsel Sri
Ramadas with reference to this aspect has already been briefly
alluded to earlier. The Decisions pressed into service by the learned
Counsel, Sri Ramadas also are referred to earlier. The two
Decisions, among others, of this Court which are mainly pressed
into service by the learned Counsel Sri Ramadas are the Decision
in Raghavendra Rao's case [ILR 1988 Kar 215.] and the Decision
in K.V. Narayana's case [AIR 1986 Karnataka 77.] .
In Raghavendra Rao's case, it is held by this Court that a
trespasser is not entitled to an order of temporary injunction
as against a true owner and that a person having possessory
title can maintain a suit for possession against another
person who has no better title than himself. However, it is
added in the said case that such possessory title cannot be
available as against a true owner of the property. Then
again, in para-10 therein, this Court has held that the
principle is that possession is good against all but the true
owner. It is further pointed out in the said case that as the
plaintiff therein has been found to be in unlawful possession
of the disputed portion of the land which is of the ownership
of defendant, the lower appellate Court has rightly refused
to grant the decree.
Similarly, in Narayan's case [AIR 1986 Karnataka 77.] this
Court, after a consideration of the various Decisions of the
Supreme Court and this Court as also of the other High Courts, has
held that a trespasser in possession is not entitled to a temporary
injunction as against a true owner. It is further observed that the
principle underlying the conclusion is that the relief of injunction,
being a relief in equity, the Court cannot aid a person who himself
is guilty of doing a wrongful thing. While taking the view which it
has taken in the said case, this Court has referred to the various
Decisions of the Supreme Court viz., the Decision in M. Kallappa
Setty v. M.V. Lakshminarayana Rao [(1973) 2 SCC 358 : AIR 1972
SC 2299.] ; the Decision in Nayar Service Society Ltd. v. K.C.
Alexander [AIR 1968 SC 1165.]. It has also considered the earlier
Decision of this Court in Mallayya v. Puttappa [1976 (1) KLJ 369.].
I may also point out here that in Raghavendra Rao's
case [ILR 1988 Kar 215.] also this Court reached the same
conclusion after considering the Decisions of the Supreme Court
viz., the Decision in Nair Service Society's case [AIR 1968 SC
1165.] and the Decision in Kallappa Setty's case [(1973) 2 SCC 358
: AIR 1972 SC 2299.]. It has also relied on the earlier Decision of
this Court in Narayan's case [AIR 1986 Karnataka 77.] ."
(Emphasis supplied)
Though the aforesaid cases deal with possession of a property
being taken by the lessor pursuant to the lease, the possession in
the case at hand being taken contrary to law and further action of
the 1st petitioner/Company would undoubtedly lead to an
unmistakable conclusion, albeit, prima facie, that the offences
alleged against the 1st petitioner/Company are met. These are all
seriously disputed questions of fact which necessarily require
investigation and trial into the matter. Reference being made to the
judgment of the Apex Court in the case of KAPTAN SINGH v.
STATE OF UTTAR PRADESH5 wherein it is held as follows:
"9.1. At the outset, it is required to be noted that
in the present case the High Court in exercise of powers
under Section 482 CrPC has quashed the criminal
proceedings for the offences under Sections 147, 148,
149, 406, 329 and 386 IPC. It is required to be noted
that when the High Court in exercise of powers under
Section 482 CrPC quashed the criminal proceedings, by
the time the investigating officer after recording the
statement of the witnesses, statement of the
complainant and collecting the evidence from the
incident place and after taking statement of the
independent witnesses and even statement of the
accused persons, has filed the charge-sheet before the
(2021) 9 SCC 35
learned Magistrate for the offences under Sections 147,
148, 149, 406, 329 and 386 IPC and even the learned
Magistrate also took the cognizance. From the impugned
judgment and order [Radhey Shyam Gupta v. State of U.P.,
2020 SCC OnLine All 914] passed by the High Court, it does
not appear that the High Court took into consideration the
material collected during the investigation/inquiry and even
the statements recorded. If the petition under Section 482
CrPC was at the stage of FIR in that case the allegations
in the FIR/complaint only are required to be considered
and whether a cognizable offence is disclosed or not is
required to be considered. However, thereafter when
the statements are recorded, evidence is collected and
the charge-sheet is filed after conclusion of the
investigation/inquiry the matter stands on different
footing and the Court is required to consider the
material/evidence collected during the investigation.
Even at this stage also, as observed and held by this Court in
a catena of decisions, the High Court is not required to go into
the merits of the allegations and/or enter into the merits of
the case as if the High Court is exercising the appellate
jurisdiction and/or conducting the trial. As held by this Court
in Dineshbhai Chandubhai Patel [Dineshbhai Chandubhai
Patel v. State of Gujarat, (2018) 3 SCC 104 : (2018) 1 SCC
(Cri) 683] in order to examine as to whether factual contents
of FIR disclose any cognizable offence or not, the High Court
cannot act like the investigating agency nor can exercise the
powers like an appellate court. It is further observed and held
that that question is required to be examined keeping in view,
the contents of FIR and prima facie material, if any, requiring
no proof. At such stage, the High Court cannot appreciate
evidence nor can it draw its own inferences from
contents of FIR and material relied on. It is further
observed it is more so, when the material relied on is
disputed. It is further observed that in such a situation,
it becomes the job of the investigating authority at such
stage to probe and then of the court to examine
questions once the charge-sheet is filed along with such
material as to how far and to what extent reliance can
be placed on such material.
9.2. In Dhruvaram Murlidhar Sonar [Dhruvaram
Murlidhar Sonar v. State of Maharashtra, (2019) 18 SCC 191 :
(2020) 3 SCC (Cri) 672] after considering the decisions of this
Court in Bhajan Lal [State of Haryana v. Bhajan Lal, 1992
Supp (1) SCC 335 : 1992 SCC (Cri) 426] , it is held by this
Court that exercise of powers under Section 482 CrPC to
quash the proceedings is an exception and not a rule. It is
further observed that inherent jurisdiction under Section 482
CrPC though wide is to be exercised sparingly, carefully and
with caution, only when such exercise is justified by tests
specifically laid down in the section itself. It is further observed
that appreciation of evidence is not permissible at the stage of
quashing of proceedings in exercise of powers under Section
482 CrPC. Similar view has been expressed by this Court
in Arvind Khanna [CBI v. Arvind Khanna, (2019) 10 SCC 686 :
(2020) 1 SCC (Cri) 94] , Managipet [State of
Telangana v. Managipet, (2019) 19 SCC 87 : (2020) 3 SCC
(Cri) 702] and in XYZ [XYZ v. State of Gujarat, (2019) 10 SCC
337 : (2020) 1 SCC (Cri) 173] , referred to hereinabove.
9.3. Applying the law laid down by this Court in the
aforesaid decisions to the facts of the case on hand, we are of
the opinion that the High Court has exceeded its jurisdiction in
quashing the criminal proceedings in exercise of powers under
Section 482 CrPC.
10. The High Court has failed to appreciate and consider
the fact that there are very serious triable issues/allegations
which are required to be gone into and considered at the time
of trial. The High Court has lost sight of crucial aspects which
have emerged during the course of the investigation. The High
Court has failed to appreciate and consider the fact that the
document i.e. a joint notarised affidavit of Mamta Gupta
Accused 2 and Munni Devi under which according to Accused 2
Ms Mamta Gupta, Rs 25 lakhs was paid and the possession
was transferred to her itself is seriously disputed. It is required
to be noted that in the registered agreement to sell dated 27-
10-2010, the sale consideration is stated to be Rs 25 lakhs
and with no reference to payment of Rs 25 lakhs to Ms Munni
Devi and no reference to handing over the possession.
However, in the joint notarised affidavit of the same date i.e.
27-10-2010 sale consideration is stated to be Rs 35 lakhs out
of which Rs 25 lakhs is alleged to have been paid and there is
a reference to transfer of possession to Accused 2. Whether Rs
25 lakhs has been paid or not the accused have to establish
during the trial, because the accused are relying upon the said
document and payment of Rs 25 lakhs as mentioned in the
joint notarised affidavit dated 27-10-2010. It is also required
to be considered that the first agreement to sell in which Rs 25
lakhs is stated to be sale consideration and there is reference
to the payment of Rs 10 lakhs by cheques. It is a registered
document. The aforesaid are all triable issues/allegations
which are required to be considered at the time of trial. The
High Court has failed to notice and/or consider the material
collected during the investigation.
11. Now so far as the finding recorded by the High Court
that no case is made out for the offence under Section 406 IPC
is concerned, it is to be noted that the High Court itself has
noted that the joint notarised affidavit dated 27-10-2010 is
seriously disputed, however as per the High Court the same is
required to be considered in the civil proceedings. There the
High Court has committed an error. Even the High Court has
failed to notice that another FIR has been lodged against the
accused for the offences under Sections 467, 468, 471 IPC
with respect to the said alleged joint notarised affidavit. Even
according to the accused the possession was handed over to
them. However, when the payment of Rs 25 lakhs as
mentioned in the joint notarised affidavit is seriously disputed
and even one of the cheques out of 5 cheques each of Rs 2
lakhs was dishonoured and according to the accused they were
handed over the possession (which is seriously disputed) it can
be said to be entrustment of property. Therefore, at this stage
to opine that no case is made out for the offence under
Section 406 IPC is premature and the aforesaid aspect is to be
considered during trial. It is also required to be noted that the
first suit was filed by Munni Devi and thereafter subsequent
suit came to be filed by the accused and that too for
permanent injunction only. Nothing is on record that any suit
for specific performance has been filed. Be that as it may, all
the aforesaid aspects are required to be considered at the time
of trial only.
12. Therefore, the High Court has grossly erred in
quashing the criminal proceedings by entering into the
merits of the allegations as if the High Court was
exercising the appellate jurisdiction and/or conducting
the trial. The High Court has exceeded its jurisdiction in
quashing the criminal proceedings in exercise of powers
under Section 482 CrPC.
13. Even the High Court has erred in observing that
original complaint has no locus. The aforesaid observation is
made on the premise that the complainant has not placed on
record the power of attorney along with the counter filed
before the High Court. However, when it is specifically stated
in the FIR that Munni Devi has executed the power of attorney
and thereafter the investigating officer has conducted the
investigation and has recorded the statement of the
complainant, accused and the independent witnesses,
thereafter whether the complainant is having the power of
attorney or not is to be considered during trial.
14. In view of the above and for the reasons stated
above, the impugned judgment and order [Radhey Shyam
Gupta v. State of U.P., 2020 SCC OnLine All 914] passed by
the High Court quashing the criminal proceedings in exercise
of powers under Section 482 CrPC is unsustainable and the
same deserves to be quashed and set aside and is accordingly
quashed and set aside. Now, the trial is to be conducted and
proceeded further in accordance with law and on its own
merits. It is made clear that the observations made by this
Court in the present proceedings are to be treated to be
confined to the proceedings under Section 482 CrPC only and
the trial court to decide the case in accordance with law and
on its own merits and on the basis of the evidence to be laid
and without being influenced by any of the observations made
by us hereinabove. The present appeal is accordingly allowed."
(Emphasis supplied)
14. In the light of the preceding analysis, I do not find any
merit to entertain the petition at this juncture. The Writ Petition
lacking in merit stands dismissed.
It is made clear that the observations made in the course of
the order are only for the purpose of consideration of the case
under Section 482 of Cr.P.C. and the same shall not bind or
influence the investigation or further proceedings in any manner.
Sd/-
JUDGE
bkp
CT:MJ
