Phoolchand Pandey vs The State Of Madhya Pradesh
2024 Latest Caselaw 12256 MP

Madhya Pradesh High Court

Phoolchand Pandey vs The State Of Madhya Pradesh on 2 May, 2024

Author: Pranay Verma

Bench: Pranay Verma

                                   1

 IN THE       HIGH COURT           OF MADHYA PRADESH

                        AT I N D O R E
                             BEFORE
           HON'BLE SHRI JUSTICE PRANAY VERMA

             MISC. CRIMINAL CASE No. 4337 of 2014

BETWEEN:-
PHOOLCHAND PANDEY S/O GANGAPRASAD PANDEY,
AGED ABOUT 57 YEARS, OCCUPATION: MANAGER,
GANDHI NAGAR GRIH NIRMAN SAHKARI SANSTHA,
INDORE R/O. 205-C, SPECIAL GANDHI NAGAR, INDORE
(MADHYA PRADESH)
                                                  .....PETITIONER
(BY SHRI PRAFULLA V. BHAGWAT - ADVOCATE)

AND
   THE STATE OF MADHYA PRADESH OFFICER
1. INCHARGE THRU. P.S. AERODROME, INDORE
   (MADHYA PRADESH)
   RUPESH S/O RAGHUVEER RATHORE, AGED ABOUT
2. 40 YEARS, NANDA NAGAR MAIN ROAD, INDORE
   (MADHYA PRADESH)
                                              .....RESPONDENTS
(BY SHRI KAPIL MAHANT - P.L. FOR STATE).
(BY SHRI NANDLAL TIWARI, LEARNED COUNSEL FOR THE RESPONDENT
NO.2.)

             MISC. CRIMINAL CASE No. 3795 of 2015

BETWEEN:-
VIJAY CHANDRAWAT S/O MOHANSINGH CHANDRAWAT,
AGED ABOUT 47 YEARS, OCCUPATION: PROJECT WORK
R/O. 53 AERODRUM ROAD INDORE (MADHYA PRADESH)
                                                  .....PETITONER
(BY SHRI VIKAS BHATT - ADVOCATE)

AND
1. THE STATE OF MADHYA PRADESH STATION HOUSE OFFICER THRU. P.S.
                                        2

   AERODRUM (MADHYA PRADESH)
   RUPESH SINGH RATHORE S/O RAGHUVEER SINGH RATHORE, AGED
2. ABOUT 40 YEARS, OCCUPATION: NIL NANDA NAGAR MAIN ROAD
   (MADHYA PRADESH)
   DHEERAJ SINGH RATHORE S/O RAGHUVEER SINGH RATHORE, AGED
3. ABOUT 35 YEARS, OCCUPATION: NIL M/1 302 AYODHAYA NAGAR NANDA
   NAGAR (MADHYA PRADESH)
                                                         .....RESPONDENTS
(BY SHRI KAPIL MAHANT - P.L. FOR STATE)
(BY SHRI NANDLAL TIWARI, LEARNED COUNSEL FOR THE RESPONDENT
NO.2 & 3.)

Reserved on :- 1/4//2024
Pronounced on :- 02/5/2024
______________________________________________________________________
      These petitions having been heard and reserved for orders, coming on
for pronouncement this day, Hon'ble Justice Pranay Verma, pronounced the
following
                                  ORDER

1. Since these petitions arise out of the same crime number and are related

to the same offence they have been heard together and are being decided by a

common order.

2. These petitions have been preferred by the petitioners/accused under

Section 482 of the Code of Criminal Procedure, 1973 for quashment of FIR

No.415/2014 dated 24/5/20214 registered at police station Aerodrome, District

Indore for the offences punishable under Section 420 read with Section 34,

467, 468 and 471 of the IPC and the final charge sheet dated 27/12/2021

3. As per the prosecution, on 25/2/2014 a report was lodged by the

complainant/respondent No.2 Rupesh Rathore to the effect that petitioner

Vijay Chandrawat had met him in 2006-07. He had stated that there is good

possibility of investment in Super corridor at Gandhi Nagar Grih Nirman

Sanstha. He said that in future big projects are going to come in that area and

that he should invest amount therein. Within 6 to 8 months he would get

possession of plots measuring 1800 sq. ft. (60 ft. x 30 ft.) delivered in his

favour for a consideration of Rs.5.00 lakhs and he shall get the sale deeds

executed in his favour. On the aforesaid pretext petitioner Vijay Chandrawat

on 23/8/2018 got a plot No.631/C which is allotted in name of one

Madhusudhan Sharma bearing membership No.1522 agreed to be sold in

favour of Dheeraj Singh, his elder brother and in his favour on 5/11/2018 plot

No.656-C recorded in the name of Rameshchandra. He said that both the

members are in need of money and he knows both of them and they are old

members of the society hence they should enter into agreement to sale with

them. Relying upon him the agreements to sale were executed. In a period of

11 months he paid a sum of Rs.10.00 lakhs to petitioner Vijay Chandrawat in

lieu of both the plots, some by cheque and some by cash. Vijay Chandrawat

had also made him meet the president of the society Phoolchand Pandey who

also reiterated what Vijay Chandrawat had said. Phoolchand Pandey said that

in 6 to 8 months the map of the society will come and the land shall become of

the ownership of the society. He stated that the persons who have entered into

agreement to sale are members of the society. It is on that assurance itself that

the agreement to sale were executed by him and his brother with the said

members of the society. On 4/5/2009 a sum of Rs.20,000/- had also been taken

from him for mutation. On 20/6/2009 the mutation certificate was also issued

to him signed by Phoolchand Pandey. Mutation order in respect of the other

plot was also given to him. The petitioners/accused have till date neither sold

the plot to him and his brother, nor have delivered possession and have instead

taken a sum of Rs.10.00 lakhs from him.

4. On lodging of the FIR investigation was commenced by the police

during the course of which statements of certain witnesses were recorded and

documents were collected. After completion of the investigation charge sheet

has been filed before the Court concerned.

5. These petitions have been preferred by the petitioners on the ground that

even if the entire allegations as levelled in the FIR as well as in the final report

are taken to be true at their face value, no offence is made out against the

petitioners. It is a pure civil dispute which has been given the colour of a

criminal dispute by the complainant for exerting pressure upon the petitioners.

The petitioners are neither the owners of the plots nor have executed any

agreement to sale in favour of the complainant and his brother nor has any

amount been paid to them. They are not beneficiaries under the transaction. In

any case besides the self serving statement of the complainant and his brother

there is no other evidence on record against the petitioners. There is no

document on the basis of which the involvement of the petitioners in the

present matter has been shown. It is hence submitted that the continuation of

the proceedings against the petitioners is a gross abuse of process of law

which deserve to be quashed.

6. Per contra, learned counsel for the respondent/State as well as learned

counsel for the complainant/respondent No.2 have vehemently opposed the

petitions and have submitted that in the entire transactions between the

members and the complainant and his brother the petitioners had been actively

involved since very inception. It is on their inducement and assurance that the

amount was parted with by the complainant and his brother in favour of the

members of the society. The petitioners had assured the complainant and his

brother that if they make investment in the society they would earn handsome

returns. Despite parting with the amount, neither has possession of the plots

been delivered, nor has the sale deed been executed nor has the amount been

returned. Thus the complainant and his brother have been at a total loss and

have been defrauded by the petitioners. The society was under liquidation and

the map of the land itself has not been approved hence the entire transactions

as got done by the petitioners are fraudulent in view of which the petitions

deserve to be dismissed.

7. I have considered the submissions of the learned counsel for the parties

and perused the record.

8. In the record are two agreement to sale executed with the complainant

and his brother by Madhusudhan Sharma and Deepak who are the members of

the society in which the said plots are situated. Therein it has been recited that

they are the owners of the plots and have agreed to transfer the same in favour

of the complainant and his brother. The sale consideration has also been

mentioned in the agreements which is stated to have been received in entirety.

The agreements state that for the present due to objection by the Government

the legal functioning of the society is halted and whenever the new elections

of the society are conducted and the governing board is established the sale

deeds shall be executed in favour of the complainant and his brother. The

petitioners are nowhere mentioned in both the agreements to sale. They have

not even signed upon the same as witnesses. Admittedly Madhusudhan

Sharma and Deepak are the owners of the plots and have agreed to sell the

same in favour of the complainant and his brother. Thus proximity of the

transactions is between them alone and involvement of the petitioners is not

shown anywhere. If the sale deed for any reason whatsoever has not been

executed in favour of the complainant and his brother, then the same is the

fault of the owners of the plots namely Madhusudhan Sharma and Deepak and

not of the petitioners. It is not the petitioners who have to execute the sale

deed in favour of the complainant and his brother. The owners alone are

competent to deliver possession. Upon failure of them to do so they alone

would be liable to repay the amount received by them from the complainant

and his brother since in the agreement to sale it has been categorically

recorded that the amount of earnest money has been received by them.

9. The averments of the complaint as well as the statement of the

complainant run counter or rather in contradiction and in conflict with the

documentary evidence adduced by him. There is no co-relation in both of

them. In the oral statement it is stated that the entire transaction was got

executed by the petitioners. However when the same is contrasted with the

documentary evidence it looses its significance completely and cannot at all be

relied upon. Going contrary to the available documents it is very easy to make

any oral averment which appears to have been done in the present matter. The

transaction as it took place can be narrated orally also provided it inspires

confidence. However, the documents available on record completely demolish

the oral statement.

10. It is also to be seen that the primary dispute on the basis of the

documents available on record is that agreement to sale were executed in

favour of the complainant and his brother by the plot owners and as per the

complainant the sale deeds have not been executed in their favour nor has the

possession of the plots been delivered to them. In the alternate the amount

received from them has also not been returned. This is primarily a civil dispute

and is in the realm of transactions regarding specific performance of contract.

There does not appear to be any element of criminal liability arising out of it.

The sale deeds have to be executed by the plot holders and they themselves

have not been arrayed as an accused. Only the petitioners who are alleged to

have got the transactions executed between the parties have been made

accused. This is very peculiar to say the least. Even admitting what the

complainant alleges then also it is not within the power or authority of the

petitioners to execute the sale deeds in favour of the complainant and his

brother. The persons against whom the complainant and his brother should

have a grievance have been conveniently left out to be impleaded as accused.

Interestingly, their statements have also not been recorded. It is hence an

apparent effort for giving criminal colour to a civil dispute. The dispute as

regards functioning of the society and its present legal status and the legal

proceedings which have been instituted in respect thereto do not have any co-

relation with the present dispute.

11. The Supreme Court has time and again cautioned that matters of civil

nature ought not to be permitted to be converted into criminal proceedings. In

cases where there is breach of performance of a civil liability, recourse to the

criminal proceedings should not be taken. It has also emphasized that in such

matters, prior to initiation of proceedings it ought to be ascertained as to

whether there had been any intention on part of the accused since the very

inception of cheating the complainant.

12. In Mitesh Kumar J. Sha V/s. State of Karnataka, (2022) 14 SCC 572

it has been held as under :-

"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.

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.

"39. It was also observed : (Indian Oil Corpn. Vs NEPC India Ltd. (2006) 6 SCC 736.

"13. While on this issue, it is necessary to take notice of a growing tendency in business circles to convert purely civil disputes into criminal cases. This is obviously on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors....There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure though criminal prosecution should be deprecated and discouraged.

40. Applying this dictum to the instant factual matrix where the key ingredient of having a dishonest or fraudulent intent under section 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."

13. In Hridaya Ranjan Prasad Verma & Ors. V/s. State of Bihar & Ors.

2000 (4) SCC 168 it has been held by the Supreme Court as under :-

"15. In determining the question it has to be kept in mind 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. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed."

14. In Uma Shankar Gopalika V/s. State of Bihar & Ors., (2005) 10 SCC

336 it has further been held as under :-

"6. Now the question to be examined by us is as to whether on the facts disclosed in the petition of complaint any criminal offence whatsoever is made out much less offences under Sections 420/120B IPC. The only allegation in the complaint petition against the accused persons is that they assured the complainant that when they received the insurance claim amounting to Rs.4,20,000/-, they would pay a sum of Rs.2,60,000/- to the complainant out of that but the same has never been paid. Apart from that there is no other allegation in the petition of complaint. It was pointed out on behalf of the complainant that the accused fraudulently persuaded the complainant to agree so that the accused persons may take steps for moving the Consumer Forum in relation to the claim of Rs.4,20,000. It is well settled that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. In the present case it has nowhere been stated that at the very inception there was any intention on behalf of the accused persons to cheat which is a condition precedent for an offence under Section 420 IPC."

15. Subsequently in Thermax Ltd & Ors. V/s. K.M. Johny & Ors. (2011)

(11) SCALE 128 after referring to various judgments it has again be reiterated

as under :-

"37. It is settled law that the essential ingredients for an offence under Section 420, which we have already extracted, is that there has to be dishonest intention to deceive another person. We have already quoted the relevant allegations in the complaint and perusal of the same clearly shows that no such dishonest intention can be seen or even inferred inasmuch as the entire dispute pertains to contractual obligations between the parties. Since the very ingredients of Section 420 are not attracted, the prosecution initiated is wholly untenable. Even if we admit that allegations in the complaint do make out a dispute, still it ought to be considered that the same is merely a breach of contract and the same cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right from the beginning of the transaction. Inasmuch as there are number of documents to show that appellant-Company had acted in terms of the agreement and in a bona fide manner, it cannot be said that the act of the appellant- Company amounts to a breach of contract."

16. Recently in Randheer Singh V/s. State of U.P. & Ors. 2021 (14) SCC

626 it has further been held as under :-

"33. In this case, it appears that criminal proceedings are being taken recourse to as a weapon of harassment against a purchaser. It is reiterated at the cost of repetition that the FIR does not disclose any offence so far as the appellant is concerned. There is no whisper of how and in what manner, this appellant is involved in any criminal offence and the charge sheet, the relevant part whereof has been extracted above, is absolutely vague. There can be no doubt that jurisdiction under Section 482 Cr.PC should be used sparingly for the purpose of preventing abuse of the process of any Court or otherwise to secure the ends of justice. Whether a complaint discloses criminal offence or not depends on the nature of the allegation and whether the essential ingredients of a criminal offence are present or not has to be judged by the High Court. There can be no doubt that a complaint disclosing civil transactions may also have a criminal texture. The High Court has, however, to

see whether the dispute of a civil nature has been given colour of criminal offence. In such a situation, the High Court should not hesitate to quash the criminal proceedings as held by this Court in Paramjeet Batra extracted above."

17. The ratio of the aforesaid decisions is that for attracting Sections 420,

418 and 406 of the IPC it is the intention of the accused to begin with which

has to be seen. There should be specific allegation that the accused never at

any point of time since the very inception had any intention of fulfilling his

promise. Only for the reason that in a commercial dispute certain amount is

liable to be paid by one party to the other and which is not so paid it would not

give rise to a criminal liability though the same act may give rise to civil

liability.

18. In view of the discussion as above, in my opinion, the allegations

levelled against the petitioners give rise to cause of action for instituting civil

proceedings but by no stretch of imagination can it be said that due to the

alleged acts on part of the petitioners, any criminal offence has been

committed by them. The essential ingredients for invocation of offences under

Sections 420, 467, 468 and 471 of the IPC are completely missing in the

present case.

19. Thus even if the allegations levelled against the petitioners are accepted

to be true at this stage, they do not constitute any offence having been

committed by them for which they have been charged.

20. Consequently, the petitions deserve to be and are accordingly allowed

and the FIR No.415/2014, registered at police station Aderodrome, Indore,

District Indore against the petitioners for offences punishable under Sections

420, 467, 468 and 471 of the IPC and the charge sheet dated 27/12/2021 filed

in respect of the same deserve to be and are accordingly quashed.

(PRANAY VERMA) JUDGE SS/-

SHAILESH Digitally signed by SHAILESH MAHADEV SUKHDEVE DN: c=IN, o=HIGH COURT OF MADHYA PRADESH BENCH INDORE, ou=HIGH COURT OF MADHYA PRADESH BENCH

MAHADEV INDORE, 2.5.4.20=b99d782efca3d28a06caddf3fa57b98c35054f3dd86 38f2f98df0172d29e61c2, postalCode=452001, st=Madhya Pradesh, serialNumber=FFA0399242CA45066C1961743F4D307CFE60 1D3C99A4A61B38FCD08EAABE7237, cn=SHAILESH

SUKHDEVE MAHADEV SUKHDEVE Date: 2024.05.02 17:21:04 +05'30'