Rajasthan High Court

Gaurav Malhotra S/O Shri Yashpal ... vs State Of Rajasthan on 3 January, 2024

Author: Sudesh Bansal

Bench: Sudesh Bansal

[2023:RJ-JP:38302]

        HIGH COURT OF JUDICATURE FOR RAJASTHAN
                    BENCH AT JAIPUR

     S.B. Criminal Miscellaneous (Petition) No. 5858/2023

Gopal Singh S/o Uttam Singh Verma, Resident Of House No. 44,
Amrit Sagar Nagar, Police Station, Kotla Mubarakpur, Delhi
South.
                                                                    ----Petitioner
                                    Versus
1.       State Of Rajasthan, Through Public Prosecutor
2.       Siddharth Gupta S/o. Shri Rakesh Gupta, Resident Of A-
         629, Kelgiri Road, Malviya Nagar, Jaipur City (East),
         Jaipur (Raj.)
                                                                 ----Respondents
                              Connected With
     S.B. Criminal Miscellaneous (Petition) No. 5840/2023
Alok Singh S/o. Shri Nageshwar Singh, Resident Of B-213, Palam
Extension, Near Rampal Chowk, Sector-7, Dwarka, South West,
Delhi.
                                                                    ----Petitioner
                                    Versus
1.       State Of Rajasthan, Through Public Prosecutor
2.       Siddharth Gupta S/o. Shri Rakesh Gupta, Resident Of A-
         629, Kelgiri Road, Malviya Nagar, Jaipur City (East),
         Jaipur (Raj.)
                                                                 ----Respondents
     S.B. Criminal Miscellaneous (Petition) No. 5859/2023
Gaurav Malhotra S/o Shri Yashpal Malhotra, Resident Of House
No. 108, Ashok Vihar-III, Gurgaon.
                                                                    ----Petitioner
                                    Versus
1.       State Of Rajasthan, Through Public Prosecutor
2.       Siddharth Gupta S/o. Shri Rakesh Gupta, Resident Of A-
         629, Kelgiri Road, Malviya Nagar, Jaipur City (East),
         Jaipur (Raj.)
                                                                 ----Respondents


For Petitioner(s)         :     Mr. S.P. Singh Chouhan,
                                Mr. Bhanvar Singh Chouhan
For Respondent(s)         :     Mr. Laxman Meena, PP
For Complainant           :     Mr. S.S. Hora with
                                Mr. Anuj Jain
                                Mr. Sanjay Sharma, ACP Malviya
                                Nagar, Jaipur




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                HON'BLE MR. JUSTICE SUDESH BANSAL

                                      Judgment
  Judgment RESERVED ON                                           December 5th 2023
  Judgment PRONOUNCED ON                                         January 3rd 2024
  BY THE COURT

REPORTABLE

1. These three separate criminal miscellaneous petitions under

Section 482 Cr.PC have been filed, for quashing of FIR

No.361/2023 registered at Police Station Malviya Nagar, District

Jaipur for offences u/s 420, 406 & 120-B IPC, along with all

subsequent proceedings arising thereof, wherein petitioners have

been named as accused persons, allegedly to be involved in

commission of such offences.

2. Since all three petitions arising out of one and the same FIR

in question, with consent of counsel for both parties, all three

petitions have been heard together and would stand decide by this

common judgment.

3. Relevant facts required to be considered to deal with the

present petitions as emerge from the record and contentions

made by counsel for both parties, in brief, are as under:-

(I) The dispute between parties is in respect of an immovable

property situated at KM-125, Delhi Jaipur Expressway (National

Highway-4), Village Pinan, District Alwar (Rajasthan), regarding

which a sublease agreement dated 16.03.2023 was executed

between G&G Road Island Developers LLP through its designated

partner Mr. Siddharth Gupta (respondent No.2 herein) and

petitioners. The possession of property was allegedly delivered to

petitioners under this sublease agreement, for the purpose of

running a Vegetarian Restaurant in the name & style of Rajwada in

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hall, initially only for a period of one month from 16.03.2023 to

15.04.2023.

(II) Later on, vide letter dated 11.04.2023, period of sublease

agreement was extended for next 2 1/2 months i.e. till 30.06.2023

by the lessor with condition that sublease rent for restaurant will

be 30% (excluding GST) of total revenue/sales proceeds from sale

of food items at the restaurant and sublease rent will be paid on

or before first week of next month; in case of delay in payment of

revenue share, the payment shall be made with interest @ 18%

per annum. It has been pointed out that the premises including

the disputed property, indeed belongs to National Highway

Authority of India (NHAI) and was leased out by the NHAI to the

PATH Company, then in turn, complainant-respondent No.2 took

some premises on lease from the PATH Company and then within

permissible terms of the lease conditions, complainant-respondent

No.2 handed over the portion of disputed property to petitioners,

on sublease, for a short period, stated to be only on trial basis.

(III) According to complainant-respondent No.2, he is required to

pay revenue, on regular basis, to the NHAI as well as to the PATH

Company, from the amount of revenue, payable by petitioners

under the sublease agreement as extended, but petitioners have

stopped to pay the revenue, which was agreed to be 30%

(excluding GST) of the total sale proceeds of restaurant, while

extending the period of sublease and thus, indeed petitioners are

enjoying the possession of the disputed property, without making

payment of the agreed revenue amount. It has been submitted

that in such eventualities, the complainant has to serve one notice

dated 01.07.2023 upon the petitioners, through which they were

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informed that the performance of petitioners has been found to be

unsatisfactory as well as they have not complied with terms and

conditions of the extended sublease agreement, therefore,

petitioners were asked to vacate the sublease premises so also to

pay the outstanding arrears of revenue, to the tune of

Rs.26,79,750/-, allegedly fallen due against them upto the period

of 30.06.2023.

(IV) According to the complainant, such notice dated 01.07.2023

was duly served upon the petitioners, however, same was never

replied/responded. On bidding to pay the arrears of due revenue

share and to hand over the vacant possession of the sublease

premises, petitioners started to misbehave with the complainant

and not only abused, but threatened to kill and openly challenged

the complainant to do anything. Under such compelling

circumstances, the complainant was forced to lodge the impugned

FIR on 16.08.2023, leveling an allegation against petitioners that

they had an intention to deceit the complainant since inception

having no intention to make payment of their revenue share.

Allegations have been leveled in the FIR that petitioners got

possession of the disputed property, with a malice intention to

detain the possession dishonestly. It has been submitted that

petitioners are giving threat to kill the complainant and their

whole action since inception to last, is collusive as much as

fraudulent. Arrears of revenue, upto the period of 31.07.2023,

have been accumulated more than Rs.77 lakhs, which have not

been paid, nor the possession of the disputed property has been

handed over despite repeated requests, therefore, stern action be

taken against the petitioners, who are cheaters and defaulters.

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(V) Learned counsel for complainant has drawn attention of this

Court, to one additional FIR No.591/2023 registered on

24.10.2023 at Police Station Rajgarh, District Alwar by the

management of one another Hotel Tokus located nearby, against

persons presently holding the management and charge of Hotel

Rajwada Darbar, in order to show that as a matter of fact,

petitioners have handed over the charge, management and

possession of Hotel Rajwada to some anti-social elements, who

are used to taking the law in their own hands. Learned counsel

contended that the accused petitioners, from the start had a

fraudulent and dishonest intention to enter into agreements with

complainant, so also induced the complainant deceitfully to hand

over the possession of premises to them. Petitioners are prima

facie guilty for committing offence of cheating and to

misappropriate the property of complainant dishonestly, hence in

totality of facts and circumstances, a clear case for commission of

offences u/s 405, 420 and 120-B IPC is make out against the

petitioners, therefore, the FIR has been lodged against petitioners

to prosecute them for their criminal acts and fraudulent deeds.

4. Learned counsel for accused petitioners, vehemently argued

that from bare perusal of contents of the impugned FIR as a

whole, it stands clear that there was a written contract between

the parties under which, the possession of property in question

was lawfully entrusted to petitioners to run a vegetarian

restaurant. It has been argued that petitioners are making

payment of their share of revenue and it has wrongly been stated

in the FIR that more than Rs.77 lakhs of the arrears of revenue

against petitioners have fallen due upto 31.07.2023. Learned

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counsel for petitioners, during course of arguments, sought to

refer details of accounts, in order to show that time to time upto

22.06.2023, petitioners have made payments in the account of

complainant through NEFT, totaling Rs.78,29,335/-. Learned

counsel has urged that even if, for the sake of arguments, it is

assumed that there is some dispute between parties, regarding

non payment of the full amount of revenue share by petitioners, a

remedy for recovery of the due amount, if any, is available to the

complainant. Learned counsel has drawn attention of this court to

the relevant Clause No.6 of the sublease agreement dated

16.03.2023, which talks about dispute resolution forum that all

kinds of disputes and differences between the parties shall be

referred to and settled by two arbitrators, one be appointed by

each party. In sum and substance, contention of learned counsel

for petitioners is that the dispute even of due arrears of revenue

or non delivery of possession or breach of conditions of the

sublease agreement, whatsoever may be, the nature of dispute

between parties is purely civil and the complainant has maliciously

tried to give color to such a civil dispute to a criminal one, by

registering the FIR impugned herein.

5. Learned counsel for petitioners submitted that a civil suit for

permanent injunction has also been filed by petitioners before the

Civil Judge, Reni, District Alwar, against the respondent No.2-

complainant, wherein the complainant himself has taken resort to

the arbitration clause as incorporated in the sublease agreement

and has moved an application under Section 8 of the Arbitration

and Conciliation Act, 1996 (hereinafter for short "A&C Act, 1996")

read with Order 7 Rule 11 CPC, to reject the plaint, being not

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maintainable before the civil Court and has taken a plea that the

dispute is to be settled by arbitration under A&C Act, 1996.

Learned counsel submits that in such overall facts and

circumstances, the registration of the impugned FIR against

petitioners and initiation of criminal action against petitioners with

the aid of Police, in a dispute which is purely of civil nature, is

impermissible and unwarranted in law as much as sheer misuse of

the process of law. The Police Authorities have no jurisdiction to

notices u/s 41-A Cr.PC were issued to the petitioners, which too

have been duly responded, yet under the influence of the

complainant, the Police Personnel are harassing the petitioners

and indeed, the complainant, by putting a pressure of the present

FIR upon the petitioners, wants to get recover the possession of

the property in question from petitioners, whereas petitioners are

in lawful possession and making payment of their revenue share

on regular basis. Hence, it has been prayed that in order to

prevent the abuse of process of law as also to secure ends of

justice, it is desirable and necessary for this Court to exercise its

inherent powers u/s 482 Cr.PC. to quash the impugned FIR with all

ancillary proceedings, thereupon commenced by the Police.

In support of his contentions, learned counsel for petitioners

has placed reliance on following judgments:-

(i) Dalip Kaur Vs. Jagnar Singh [(2009) 14 SCC 696];

(ii) Sarabjit Kaur Vs. The State of Punjab [(2023) 5 SCC

360];

(iii) Vijay Kumar Ghai Vs. The State of West Bengal

[(2022) 7 SCC 124];

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(iv) Anil Mahajan Vs. Bhor Industries Ltd. [(2005) 10 SCC

228];

(v) Uma Shankar Gopalika Vs. State of Bihar [(2005) 10

SCC 336] and;

(vi) Satishchandra Ratanlal Shah Vs. State of Gujarat

[(2019) 9 SCC 148].

6. On the contrary, learned Public Prosecutor has opposed

present petitions and submitted that from contents of the FIR and

investigation carried out by the Police so far, a cognizable offence

is make out to have committed by petitioners. During course of

investigation, notices u/s 41-A Cr.PC were issued to petitioners,

but petitioners have not cooperated in the investigation and have

not turned up. During investigation, it has transpired that an

amount of Rs.76,19,619/- is outstanding against petitioners qua

arrears of sublease agreement and petitioners are absconding,

however getting benefits by running the restaurant with the help

of local culprits. In order to complete the investigation, arrest of

petitioners is necessary, as commission of offences u/s 420, 406 &

120-B IPC is established against them. A copy of status report of

the investigation dated 05.12.2023 has been placed on record.

7. Learned counsel appearing for and on behalf of complainant-

respondent No.2, through his persuasive and strong submissions,

tried to establish before this Court that merely availability of a civil

remedy to the complainant does not preclude him to initiate the

criminal action, once the accused petitioners had a fraudulent and

dishonest intention since inception and have induced as well as

deceit the complainant to hand over the possession of premises to

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them and thereafter, petitioners have dishonestly misappropriate

the property for their own use. It has been urged that in catena of

cases, decided by the Hon'ble Supreme Court, it has been held

that facts giving rise to a civil claim can also amount to criminal

offence and merely because a civil claim is maintainable or there

exists an arbitration agreement between parties, same itself does

not thwart out the criminal proceedings. Learned counsel

strenuously submits that the disputed premises is a public

premises, belonging to NHAI, and since inception petitioners tried

to misappropriate the property to use the same for their personal

benefits, even the property was given for a short term only on

trial basis, but petitioners had a fraudulent intention to deceive

the complainant since beginning and they have not paid the

arrears of even the agreed revenue, which have accumulated now

above to the tune of Rs. One Crore. The intention of petitioners

was not bonafide and fair since beginning and now they have

engaged other culprits to create a fearful atmosphere in the area.

Petitioners have been found guilty, prima facie by the Police and

by their acts and deeds as a whole, offences of cheating and

criminal breach of trust, are make out against them. Therefore,

considering the conduct of petitioners, so also non-cooperation in

the investigation and in totality of facts and circumstances, the

impugned FIR is not liable to be quashed at the stage of

investigation. He submits that the proposition of law is that

powers by the High Court should be exercised exceptionally and

sparingly, to quash the FIR that too before completion of the

investigation thereupon. There is no abuse of process of law to

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continue the investigation on the impugned FIR by the Police

agency and thus, present petitions be dismissed at this stage.

In support of his contentions, learned counsel for

complainant-respondent No.2 has placed reliance on following

judgments:-

(i) Trisuns Chemical Industry Vs. Rajesh Agarwal [(1999

8 SCC 686];

(ii) Kamaladevi Agarwal Vs. State of West Bengal [(2002)

1 SCC 555];

(iii) State of Orissa Vs. Ujjal Kumar Burdhan [(2012) 4 SCC

547];

(iv) Priti Saraf Vs. State of NCT of Delhi [(2021) SCC

OnLine 206] and;

(v) Lalmuni Devi Vs. State of Bihar [(2001) 2 SCC 17]

8. Apart from making contentions by learned counsel for both

sides, noted hereinabove, both parties have also placed on record

copies of few documents, including sublease agreements executed

between parties, extension letter dated 11.04.2023 given by the

complainant, notice dated 01.07.2023 issued by the complainant

for and on behalf of G&G Road Island Developers LLP, another FIR

No.591/2023, reply by petitioners to notice u/s 41-A Cr.PC, civil

suit for permanent injunction filed by and on behalf of petitioners

against complainant and application u/s 8 of the A&C Act, 1996

read with Order 7 Rule 11 CPC moved by complainant therein etc.

The aforesaid documents, being undisputed between parties and

with consent of learned counsel for both parties, have also been

taken into consideration, apart from taking into consideration the

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rival contentions made by learned counsel appearing for both

sides.

9. Before considering the factual matrix in the present matters,

at the outset, it would be appropriate to discuss the ambit and

scope of the High Court, to exercise its powers under Section 482

Cr.PC, more particularly in respect of quashing the FIR at the

stage of investigation. On this issue, it is suffice to observe that

the proposition of law has been set at rest by the Hon'ble

Supreme Court through its N-number of pronouncements in

various cases, whereunder it has been settled that the inherent

powers by the High Court, which are preserved and have been

recognized by virtue of Section 482 Cr.PC, are to be exercised with

great care and circumspection, that too in rarest of rare cases,

where on close scrutiny of facts and material brought on record,

the High Court reaches to a conclusion that in order to prevent the

abuse of process of any Court or to secure ends to justice, it is

necessary to quash the first information report. It may be noted

that contents of FIR are not an encyclopedia, however, allegations

leveled therein should be read as it is, without adding or

subtracting anything and other material/evidence collected by the

Police or produced by parties, if undisputed, may also be taken

into consideration, to form an opinion, as to whether the entirety

of facts cumulatively give rise to commission of a cognizable

offence, which needs to be put for investigation on the hands of

Investigation Agency or to proceed for criminal prosecution before

the Court of law. It is to be kept in mind that the High Court at

this stage is not required to go into making a roving inquiry in the

matter or to examine the correctness/truthfulness of allegations

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leveled in the FIR. There is no doubt that powers vested in the

High Court under Section 482 Cr.PC are wide enough and, if

judiciously and cautiously exercised, can take care almost all the

situations, where the initiation/continuation of the criminal

proceedings are found to be amount to oppression or harassment

of the party, even at the stage of investigation on the FIR or

inquiry on the complaint or in any trial or criminal proceedings. In

such type of exceptional cases, the High Court may exercise its

inherent powers and jurisdiction under Section 482 Cr.PC for

quashing the FIR & investigation and to terminate the criminal

proceedings as well, if the case of abuse of process of law is

clearly make out.

To buttress and extend strength to such proposition of law,

as observed hereinabove, reference of few of the celebrated

judgments of the Hon'ble Supreme Court, out of n-number of

judgments, would be suffice; i) R.P. Kapur Vs. The State of

Punjab [AIR (1960) SC 866], ii) State of Haryana Vs.

Choudhary Bhajanlal [(1992) Suppl.(1) SCC 335] (Para

No.102), iii) M/s Neeharika Infrastructure Pvt. Ltd. Vs. State

of Maharashtra [Air (2021) SC 1918] [Para No.23(xiv)], iv)

Parbatbhai Aahir @ Parbatbhai Bhimsinhbhai Karmur Vs.

State of Gujarat [(2017) 9 SCC 641] (Para No.16) and, v)

Priti Saraf Vs. State of NCT of Delhi [(2021) SCC OnLine

10. Coming to the merits of present matters, from bare perusal

of contents of the impugned FIR, an undisputed fact appears that

partners of firm G&G Road Island Developers LLP, including

complainant-respondent No.2 consciously and willingly handed

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over the possession of the rest area to petitioners, owners of the

Rajwada Restaurant, to run a restaurant in the hall on sublease

initially for a period from 16.03.2023 to 15.04.2023 on trial basis

and later on, one month period of sublease was extended till

30.06.2023. It is an undisputed fact between parties that a

written contract, incorporating terms & conditions of sublease was

executed on trial basis and thereafter, the sublease period was

also extended in writing vide sublease deed extension letter dated

11.04.2023 by the complainant Mr. Siddharth Gupta, being the

authorized designated partner for and on behalf of G&G Road

Island Developers LLP. The extension letter dated 11.04.2023,

being an undisputed document, which has been placed on record,

reads as under:-

"Sub.: Extension/Renewal of sub lease of RHS part at Hall No. 1, of Block No.3, situated at KM 125, Delhi Jaipur Express way National Expressway-4), Vilage Pinan, District Alwar, Rajasthan, Pincode-301413 for next 2 and half months which will expire on 30th June 2023 of running a Vegetarian Restaurant.

Dear Sir,

As per your verbal telephonic request and Personal Meeting and on the basis of your offer of revised revenue share arrangement, we extend the sub lease deed for next 2 and half months i.e. till 30/06/2023, which originally executed on 16/03/2023 for initial period of one month for using premises situated at "RHS part of Hall No.1, of Block No.3, situated at KM 125, Delhi Jaipur Expressway (National Expressway-4), Village Pinan, Dist. Alwar, Rajasthan, Pincode-301413" for running a Vegetarian Restaurant as mutually agreed between us. Further the extension of the original sub lease has been done on the grounds that you will agree to shift the above mentioned restaurant in RHS Hall No. 02 of Block No. 3 after doing interior work as it was not done in RHS Hall No. 01 of Block No.3. This shifting is to be done in this period of extended sub lease. Further, this extension has been done on same terms and conditions as mentioned & agreed in the above mentioned original sub

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lease deed subject to amendment in below clause and one new clause/condition has been added:-

• Clause 2 at page no.2 of the original agreement amended and will be now read as "Sublease Rent for Restaurants will be 30% (Excluding GST) of total revenue/sales proceeds from sale of food items. Sublease rent will be paid on or before 1 st week of next month". In case of delay in payment of revenue share, the payment shall be made with interest @18% p.a".

• New Clause/condition as mutually agreed in extended sub lease is that "After completing the interior work of RHS Hall No. 02 of Block No. 3, the restaurant presently running in RHS Hall No. 01 of Block No. 03 will have to be shifted to RHS Hall No. 02 of Block No. 3 within this extended sub lease period i.e., upto 30/06/2023. And only thereafter fresh lease deed can be executed, or this lease deed can be extended to run Vegetarian Restaurant in RHS Hall No. 2 of Block No. 3".

The remaining terms & conditions of the original sub lease deed will remain the same. Kindly keep this letter as token for our (lessor's) acceptance to extension of sub lease deed till 30th June 2023. Contravention to any terms & conditions as agreed in the original sub lease or the amended/newly added clauses may lead to termination of the sub-lease agreement, and you will be required to vacate the premises."

(Underline Supplied)

11. A further perusal of contents of the impugned FIR indicates

that allegation against petitioners is that, after extension of the

sublease period upto 30.06.2023, petitioners stopped to make

payment of the revenue share and therefore, a written notice

dated 01.07.2023 was issued by the complainant. The issuance of

the notice dated 01.07.2023 by the complainant to one of the

petitioners namely Sh. Gopal Singh, is also an undisputed fact, so

it would also be apropos to reproduce the contents of this notice in

order to appreciate intentions of parties, prior and post to

execution of the sublease agreement and to look into the matter

in respect of allegations of inducement and deceitful action of

petitioners since beginning. The notice dated 01.07.2023 reads as

under:-

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"Sub.: Notice to vacate the lease premises at "LHS part at Hall No.1, of Block No.3, situated at KM 125, Delhi Jaipur Expressway (National Expressway-4), Village Pinan, Dist. Alwar, Rajasthan, Pincode 301413" given on lease through original sub lease dated 16/03/2023 which extended through letter dated 11/04/2023.

Dear Sir,

This letter serves as notice to you that to vacate the leased premises "LHS part at Hall No 1, of Block No.3, situated at KM 125, Delhi Jaipur Expressway (National Expressway-4), Village Pinan, Dist. Alwar, Rajasthan, Pincode-301413" as the extension of sub lease has ended on 30/06/2023. In this extended lease period, your performance is found to be unsatisfactory, as you failed to comply with the terms & conditions of the extended sub lese period which may understood as under. -

i. As per our terms and conditions you were required to complete interior work of LHS Hall No. 02 of Block No. 3 and shift your restaurant from LHS Hall No. 01 of Block No. 3 to LHS Hall No. 02 of Block No. 3. But till today no work has been started by you.

ii. You have also failed to comply with the basic condition of lease i.e. full payment of agreed revenue share to us on or before 1st week of next month. As per your daily report of Revenue generated, total amount of revenue share of Rs. 26,79,750/- is due from you till 30/06/2023.

It is pertinent to note that NHAI (i.e, Govt of India) is also having share in the revenue generated from your restaurant, Therefore some part of revenue share also need to be deposited with NHAI as well which you have failed to comply. Please note that non-compliance to the above clauses which may affect your future prospects in various wayside amenities of NHAI which may even include blacklisting you as sub-contracted vendor with NHAI.

Since the extended lease period was only upto 30/06/2023 and we are not desirous/ intending to extend the lease period any further, therefore you are required to vacate the premises situated at "LHS part of Hall No.1, of Block No.3, situated at KM 125, Delhi Jaipur Expressway (National Expressway-4), Village Pinan, Dist. Alwar, Rajasthan, Pincode-301413" within 7 days ie. on or before 07/07/2023 and you are also required to deposit the above mentioned balance amount of revenue share of Rs. 26,79,750/- within 7 days of the date of this notice plus the additional revenue share till the date of actual payment or the date till which the restaurant is run and operated by you. Failing to comply any of the terms and

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conditions may lead to initiation of legal actions against you for which you will be solely responsible.

Hence you are requested to (1) deposit the balance lease rental amount immediately as calculated and (2) vacant the lease premises. Kindly consider this matter as urgent."

12. Having gone through the contents of the extension letter

dated 11.04.2023 and the notice dated 01.07.2023, admittedly

written by the complainant, there is not a whisper or even a word

of allegation against petitioners that they induced the complainant

or partners of the G&G Road Island Developers LLP, in any manner

to enter into sublease agreement, so also to hand over the

possession of the property in question to petitioners to run a

vegetarian restaurant in the name and style of Rajwada. Even

what has been reflected that the revenue agreed between parties

for the initial sublease period from 16.03.2023 to 15.04.2023 was

not stated to be due i.e. obviously had been duly paid by the

petitioners and for the subsequent period of extension of sublease,

the allegation is only not to pay the full payment of the agreed

revenue share on or before first week of next month. Although, on

this count, from the side of petitioners, it has been tried to point

out that after extension of sublease period, payments of the

revenue share were made time to time in the account of

complainant through NEFT upto 22.06.2023 and a totaling of

Rs.78,29,335/- has been paid. Yet, this Court is refraining itself to

enter into such arena of dispute between parties, in respect of the

amount of due arrears of revenue share, for which it cannot be

disputed that petitioners were/are liable to pay, if any outstanding

amount of revenue falls due, but same is not within the scope of

present petitions. This Court is extending its focus to the point, as

to whether the intention of petitioners was fraudulent and

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deceitful since inception and petitioners induce the complainant in

any manner to enter into the sublease agreement and to hand

over the possession of the property in question, for the purpose to

run a vegetarian restaurant by petitioners.

13. The Hon'ble Supreme Court in case of Vijay Kumar Ghai

(Supra), referred by counsel for petitioners, dealt with provisions

of Section 405-Criminal Breach of Trust and Section 415-Cheating

of IPC. After discussion of the essential ingredients to constitute

offences under these provisions of law, the Apex Court in Para

Nos.28 & 31 observed as under:-

"28. A fraudulent or dishonest inducement is an essential ingredient of the offence. A person who dishonestly induces another person to deliver any property is liable for the offence of cheating.

31. To establish the offence of Cheating in inducing the delivery of property, the following ingredients need to be proved:-

1. The representation made by the person was false.

2. The accused had prior knowledge that the representation he made was false.

3. The accused made false representation with dishonest intention in order to deceive the person to whom it was made.

4. The act where the accused induced the person to deliver the property or to perform or to abstain from any act which the person would have not done or had otherwise committed."

In case of Sarabjit Kaur (Supra), the Apex Court was

dealing with the issue of quashing of FIR registered for offences

u/s 420, 120-B and 406 IPC, because of breach of terms of

contract entered into between parties. In such factual backdrop,

the Apex Court in Para No.13 observed as under:

"13. A breach of contract does not give rise to criminal prosecution for cheating unless fraudulent or dishonest

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intention is shown right at the beginning of the transaction. Merely on the allegation of failure to keep up promise will not be enough to initiate criminal proceedings. From the facts available on record, it is evident that the Respondent No. 2 had improved his case ever since the first complaint was filed in which there were no allegations against the Appellant rather it was only against the property dealers which was in subsequent complaints that the name of the Appellant was mentioned. On the first complaint, the only request was for return of the amount paid by the Respondent No. 2. When the offence was made out on the basis of the first complaint, the second complaint was filed with improved version making allegations against the Appellant as well which was not there in the earlier complaint. The entire idea seems to be to convert a civil dispute into criminal and put pressure on the Appellant for return of the amount allegedly paid. The criminal Courts are not meant to be used for settling scores or pressurise parties to settle civil disputes. Wherever ingredients of criminal offences are made out, criminal courts have to take cognizance. The complaint in question on the basis of which F.I.R. was registered was filed nearly three years after the last date fixed for registration of the sale deed. Allowing the proceedings to continue would be an abuse of process of the Court."

14. Having adverted to the factual allegations leveled by the

complainant in the FIR and avertments incorporated by the

complainant, while extending period of sublease vide extension

letter dated 11.04.2023 and while issuing notice dated 01.07.2023

to demand vacation of the sublease area on account of default in

making payment of revenue share as also in respect of committing

breach of other terms & conditions of the extended sublease

period, it nowhere reflects that the complainant was induced in

any manner by the petitioners, that too with a fraudulent and

dishonest intention, to enter into the sublease agreement or to

settle terms & conditions of sublease as agreed between the

parties or to deliver the possession of the property in question to

run a vegetarian restaurant. Even if the case of complainant, as

put forth in the FIR with support of other documents placed on

record, is taken on its face value, the basic ingredients to

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constitute offences u/s 406 & 420 IPC are found absent. In the

status report dated 05.12.2023 placed on record by the learned

Public Prosecutor after initial investigation by the Police, there is

no reference or reliance on any material to make an observation

that on what basis, offences u/s 420, 406 and 120-B IPC are held

to be established against the petitioners. It is to be noted here

that mere using of words "deceive", "cheating" or "criminal breach

of trust" in the FIR is not suffice to constitute such offences and

unless something is prima facie culled out from contents of the

FIR or during course of investigation that petitioners played

deceitfully at the very inception to entrust the property, mere

inference of the Investigation Agency without any foundational

material, may not be treated as sufficient, to accept the criminal

motion within parameters of law and for not to exercise the

jurisdiction by the High Court to quash the FIR and the

investigation, more so when it is more than clear from record on

its face value that essential elements to establish the commission

of offence are absent. From perusal of the status report, it

appears that the Investigation Agency has opined the need to

arrest petitioners for investigation, without assigning any specific

reasons, whatsoever may be, which is basic requirement of law to

explain reasons for need to arrest. Therefore, in such

eventualities, it can be observed herein that issuance of notice by

the Investigation Agency u/s 41-A Cr.PC seems to be merely an

eye-wash and is not in conformity to the object of provision.

It appears that the complainant with aid & help of the Police,

intends to continue the criminal motion for one or other reason,

apparently to achieve his goal/purpose against petitioners, for

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putting an undue pressure upon them, of pending investigation on

the impugned FIR. The motion of criminal action may not be

allowed to initiate or continue only to exert pressure or

harassment of the accused persons. As has been discussed

hereinabove with the help of various pronouncements of the Apex

Court that if the FIR and investigation thereupon, is found to be

fallen in any of the criteria as set out by the Hon'ble Supreme

Court in landmark judgment of Choudhary Bhajanlal (Supra),

the High Court may exercise its inherent powers to quash the FIR

and subsequent criminal proceedings arising thereof. For ready

reference, relevant portion of the said judgment i.e. Para No.102

& Sub-Para No.102(3) is being reproduced hereunder:-

"102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.

......

3. Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.

Facts of the present case, invite invocation of such criteria,

to exercise the inherent powers by the High Court.

15. As far as contentions put forth by learned counsel for

complainant are concerned, as noted hereinabove, this Court finds

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that from perusal of previous documents executed between

parties, including the sublease agreement, extension letter and

notice issued by the complainant, which are prior to lodging the

impugned FIR, there is no smack or even a word about playing

any inducement by petitioners upon the complainant, that too with

a dishonest and malice intention to take over the possession of

the property since inception i.e. at the time of entering into

sublease agreement or even subsequent thereto. It is an admitted

case of the complainant which reflects from perusal of the

extension letter of sublease period dated 11.04.2023 and the

notice dated 01.07.2023 that terms & conditions on which the

possession of rest area (property in question herein) was

entrusted to petitioners, were settled between parties mutually.

The best case of complainant is, at the most, of flouting the

agreed terms & conditions by petitioners incorporated in the

sublease agreement so also in the extension letter. Allegations

sought to be leveled against petitioners for inducement and having

dishonest intention since inception, do not find any corroboration

and support from the previous documents executed between

parties, prior to lodging the impugned FIR. Such allegations, in the

backdrop of peculiar facts of the present case, seems to be

afterthoughts and have been raised in air, possibly by taking help

of any legal expert and by way of distortion and twisting the

original and true facts. Therefore, merely on the basis of such

afterthoughts and unfounded allegations, the case of complainant

does to fall within the parameters of a legitimate criminal motion.

In case of Uma Shankar Gopalika (Supra), the Hon'ble

Supreme Court, while dealing with a case to quash the FIR, in the

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backdrop of facts that the finance company despite receiving the

claim on the financed vehicle from the insurance company, did not

pay the compensation amount to the complainant, in spite of

assurance given by the finance company to him, due to which the

complainant lodged the criminal complaint for prosecution of

finance company to cheat, it was held that "It is well settled that

every breach of contract would not give rise to 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 cheat." (Underlines are mine). Applying

such principle of law, which has been followed by the Apex Court

in case of Vijay Kumar Ghai (Supra) in the year 2022, on facts

of present case, nothing has transpired on record either from the

FIR or from the investigation report that at the very inception, at

the time of entering into sublease agreement or at the time of

extension of sublease period, there was any dishonest intention of

petitioners to cheat. Allegations of the complainant that

petitioners stopped to make payment of revenue share, after

extension of the sublease period and declined to hand over the

vacant possession despite issuance of notice dated 01.07.2023,

even though may be accepted as it is, same at the most give rise

to a dispute between parties about outstanding arrears of the

revenue share and non delivery of possession by petitioners, and

such nature of dispute, predominantly falls withitn purview of civil

dispute between the parties. In absence of any element of

dishonest intention since inception or inducement on the part of

petitioners, which are condition precedent to constitute offences

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u/s 406 and 420 IPC, petitioners cannot be allowed to be

prosecuted by initiation of criminal motion at the whims of

complainant for ulterior motive. Indeed, in backdrop of such

peculiar facts of the case, the remedy lies for the parties to

approach the civil forum. The Hon'ble Supreme Court clearly

observed in Uma Shankar Gopalika (Supra) that "In our

opinion, in view of these facts allowing the police investigation to

continue would amount to an abuse of the process of court and to

prevent the same it was just and expedient for the High Court to

quash the same by exercising the powers under Section 482 of

the Code of Criminal Procedure which it has erroneously refused ."

(Underlines are mine). Hence, this Court finds the present case to

be an exceptional and fit case for exercising its powers under

Section 482 Cr.PC to quash the impugned FIR and investigation

thereupon.

16. The contention of learned counsel for complainant that

merely availability of a civil remedy in respect of breach of terms

& conditions of sublease agreement as extended, does not

preclude the complainant to initiate the criminal action and the

civil as also criminal proceedings could go simultaneously, has not

been repelled by learned counsel for petitioners. There is no

doubt/dispute about the legal proposition. Similarly, the

proposition of law that criminal prosecution cannot be thrown

away only on the ground that there exists an arbitration clause in

the written agreement between parties to settle the dispute as has

been set out by the Hon'ble Supreme Court in cases of Trisuns

Chemical Industry (Supra), Lalmuni Devi (Supra) & Ujjal

Kumar Burdhan (Supra), referred by counsel for complainant, is

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also not in dispute. There is no quarrel about such proposition of

law that civil and criminal proceedings could go together, but

subject to condition that if acts committed do constitute an

offence. But on appreciation of the factual matrix of present

matters, even after taking into consideration the avertments of

FIR so also the status report of the Investigation Agency after

preliminary investigation thereupon, coupled with the previous

undisputed documents executed between parties, prima facie no

offence against petitioners is make out to prosecute them for non

compliance of terms & conditions of the sublease agreement,

including conditions indicated in the extension letter, even if the

petitioners are for the sake of argument, assumed to be

defaulters. In the opinion of this Court when prima facie from the

avertments and allegations made in the FIR and after

consideration of entire facts in totality, as discussed hereinabove,

commission of any offence does not make out nor the entire chain

of events as stated by the complainant discloses commission of

any offence by the petitioners, then it would be travesty of justice

to book the petitioners for prosecute of offences of cheating and

criminal breach of trust. In such eventualities and peculiar facts,

the registration of FIR and allowing investigation thereupon, at the

hands of Police Personnel, would not amount to secure the ends of

justice, rather stands in abuse of process of law.

17. This Court finds it appropriate and gainful to reproduce

observations made by the Hon'ble Supreme Court in case of M.N.

Ojha Vs. Alok Kumar Srivastav [(2009) 9 SCC 682], while

dealing with the matter of non exercising inherent powers by the

High Court to terminate the criminal proceedings, despite making

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out a case that purpose of initiation of criminal motion by the

complainant was to exert pressure and harassment of accused

persons. For ready reference, relevant portions of the said

judgment i.e. Para Nos.29, 30, 31 & 32 are being reproduced

hereunder:-

"29. It is true that the court in exercise of its jurisdiction under Section 482 of the Code of Criminal Procedure cannot go into the truth or otherwise of the allegations and appreciate the evidence if any available on record. Normally, the High Court would not intervene in the criminal proceedings at the preliminary stage/when the investigation/enquiry is pending.

30. Interference by the High Court in exercise of its jurisdiction under Section 482 of Code of Criminal Procedure can only be where a clear case for such interference is made out. Frequent and uncalled for interference even at the preliminary stage by the High Court may result in causing obstruction in progress of the inquiry in a criminal case which may not be in the public interest. But at the same time the High Court cannot refuse to exercise its jurisdiction if the interest of justice so required where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no fair-minded and informed observer can ever reach a just and proper conclusion as to the existence of sufficient grounds for proceeding. In such cases refusal to exercise the jurisdiction may equally result in injustice more particularly in cases where the Complainant sets the criminal law in motion with a view to exert pressure and harass the persons arrayed as accused in the complaint.

31. It is well settled and needs no restatement that the saving of inherent power of the High Court in criminal matters is intended to achieve a salutary public purpose 'which is that a court proceeding ought not to be permitted to degenerate into a weapon of harassment or persecution. [If such power is not conceded, it may even lead to injustice]'.

32. We are conscious that 'inherent powers do not confer an arbitrary jurisdiction on the High Court to "act according to whim or caprice. That statutory power has to be exercised sparingly, with circumspection and in the rarest of rare cases.'"

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18. Thus, after referring the sequence of events, elucidated

hereinabove, extensively and considered holistically, this Court is

of firm opinion that petitioners have made an exceptional case to

invoke inherent jurisdiction of this Court under Section 482 of the

Code of Criminal Procedure. The registration of the impugned FIR

and continuation of investigation thereupon, is prima facie found

to be malicious and in abuse of process of law. It appears that the

complainant has initiated the criminal motion with a view to exert

pressure and harassment of petitioners and arrayed them as

accused in the impugned FIR. The dispute between parties, at the

most, has been found to be predominantly a dispute of civil