M/S.Aditya Housing ... vs The State Of Telangana Another
2022 Latest Caselaw 760 Tel

           THE HON'BLE Dr. JUSTICE G. RADHA RANI

                CRIMINAL PETITION No.10637 of 2016
ORDER:

This petition is filed by the petitioners-A1 and A2 under Section

482 Cr.P.C. to quash the proceedings in CC No.543 of 2015 on the file

of III Additional Chief Metropolitan Magistrate, Nampally, Hyderabad.

2. The case of the petitioners in brief was that the 2nd respondent

filed a private compliant against them alleging that A2 had started a

venture, by name, M/s. Aditya Housing and Infrastructure

Development and that he was going to construct an apartment in the

name and style of "Empress Heights" consisting of one cellar + sub-

cellar + stilt + 22 upper floors at Shaikpet village, Hyderabad and

intimated to the complainant that he had taken permission from

GHMC, Hyderabad for construction of the same. A2 was the Director

of A1 Company. Believing A2, the complainant booked two Flats, one

in his name and another in the name of his daughter, Flat Nos.110 and

210, a total extent of approximately 2,500 sft., in the said apartment on

03.08.2010 and paid an advance amount of Rs.10.00 lakhs. A2

promised that the construction would be completed within one year

from the date of the said payment and on 03.03.2011 the representative

of A1 company issued an allotment letter to the complainant for the

above said flats. The complainant made repeated requests to provide

documents, plan etc., of the booked flats to approach the bank for the

purpose of loan. Inspite of several requests, A2 failed to supply the Dr.GRR,J

same. The complainant requested A2 to return the advance amount

with interest. On 25.03.2013, A2 had taken a blank letter from the wife

of the complainant with a promise to return the amount along with

interest and damages within 25 days. But contrary to the said promise,

he failed to repay the same. The complainant came to know that A2

with an intention to cheat him suppressed the fact that the flats booked

by the complainant were mortgaged to GHMC, Hyderabad. The

complainant came to know the same by an application filed under

Right to Information Act before the GHMC. Thus, A1 and A2 cheated

the complainant by taking advance amount of Rs.10.00 lakhs against

the mortgaged property which was in violation of rules and instructions

of GHMC and committed the offences under Sections 406, 420 and

506 read with 34 IPC. The said complaint was referred to the police

for investigation. The same was registered as Crime No.1137 of 2014

by the SR Nagar Police and after completing investigation, filed charge

sheet against A1 and A2 for the offences under Section 406, 420 and

506 IPC.

3. Heard the learned counsel for the petitioners, learned counsel

for the 2nd respondent and the learned Assistant Public Prosecutor for

the 1st respondent.

4. Learned counsel for the petitioners submitted that the

allegations in the complaint or in the charge sheet would not constitute

any offences punishable under Sections 406, 420 and 506 IPC. The

complaint was referred without there being any affidavit filed by the Dr.GRR,J

2nd respondent and without approaching the concerned police and in

violation of the judgment of the Hon'ble Apex Court in Priyanka

Srivastava and another v. State1. The allegations made against the

petitioners were civil in nature as it was regarding non-refund of

advance amount paid by the 2nd respondent. The 2nd respondent did not

want to purchase the said flats and wanted to get back his amount. As

such, the initiation and continuation of criminal proceedings was

nothing but an abuse of process of law and was liable to be quashed.

As per the 2nd respondent, the said flats were allotted in his favour on

03.08.2010 on part payment but the complaint was filed in the year

2014. Without paying the entire sale consideration as per the allotment

letter, the complainant had chosen a shortcut method to get back his

advance amount and filed the said complaint only with an intention to

harass and to cause dis-repute to the petitioners. The Investigating

Officer had also not investigated into the fact of obtaining occupancy

certificate from GHMC by the petitioners with regard to the flats

constructed by the petitioners and prayed to quash the proceedings.

5. Learned counsel for the 2nd respondent, on the other hand,

submitted that as on the date of entering into agreement by the

petitioners with the 2nd respondent, the property was mortgaged with

the GHMC and the said fact would clearly show that the petitioners had

an intention of cheating the 2nd respondent from the inception itself

attracting the offence under Section 420 IPC, as such this was not a

case of quashing the proceedings under Section 482 Cr.P.C.

2015 (6) SCC 287 Dr.GRR,J

6. Learned Assistant Public Prosecutor also opposed the petition

submitting that the matter was coming for cross examination of PW.1

before the trial Court and prayed to allow the trial to be continued so

that the truth of the allegations could be known.

7. Perused the record. As per the complaint, the 2nd respondent

intended to purchase two flats, one for him and another for his

daughter, and paid an amount of Rs.10.00 lakhs (Rs.5.00 lakhs each)

towards advance sale consideration of booking flat Nos.110 and 210 in

the apartment constructed in the name and style of "Empress Heights"

at Shaikpet village, Hyderabad by the petitioners herein. The

contention of the 2nd respondent was that he requested the 2nd petitioner

to provide the documents and plan of the booked flats to enable him to

apply for a bank loan but the petitioners failed to comply the same. His

another contention was that the 2nd petitioner with an intention to cheat

him, suppressed about the mortgage of the booked flats with the

GHMC and cheated him. He further contended that he requested for

return of the advance amount, but as the petitioners failed to return the

amount, filed the private complaint.

8. The record also would disclose that the petitioners had issued

a notice to the 2nd respondent on 14.02.2012 prior to his lodging the

private complaint itself stating that he was overdue an amount of

Rs.37,50,000/- as per the payment schedule agreed between the parties

and they had issued several letters but as the 2nd respondent failed to

make the subsequent payments since the date of booking, left with no Dr.GRR,J

other option, they had cancelled the booking of flats by forfeiting the

amount. Prima facie, it appears to be a breach of contractual obligation

between the parties and the remedy lies in filing a civil case for return

of the advance amount paid by the 2nd respondent in favour of the

petitioners. But, instead of filing a civil case, the 2nd respondent

resorted to file a criminal case against the petitioners.

9. Learned counsel for the petitioners relied upon a judgment of

the Hon'ble Apex Court in Inder Mohan Goswamy v. State of

Uttaranchal2, wherein the Hon'ble Apex Court after referring to the

various decisions delivered by it earlier on the scope and ambit of

power of Courts under Section 482 Cr.P.C and after extracting the

definition of cheating under Section 415 IPC punishable under Section

420 IPC, held that:

"42. On a reading of the aforesaid section, it is manifest that in the definition there are two separate classes of acts which the person deceived may be induced to do. In the first class of acts he may be induced fraudulently or dishonestly to deliver property to any person. The second class of acts is the doing or omitting to do anything which the person deceived would not do or omit to do if he were not so deceived. In the first class of cases, the inducing must be fraudulent or dishonest. In the second class of acts, the inducing must be intentional but need not be fraudulent or dishonest. 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 a fraudulent or dishonest intention at the time of making the promise. From his mere failure to subsequently keep a promise, one cannot presume that he all along had a culpable intention to break the promise from the beginning."

10. The contention of the learned counsel for the 2nd respondent

was that the petitioners had an intention to cheat the 2nd respondent

2007 LawSuit (SC) 1095 Dr.GRR,J

from the inception at the time of making the promise itself as he

suppressed the fact that the flats which were offered by the petitioners

were already mortgaged before the GHMC, Hyderabad. It is to be

noted that the 2nd respondent had also approached the State Consumer

Disputes Redressal Commission by filing CC No.169 of 2015

complaining about the deficiency in service on the part of the opposite

parties (petitioners herein) directing them to refund Rs.10,00,000/- paid

towards advance sale consideration together with interest and the same

was dismissed by the said Commission on 28.04.2017.

11. It is also to be noted that it was a common practice that

certain flats in any project under construction would be mortgaged to

GHMC and would be released later from mortgage once the

construction was completed and during continuation of the mortgage,

the mortgaged flats could not be sold, but however, agreement of sale

or booking could be done with the undertaking that they could be sold

subject to release of mortgage and the 2nd respondent had not filed any

document to show that the flat Nos.110 and 210 had been specifically

mortgaged in favour of GHMC and that the charge sheet would

disclose that 10% of the built up area in the 1st floor and 5% of the built

up area in the 2nd floor was mortgaged to GHMC Authorities. The

record would disclose that occupancy certificate was also issued by the

GHMC on 23.09.2014 releasing the mortgage. Thus, it cannot be said

that the petitioners had an intention to cheat the 2nd respondent from the

beginning and that they offered to sell the mortgaged property to him Dr.GRR,J

and thereby cheated him. The remedy lies in filing a civil suit by the

2nd respondent for claiming refund of the advance amount paid by him,

if he intends to withdraw from the agreement entered by him with the

petitioners, but not filing a criminal case. The contents of the charge

sheet also would not disclose the ingredients of the offences under

Sections 406 and 506 IPC. As such, it is considered fit to quash the

proceedings against the petitioners in CC No.543 of 2015 on the file of

III Additional Chief Metropolitan Magistrate, Nampally, Hyderabad.

12. In the result, the Criminal Petition is allowed quashing the

proceedings in CC No.543 of 2015 on the file of III Additional Chief

Metropolitan Magistrate, Nampally, Hyderabad against the petitioners

- A1 and A2.

Miscellaneous petitions pending, if any, shall stand closed.

_____________________ Dr. G. RADHA RANI, J February 18, 2022 KTL