Boodati Laxminarayana, vs State Of Telangana,
2023 Latest Caselaw 1821 Tel

         THE HONOURABLE SRI JUSTICE K.SURENDER

CRIMINAL PETITION Nos.11516 & 11766 OF 2022

COMMON ORDER:

Criminal Petition 11516 of 2022 is filed under Section 482 of

the Code of Criminal Procedure, 1973 (for short 'Cr.P.C.') by the

petitioner/A1 and Criminal Petition 11766 of 2022 is filed by the

petitioners/A2 and A3 to quash the proceedings against them in

Crime No.158 of 2022 on the file of Central Crime Station,

Hyderabad. The offences alleged against the petitioners/A1 to A3 are

under Sections 406, 420, r/w.34 of the Indian Penal Code.

2. Heard both sides and perused the record.

3. The Central Crime Station, Hyderabad, registered FIR against

the petitioners/A1 to A3 on the basis of written complaint given by

the customers of a residential building project at Ameenpur

Village/Mandal, Sangareddy District. The said venture was started

by Sahiti Infratech Ventures India Private Limited, situated at Road

No.36, Jubilee hills. The gist of the complaint is that there was a 'Pre

Launch offer' quoted by the Company and the venture was marketed

from June, 2019 onwards with a Project Estimated Cost of Rs.1200

crores. More than 1800 customers booked the flats and 650 and odd

customers cancelled the bookings. However, the Company was not

accepting the cancellation. More than 72 crores was collected from

240 customers. In the complaint it is further alleged that A1

promised to pay the amounts received towards advances after

repeated requests from the customers and in fact informed about

plan of action to return the amount. However, it was found that there

were no permission for the said Project and the customers were

cheated. On the basis of the said complaint, the Central Crime

Station, registered the crime.

4. The grounds urged for quashing the proceedings are that the

transactions inter-se the customers and the Project owners is purely

a civil dispute arising out of contractual obligation in the process of

purchasing flats in the venture floated by the petitioners. The said

issues should be sorted out by the Civil Court, however to pressurize

and settle civil disputes, criminal complaint is filed. Even according

to the complaint there is only a delay in the execution of the project

and it is not the case that the petitioners have taken the amounts

and absconded. The provisions of Telangana State Protection of

Depositors of Financial Establishments Act, 1999 (for short 'TSPDFE

Act'.) are not at all attracted, however, the Police have deliberately

included the said provisions later at the time of remanding the

accused. The Company is not a financial establishment as defined

under Section 2-C of the said Act and the money given towards

purchase of flats cannot be termed as deposits as defined in the said

Act. Further, the ingredients of Section 420 of the Indian Penal Code

are not made out as it is necessary to show that the intention to

defraud was from the inception. In the said circumstances neither

Section 406 nor 420 is made out. The criminal proceedings cannot

be a weapon in the hands of complainant and since the proceedings

are abuse of process of law, the same have to be quashed.

5. Learned Counsel for the petitioners relied on the following

Judgments;

6. In Mitesh Kumar J. Sha v. The State of Karnataka &

others 1 and G.Sagar Suri v. State of U.P.2 it was held that any

effort to settle disputes, which do not involve any criminal offence, by

applying pressure through criminal prosecution, should be

discouraged and deprecated.

7. In Ranbeer Singh v. State of U.P.3 it was held that the High

Court has 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.

2021 SCC OnLine SC 976

(2000) 2 SCC 636

2021 SCC OnLine SC 964

8. In Madhavrao Jiwajirao Scindia v. Sambhajirao

Chandrojirao Angre 4 it is held that the test to be applied by the

Court is to see whether the uncontroverted allegations, prima facie

establish the offence. The Court may while taking into consideration

the special facts of a case also quash the proceedings even though it

may be at a preliminary stage.

9. In Stae of Haryana v. Bhajan Lal 5 it is held that where the

allegations made in the FIR or the complaint, even if they are taken

at their face value and accepted in their entirety, do not prima facie

constitute any offence or make out a case against the accused (or)

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,

inherent powers of the Court Section 482 of Cr.P.C. can be exercised

in order to secure the ends of justice.

10. In Vesa Holdings (P) Ltd. V. State of Kerala6; Hira Lal Hari

Lal Bhagwati v. CBI7 and Vijay Kumar Ghai v. State of West

Bengal8 it is held that every breach of contract would not give rise to

an offence of cheating and only in those cases breach of contract

(1988) 1 SCC 692

1992 Supp (1) SCC 335

(2015) 8 SCC 293

(2003) 5 SCC 257

(2022) 7 SCC 124

would amount to cheating where there was any deception played at

the very inception. The real test is whether the allegations in the

complaint disclose the criminal offence of cheating or not. Further,

for establishing the offence of cheating, the complainant is required

to show that the accused had fraudulent or dishonest intention at

the time of making promise or representation. From his making

failure to keep promise subsequently, such a culpable intention right

at the beginning that is at the time when the promise was made

cannot be presumed.

11. It is not in dispute that customers have approached the

petitioners and parted with huge amounts towards payments of the

flats to the Company headed by the petitioners. Whether the

amounts are collected by these petitioners deliberately to cheat or

otherwise cannot be decided when the investigation is still in

progress. It is not in dispute that the Project was floated and certain

lands were also purchased by these petitioners. Further, since the

project did not start as planned, the customers were reluctant to

proceed with the purchase and sought return of their advances.

12. It is not in dispute that the amounts were taken by these

petitioners and the same is with the petitioners. It is not as though

the project is half completed or at the advance stage of completion.

Several issues have lead to the present complaint. All the grounds

raised by the petitioners can as well be agitated on the completion of

investigation. I do not find any reasons to quash the proceedings at

the initial stage of investigation. It is for the investigating Agency to

draw conclusions based on the evidence collected during the course

of investigation to know whether the offences as alleged in the

complaint are made out or not.

13. Accordingly, the Criminal Petitions are dismissed.

Miscellaneous applications pending, if any, shall stand closed.

__________________ K.SURENDER, J Date: 27.04.2023 tk

THE HON'BLE SRI JUSTICE K.SURENDER

CRIMINAL PETITION Nos.11516 & 11766 OF 2022

Dt. 27.04.2023

tk