Smt Kondi Pramila Rani vs The State Of Telangana
2024 Latest Caselaw 1217 Tel

Telangana High Court

Smt Kondi Pramila Rani vs The State Of Telangana on 21 March, 2024

          THE HONOURABLE SMT. JUSTICE K. SUJANA
            CRIMINAL PETITION No.4956 OF 2023


ORDER:

This Criminal Petition is filed by petitioner Nos.1 to 4

under section 482 Cr.P.C. seeking the Court to quash the FIR

No.412 of 2023 dated 4.7.2023 of PS Jubilee Hills, Hyderabad

on the file of XVII Additional Chief Metropolitan Magistrate at

Hyderabad.

2. The case of the defacto complainant is that he entered

into an agreement of sale dated 13.9.2022 with petitioners

with respect to subject property bearing No.8-3-318/6/3/34,

admeasuring 200 sq. yard, situated at Yellareddyguda,

Hyderabad, Telangana for a total sale consideration of

Rs.1,80,00,000/- and he paid Rs.30,50,000/- towards

advance sale consideration. The defacto complainant arranged

the balance sale consideration and approached the petitioners

several times, but the petitioners/accused persons are

postponing the matter on one pretext or the other and that

petitioners are trying to dispossess the property to the third

party for higher price and trying to show defacto complainant

as defaulter and the petitioners are giving evasive replies and

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warned the defacto complainant by using abusive language

and threatened her that they are not likely to get registration

in her favour and thereby they lured defacto complainant to a

tune of Rs.30,50,000/- and caused wrongful loss. As such, she

filed a private complaint on 15.03.2023 under Sections 190

and 200 Cr.P.C. vide S/R No.909 of 2023 on the file of III

Additional Chief Metropolitan Magistrate at Hyderabad and the

same was referred to P.S.Banjara Hills and was registered vide

FIR No.412 of 2023 dated 04.07.2023 for the offences

punishable under Sections 406, 420, 506 of IPC r/w Sec 156

(3) of Cr.P.C.

3. The contention of the petitioners herein is that the

petitioner Nos.1 to 4 are the lawful owners and peaceful

possessors of the property bearing House No. 8-3-318/6/3/34,

admeasuring 200 sq. yards, situated at Yellareddyguda,

Hyderabad and with an effort to sell the same to the defacto

complainant for their personal requirements they entered into

the agreement on 13.09.2022. The wife of petitioner No.3 filed

DVC No.270/2022 on the file of III Metropolitan Magistrate,

Hyderabad on 14.9.2022 along with D.V.M.P.No. 342 of 2022

against petitioner Nos.1 and 3 and obtained ad-interim orders

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prohibiting the petitioner No.3 from alienating the subject

property. That the order passed by the III Metropolitan

Magistrate was an exparte order and none of the petitioners

were aware of the prohibitory order and Smt. Kondi Renuka

through her counsel vide dated 15.09.2022 informed the office

of Sub-Registrar about the ad interim prohibitory order in

respect of subject property and requested to include the

property into prohibited list. Accordingly, the above mentioned

property was included into the prohibitory list and same is in

the prohibited properties list as on the date and the

petitioners/accused No.1 to 4 were unaware of the fact that it

is included in the prohibited properties list and in the month

of January, 2023 petitioner Nos.1 to 4 approached the office of

Sub-Registrar, Banjara Hills along with defacto complainant

for execution of Sale Deed. However, the Sub-Registrar refused

to receive the Sale Deed by stating that the property is in

prohibited list as per the order dated 14.09.2022 in

D.V.M.P.No.342/2022 in D.V.C.No.270 of 2022. The defacto

complainant knowing very well about the facts and

circumstances upon legal advice issued a legal notice on

23.1.2023 through her counsel to the petitioners/A1 to A4 and

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the entire notice is silent upon any malafide intention,

mensrea to cheat the defacto complainant by accused persons

herein. On 10.2.2023 the defacto complainant filed Specific

Performance Suit bearing No. O.S.No.150 of 2023 on the file of

X Additional Chief Judge, City Civil Court at Hyderabad which

is in summons stage. While initiating the civil remedy by

suppressing the facts defacto complainant lodged a police

complaint, dated 24.01.2023 before P.S. Banjara Hills and

thereafter lodged a private complaint. That in her police

complaint and her private complaint defacto complainant has

not whispered about initiation of civil proceedings.

4. The defacto complainant has played fraud upon the

Court and to refer the complaint to the police station intending

to take a short cut to her civil dispute giving a colour of

criminal nature. The allegations made in the complaint would

not attract the ingredients of Sections 406, 420 and 506 of

IPC.

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5. In Hridaya Ranjan Prasad Verma and others vs. State

of Bihar and another 1, wherein the Hon'ble Supreme Court

has recited that :

"On a reading of the complaint portions of which have been extracted earlier it is clear that the main offence alleged to have been committed by the appellants is 'cheating' punishable under Section 420 IPC.

Cheating is defined in Section 415 of the Code as, "Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to "cheat".

Explanation- A dishonest concealment of facts is a deception within the meaning of this section.

The section requires -

(1) Deception of any person.

(2) (a) Fraudulently or dishonestly inducing that person

(i) To deliver any property to any person; or

(ii) To consent that any person shall retain any property ; or

(2000) 4 Supreme Court Cases 168

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(b) intentionally inducing that person to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body mind, reputation or property.

On a reading of the section it is manifest that in the definition there are set forth two separate classes of acts which the person deceived may be induced to do. In the first place he may be induced fraudulently or dishonestly to deliver any property to any person. The second class of acts set forth in the section 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 not fraudulent or dishonest.

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 of 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

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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.

Alpic Finance Limited Vs. P.Sadasivan and another 2, wherein the Hon'ble Apex Court has recited that :

"The facts in the present case have to be appreciated in the light of the various decisions of this Court. When somebody suffers injury to his person, property or reputation, he may have remedies both under civil and criminal law. The injury alleged may form basis of civil claim and may also constitute the ingredients of some crime punishable under criminal law. When there is dispute between the parties arising out of a transaction involving passing of valuable properties between them, the aggrieved person may have right to sue for damages or compensation and at the same time, law permits the victim to proceed against the wrongdoer for having committed an offence of criminal breach of trust or cheating.

Here the main offence alleged by the appellant is that respondents committed the offence under Section 420 I.P.C. and the case of the appellant is that respondents have cheated him and thereby dishonestly induced him to deliver property. To deceive is to induce a man to believe that a thing is true which is false and which the person practicing the deceit knows or believes to be false. It must also be shown that there existed a fraudulent and

(2001) 3 Supreme Court Cases 513

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dishonest intention at the time of commission of the offence. There is no allegation that the respondents made any wilful misrepresentation. Even according to the appellant, parties entered into a valid lease agreement and the grievance of the appellant is that the respondents failed to discharge their contractual obligations. In the complaint, there is no allegation that there was fraud or dishonest inducement of the part of the respondents and thereby the respondents parted with the property. It is trite law and common sense that an honest man entering into a contract is deemed to represent that he has the present intention of carrying it out but if, having accepted the pecuniary advantage involved in the transaction, he fails to pay his debt, he does not necessarily evade the debt by deception. Moreover, the appellant has no case that the respondents obtained the article by any fraudulent inducement or by wilful misrepresentation.

We are told that respondents, though committed default in paying some instalments, have paid substantial amount towards the consideration.

Having regard to the facts and circumstances, it is difficult to discern an element of deception in the whole transaction, whereas it is palpably evident that the appellant had an oblique motive of causing harassment to the respondents by seizing the entire articles through magisterial proceedings. We are of the view that the learned judge was perfectly justified in quashing the proceedings and we are disinclined to interfere in such matters.

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Dalip Kaur and others vs. Jagnar Singh and another wherein the Hon'ble Supreme court has recited that:

Sections 405 and 415 of the Indian Penal Code defining 'criminal breach of trust' and 'cheating' respectively read as under:

"405 - Criminal breach of trust. - Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits "criminal breach of trust".

"415. Cheating - Whoever, by deceiving any person fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to 'cheat'.

An offence of cheating would be constituted when the accused has fraudulent or dishonest intention at the time of making promise or representation. A pure and simple breach of contract does not constitute an offence of cheating.

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The High Court, therefore should have posed a question as to whether any act of inducement on the part of the appellant has been raised by the second respondent and whether the appellant had an intention to cheat him from the very inception. If the dispute between the parties was essentially a civil dispute resulting from a breach of contract on the part of the appellants by non-refunding the amount of advance the same would not constitute an offence of cheating. Similar is the legal position in respect of an offence of criminal breach of trust having regard to its definition contained in Section 405 of the Indian Penal Code.

Further submitted that in the light of the propositions of law laid down in R.Kalyani v. Janak C. Mehta & Ors. 3 , Hira Lal & Ors. V. State of U.P. & Ors. 4, Indian Oil Corporation vs. NEPC India Ltd. 5 that the entire criminal proceedings has been manifestly initiated with ulterior motive of taking vengeance against the petitioners, as such the same is liable to be quashed as per the guidelines laid down under Bhajan Lal Case, as such he prayed the Court to quash the proceedings.

6. Heard Mr. Mukarram Ali, learned counsel for the

petitioners and learned Assistant Public Prosecutor for

respondent No.1. None appeared for the respondent No.2 even

after receiving notice.

(2009) (1) SCC 516

(2009) (5) SCALE 418

(2006) (6) SCC 736

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7. The learned counsel for the petitioners would submit

that the petitioner Nos.1 to 4 entered into an agreement of sale

with the defacto complainant and upon approaching the

registration office for the registration of the said house, they

came to know from the registration office that the property is

in prohibitory list as the wife of petitioner No.3 filed a DVC

case. The Prohibitory order was obtained on 15.9.2022 which

discloses that at the time of entering into agreement on

13.09.2022, there was no prohibitory order, as such, it does

not constitute cheating and the property is in the name of

petitioner Nos.1 to 4. Since, the ingredients of the complaint

does not constitute the offences under sections 420, 406 IPC,

he prayed the Court to quash the proceedings.

8. Learned Assistant Public Prosecutor would submit that

the case is at the stage of FIR and in order to elicit the true

facts of the case the investigation has to be conducted.

Therefore, prayed the Court to dismiss the petition.

9. Having regard to the rival submissions and material on

record, the defacto complainant under Sections 190 and 200

Cr.P.C. in III Additional Chief Metropolitan Magistrate Court

against these petitioners stating that though they entered into

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the agreement of sale they filed the registered property in her

name and she already paid Rs.30,50,000/- to the petitioners

and the property was not transferred into the name of defacto

complainant. Admittedly, these petitioners also filed

O.S.No.150 of 2023 on the file of X Additional Chief Judge,

City Civil Court, Hyderabad for specific performance of the

agreement of sale which is pending in the trial Court.

10. It is contended by the learned counsel for the petitioners

that due to the prohibitory order passed by the trial Court in

D.V.M.P.No. 342 of 2000 in DVC 220 of 2022, they are unable

to register the property in the name of defacto complainant.

They entered into a contract on 13.09.2022 and the

prohibitory order was passed by the trial Court on 14.9.2022,

as such, on the date of entering into the agreement they are

unaware of the prohibitory order passed by the Court in DVC.

Therefore, there is no intention to cheat the

respondent/defacto complainant and further submitted that

the petitioner No.3 is contesting the case in DVC and it is not a

collusive case and they do not know about the prohibitory

order when they approached the Sub Registrar office for the

registration of property along with the defacto complainant.

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However defacto complainant very well know about the fact

and he also relied on the judgment of the Hon'ble Supreme

Court in Hridayaranjan Vs. State of Bihar and another (1

supra) wherein it is observed that mere breach of contract

cannot give rise to criminal prosecution for cheating unless

fraudulent or dishonest intention is shown right at the

beginning of transaction i.e. at the time when the offence is

said to have been committed with the intention to commit

offence and to hold the person guilty of cheating, it is

necessary to show that fraudulent or dishonest intention at

the time of making the promise.

11. Admittedly in the present case also when they entered

into the agreement of sale there is no prohibitory order and

further in Alpic Finance Limited Vs. P.Sadasivan and

another (3 supra), the Apex Court observed that to deceive is

to induce a man to believe that a thing is true which is false

and which the person practicing the deceit knows or believes

to be false. It must also be shown that there existed a

fraudulent and dishonest intention at the time of commission

of the offence. There is no allegation in the present case, that

the petitioner made the representation and according to the

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respondent the parties entered into a valid agreement of sale.

As such, there is no dishonest intention in the present case

also.

12. Further in Dalip Kaur and others vs. Jagnar Singh and

another the Hon'ble Supreme Court observed that if the

dispute between the parties was essentially a civil dispute

resulting from a breach of contract on the part of appellants by

non refunding the amount of advance the same would not

constitute an offence of cheating. Similar is the legal position

in respect of an offence of criminal breach of trust having

regard to its definition contained in Section 405 of the Indian

Penal Code.

13. Admittedly in the present case also the defacto

complainant filed a suit for the specific performance which is

pending in the trial Court. The only allegation against these

petitioners is that though there is a prohibitory order, they

entered into contract with the defacto complainant but the fact

remains that the prohibitory order was passed in DVC after

the agreement of sale was entered. Therefore, there is no

dishonest intention at the time of entering into the agreement

of sale and further a suit for specific performance was also

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filed by the defacto complainant and in view of the

observations of the Hon'ble Apex Court in the judgments

referred supra, this petition also falls under the same category.

Therefore the proceedings in FIR No.412 of 2023 are liable to

be quashed.

14. Accordingly, this Criminal Petition is allowed by

quashing the FIR No.412 of 2023 of P.S. Jubilee Hills,

Hyderabad on the file of XVII Additional Chief Metropolitan

Magistrate at Hyderabad.

15. Miscellaneous Applications, pending if any, shall stand

closed.

______________ K.SUJANA, J Date: 21.03.2024 BV