Supreme Court has held that mere filing of the suits for recovery of the money and complaint filed under Section 138 of the N.I. Act by itself is no ground to quash the proceedings in the complaints related to cheating.
A bench of Justice Banumathi vs Justice Reddy passed the order in the case titled as Dr. Lakshman vs The State of Karnataka & Ors. Etc. on 17.10.2019.
The appellant herein has filed complaint on 29th April, 2013 before the Chief Metropolitan Magistrate, Bangalore, which is registered as P.C.R. No.12317 of 2013 against the accused A1 to A5, namely (1) M/s. Pramila Santhosh Land Developers and Builders Pvt. Ltd., (2) D.T. Santhosh (3) D.C. Thamanna (4) Smt. K.G. Pramila and (5) M/s. Sri Sai Developers for the alleged offences under Sections 403, 406, 420, 506(B) of the Indian Penal Code. There is also a susequent complaint by the same complainant on 27th November, 2015 which is registered as P.C.R. No.14420 of 2015, which is subseqently numbered as CC No.54 of 2016 (after filing of the chargesheet dated 22nd December, 2015) against the accused therein namely (1) M/s. Pramila Santhosh Land Developers and Builders Pvt Ltd. (2) D.T. Santhosh and (3) Smt. K.G. Pramila for the alleged offences under Sections 417, 418, 420, 422, 120(B) read with Section 34 of IPC and for offences under the Prevention of Money Laundering Act.
The High Court has allowed the petitions filed under Section 482, Cr.P.C. by the respondents-accused mainly on the ground that in view of the agreement entered into on 08.11.2012, there is a novation of the contract between the parties. Further the High Court has disbelieved the Schedule to the MOU dated 08.11.2012 on the ground that the additional pages were not paginated. Further on the grounds that the appellant has already filed a civil suit for recovery of advance paid by him for a sum of Rs.9 crores (Rupees Nine crores) and the appellant has filed complaint for offence under Section 138 of the Negotiable Instruments Act, 1881, the appellant has joined in the sale deed for lands covered by Survey Nos.115 and 117 of Ballur Village, has allowed the petitions and quashed the proceedings.
Supreme Court observed "Mere filing of the suits for recovery of the money and complaint filed under Section 138 of the N.I. Act by itself is no ground to quash the proceedings in the complaints filed by the appellant herein. When cheating and criminal conspiracy are alleged against the accused, for advancing a huge sum of Rs.9 crores, it is a matter which is to be tried, but at the same time the High Court has entered into the disputed area, at the stage of considering the petitions filed under Section 482, Cr.P.C. It is fairly well settled that power under Section 482 Cr.P.C. is to be exercised sparingly when the case is not made out for the offences alleged on the reading of the complaint itself or in cases where such complaint is filed by way of abuse of the process".
Supreme Court also observed "Though the contract is of civil nature, if there is an element of cheating and fraud it is always open for a party in a contract, to prosecute the other side for the offences alleged. Equally, mere filing of a suit or complaint filed under Section 138 of the N.I. Act, 1881 by itself is no ground to quash the proceedings. While considering the petition under Section 482 of Cr.P.C., we are of the view that the High Court also committed an error that there is a novation of the contract in view of the subsequent agreement entered into on 08.11.2012. Whether there is novation of contract or not and the effect of such entering into the contract is a matter which is required to be considered only after trial but not at the stage of considering the application under Section 482, Cr.P.C".
Supreme Court then set aside the order of the High Court.
Read the Order here:
Picture Source :
