Dr. Lakshman v. the State of Karnataka & Ors.

R. SUBHASH REDDY, J. 1. Leave granted. 2. These criminal appeals are filed by the complainant, aggrieved by the judgment and order dated 28 th April, 2017 passed by the High Court of Karnataka at Bengaluru in Crl.P Nos.2383 of 2017, 7976 of 2013 and 7161 of 2016. By the aforesaid order, the High Court has allowed the petitions filed by the respondents-accused under S ection 482 of Cr.P.C. and quashed the complaint bearing P.C.R. No.12317 of 2013 filed before the IV ACMM, Bangalore, and complaint bearing P.C.R. No.14420 of 2015, filed before the VIII ACMM, Bengaluru, as well as the order dated 27 th November, 2015 (wrongly mentioned as 27 th July, 2015) passed by the VIII ACMM, Bengaluru, in P.C.R.No.14420 of 2015, directing the Sanjaya Nagara Police Station to investigat e the matter. 3. The appellant herein has filed complaint on 29 th 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 Secti ons 403, 406, 420, 506(B) of the Indian Penal Code. There is also a susequent complaint by the same complainant on 27 th November, 2015 which is registered as P.C.R. No.14420 of 2015, which is subseqently numbered as CC No.54 DR. LAKSHMAN v. THE STATE OF KARNATAKA & ORS. of 2016 (after filing of the chargesheet dated 22 nd December, 2015) against the accused therein namely (1) M/s. Pramila Santhosh La nd 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. 4. The first complaint dated 29 th April, 2013 was filed alleging that the respondents-accused made a representation that they are owners and are absolutely seized and possessed of land at Ballur village, Attibele Hobli, Anekal Taluk and promised to procure an extent of 70 acres of land and entered into an agreement with the appellant-complaina nt on 26 th September, 2012 and received an amount of Rs.9 crores (Rupees Nine crores) by way of cheques and demand drafts. It is alleged that the extent and survey nos. of land mentioned in the Schedule appended to the Memorandum of Understanding (MOU) were to be procured in favour of the complainant. It was further pleaded that there we re two cheques issued by the accused as security for the amount of advanc e paid by the appellant-complainant. It was the case of th e complainant that subsequent to agreement dated 26 th September, 2012, the respondents-accused having failed to perform the contract in terms of agreement, have entered into another MOU on 8 th November, 2012, representing that they are in possession of 70 acres of agricultural land and 30 acres of converted land and they promised to transfer such land in favour of the appellant. To the MOU dated 8 th November, 2012 M/s. Sri Sai Developers was added as a party. As per the complaint, there is also a Schedule indicating the survey nos. and extent of lands to the second MOU. In the complaint filed on 29 th April, 2013 it was alleged that though the respondents have already sold the land covered by Survey Nos.115 and 117 to M/s. Sri Sai Developers on 7 th June, 2012, with a dishonest intention respondents have played fraud and cheated the appellant by receiving huge sum of Rs.9 Crores (Rupees Nine crores), by including the lands covered by Survey Nos.115 and 117 also. Further alleging that when the demand was made to comply with the ter ms of the contract, the respondents have threatened the complainant, as such the respondents are liable to be punished for offences under Sections 403, 406, 420, 506(B) of IPC. 5. Further alleging that after filing of the first criminal complaint, the respondents have threatened and pressurised the appella nt and the 485 second complaint was filed. In the second complaint, it was alleged that one of the accused, by name, D.C. Thamanna also gave an undertaking in writing stating that from 16 th May, 2013 onwards they would start registering the sale deeds but they failed to do so. It was further alleged that instead of abiding by such undertaking, the appellant was forced to enter into an addendum dated 30 th May 2013. In the second complaint, it is alleged that all the accused have told the appellant that lands bearing Survey Nos.115 and 117 are not available for sale, as such they will compensate in other lands and made a request to become confi rming party to sale deed dated 6.7.2013 executed in favour of the trust. I t is stated in the complaint that though the purchaser of the lands c overed by Survey nos.115 and 117 was not known to the appellant, he was made to sign the sale deed as a confirming party whi ch is also a conspiracy of all the accused to avoid performance of the contract entered into by the accused with the appellant and to retain the amount of Rs.9 crores (Rupees Nine crores) with them illegally. In the second complaint, it was further the case of the appellant that when the chequ es, which were given by the accused as security, were presented, it w as learnt that the account of which cheques were issued was closed even prior to entering into the agreement dated 26.9.2012. Alleging that there i s a fraud, cheating and conspiracy, it is pleaded that the responden ts are liable to be prosecuted for the offences under Sections 417, 418, 420, 422 and 120(B) read with Section 34, IPC and the provisions of Prevention of Money Laundering Act. 6. At this stage, it is to be noticed that in the second comp laint, after investigation, chargesheet is also filed and C.C. is numbered. 7. 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 tha t the additional pages were not paginated. Further on the grounds tha t the appellant has already filed a civil suit for recovery of advanc e paid by him for a sum of Rs.9 crores (Rupees Nine crores) and the appel lant 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. DR. LAKSHMAN v. THE STATE OF KARNATAKA & ORS. [R. SUBHASH REDDY, J.] 8. Having heard Sri Arun Joshi, learned counsel for the appellant and Sri R. Basant, learned senior counsel assisted by Mr. Anand Sanjay M. Nuli, Advocate, appearing for the respondents, we have perused the impugned order passed by the High Court and other materials placed on record. 9. It is not seriously disputed by the parties with regard to th e entering of the agreements for procuring the land in favour of the appellant in Ballur Village, Anekal Taluk, Bangalore Urban District and respondents have received the amount of Rs.9 crores by way of demand drafts a nd cheques. It is the specific case of the appellant that there are schedules mentioned to the agreements as per which respondents have agr eed to procure the land covered by Survey Nos.115 and 117 of Ballur Village apart from other lands. In a petition under Section 482, Cr.P.C. it is fairly well settled that it is not permissible for the High Court to record any findings, wherever there are factual disputes. Merely on the ground that there is no pagination in the Schedule, the High Court has disbelieved such Schedule to the Agreements. It is the specific case of the appellant that the lands covered by Survey Nos.115 and 117 of Ballur Villa ge were sold even prior to the first agreement, as such respond ents have committed an act of cheating. It is also the specific case of the appellant that two cheques were issued by respondents-accused by way of security for the amount of Rs.9 crores which is advance but the account of such cheques was closed even prior to entering into the Agreement its elf. The second complaint filed by the appellant is self-explanatory and he is forcefully made to sign the sale deed which were executed subsequently for the lands covered by Survey Nos.115 and 117 of Ballur Vill age. Mere filing of the suits for recovery of the money and complain t filed under Section 138 of the N.I. Act by itself is no ground to quas h 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. Whether any Schedules were appended to the agreement or not, a finding is required to be recorded aft er full 487 fledged trial. Further, as the contract is for the purpose of procuring the land, as such the same is of civil nature, as held by the H igh Court, is also no ground for quashing. 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. 10. Learned senior counsel Sri R. Basant appearing for the accused, in support of his case, relied on the judgment of this Court in the case of S.W. Palanitkar and Ors . vs. State of Bihar and Anr . 1 and submitted that every breach of contract may not result in a penal off ence, but in the very same judgment, this Court has held that breach of trust with mens rea gives rise to a criminal prosecution as well. In a given cas e, whether there is any mens rea on the part of the accused or not is a matter which is required to be considered having regard to the facts and circumstances of the case and contents of the complaint et c. In the case on hand, it is clearly alleged that even before enter ing into the agreement dated 26.09.2012, lands were already sold to third party, which were agreed to be procured in favour of the appellant. Not only that, it is the specific allegation of the complainant that the cheques were issued towards security from the account which was also closed much earlier to the date of Agreement itself. Learned counsel also relied on judgment in the case of Anil Mahajan vs. Bhor Industries Ltd. and Anr . 2 but in the very same judgment it is also held that where there exists a fraudulent and dishonest intention at the time of the commission of the offence, law permits the victim to proceed against the wrong doer for having committed an offence of criminal breach of trust or cheating. In another case relied on by the learned counsel, viz., Inder Mohan Goswami and Anr . vs. State of Uttaranchal and Ors . 3 this Court has 1 (2002) 1 SCC 241 2 (2005) 10 SCC 228 3 2007 (12) Scale 15 DR. LAKSHMAN v. THE STATE OF KARNATAKA & ORS. [R. SUBHASH REDDY, J.] reiterated the scope of power of the High Court under Section 482 Cr.P.C. Having regard to the facts of the case, we are of the view that the said judgments relied on by the learned counsel would not support the case of the respondents. It is also to be noticed that in the complaint filed in P.C.R.No.14420 of 2015, investigation has been comp leted and chargesheet was also filed on 22 nd December 2015. 11. For the aforesaid reasons, we are of the view that the High Court has committed an error in allowing the petitions filed under Section 482, Cr.P.C. by the respondents-accused. Accordingly, these criminal appeals are allowed and impugned common order dated 28.4.2017 passed by the High Court of Karnataka at Bengaluru is set aside. It i s made clear that the findings recorded in this judgment are confined only for these appeals and the same cannot be construed as an expre ssion of opinion on merits of the matter and it is open for the trial court to proceed in accordance with law and decide the complaints on their own merits. Ankit Gyan Appeals allowed.