1. This Criminal Petition is filed under Section - 482 of the Code of Criminal Procedure, 1973 (for short, ‘the Cr.P.C.’) to quash the proceedings
in C.C.No.3159 of 2020 pending on the file of XI Additional Chief Metropolitan Magistrate, Secunderabad. The petitioners herein are A.2 and A.3 in
the said case. The offences alleged against them are under Sections 406, 420, 425, 465, 471 and 506 read with 120(B) of IPC.
2. Heard Sri D.Bhasker Reddy, learned counsel for the petitioners and Sri K.R.Koteshwar Rao, learned counsel appearing for 2nd respondent and
learned Asst. Public Prosecutor for the 1st respondent â€" State. Perused the record.
3. As per the charge sheet, the allegations leveled against the petitioners herein are that the father of the 2nd respondent i.e. L.W.1 GPA holder of the
2nd respondent had purchased two plots i.e. 5 and 6 of admeasuring 500 sq.yards in Sy.No.10 situated at Bowenpally, Secunderabad cantonment
under registered sale deed vide Doc.No.1706 of 1997, dated 28.11.1997 from Sneha Co-operative Housing Society represented by its President
K.Manohar Reddy/A.1. Since then, he was in possession of the said property. The 2nd respondent was minor at that particular point of time and he
was prosecuting his studies. L.W.1 was also too busy in view of his avocation. L.W.1 requested his friend A.1 to look after his property so that it can
be safe from encroachments. Taking advantage of the same, A.1 has allowed K.Jayarami Reddy, to set up business in the name of Pioneer
Fabrications without consent of L.W.1. When L.W.1 requested the said K. Jayarami Reddy to vacate the premises, he started giving lame excuses.
Therefore, the 2nd respondent, after attaining majority, had filed a suit vide O.S.No.68 of 2013 against said K. Jayarami Reddy, A.1, the petitioners
herein and other accused for declaration of title and for possession of the property. The said suit is pending.
4. In the said suit, the said K. Jayarami Reddy had filed a written statement saying that he has obtained estate from one A.Manohar Reddy in respect
of Plot No.5 and Smt. N.Surekha/A.2 in respect of Plot No.6 and commenced the Fabrication business, he is paying rents to the said A.Manohar
Reddy. On going through the contents of the said written statement, L.W.1 approached registration office and obtained certified copies pertaining to
the plot Nos.5 and 6 and came to know that A.1 got executed deed of cancellation bearing document No.1613/1999, dated 28.08.1999 cancelling the
sale deed of 2nd respondent bearing document No.1706 of 1997, dated 28.11.1997 unilaterally without issuing any notice either to L.W.1 or L.W.2
before cancellation. Thereafter on 13.09.1999, A.1 divided the said property admeasuring 500 sq. yards into three plots and had executed three sale
deeds in favour of 3 individuals i.e. sale deed No.1614 of 1999 dated 30.09.1999 in favour of the 1st petitioner herein/A.1 to an extent of 230sq.yards
showing as plot No.6/part, the sale deed bearing document No.1615 of 1999, dated 30.09.1999 in favour of A.Manohar Reddy, to an extent of
230sq.yards showing as Plot No.5/Part and sale deed bearing document No.1616 of 1999, dated 30.09.1999 in favour of M.Nagireddy, the 2nd
petitioner herein/A.3 and one N.Sudarshan Reddy to an extent of 40sq.yards as part of Plot Nos.5 and 6. Thus, the said K.Manohar Reddy/A.1, being
President of the said Sneha Co-operative Housing Society Limited having obtained cancellation deed unilaterally, divided the said property into three
plots and sold it to the above said three persons including the petitioners herein under the above said three sale deeds and thus cheated the 2nd
respondent. Thus, they have committed the aforesaid offences.
5. On receipt of the complaint from the father of 2nd respondent, the Police Bowenpally Police Station, have registered a case in Cr.No.395 of 2015
and on completion of investigation, laid charge sheet against the petitioners herein for the aforesaid offences and the same was taken on file as
C.C.No.3159 of 2020. During the course of investigation, the Investigating Officer has recorded the statements of 2nd respondent as L.W.2, his father
as L.W.1 and statement of one C. Ramesh Chander. On consideration of the said statements only, the Investigating Officer has laid the charge sheet
against the petitioners herein.
6. Sri D.Bhasker Reddy, learned counsel for the petitioners would submit that the contents of the charge sheet lacks the ingredients of the offences
alleged against the petitioners herein. There is no entrustment of any property to the petitioners by the 2nd respondent and that they had no domain
over any of the properties of the 2nd respondent. There is no allegation of inducement at the inception or thereafter by the petitioners herein. There is
no allegation of forgery and cheating against the petitioners herein. All the allegations are against A.1 only. The petitioners herein are bona fide
purchasers of the said property. A suit vide O.S.No.68 of 2013 filed by the 2nd respondent seeking declaration and recovery of possession and also
declaring the said sale deeds null and void is pending. The 2nd respondent without waiting for the outcome of the said suit, implicated the petitioners
herein in the present case. Thus, according to him, the contents of the charge sheet lacks the ingredients of the offences against the petitioners herein.
7. Whereas, learned counsel appearing for the 2nd respondent would submit that the contents of the charge sheet, statements recorded under Section
161 of Cr.P.C. constitute the offences alleged against the petitioners herein. The defences taken by the petitioners herein cannot be considered in a
petition filed under Section 482 of Cr.P.C. The petitioners herein in active connivance with the A.1 cheated the 2nd respondent. There are several
triable issues and the petitioners herein have to face trial and prove their innocence.
8. Learned Asst. Public Prosecutor also adopted the very same arguments.
9. The above stated facts would reveal that the subject property plot Nos.5 and 6 admeasuring 500 sq.yards in Sy.No.10 situated at Bowenpally,
Secunderabad cantonment i.e. Sneha lay out , belongs to Sneha Housing Co-operative Society Limited to which A.1 was President. L.W.1 has
purchased the subject property in the name of his son L.W.2/ 2nd respondent from the said Society represented by its President K.Manohar
Reddy/A.1 under registered sale deed Doc.No.1706 of 1997, dated 28.11.1997. Thereafter, the said sale deed was cancelled by way of execution of
cancellation deed bearing Doc.No.1613 of 1999 dated 28.09.1999 on the ground that the 2nd respondent violated the bye-laws of the said Society in
obtaining the said sale deed. Therefore, the Society in its meeting dated 10.09.1999 has decided to cancel the sale deed executed in favour of the 2nd
respondent. It is a unilateral cancellation. The 2nd respondent is not a party to the said sale deed. In the said cancellation deed, it is mentioned that
despite informing, the 2nd respondent failed to comply with the Rules and Regulations of the Society and the said fact was informed to the 2nd
respondent and including the decision of the Society that it has decided to cancel the said sale deed and the 2nd respondent voluntarily give up interest.
Thereafter, the said Society represented by its President/A.1 had executed the above said three sale deeds in favour of the petitioners and one
A.Manohar Reddy. Therefore, the petitioners herein are purchasers from the said Society under the above said two sale deeds.
10. The 2nd respondent had filed a suit vide O.S.No.68 of 2013 against the petitioners herein, A.1 and the said Society seeking declaration of title and
recovery of possession of the subject property and to declare the cancellation deed bearing document No.1613/1999 dated 28.09.1999 as null and void
and consequential sale deeds are also null and void, to deliver vacant possession and also pay mesne profits. The said suit is a comprehensive suit
which is pending.
11. Perusal of the statements of the witnesses and the contents of the charge sheet would reveal that there is no allegation against the petitioners
herein that they have cheated the 2nd respondent and that they have forged the signature of the 2nd respondent. The entire allegations are against Mr.
K.Manohar Reddy/A.1, President of the above said Society. There is no allegation against the petitioners herein with regard to criminal breach of
trust.
12. It is relevant to note that Section 405 of IPC deals with Criminal breach of trust which reads as follows:-
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 willfully suffers any other person
so to do, commits ""criminal breach of trust"".
As discussed supra, there is no allegation against the petitioners herein that 2nd respondent had entrusted property to the petitioners herein and that
they have any domain over the subject property. The contents of the complaint, statements of the witnesses recorded under section 161 of Cr.P.C.
and charge sheet lack the ingredients of Section 405 of IPC, against the petitioners.
13. Like wise, Section 415 of IPC deals with cheating which reads as follows:-
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 “cheatâ€.
14. As discussed supra, there is no allegation against the petitioners herein that they have induced the 2nd respondent either at the inception or later.
Thus, the contents of the charge sheet lack the ingredients of the offence under Section 415 of IPC, against the petitioners.
15. Section 463 of IPC deals with forgery which reads as follows:-
Whoever makes any false documents or false electronic record or part of a document or electronic record, with intent to cause damage or injury to
the public or to any person, or to support any claim or title, or to cause any person to part with property, or to enter into any express or implied
contract, or with intent to commit fraud or that fraud may be committed, commits forgery.
16. Section 465 deals with punishment for forgery which reads as follows:-
Whoever commits forgery shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with
both.
17. It is relevant to state that in the complaint or in statements of the witnesses recorded under Section 161 of Cr.P.C, there is no allegation of
cheating against the petitioners herein. The allegation is against A.1 only. Therefore, according to this Court, the contents of the charge sheet lacks the
ingredients of the offence under Section 465 of I.P.C, against the petitioners.
18. Section 471 of IPC deals with using as genuine a forged document or electronic record, which reads as follows:-
Whoever fraudulently or dishonestly uses as genuine any document or electronic record which he knows or has reason to believe to be a forged
document or electronic record, shall be punished in the same manner as if he had forged such document or electronic record.
Even there is no allegation against the petitioners herein that they have fraudulently or dishonestly used as genuine any document or electronic record
which he knows or has reason to believe to be a forged document or electronic record.
19. Thus, the contents of the charge sheet lack the ingredients of any of the offences alleged against the petitioners herein. It is also relevant to note
that even there is no allegation of forgery against A.1. The allegation against him is that he has obtained deed of cancellation bearing document
No.1618 of 1999 dated 28.09.1999 unilaterally without consent of either L.W.1 or L.W.2. Thereafter, he has divided the said property into three plots
and sold it to three individuals including the petitioners herein under the above said three sale deeds. Thus, even against A.1, there is no allegation of
forgery.
20. It is relevant to note that in Hira Lal Hari Lal Bhagwati Vs. CBI (2003) 5 SCC 257, the Apex Court in paragraph No.40 held as follows:-
It is settled law, by catena of decisions, that 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 up promise subsequently, such a
culpable intention right at the beginning that is at the time when the promise was made cannot be presumed. It is seen from the records that the
exemption certificate contained necessary conditions which were required to be complied with after importation of the machine. Since the GCS could
not comply with it and, therefore, it rightly paid the necessary duties without taking advantage of the exemption certificate. The conduct of the GCS
clearly indicates that there was no fraudulent or dishonest intention of either the GCS or the appellants in their capacities as office bearers right at the
time of making application for exemption. As there was absence of dishonest and fraudulent intention, the question of committing offence under
Section 420 of the Indian Penal Code does not arise. We have read the charge sheet as a whole. There is no allegation in the First Information Report
or the Charge sheet indicating expressly or impliedly any intentional deception or fraudulent/dishonest intention on the part of the appellants right from
the time of making the promise or misrepresentation. Nothing has been said on what those misrepresentations were and how the Ministry of Health
was duped and what where the roles played by the appellants in the alleged offence. The appellants, in our view, could not be attributed any mens rea
of evasion of cus toms duty or cheating the Government of India as the cancer society is a non profit organization and, therefore, the allegations
against the appellants leveled by the prosecution are unsustainable. Kar Vivad Samadhan Scheme Certificate along with the Duncan's and Sushila
Rani's judgments clearly absolve the appellants herein from all charges and allegations under any other law once the duty so demanded has been paid
and the alleged offence has been compounded. It is also settled law that once a civil case has been compromised and the alleged offence has been
compounded, to continue the criminal proceedings thereafter would be an abuse of the judicial process.
21. The said principle was also reiterated by the Apex Court in Indian Oil Corporation Vs. NEPC India Limited (2006) 6 SCC 736. In Vir Prakash
Sharma Vs. Anil Kumar Agarwal (2007) 7 SCC 373, the Apex Court in paragraph Nos. 13 to 16 held as follows:-
13. The ingredients of Section 420 of the Indian Penal Code are as follows :
i) Deception of any persons;
ii) Fraudulently or dishonestly inducing any person to deliver any property; or
iii) to consent that any person shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do
or omit.
No act of inducement on the part of the appellant has been alleged by the respondent. No allegation has been made that he had an intention to cheat
the respondent from the very inception.
14. What has been alleged in the complaint petition as also the statement of the complainant and his witnesses relate to his subsequent conduct. The
date when such statements were allegedly made by the appellant had not been disclosed by the witnesses of the complaints. It is really absurd to opine
that any such statement would be made by the appellant before all of them at the same time and that too in his own district. They, thus, appear to be
wholly unnatural.
15. In law, only because he had issued cheques which were dishonoured, the same by itself would not mean that he had cheated the complainant.
Assuming that such a statement had been made, the same, in our opinion, does not exhibit that there had been any intention on the part of the appellant
herein to commit an offence under Section 417 of the Indian Penal Code.
16. Furthermore, admittedly, their residences are in different districts. Whereas the appellant is a resident of the district of Ajamgarh, the respondent is
a resident of the district of Rampur. Cheques were admittedly issued by the appellant at his place. There is nothing on record to show that any part of
the cause of action arose within the jurisdiction of the court concerned. Even if such statements had been made, the same admittedly have been made
only at the place where the appellant resides. The learned Magistrate, therefore, had no jurisdiction to issue the summons.
22. The said principle was also reiterated by the Apex Court in All Cargo Movers (I) Pvt. Ltd. Vs. Dhanesh Badarmal Jain (2007) 14 SCC 776
wherein in paragraph No.16 held as follows:-
For the said purpose, allegations in the complaint petition must disclose the necessary ingredients therefor. Where a civil suit is pending and the
complaint petition has been filed one year after filing of the civil suit, we may for the purpose of finding out as to whether the said allegations are
prima facie cannot notice the correspondences exchanged by the parties and other admitted documents. It is one thing to say that the Court at this
juncture would not consider the defence of the accused but it is another thing to say that for exercising the inherent jurisdiction of this Court, it is
impermissible also to look to the admitted documents. Criminal proceedings should not be encouraged, when it is found to be mala fide or otherwise an
abuse of the process of the Court. Superior Courts while exercising this power should also strive to serve the ends of justice.
23. Considering the principle laid down by it in the above referred judgments, the Apex Court in V.Y.Josh Vs. State of Gujarat (2009) 3 SCC 78 in
paragraph Nos.28, 29 and 30 held as follows:-
28. A matter which essentially involves dispute of a civil nature should not be allowed to be the subject matter of a criminal offence, the latter being
not a shortcut of executing a decree which is non-existent. The Superior Courts, with a view to maintain purity in the administration of justice, should
not allow abuse of the process of court. It has a duty in terms of Section 483 of the Code of Criminal Procedure to supervise the functionings of the
trial courts.
29. An offence of cheating may consist of two classes of cases :
(1) where the complainant has been induced fraudulently or dishonestly. Such is not the case here;
(2) When by reason of such deception, the complainant has not done or omitted to do anything which he would not do or omit to do if he was not
deceived or induced by the accused.
30. It is in that sense, a distinction between a mere breach of contract and the offence of cheating should be borne in mind. We, having regard to the
facts and circumstances of the case, are of the opinion that no case has been made out and against the appellant so as to hold that he should face the
criminal trial.
24. As discussed supra, there are no allegations of criminal breach of trust, cheating and forgery against the petitioners herein. The allegations are
against only A.1. Admittedly, a suit vide O.S.No.68 of 2013 filed by the 2nd respondent against the petitioners herein and others is pending. Therefore,
the 2nd respondent has to wait for the outcome of the same. Instead of doing so, he has lodged the present complaint against the petitioners herein.
The Investigating Officer has not recorded the statements of any independent witnesses and without consideration of the contents of the statements of
the witnesses recorded under Section 161 of Cr.P.C, he has laid the charge sheet against the petitioners herein. Thus, the contents of the charge sheet
lack the ingredients of the offences alleged against the petitioners herein. Continuation of proceedings in 3159 of 2020 is an abuse of process of law
and it squarely falls in the parameters/guidelines laid by the Apex Court for exercise of power of this Court under Section 482 Cr.P.C. in State of
Haryana vs. Bhajan Lal 1992 Supp (1) SCC 335 and the same are extracted herein:-
(1) Where the allegations made in the first information report 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.
(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence,
justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section
155(2) of the Code.
(3) 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.
(4) Where the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted
by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.
(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever
reach a just conclusion that there is sufficient ground for proceeding against the accused.
(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the Act concerned (under which a criminal proceeding is
instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or Act concerned, providing
efficacious redress for the grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for
wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.
25. Viewed from any angle, the proceedings in C.C.No.3159 of 2020 cannot go on against the petitioners herein.
26. Therefore, this Criminal Petition is allowed. The proceedings in C.C.No.3159 of 2020 pending on the file of XI Additional Chief Metropolitan
Magistrate, Secunderabad, are quashed against the petitioners herein.
Miscellaneous petitions, if any, pending in the criminal petition, shall stand closed.
