DR. LAKSHMAN versus THE STATE OF KARNATAKA & ORS. on 17 October 2019

480

SUPREME COURT REPORTS

[2019] 13 S.C.R.

DR. LAKSHMAN

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v.

THE STATE OF KARNATAKA & ORS.

(Criminal Appeal Nos. 1573-1575 of 2019)

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OCTOBER 17, 2019

[R. BANUMATHI AND R. SUBHASH REDDY, JJ.]

Penal Code, 1860 – ss.403, 406, 417, 418, 420, 506(B),422, 120(B) – Appellant-complainant case that respondent-accusedentered into an agreement with appellant on 26.09.2012 to procureC70 acres of agricultural land in favour of appellant and receivedan amount of Rs. 9 crores from him, however, respondents failed toperform the contract in terms of agreement – It was alleged thatthereafter, they entered into another MOU dated 08.11.2012 with aschedule indicating the survey nos., the respondent represented thatDthey were in possession of 70 acres of land and 30 acres of convertedland and promised to transfer the same to the appellant – It wasalleged that respondents had already sold the land covered by thesurvey nos. 115 and 117 and later appellant was forced to sign thesale deed as a confirming party of the same survey nos. which wereexecuted subsequently – Also, Respondents had issued two chequesEas a security for the amount of advance paid by the appellant andwhen the said cheques were presented, it was alleged that accountof which cheques were issued was closed – Appellant allegedcheating, fraud and criminal conspiracy in his complaints –Respondents filed petition u/s.482 Cr.P.C. to quash the complaintsFfiled by the appellant – High Court held there was novation ofcontract on 08.11.2012 – High Court also disbelieved the scheduleattached to the agreement on the ground that additional pages werenot paginated – Further, High Court quashed the proceedings onthe ground that appellant had already filed a Civil suit for recoveryof sum of Rs.9 crores and complaint u/s.138 Negotiable InstrumentsG– On appeal, held: So far as pagination of the schedule is concerned,in a petition u/s.482 Cr.P.C. it is fairly well settled that it is notpermissible for the High Court to record any findings, whereverthere are factual disputes – Further, mere filing of the suit forrecovery of money and complaint filed u/s.138 of Negotiable H

Instruments Act by itself was no ground to quash the proceedings inthe complaints filed by the appellant – When cheating and criminalconspiracy are alleged against the accused, for advancing a hugesum of Rs.9 crores, it is a matter which is to be tried, but at the sametime the High Court has entered into the disputed area, at the stageof considering the petitions filed u/s.482 Cr.P.C. – Whether there isnovation of contract or not and the effect of such entering into acontract is a matter which is required to be considered only aftertrial but not at the stage of considering the application u/s. 482Cr.P.C. – High Court committed error in allowing the petitions filedu/s.482 Cr.P.C. – Accordingly, order of the High Court set aside.

Allowing the appeals, the Court

Conclusion

Allowing the appeals, the Court

HELD: 1. It is not seriously disputed by the parties withregard to the entering of the agreements for procuring the landin favour of the appellant and respondents have received theamount of Rs.9 crores by way of demand drafts and cheques. Itis the specific case of the appellant that there are schedulesmentioned to the agreements as per which respondents haveagreed to procure the land covered by Survey Nos.115 and 117apart 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 Courtto 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 bySurvey Nos.115 and 117 were sold even prior to the firstagreement, as such respondents have committed an act ofcheating. It is also the specific case of the appellant that twocheques were issued by respondents-accused by way of securityfor the amount of Rs.9 crores which is advance but the account ofsuch cheques was closed even prior to entering into theAgreement itself. The second complaint filed by the appellant isself-explanatory and he is forcefully made to sign the sale deedwhich were executed subsequently for the lands covered bySurvey Nos.115 and 117. Mere filing of the suits for recovery ofthe money and complaint filed under Section 138 of the N.I. Actby itself is no ground to quash the proceedings in the complaintsfiled by the appellant herein. When cheating and criminal AB

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Aconspiracy are alleged against the accused, for advancing a hugesum of Rs.9 crores, it is a matter which is to be tried, but at thesame time the High Court has entered into the disputed area, atthe stage of considering the petitions filed under Section 482,Cr.P.C. It is fairly well settled that power under Section 482Cr.P.C. is to be exercised sparingly when the case is not madeBout for the offences alleged on the reading of the complaint itselfor in cases where such complaint is filed by way of abuse of theprocess. Whether any Schedules were appended to theagreement or not, a finding is required to be recorded after fullfledged trial. Further, as the contract is for the purpose ofCprocuring the land, as such the same is of civil nature, as held bythe High Court, is also no ground for quashing. Though thecontract is of civil nature, if there is an element of cheating andfraud it is always open for a party in a contract, to prosecute theother side for the offences alleged. Equally, mere filing of a suitor complaint filed under Section 138 of the N.I. Act, 1881 by itselfDis no ground to quash the proceedings. While considering thepetition under Section 482 of Cr.P.C., this Court is of the viewthat the High Court also committed an error that there is anovation of the contract in view of the subsequent agreemententered into on 08.11.2012. Whether there is novation of contractEor not and the effect of such entering into the contract is a matterwhich is required to be considered only after trial but not at thestage of considering the application under Section 482, Cr.P.C.[Para 9] [486-B-H; 487-A-C]

S.W. Palanitkar and Ors. v. State of Bihar and Anr.F(2002) 1 SCC 241 : [2001] 4 Suppl. SCR 397 ;AnilMahajan v. Bhor Industries Ltd. and Anr.(2005) 10SCC 228 ;Inder Mohan Goswami and Anr. v. State ofUttaranchal and Ors.2007 (12) Scale 15 – referredto.

Case Law Reference

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CRIMINAL APPELLATE JURISDICTION : Criminal AppealNos. 1573-1575 of 2019.

From the Judgment and Order dated 28.04.2017 of the High Courtof Karnataka at Bengaluru in Criminal Petition Nos. 2383 of 2017, 7976of 2013 and 7161 of 2016.

Arun Joshi, Ankolekar Gurudatta, Chandan Malapur, MukeshKumar Singh, Mohit Kaushik, Rajendra Koushik, Advs. for the Appellant.

R. Basant, Sr. Adv., Anand Sanjay M. Nuli, Sunil Rao, DharmSingh, Nanda Kumar K.B., Prawal Mishra, Suraj Kaushik, Manu Krishna(for M/S. Nuli & Nuli), V. N. Raghupathy, Md. Apzal Ansari, Advs. forthe Respondents.

The Judgment of the Court was delivered by

R. SUBHASH REDDY, J.

1. Leave granted.

2. These criminal appeals are filed by the complainant, aggrievedby the judgment and order dated 28[th] April, 2017 passed by the HighCourt of Karnataka at Bengaluru in Crl.P Nos.2383 of 2017, 7976 of2013 and 7161 of 2016. By the aforesaid order, the High Court hasallowed the petitions filed by the respondents-accused under Section482 of Cr.P.C. and quashed the complaint bearing P.C.R. No.12317 of2013 filed before the IV ACMM, Bangalore, and complaint bearing P.C.R.No.14420 of 2015, filed before the VIII ACMM, Bengaluru, as well asthe 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 of2015, directing the Sanjaya Nagara Police Station to investigate thematter.

3. The appellant herein has filed complaint on 29[th] April, 2013before the Chief Metropolitan Magistrate, Bangalore, which is registeredas 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 complaintby the same complainant on 27[th] November, 2015 which is registered asP.C.R. No.14420 of 2015, which is subseqently numbered as CC No.54

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Aof 2016 (after filing of the chargesheet dated 22[nd] December, 2015)against the accused therein namely (1) M/s. Pramila Santhosh LandDevelopers 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 Preventionof Money Laundering Act.B

4. The first complaint dated 29[th] April, 2013 was filed alleging thatthe respondents-accused made a representation that they are ownersand are absolutely seized and possessed of land at Ballur village, AttibeleHobli, Anekal Taluk and promised to procure an extent of 70 acres ofland and entered into an agreement with the appellant-complainant onC26[th] September, 2012 and received an amount of Rs.9 crores (RupeesNine crores) by way of cheques and demand drafts. It is alleged that theextent and survey nos. of land mentioned in the Schedule appended tothe Memorandum of Understanding (MOU) were to be procured infavour of the complainant. It was further pleaded that there were twoDcheques issued by the accused as security for the amount of advancepaid by the appellant-complainant. It was the case of the complainantthat subsequent to agreement dated 26[th] September, 2012, therespondents-accused having failed to perform the contract in terms ofagreement, have entered into another MOU on 8[th] November, 2012,representing that they are in possession of 70 acres of agricultural landEand 30 acres of converted land and they promised to transfer such landin 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 isalso a Schedule indicating the survey nos. and extent of lands to thesecond MOU. In the complaint filed on 29[th] April, 2013 it was allegedFthat though the respondents have already sold the land covered by SurveyNos.115 and 117 to M/s. Sri Sai Developers on 7[th] June, 2012, with adishonest intention respondents have played fraud and cheated theappellant by receiving huge sum of Rs.9 Crores (Rupees Nine crores),by including the lands covered by Survey Nos.115 and 117 also. Furtheralleging that when the demand was made to comply with the terms ofGthe contract, the respondents have threatened the complainant, as suchthe respondents are liable to be punished for offences under Sections403, 406, 420, 506(B) of IPC.

5. Further alleging that after filing of the first criminal complaint,the respondents have threatened and pressurised the appellant and theH

second complaint was filed. In the second complaint, it was alleged thatone of the accused, by name, D.C. Thamanna also gave an undertakingin writing stating that from 16[th] May, 2013 onwards they would startregistering the sale deeds but they failed to do so. It was further allegedthat instead of abiding by such undertaking, the appellant was forced toenter 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 bearingSurvey Nos.115 and 117 are not available for sale, as such they willcompensate in other lands and made a request to become confirmingparty to sale deed dated 6.7.2013 executed in favour of the trust. It isstated in the complaint that though the purchaser of the lands coveredby Survey nos.115 and 117 was not known to the appellant, he wasmade to sign the sale deed as a confirming party which is also aconspiracy of all the accused to avoid performance of the contract enteredinto by the accused with the appellant and to retain the amount of Rs.9crores (Rupees Nine crores) with them illegally. In the second complaint,it was further the case of the appellant that when the cheques, whichwere given by the accused as security, were presented, it was learntthat the account of which cheques were issued was closed even prior toentering into the agreement dated 26.9.2012. Alleging that there is afraud, cheating and conspiracy, it is pleaded that the respondents areliable to be prosecuted for the offences under Sections 417, 418, 420,422 and 120(B) read with Section 34, IPC and the provisions of Preventionof Money Laundering Act.

6. At this stage, it is to be noticed that in the second complaint,after investigation, chargesheet is also filed and C.C. is numbered.

7. The High Court has allowed the petitions filed under Section482, Cr.P.C. by the respondents-accused mainly on the ground that inview of the agreement entered into on 08.11.2012, there is a novation ofthe contract between the parties. Further the High Court has disbelievedthe Schedule to the MOU dated 08.11.2012 on the ground that theadditional pages were not paginated. Further on the grounds that theappellant has already filed a civil suit for recovery of advance paid byhim for a sum of Rs.9 crores (Rupees Nine crores) and the appellanthas filed complaint for offence under Section 138 of the NegotiableInstruments Act, 1881, the appellant has joined in the sale deed for landscovered by Survey Nos.115 and 117 of Ballur Village, has allowed thepetitions and quashed the proceedings.

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A8. Having heard Sri Arun Joshi, learned counsel for the appellantand Sri R. Basant, learned senior counsel assisted by Mr. Anand SanjayM. Nuli, Advocate, appearing for the respondents, we have perused theimpugned order passed by the High Court and other materials placed onrecord.B9. It is not seriously disputed by the parties with regard to the

B9. It is not seriously disputed by the parties with regard to theentering of the agreements for procuring the land in favour of the appellantin Ballur Village, Anekal Taluk, Bangalore Urban District and respondentshave received the amount of Rs.9 crores by way of demand drafts andcheques. It is the specific case of the appellant that there are schedulesmentioned to the agreements as per which respondents have agreed toCprocure the land covered by Survey Nos.115 and 117 of Ballur Villageapart from other lands. In a petition under Section 482, Cr.P.C. it isfairly well settled that it is not permissible for the High Court to recordany findings, wherever there are factual disputes. Merely on the groundthat there is no pagination in the Schedule, the High Court has disbelievedDsuch Schedule to the Agreements. It is the specific case of the appellantthat the lands covered by Survey Nos.115 and 117 of Ballur Villagewere sold even prior to the first agreement, as such respondents havecommitted an act of cheating. It is also the specific case of the appellantthat two cheques were issued by respondents-accused by way of securityfor the amount of Rs.9 crores which is advance but the account of suchEcheques was closed even prior to entering into the Agreement itself.The second complaint filed by the appellant is self-explanatory and he isforcefully made to sign the sale deed which were executed subsequentlyfor the lands covered by Survey Nos.115 and 117 of Ballur Village.Mere filing of the suits for recovery of the money and complaint filedFunder Section 138 of the N.I. Act by itself is no ground to quash theproceedings in the complaints filed by the appellant herein. When cheatingand criminal conspiracy are alleged against the accused, for advancinga huge sum of Rs.9 crores, it is a matter which is to be tried, but at thesame time the High Court has entered into the disputed area, at thestage of considering the petitions filed under Section 482, Cr.P.C. It isGfairly well settled that power under Section 482 Cr.P.C. is to be exercisedsparingly when the case is not made out for the offences alleged on thereading of the complaint itself or in cases where such complaint is filedby way of abuse of the process. Whether any Schedules were appendedto the agreement or not, a finding is required to be recorded after full H

fledged trial. Further, as the contract is for the purpose of procuring theland, as such the same is of civil nature, as held by the High Court, isalso no ground for quashing. Though the contract is of civil nature, ifthere is an element of cheating and fraud it is always open for a party ina 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 consideringthe petition under Section 482 of Cr.P.C., we are of the view that theHigh Court also committed an error that there is a novation of the contractin view of the subsequent agreement entered into on 08.11.2012. Whetherthere is novation of contract or not and the effect of such entering intothe contract is a matter which is required to be considered only aftertrial 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 ofS.W. Palanitkar and Ors. vs. State of Bihar and Anr.[1] and submittedthat every breach of contract may not result in a penal offence, but inthe very same judgment, this Court has held that breach of trust withmens rea gives rise to a criminal prosecution as well. In a given case,whether there is any mens rea on the part of the accused or not is amatter which is required to be considered having regard to the facts andcircumstances of the case and contents of the complaint etc. In thecase on hand, it is clearly alleged that even before entering into theagreement dated 26.09.2012, lands were already sold to third party, whichwere agreed to be procured in favour of the appellant. Not only that, itis the specific allegation of the complainant that the cheques were issuedtowards security from the account which was also closed much earlierto the date of Agreement itself. Learned counsel also relied on judgmentin the case of Anil Mahajan vs. Bhor Industries Ltd. and Anr.[2] butin the very same judgment it is also held that where there exists afraudulent and dishonest intention at the time of the commission of theoffence, law permits the victim to proceed against the wrongdoer forhaving committed an offence of criminal breach of trust or cheating. Inanother case relied on by the learned counsel, viz., Inder MohanGoswami 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

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Areiterated 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 saidjudgments relied on by the learned counsel would not support the caseof the respondents. It is also to be noticed that in the complaint filed inP.C.R.No.14420 of 2015, investigation has been completed andchargesheet was also filed on 22[nd] December 2015.B

11. For the aforesaid reasons, we are of the view that the HighCourt has committed an error in allowing the petitions filed under Section482, Cr.P.C. by the respondents-accused. Accordingly, these criminalappeals are allowed and impugned common order dated 28.4.2017 passedby the High Court of Karnataka at Bengaluru is set aside. It is madeCclear that the findings recorded in this judgment are confined only forthese appeals and the same cannot be construed as an expression ofopinion on merits of the matter and it is open for the trial court to proceedin accordance with law and decide the complaints on their own merits.

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Ankit Gyan

Appeals allowed.

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