Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases Indian Laws Indian Laws + SC Indian Laws - 2021 (10) TMI SC This

  • Login
  • Cases Cited
  • Referred In
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

2021 (10) TMI 1423 - SC - Indian Laws


Issues Involved:
- Whether the necessary ingredients of offences punishable under Sections 406, 419, and 420 are prima facie made out.
- Whether the sale of excess flats, even if made, amounts to a mere breach of contract or constitutes an offence of cheating.
- Whether the dispute is one of entirely civil nature and therefore liable to be quashed.

Issue-wise Detailed Analysis:

1. Whether the necessary ingredients of offences punishable under Sections 406, 419, and 420 are prima facie made out:
The judgment examines whether the appellants' actions constitute criminal breach of trust and cheating. Section 405 IPC defines criminal breach of trust as dishonestly misappropriating or converting another's property for one's own use. Section 420 IPC involves cheating and dishonestly inducing delivery of property. Both sections require 'dishonest intention' as a pre-condition. The court notes that the builder company sold four excess flats beyond its share, which Respondent No. 2 contends was unauthorized. However, the appellants argue that a subsequent MoU allowed them to sell additional flats to adjust payments made to Religare Finvest Ltd. The court finds no evidence of deceptive or intentional misconduct by the appellants, emphasizing that the appellants first resorted to arbitration and that Respondent No. 2 withdrew his claim regarding the excess flats from the arbitration proceedings. Thus, the court concludes that no prima facie case of criminal breach of trust or cheating is made out.

2. Whether the sale of excess flats, even if made, amounts to a mere breach of contract or constitutes an offence of cheating:
The court refers to the case of Hridaya Ranjan Prasad Verma & Ors. Vs. State of Bihar & Anr. (2000) 4 SCC 168, which distinguishes between mere breach of contract and the offence of cheating. The key factor is the intention at the time of inducement. The court finds that the appellants did not have a fraudulent or dishonest intention at the time of the transaction. The dispute arises from differing interpretations of the agreements and MoU, rather than any fraudulent intent. Therefore, the court concludes that the case involves a mere breach of contract, not an offence of cheating.

3. Whether the dispute is one of entirely civil nature and therefore liable to be quashed:
The court emphasizes that the existence of dishonest or fraudulent intention has not been established against the appellants. The dispute is fundamentally civil, involving contractual disagreements and arbitration proceedings. The court cites several precedents, including M/s Indian Oil Corporation Vs. M/s. NEPC India Ltd & Ors. (2006) 6 SCC 736, which caution against converting civil disputes into criminal cases. The court also refers to the landmark judgment in State of Haryana & Ors. Vs. Ch. Bhajan Lal and Ors. (1992) SCC (Cri) 426, which outlines categories where inherent powers under Section 482 CrPC can be exercised to quash proceedings. The present case falls within these categories, warranting intervention to prevent abuse of the process of law.

Conclusion:
The court sets aside the impugned order dated 13.08.2019 by the High Court of Karnataka. The FIR No. 185/2016 and proceedings in C.C.No. 20609 of 2017 against the appellants are quashed. The appeal is allowed.

 

 

 

 

Quick Updates:Latest Updates