2019 (3) TMI 1879 - HC - Indian Laws

Cheating - forfeiture of earnest money - It was pointed out that complainant had failed to provide the drawings within the timeline provided in Agreement to Sell and later on, it was provided and thereafter land of complainant was demarcated by erecting pillars, as it was known to both the sides that subject property could not be sub-divided - HELD THAT - The earnest money was received by petitioner-Meera Goyal in terms of Agreement to Sell in question and there is no basis to conclude that the earnest money received by her was used in clearing her bank dues of Rupees Eighteen Crores. Notice to perform Agreement to Sell and subsequent Termination Notice of 30th January, 2013, was duly served by petitioner- Meera Goyal on 30th January, 2013 upon complainant-Priti Saraf. It is so evident from complainant s reply of 26th February, 2013 which was sent to petitioner s Notice terminating Agreement to Sell of 24th December, 2011. Pertinently, as per complainant s reply, deadline of 24th March, 2012 stood novated. Petitioner- Meera Goyal, had obtained sanctioned plan for the property in question from the competent authority and had also cleared her bank dues and, so it cannot be said that any kind of cheating is attributable to petitioner- Meera Goyal and respondent-Ashok Kumar, who was a broker. Judicial notice can be taken note of the settled legal position that criminal proceedings are not to be initiated casually and before issuing the process, criminal court has to exercise great deal of caution, which has not been adhered to, by the courts below in this case. Considering that arbitration proceedings in respect of Agreement to Sell in question are still pending, this Court would refrains from commenting upon the merits of dispute between the parties but would certainly like to clarify in unequivocal terms that the element of cheating alleged is lacking in the instant case. This Court is therefore of the considered opinion that criminal proceedings against Meera Goyal and Ashok Kumar ought to be dropped, as ingredients of offence of cheating are lacking in the instant case. It prima facie appears that Complainant- Priti Saraf s failure to perform Agreement to Sell cannot be justified because lease of subject property ended before initiation of criminal proceedings. The impugned orders of 24th April, 2017 and 15th November, 2016 qua petitioner Meera Goyal are hereby quashed - petition disposed off.

Summary

Issues:
1. Trial court's order taking cognizance of cheating against petitioner
2. Revisional court's order setting aside trial court's order against Ashok Kumar

Analysis:
1. The first issue revolves around a dispute where the complainant agreed to purchase land from the petitioner for a substantial amount. The petitioner forfeited the earnest money as the complainant failed to perform her part of the agreement. The petitioner argued that she had fulfilled her obligations and the dispute should be resolved through civil remedies, not criminal proceedings. The court found that the petitioner had obtained necessary approvals and there was no basis to conclude that she used the earnest money improperly. The court emphasized that not every breach of contract amounts to cheating, and in this case, no deception was found at the inception. The court quashed the criminal proceedings against the petitioner, stating that the dispute was primarily civil in nature.

2. The second issue involves the revisional court's order regarding Ashok Kumar, who was accused of involvement in the alleged cheating. The complainant argued that Ashok Kumar should not be let off as he had refunded a sum to her. However, the court found that there was no dishonest intention attributable to Ashok Kumar. It emphasized that criminal proceedings should not be initiated casually and that injecting criminality into a purely civil dispute is an abuse of the legal process. The court affirmed the revisional court's order in favor of Ashok Kumar, stating that no cheating offense was made out against him.

In conclusion, the court quashed the trial court's order against the petitioner, as the dispute was civil in nature and lacked elements of cheating. The court affirmed the revisional court's order regarding Ashok Kumar, stating that no dishonest intention was found. The judgments were made with caution to avoid prejudicing the parties in ongoing arbitration proceedings, and the observations in the order were not to be construed as expressions on the merits of the case in arbitration.