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2024 (3) TMI 486 - HC - Indian LawsDishonour of Cheque - civil nature dispute - main contention of the petitioners is that the transaction between them and respondent No. 2 was purely of civil nature as such, the respondents could not have given a criminal colour to it by registering the impugned FIR - whether in the face of aforesaid nature of dispute between the parties, it would be open to set the criminal proceedings into motion at the instance of one party to the dispute against the other and whether this Court in exercise of its jurisdiction under Section 482 Cr.P.C. can quash impugned proceedings? HELD THAT - This issue has been discussed and deliberated upon by the Supreme Court in the case of INDIAN OIL CORPORATION VERSUS NEPC INDIA LTD ORS 2006 (7) TMI 575 - SUPREME COURT has held that A commercial transaction or a contractual dispute, apart from furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. As the nature and scope of a civil proceedings are different from a criminal proceeding, the mere fact that the complaint relates to a commercial transaction or breach of contract, for which a civil remedy is available or has been availed, is not by itself a ground to quash the criminal proceedings. The test is whether the allegations in the complaint disclose a criminal offence or not. From the foregoing enunciation of the law on the subject, it is clear that a commercial transaction or a contractual dispute apart from furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. It is also clear that the scope of a civil proceeding is different from a criminal proceeding and the mere fact that the allegations relate to a commercial transaction or breach of contract for which a civil remedy is available, is not by itself a ground to quash the criminal proceedings. In the present case, the petitioner-Mohd Afzal Beigh despite having the knowledge that he was not the owner of the property in question, represented to respondent No. 2 that he is owner of the property in question. Whether the action of petitioner-Mohd. Afzal Beigh amounts to the offence of cheating? - HELD THAT - The fraudulent intention on the part of petitioner Mohd Afzal Beigh was existing there from the very inception of the transaction between the parties. It is not a case where petitioner-Mohd Afzal Beigh was owner of the property and he had agreed to sell the said property to respondent No. 2 and for any reason, he could not execute the sale deed, but it is a case, where he falsely represented to respondent No. 2 that he is owner of the property in question, which he was not. So from the very beginning, he was knowing that it was not within his power and competence to execute the sale deed in respect of the land in question in favour of respondent No. 2, but despite this, he entered into agreement to sell with respondent No. 2 and made her to part with partial amount of sale consideration. Thus, offence under Section 420 IPC, which is a cognizable offence, is made out from the allegations made in the complaint and the material available on record. Petitioner-Mohd Afzal Beigh has executed a number of affidavits declaring therein that he has received an amount of Rs. 1.80 crores from respondent No. 2, which he has been unable to repay to her. Subsequently cheques have also been issued by his wife petitioner- Fehmida Kouser in connection with repayment of the aforesaid amount but the cheques have been dishonoured, in respect of which separate proceedings are stated to be pending. There are allegations against the petitioners that after receiving the amount from respondent No. 2 they have diverted the funds and out of the said funds, petitioner-Abdul Rashid Beigh has constructed a building in his village. This prima facie goes on to show that the petitioners were having fraudulent intention while entering into transaction with respondent No. 2 and all the petitioners appear to be having a role in it. The power under Section 482 Cr.P.C. to quash the criminal proceedings has to be exercised sparingly only in deserving cases in the circumstances illustrated in the aforesaid judgment. Even allegations of mala fides against the informant by itself is not a ground for quashing the criminal proceedings. The defence set up by the petitioners particularly the petitioners-Abdul Rashid and Fehmida Kouser can be looked into by the Investigating Agency during the investigation of the case and not by this Court in their proceedings by holding a mini trial. Having regard to the fact that allegations made in the impugned FIR disclose commission of cognizable offences, therefore, exercise of jurisdiction under Section 482 Cr.P.C. to quash the proceedings in the instant case would amount to stifling a legitimate prosecution, which is not permissible in law. There are no merit in the instant petitions. The same are dismissed.
Issues Involved:
1. Jurisdiction of the Crime Branch to investigate the FIR. 2. Nature of the transaction between the parties (civil vs. criminal). 3. Allegations of fraudulent intention and cheating. 4. Role of co-petitioners in the alleged conspiracy. 5. Scope of power under Section 482 Cr.P.C. to quash criminal proceedings. Summary: Jurisdiction of the Crime Branch: The petitioners contended that the Crime Branch lacked jurisdiction to investigate the FIR as it did not have inter-district ramifications, relying on the case of Kamlesh Devi vs. State of J&K. However, the court noted that the FIR was registered in 2023 and falls under SO 232 dated 09.05.2022, which allows the Economic Offences Wing to investigate real estate frauds. Therefore, the Crime Branch had jurisdiction. Nature of the Transaction: The petitioners argued that the dispute was purely civil and should not have been given a criminal color. The court observed that the allegations in the FIR indicated that the petitioner-Mohd Afzal Beigh falsely represented himself as the owner of the land and induced the complainant to pay Rs. 1.80 crores. This constituted a fraudulent intention from the inception, making it a case of cheating under Section 420 IPC. Fraudulent Intention and Cheating: The court highlighted that the petitioner-Mohd Afzal Beigh's representation of ownership, despite knowing he was not the owner, and inducing the complainant to part with money, established fraudulent intention. The execution of affidavits and issuance of cheques that were dishonored further supported the allegations of cheating. Role of Co-Petitioners: The petitioners-Fehmida Kouser and Abdul Rashid Beigh argued their limited involvement. The court clarified that the roles of these petitioners in the conspiracy were matters for investigation. The distinction between offences under Section 138 of the Negotiable Instruments Act and Section 420 IPC was also emphasized, allowing for separate investigations. Scope of Power under Section 482 Cr.P.C.: The court reiterated that the power to quash criminal proceedings under Section 482 Cr.P.C. should be exercised sparingly and only in exceptional cases. The allegations in the FIR disclosed cognizable offences, and quashing the proceedings would stifle a legitimate prosecution. The court cited the principles laid down in M/s Neharika Infrastructure Pvt. Ltd. vs. State of Maharashtra, emphasizing the limited scope of interference at the investigation stage. Conclusion: The petitions were dismissed, and the interim directions were vacated, allowing the investigation to proceed. The court underscored the need for the Investigating Agency to complete its statutory duty without interference.
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