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SUPREME COURT OF INDIA
INDU MALHOTRA, AJAY RASTOGI, JJ.
Priti Saraf & Anr. - Appellants
Versus
State of NCT of Delhi & Anr. - Respondents
Criminal Appeal No(S).296 of 2021 (Arising out of SLP(Crl.) No(s). 6364 of 2019)
Decided On : 10-03-2021
(A) Criminal Procedure Code, 1973 – Section 482 – Exercise of inherent jurisdiction – To exercise powers under Section 482 Cr.P.C., complaint in its entirety shall have to be examined on the basis of allegation made in complaint/FIR/charge-sheet and High Court at that stage was not under obligation to go into the matter or examine its correctness – Whatever appears on face of complaint/FIR/charge-sheet shall be taken into consideration without any critical examination of same – Offence ought to appear ex facie on complaint/FIR/charge-sheet and other documentary evidence on record – Exercise of inherent power of High Court is an extraordinary power which has to be exercised with great care and circumspection before embarking to scrutinise complaint/FIR/charge-sheet in deciding whether case is rarest of rare case, to scuttle prosecution at its inception. (Paras 23 and 28)
(B) Indian Penal Code, 1860 – Sections 420, 406 and 34 – Criminal Procedure Code, 1973 – Section 482 – Cheating and criminal breach of trust – Cognizance of offence – In the matter of exercise of inherent power by High Court, only requirement is to see whether continuance of proceedings would be a total abuse of process of Court – Criminal Procedure Code contains a detailed procedure for investigation, framing of charge and trial – In the event when High Court is desirous of putting a halt to known procedure of law, it must use proper circumspection with great care and caution to interfere in complaint/FIR/charge-sheet in exercise of its inherent jurisdiction – In instant case, it cannot be said that complaint does not disclose commission of an offence – Ingredients of offences under Sections 406 and 420 IPC cannot be said to be absent on the basis of allegations in complaint/FIR/charge-sheet – Whether allegations in complaint are otherwise correct or not, has to be decided on the basis of evidence to be led during course of trial – Simply because there is a remedy provided for breach of contract or arbitral proceedings initiated at instance of appellants, that does not by itself clothe court to come to a conclusion that civil remedy is only remedy and initiation of criminal proceedings, in any manner, will be abuse of process of court for exercising inherent powers of High Court under Section 482, Cr.P.C. for quashing such proceedings – Issue involved in matter under consideration is not a case in which criminal trial should have been short-circuited – High Court was not justified in quashing criminal proceedings in exercise of its inherent jurisdiction – Facts narrated in present complaint/FIR/charge-sheet indeed reveal commercial transaction but that is hardly a reason for holding that offence of cheating would elude from such transaction – Many a times, offence of cheating is committed in course of commercial transactions – Initiation of arbitral proceedings has no correlation with criminal proceedings – Judgment of High Court impugned set aside – Trial Court may proceed with trial expeditiously. (Paras 31, 32, 33, 34 and 38)
Facts of the case:
Appellants who are de-facto complainants in FIR No. 132/2017 dated 28th April, 2017 are questioning order of the High Court dated 15th March, 2019 passed in Criminal Miscellaneous Case Nos. 1718/2017 and 7009/2017 whereby the learned Single Judge in exercise of its jurisdiction under Section 482 of Code of Criminal Procedure taking cognizance for the offence under Sections 420, 406 and 34 IPC quashed orders and set aside criminal proceedings against 2nd respondent on the foundation that the allegations made in the complaint/FIR does not constitute offences under aforestated sections. Question which is raised for consideration is that in what circumstances and categories of cases, a criminal proceeding may be quashed either in exercise of the extraordinary powers of the High Court under Article 226 of the Constitution, or in the exercise of the inherent powers of the High Court under Section 482 Cr.P.C.
Findings of Court:
Submission that it was a simple case of termination because of breach of terms of the contract giving rise to a purely civil dispute or initiation of the arbitral proceedings would not attract the provisions under Sections 406, 420, 34 IPC may not hold good at this stage for the reason what is being suggested by the learned counsel for the 2nd respondent can be his defence during the course of trial but was not open to be examined by the High Court to take a judicial notice and for quashing of the criminal proceedings in exercise of its inherent powers under Section 482 Cr.P.C.
Result : Appeal allowed.
JUDGMENT :
Rastogi, J.
1. Leave granted.
2. The appellants who are the de-facto complainants in FIR No. 132/2017 dated 28th April, 2017 are questioning the order of the High Court dated 15th March, 2019 passed in Criminal Miscellaneous Case Nos. 1718/2017 and 7009/2017 whereby the learned Single Judge in exercise of its jurisdiction under Section 482 of the Code of Criminal Procedure(hereinafter being referred to as “CrPC”) taking cognizance for the offence under Sections 420, 406 and 34 IPC quashed the orders and set aside the criminal proceedings against 2nd respondent on the foundation that the allegations made in the complaint/FIR does not constitute offences under aforestated sections.
Brief facts of the case
3. The factual matrix of the matter as reflected from the complaint as alleged are that the subject property in question, i.e., 37, Friends Colony(East), New Delhi is in the ownership of 2nd respondent. The said property was mortgaged with State Bank of Patiala and the total legal liability payable to the Bank was Rs. 18 crores. That in order to clear the said dues, 2nd respondent hatched a conspiracy with broker Ashok Kumar so as to cheat and defraud the appellants/complainants and to further misappropriate the amounts paid by the complainants as part of the deal, the 2nd respondent breached the trust of the appellants/complainants deliberately and falsely stating to the appellants/complainants that the 2nd respondent would be liable to pay a sum of Rs. 25.50 crores to the complainant if the deal is not carried forward by the 2nd respondent. Keeping in view the overall scenario, agreement to sell was executed on 24th December, 2011 between the 2nd respondent and the 1st appellant. The 2nd respondent agreed to sell 1205.43 sq yds. of the property in question for a total sale consideration of Rs. 63,28,50,750/-. At the time of execution, 1st appellant paid a sum of Rs. 12.50 crores vide cheque dated 24th December, 2011 drawn on HDFC Bank, New Friends Colony, Delhi. As per clause 3 of the said agreement to sell, 2nd respondent had to perform and complete three requirements which were compulsory in nature. The said requirements were to be completed by the 2nd respondent latest by 24th March, 2012 before any further amount is to be received by her from the 1st appellant/complainant.
4. It was further alleged in the complaint that the three requirements in terms of clause 3 of the agreement to sell were not fulfilled by the 2nd respondent and even after there being a delay in obtaining sanction plans, still the 1st appellant on demand made a payment of Rs. 5.40 crores by a cheque dated 23rd May, 2012 and to show her bonafides, the 2nd respondent handed over post-dated cheques worth Rs. 25.50 crores towards security for performance of agreement dated 24th December 2011. After the amount was received from the 1st appellant/complainant, 2nd respondent immediately cleared her outstanding legal liability of State Bank of Patiala and obtained NOC from the bank, however, the fact of obtaining NOC was never divulged by the 2nd respondent to the complainants deliberately. This fact for the first time was disclosed by the 2nd respondent at the stage when post-dated cheques of Rs.25.50 crores handed over as security to the complainant were rendered invalid.
5. The intention of the 2nd respondent from the very inception to cheat and deceive the complainants/appellants is made out from the fact that the 2nd respondent had to complete the compulsory requirement on or before 24th March, 2012 but the first two requirements were completed on 11th May, 2012 and 2nd June, 2012 respectively and the third requirement was still not complete. At this stage, just to cheat the 1st appellant/complainant, 2nd respondent illegally terminated the agreement to sell vide communication dated 30th January, 2013. The 1st appellant had tried her level best to get the matter settled but, the modus operandi of the 2nd respondent was to cheat from the very inception
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