Pradeep Bhupatrai Vasa vs Bombay Builders Pvt. Ltd. & others

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1985 Supreme(Bom) 341

IN THE HIGH COURT OF BOMBAY
D.N. Mehta, J.
Pradeep Bhupatrai Vasa... Petitioner.
Versus
Bombay Builders Pvt. Ltd. others... Respondents.
Criminal Revision Application No. 282 of 1984, decided on 18-12-85.
Advocates appeared :
V.H. Gumaste with Kange Co., for petitioner original complainant.
R.S. Bhosale with Ramesh Shroff Co. and V.S. Kotwal, R.B. Masodkar, K.M. Mahimkar, for respondents Nos. 1 to 7.
V.S. Jadhav, P.P., for respondent No. 8-State.

Headnote:Sections 406, 409, 420 and 34-Mabarasbtra Ownership Flats (Regulation of Promotion; Construction, Sale, Management and Transfer) Act, 1963, Sections 3, 4, 5, 9 and 13, 14-Offence under-Validity of-In a specific ease the charge of cheating may depends upon the transaction apart from the agreement which, remained to be registered the criminal liability of, a party, however, will not be extinguished. A criminal liability does not necessarily emerge only from an agreement, but from the entire transaction between the parties. The oral representations made by one party to another or written documents besides the agreement may amount to an offence. In a specific case the charge of cheating may depend on the transaction apart from the agreement which remained to be registered.
       Trial Magistrate was in error when he stated that the agreement pursuant to the ruling of this Court cited heretofore became "a scrap of paper."
       Therefore, having come to the conclusion that respondents could still be prosecuted for the criminal offence of breach of trust and cheating as also other offences under the Ownership Flats Act, it will now be appropriate to consider whether respondents have committed any offence or offences.
       In view of the provisions of Clause 9 of the agreement dated 26-6-1980, the petitioner has become entitled to the refund of the moneys paid by him to the Vendors together with interest at 10 per cent per annum as stipulated. If respondent Nos. 1 to 7 have been willing to refund these moneys along with not only the interest hut compensation, as stated heretofore, then it could not he stated that they have committed criminal breach of trust.
       Therefore, once respondents have shown their willingness to refund the moneys paid to them by the petitioner, it cannot he stated that respondents had dishonestly used or disposed of that property in violation of any direction of law or in violation of the agreement entered into between the petitioner and respondents. The charge of criminal breach of trust under Section 400 of the Indian Penal Code can not be sustained on the evidence adduced by the petitioner or the documents relied on by him.
       As far as the alternative charge under Section 420 of the Indian Penal Code is concerned, the argument or Shri Gumaste is that at the time when the moneys were handed over by the petitioner to respondents the latter had no intention of delivering possession of the fiat. On the evidence, it is clear that after having received the moneys, respondents did construct the said building previously known a "Mahendra Towers" at Bomanji Petit Road, Bombay, It was only after the construction that respondent resiled from the agreement and refused to deliver possession of Flat No. 114 to the petitioner.
       In these circumstances, the petitioner is entitled to claim the refund of his moneys in a civil suit. There does not appear to be any element of criminality in this transaction and the entire transaction appears to be of a civil nature.

JUDGMENT - D.N. MEHTA, J.:---The petitioner herein Pradeep Bhupatrai Vasa has filed this Criminal Revision Application impugning the Order dated 29-3-1984 passed by the learned Additional Chief Metropolitan Magistrate, 40th Court, Girgaum, Bombay, whereunder the learned Additional Chief Metropolitan Magistrate was pleased to discharge the accused.

2. Respondent No. 1 is a Private Limited Company carrying on business as Builders and Promoters of Co-operative Societies and building. Respondent No. 1 Company carried on the business of construction and sale of residential flats on ownership basis under the Maharashtra Ownership Flats (Regulation of Promotion, Construction, Sale, Management and Transfer) Act, 1963 (hereinafter referred to as "the Ownership Flats Act"). Respondent Nos. 2 to 7 were the Directors of respondent No. 1 Company at all relevant times and were incharge of and responsible for the management of respondent No. 1 Company.

3. By an agreement dated 23-6-1978 between respondent No. 1 and the petitioner, respondent No. 1 agreed to sell to the petitioner on ownership basis a flat, being Flat No. 114, on the 11th Flour of a building known as "Mahendra Towers" to be constructed by the respondents at Bomanaji Petit Road, Bombay, together with a covered car parking space, for the total price of Rs. 2,17,500/-. On 20-4-1978, the petitioner paid to the respondents a sum of Rs. 25,000/- as earnest money. Between 19-7-1978 and 26-9-1979, the petitioner paid an aggregate amount of Rs. 2,00,100/- to respondent Nos. 1 to 7, inclusive of the earnest money of Rs. 25000/-. The said payments were made by cheques and were received as the purchase price of the said flat and the car parking space. According to the petitioner, only a sum of Rs. 17,400/- remained to be paid.

4. According to the petitioner, sometime in March 1983, respondent No. 2 met the petitioner and asked him whether he would agree to surrender his right, title and interest in the said agreement in respect of the flat and the covered car parking space. Respondent No. 2 offered to repay the sum of Rs. 2,00,100/- paid by the petitioner under the said agreement and a further sum of Rs. 2,24,900/- by way of compensation aggregating Rs. 4,25,000/- by the end of February 1980. The petitioner expressed his willingness to accept the offer of respondent No. 2 provided the payment was made within the stipulated period. According to the petitioner, respondent Nos. 1 to 7 failed to make this payment within the period of three weeks as indicated by respondent No. 2. Subsequently the arrangement was considered as cancelled and withdrawn.

5. According to the petitioner, under the said agreement dated 23-6-1978 respondents Nos. 1 to 7 had agreed to deliver possession of the said flat and the car parking space to the petitioner by 30th June, 1980. Respondents Nos. 1 to 7, however, failed to deliver possession either of the flat or of the car parking space. The petitioner offered to respondents Nos. 1 to 7 to pay the balance of the purchase price at the time of delivery of possession. Respondent Nos. 1 to 7, however, gave evasive replies about handing over possession of the flat to the petitioner. Respondents Nos. 1 to 7 kept assuring the petitioner that the said flat would be delivered after the building had been completed.

6. Sometime in August 1981, the petitioner came to know that respondents Nos. 1 to 7 had sold all the flats in the said building known as "Mahendra Towers", including the flat of the petitioner and the car parking space, to the Industrial Development Bank of India (I.D.B.I). On coming to learn or this, the petitioner paid a visit to the site and found that the name of the building had been changed from "Mahendra Towers" to "I.D.B.I. Quarters". The petitioner come to learn that respondents Nos. 1 to 7 had delivered possession of the flats, including the flat of the petitioner, to the I.D.B.I.

7. Some days after his visit to the site, the petitioner went to the Office of

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