Criminal jurisdiction is restricted to the area where the offence occurred, and parties cannot confer jurisdiction through a contract; thus, allegations of fraud in a lease agreement without evidence of criminal intent do not warrant an FIR.

JUDGMENT

1. This petition has been filed under Article 226 of the Constitution of India read with Section 482 Cr.P.C. for quashing the order dated 14th March, 2016 passed by the learned Metropolitan Magistrate-03 (for short, `MM'), South District, Saket, Delhi.

2. The facts as are relevant for the disposal of the present petition are that the petitioners and respondent No.2 entered into a commercial transaction where under the petitioners had leased out a property at Jaisalmer. The petitioner No.1 was a partner in the partnership firm by the name of M/s SRM Heritage Jaisalmer having its registered office at Mumbai. The petitioner No.2 was working as the Chief Development Officer of the partnership firm at the relevant time. The respondent No.2 is the Director of M/s JAH Developers Pvt. Ltd. (`company') alongwith two other Directors, Mrs. Jaswanti Panwar (wife of respondent No.2) and their son Mr. Anuj Panwar. This company had constructed a hotel situated at Plot Nos.14, 15 & 16, Barmer Road, Jaisalmer known as Hotel Jaisal Villas in the year 2009, apparently taking a huge loan from the State Bank of India. It is this property that was taken on lease by the petitioners through Lease Deed dated 6th September, 2013.

3. It is the contention of the petitioner that this Lease Deed was executed on 6th September, 2013 by the respondent No.2 despite being aware of a restraint order upon them issued by the Debt Recovery Tribunal (`DRT') on a plea of the State Bank of India (`Bank') from whom the company had borrowed a heavy amount and after its account had become a Non Performing Asset (NPA). Apparently, the loan was taken on a mortgage of the land on which the hotel premises were constructed. Thus, according to the petitioners, it was with mala fide intentions that the Lease Deed (Annexure P-1) was executed by the respondent no.2 and his company, for a period of 9 years, with a `lock-in period' of three years.

4. As the account of the company had become NPA, the Bank issued a notice on 17th December, 2013 along with the legal notice dated 20th May, 2013 setting out these facts, as also that the company had borrowed Rs.17 Crores from the Bank and the hotel was on a mortgage with it. A notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (for short, `SARFAESI Act.), 2002 had also been issued. When a clarification was sought from Mr. Anuj Panwar, the petitioner was assured that the matter would be settled with the Bank.

5. However, instead of doing that, they referred the matter to a Sole Arbitrator. It was at that juncture that the petitioners filed a case under the Rajasthan Rent Control Act before the Rent Control Authority, Jaisalmer for protection against dispossession. Subsequently, the company filed a complaint under Section 8 of the Arbitration and Conciliation Act (for short, `A&C' Act), 1996 read with Order VII Rule XI CPC for dismissal of the rent petition. That application was rejected by the Rent Tribunal on 15th July, 2014 while at the same time, the Sole Arbitrator rejected the objection raised by the petitioner and decided to continue with the arbitral proceedings. The company also filed a petition under Section 9 of the A&C Act, which was still pending. Subsequently, since the Sole Arbitrator withdrew from the arbitration proceedings, the said proceedings stood terminated under Section 25 of the A&C Act. It may be mentioned that a second arbitrator was appointed later, but no award was passed.

6. It is the case of the petitioners that the respondent No.2 and the company had not disclosed abo