IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
B.N. KARIA, J.
Vipulbhai Chandrakantbhai Gosaliya - Applicant
Versus
State of Gujarat - Respondent
R/Special Criminal Application No. 8626 of 2018
Decided On : 08-10-2021
Indian Penal Code, 1860 – Sections 406, 409, 420, 467, 468, 471, 477A, 120B, 34, 114 – Criminal Procedure Code, 1973 – Section 482 – Criminal Case – By way of present petition, petitioners have prayed reliefs – Punishment for criminal breach of trust – Criminal breach of trust by public servant, or by banker, merchant or agent – Cheating and dishonestly inducing delivery of property – Forgery of valuable security, will, etc – Forgery for purpose of cheating – Falsification of accounts – criminal conspiracy – Abettor present when offence is committed – Held, Facts of case that main accused, who was borrower, had paid up entire dues of respondent no.2-bank and also obtained No Due Certificate to that effect – In light of said facts, one quashing petition being Special Criminal Application came to be filed by her before this Court and said petition came to be disposed of vide order where this Court was pleased to allow petition and quash subject FIR and subsequent proceedings qua that petitioners for the reason that no fruitful result could be achieved from continuation of such proceedings and it would be unnecessary for petitioners before this Court to continue with trial – Considering factual background of present case, no ingredients of the offence punishable under Sections 406, 409, 420, 467, 468, 471, 477A, 120B, 34 and 114 of the IPC are made out against petitioners and as no evidence incriminating petitioners has come on record during investigation, no useful purpose would be served by permitting prosecution to continue – It is, therefore, a fit case to exercise of inherent powers under Section 482 of the Code of Criminal Procedures, 1973 – Petition allowed.
JUDGMENT :
1. By way of present petition, petitioners have prayed for following reliefs :
(B) This Hon'ble Court may be pleased to issue an appropriate writ, order or direction quashing and setting aside the complaint and F.I.R. bearing I-C.R. No.80/2005 registered on 25.03.2005 with C-Division Police Station, Bhavnagar, the chargesheet no.131/2005, dated 05.10.2005 and the additional chargesheet no.I-131/2005, dated 03.06.2007,and all the subsequent proceedings thereon.
(C) Such other and further reliefs as this Hon'ble Court may deem just, fit and expedient be granted in favour of the petitioners.”
2. The brief facts of the case are as under:
2.1 The petitioners have sought for quashing of the complaint registered against the petitioners bearing C.R. No.I-80/2005 with C-Division Police Station, Bhavnagar for the offence punishable under Sections 406, 409, 420, 467, 468, 471, 477A, 120B, 34 and 114 of the Indian Penal Code (hereinafter referred to as “the IPC” for short) on 25.03.2005. In pursuance of the said FIR charge-sheet came to be filed against the petitioner No.2 and other co-accused vide Chargesheet No.131/2005 on 05.10.2005, whereas the petitioner no.1's name came to be added vide additional charge-sheet no.I-131/2005 on 03.06.2007. In pursuance of filing of the charge-sheet, learned Chief Judicial Magistrate of Bhavnagar was pleased to frame charge and cases vide Criminal Case No.2748/2007 and Criminal Case No.8956/05 came to be initiated against the petitioners, respectively.
2.2 The petitioner no.1 was the valuer for collateral properties for the loans of subject transactions, whereas petitioner no.2 was the loan officer with respondent No.2-bank at the relevant point of time. The only allegation against the petitioner No.1 is of exaggerated valuation, where allegation against the petitioner no.2 is of granting loans in the subject transactions. Respondent No.2 was the co-operative bank, which had granted the loans in the subject transactions.
2.3 In the said cases, the main accused Kalpanaben Khantilal Shah, who was the borrower had paid up the entire dues of the respondent no.2 bank, and had also obtained nodue certificate to that effect. In light to the said facts, one quashing petition vide Special Criminal Application no.5456/2018 came to be filed before this Court. The said petition came to be disposed of vide order dated 06.09.2018 (Coram: Hon'ble Mr. Justice A.J. Desai) where the Hon'ble Court was pleased to allow the petition and quash the subject FIR and subsequent proceedings qua the applicant for the reason that no fruitful result could be achieved from continuation of such proceedings and that it might be unnecessary harassment to the applicant to continue with the trial. It is also a case of the petitioners on merits less complaint and hence in consideration of the above factual background the same is challenged by way of present petition before this Court.
3. Heard learned advocates for the respective parties and learned APP for the respondent-State.
4. Learned advocate for the petitioners submits that the complaint, if read as it is, no ingredients of the offence u/s 406, 409, 420, 467, 468, 471, 477A, 120B, 34 and 114 of the I.P.C are made out against the petitioners. That no role has been attributed to the petitioners in the complaint, FIR or the charge-sheet. Moreover, no evidence incriminating the petitioners has come on record during the investigation. Even if the complaint and charge-sheet are read as it is, ingredients of offence punishable under Sections 406, 409, 420, 467, 468, 471, 477A, 120B, 34 and 114 of the I.P.C are not made out. That petitioner No.1's role was only to issue a valuation report (an expert opinion) which was claimed to be on higher side as compared to value shown in sale-deed and by that way he had allegedly conspired with borrower.
5. That the petitioner No.2 was the loan officer with the respondent no.2-b
The court upheld that specific allegations of fraudulent conduct can sustain criminal charges against a property valuer providing inflated valuations to facilitate loan approvals.
A breach of contract does not constitute cheating unless fraudulent intent is proven at the outset of the agreement, as established in relevant legal precedents.
The main legal point established in the judgment is the requirement for allegations to constitute a cognizable offense and the application of the legal maxim 'Caveat Emptor' in property transactions.
Point of law: Criminal cases involving offences which arise from commercial, financial, mercantile, partnership or similar transactions with an essentially civil flavour may in appropriate situations....
The Court emphasized that the power to quash criminal proceedings should be exercised sparingly and only in exceptional cases, and that the Court should not inquire about the reliability or genuinene....
Settlement of monetary disputes does not automatically justify the quashing of criminal proceedings in cases involving serious allegations of criminality.
Redundant criminal proceedings should not be allowed to continue.
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