The court affirmed that an FIR under Section 420 IPC is not maintainable without prima facie evidence of dishonest intent or fraud, as mere contractual disputes do not constitute criminal cheating.

ORDER :

T.V. THAMILSELVI, J.

1. The petitioners have filed this petition to quash the FIR in Crime No.228 of 2017 pending investigation on the file of the 1^st respondent, for the offences under Sections 420 of IPC, as against the petitioners.

2. The case of the prosecution is that the petitioners are partners in M/s. R.P. Rajarajan Associates and owner of Multi-storied complex at a prime locality of Chennai. In order to clear the loan over the property, they decided to sell it. In that process, the 2^nd respondent agreed to purchase the same and sale consideration was fixed as a sum of Rs.92 Crores. At the time the 2^nd respondent was a member of the Income Tax Appellate Tribunal. The 2^nd respondent agreed to take over the loan of Rs.29 Crores, borrowed by the petitioners to purchase the property. As advance she issued two cheques for Rs.10 Crores and Rs.8 Crores dated 01.08.2014 and 13.07.2014, agreeing to take over loan and pay the balance, but there was no written agreement. At the instruction of 2^nd respondent one cheque for a sum of Rs.10 Crores alone was encashed on 13.10.2014. There was a delay caused by the 2^nd respondent in taking over the loan of the petitioners with Indian Overseas Bank, St.Thomas Mount Branch for a sum of Rs.29 Crores by paying the balance advanced sale consideration towards the loan. Even according to the second respondent, she could not mobilise the balance amount and she was waiting to sell her farm outside the city to mobilize the balance. Therefore, due to delay, on 12.12.2014 the petitioners returned Rs.7 Crores by Cheque No.448188 in favour of the 2^nd respondent and the same was encashed by her. According to the petitioners, a sum of Rs.3 Crores was deducted towards loss sustained by them on account of the delay on the part of the 2^nd respondent as they were unable to pay the bank loan. Even on 12.12.2014, along with the cheque for Rs.7 Crores, a letter was sent in which it was clearly mentioned about the deduction of Rs.3 Crores. The 3^rd respondent who is advocate by profession and son of 2^nd respondent, communicated through letters stating that the deduction of Rs.3 crores is not justifiable. In order to cover up the illegal recession by the second respondent, causing loss, by diminishing the value of the property and also for recovery of Rs.3 Crores, the respondents 2 & 3 sent their henchmen demanding payment. The petitioners therefore filed C.S. No. 873 of 2014 for a declaration to declare that withholding of Rs.3 Crores as damages for illegal recession of contract from the 2^nd respondent is appropriate. As a counter blast to the suit, the 3^rd respondent lodged a complaint before the Mylapore Police stating that only Rs.75 crores was agreed and a written agreement was made, signed by the second respondent and the first petitioner did not return it after their signature. In the complaint, the summons issued to the petitioners have been evaded. Therefore, alleging inaction on the part of the police officials in investigating the complaint, the respondents 2 and 3 filed Crl. O.P. No. 6835 of 2016 in which a direction was issued by this Court to conduct an enquiry on the basis of the complaint. Pursuant to such direction, on 16.02.2017 a first information report was registered against the petitioners. As per the FIR, the actual proof of payment was not stated. The complaint was filed with deliberate suppression of material facts. Further more, the 2^nd respondent also filed C.S. No. 198 of 2021 for recovery of Rs.10,50,00,000/- with interest and for a mandatory injunction directing IDBI Bank to deposit the sale cons