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2023 Supreme(P&H) 1533

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Karamjit Singh, J.
Naresh Kumar – Appellant
Versus
State of Punjab – Respondent
CRM-M No. 12961 of 2022
Decided On : 13-03-2023

Advocates appeared:
For the Parties : Mr. Inderjit Sharma, Mr. C.L. Pawar AAG, Punjab, Mr. Munish Puri

Headnote:(A) Criminal Procedure Code, 1973 - Section 438 - Anticipatory bail - The petitioner sought anticipatory bail in an FIR under Sections 417 and 420 IPC alleging breach of an agreement to sell a property - Courts emphasize that mere breach of contract does not constitute criminal cheating without fraudulent intent - The petitioner filed a civil suit disputing the agreement's authenticity while the complainant seeks specific performance - Investigation is complete, and petitioner joined - Court cannot act as a recovery agent without a trial - Petitioner not required for further investigation - Petition allowed, interim bail made absolute. (Paras 1-8)

Facts of the case:
The petitioner, related to the complainant, executed an agreement to sell property but failed to complete the sale or return funds following a family member's death.

Findings of Court:
Anticipatory bail granted as the petitioner joined the investigation and was not needed for custodial interrogation.

Issues: Whether mere breach of contract constitutes cheating and the necessity of custodial interrogation in the context of the provided lawsuit.

Ratio Decidendi: Criminal liability cannot arise solely from a breach of contract unless fraud is evident since the court's role is not to enforce civil obligations.

Result: Petition allowed; interim bail made absolute.

Table of Content
1. allegations underlying fir for anticipatory bail. (Para 1 , 2)
2. nature of dispute: civil vs. criminal. (Para 3 , 4)
3. considerations for anticipatory bail ruling. (Para 5 , 6)
4. breach of contract does not equal criminal intent. (Para 7)
5. grant of anticipatory bail allowed. (Para 8)

Judgment

Mr. Karamjit Singh, J.

The present petition has been filed by the petitioner under Section 438 Cr.P.C. seeking anticipatory bail in case having FIR No. 18 dated 25.02.2022, registered under Sections 417 and 420 IPC at Police Station Division No.1, Pathankot.

2. As per the allegations recorded in the FIR, the petitioner and his father Harbans Lal entered into an agreement to sell the property in question with complainant Deepak Kumar and in this regard agreement to sell was executed between the parties on 02.07.2019 and the entire sale consideration of Rs.46,00,000/- has been received by the vendors from the complainant. That thereafter Harbans Lal died while the petitioner failed to execute the sale deed in favour of the complainant, who is his real brother and the petitioner also failed to return the sale consideration which was received by him and his father at the time of execution of agreement to sell dated 02.07.2019.

3. The counsel for the petitioner, inter alia, contends that the entire dispute between the parties is of civil nature and the petitioner has already filed suit for declaration that the aforesaid agreement to sell is a fake document, while the complainant has filed suit for specific performance of the aforementioned agreement to sell. The counsel for the petitioner further submits that the petitioner has joined the investigation with the police in compliance of the order of interim bail passed by this Court and that the entire case is based on documentary evidence which has already been collected by the investigating agency.

4. The present petition is contested by the counsel for the complainant who submits that the petitioner is simply denying the execution of agreement to sell dated 02.07.2019. The counsel for the complainant further submits that at the time of execution of the said agreement to sell certain payments were made through cheques and record regarding the same is available with the concerned bank. The counsel for the complainant further submits that there was clear malafide intention on the part of the petitioner to defraud the complainant at the time of execution of agreement to sell in question and at that time payment of Rs.10,00,000/- was made by the complainant to the petitioner and his father Harbans Lal as earnest money. The counsel for the complainant further submits that the custody of the petitioner is required for recovery of the entire sale consideration, already received by him.

5. The State counsel on instructions from ASI Kuldeep Raj submits that the petitioner has joined the investigation with the police and is not required for further investigation or custodial interrogation.

6. I have considered the submissions made by counsel for the parties.

7. Admittedly, the present FIR is based on agreement to sell dated 02.07.2019. It is settled law that mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction. Undoubtedly, in the present case the petitioner is real brother of the complainant and the another person who executed agreement to sell in question was their father who has since died. It is a matter of evidence as to whether the petitioner and his father entered into aforesaid agreement to sell with the complainant with malafide intention from the very beginning to deceive the complainant. Further, a criminal Court exercising jurisdiction to grant bail/ anticipatory bail is not expected to act as a recovery agent to realize the dues of the complainant and that too without any trial, as has been held by the Hon’ble Supreme Court in SLP (Crl.) 1274 of 2021 Manoj Kumar S

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