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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
K. SURENDER, J.
Habib Abdul Razzaq Baghdadi @ Hadi Ali & Ors. - Petitioners
Versus
The State of Telangana & Others - Respondents
Criminal Petition Nos. 12942, 12944, 12945, 12951, 12958, 8958 of 2018, 2098 of 2019, 1190 & 1298 of 2020
Decided On : 05-09-2023
Cheating - Real Estate Fraud - Sections 420, 406, 447, 506 r/w 34 IPC and Section 83 of Stamps and Registration Act - The court quashed the proceedings against the petitioners in multiple criminal petitions related to fraudulent real estate transactions involving the sale and development of plots. The court found that the petitioners, who were directors of the companies involved, were not personally liable for the alleged offenses and that the complaints were primarily civil in nature. The court also noted that the transactions involved registered documents and that the complainants had knowledge of the agreements before purchasing the plots. The court allowed some petitions and partly allowed others, quashing the proceedings against certain petitioners and recalling NBWs issued against others.
Fact of the Case:
The cases involved multiple complaints filed against the petitioners for fraudulent real estate transactions related to the sale and development of plots. The complainants alleged that the petitioners, who were directors of the companies involved, cheated them by selling plots and subsequently entering into development agreements with other companies, causing wrongful loss to the purchasers.
Finding of the Court:
The court found that the complaints were primarily civil in nature and that the petitioners were not personally liable for the alleged offenses. The court also noted that the transactions involved registered documents and that the complainants had knowledge of the agreements before purchasing the plots. The court quashed the proceedings against certain petitioners and recalled NBWs issued against others.
Issues: The main issues revolved around the alleged fraudulent real estate transactions, the liability of the petitioners, and the nature of the complaints as civil or criminal in nature.
Ratio Decidendi: The court held that the complaints were primarily civil in nature and that the petitioners, as directors of the companies involved, were not personally liable for the alleged offenses. The court also considered the knowledge of the complainants regarding the agreements before purchasing the plots.
Final Decision: The court allowed some petitions and partly allowed others, quashing the proceedings against certain petitioners and recalling NBWs issued against others.
ORDER :
1. Criminal Petition No.12942 of 2018 is filed to quash the proceedings in FIR No.249 of 2018, dated 20.08.2018 on the file of Narayanaguda Police Station, Hyderabad.
2. The 2nd respondent filed a private complaint before the IX Additional Chief Metropolitan Magistrate at Hyderabad against these petitioners, who are arrayed as A1 to A4, A9 and seven others. In the complaint, it is alleged that he purchased 500 sq.yds plot situated at Hi-Grove County County in Manneguda Village, Pudur Mandal, Vikarabad District on 21.05.2018 through GPA holder A-12. The owner was A11. It is alleged that A9/M/s.Hira Multi Construction Ventures Private Limited represented by A1 to A4 converted land into non-agricultural land for the purpose of residential plots for construction of houses. A11 purchased a plot on 20.11.2010. In the year 2015, A11 visited the site and found that Golf Course was coming up. Then A11 approached A2 and enquired about his plot from A2, who gave assurance that when the project would be complete, the cost of plot would increase several times. However, A11 through A12 sold the plot to the defacto complainant by way of registered sale deed dated 21.05.2018.
3. The 2nd respondent visited the site on 08.07.2018. However, he was not permitted to enter into his plot in the venture. On enquiry, he came to know that A10 was given agreement-cum-GPA by A1 to A9. It was further informed that A1 to A9 have no connection whatsoever with the said development of Gulf Course and it is for A10 to develop the said land in accordance with the DTCP layout. Both the complainant and A11 requested the petitioners herein to handover their plot, however, there was no use. For the reason of selling the plot without the consent of A11 and handing it over to A10 on 03.08.2016, complaint was filed. Since the 2nd respondent incurred wrongful loss, private complaint was filed.
4. Learned Magistrate referred the case for the purpose of investigation to Narayanaguda Police, which was registered as Crime No.249 of 2018 dated 20.08.2018 for the offences under Sections 420, 406, 447, 120-A, 120B, 506 r/w 34 IPC and Section 83 of Stamps and Registration Act.
5. Criminal Petition No.12944 of 2018 is filed to quash the proceedings in FIR No.246 of 2018, dated 17.08.2018 on the file of Narayanaguda Police Station, Hyderabad.
6. The 2nd respondent filed a private complaint before the IX Additional Chief Metropolitan Magistrate at Hyderabad against these petitioners, who are arrayed as A1 to A4, A9 and seven others. In the complaint, it is alleged that he purchased 785.02 sq.yds plot situated at Hi-Grove County in Manneguda Village, Pudur Mandal, Vikarabad District on 05.03.2018 from A11. It is alleged that A9/M/s.Hira Multi Construction Ventures Private Limited represented by A1 to A4 converted the land into non-agricultural land for the purpose of residential plots for construction of houses. A11 purchased a plot on 20.11.2010. In the year 2015, A11 visited the site and found that Golf Course was coming up. Then A11 approached A2 and enquired about his plot from A2, who gave assurance that when the project would be complete, the cost of plot would increase several times. A11 sold the plot to the defacto complainant by way of registered sale deed dated 05.03.2018.
7. The 2nd respondent visited the site on 08.07.2018. However, he was not permitted to enter his plot in the venture. On enquiry, he came to know that A10 was given agreement-cum-GPA by A1 to A9. It was further informed that A1 to A9 have no connection whatsoever with the said development of Gulf Course and it is for A10 to develop the said land in accordance with the DTCP layout. Both the complainant and A11 requested the petitioners herein to handover their plot, however, no plot was given. For the reason of selling the plot without the consent A11 and handing it over to A10 on 03.08.2016, the 2nd respondent incurred wrongful loss, as such private complaint was filed.
8. Learned Magistrate referred t
AI
Criminal liability for cheating requires proof of dishonest intent from inception, distinguishing breach of contract from criminal offence.
Fraudulent intent must be established for criminal liability in financial transactions, distinguishing between civil breaches of contract and criminal offenses like cheating.
The main legal point established in the judgment is that the offence of cheating under Sections 415 and 420 of the IPC requires the presence of fraudulent or dishonest intention to induce delivery of....
Inherent powers under Section 482 CrPC do not permit quashing proceedings when prima facie evidence of a crime is present, mandating a trial to ascertain truth.
The power to quash criminal proceedings should be exercised sparingly and only when the allegations do not disclose a prima facie case of a criminal offence.
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.
The court quashed the FIR as it lacked evidence and constituted a civil dispute improperly framed as a criminal matter.
The central legal point established in the judgment is that for an act to constitute an offence under Section 420 of the Penal Code, there must be fraudulent or dishonest inducement, and the absence ....
The court ruled that ongoing civil litigation does not preclude criminal prosecutions where sufficient evidence indicates dishonest intent constituting an offence under Section 420 IPC.
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