Fraudulent intent must be established for criminal liability in financial transactions, distinguishing between civil breaches of contract and criminal offenses like cheating.

ORDER :

1. This Criminal Petition is filed under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (previously Section 482 of the Code of Criminal Procedure, 1973) by the petitioners-accused Nos.1 to 3 seeking to quash the proceedings against them in Crime No.231 of 2024 of EOW Team VI, CCS, DD, Hyderabad, registered for the offences under Sections 403 , 406, 420 and 506 read with 120-B of the Indian Penal Code (hereinafter referred as ‘ IPC ’).

2. Heard Mr. T.Pradyumna Kumar Reddy, learned Senior Counsel representing Mr. S.Ganesh, learned counsel for the petitioners, Mr. G.Ashok Reddy, learned counsel representing Mr. K.V.Rusheek Reddy, learned counsel for respondent No.2 and Mr. M.Ramachandra Reddy, learned Additional Public Prosecutor for respondent No.1-State. Perused the record.

3. Factual Matrix:

3.1. The de facto complainant, a designated partner in UBRS Housing and Infra Developers LLP and Bathala Housing and Infra Developers LLP, and also engaged in hotel and real estate businesses, sought to invest in land, in and around Hyderabad in 2019. 3.2. Through his relative namely RTV Prasad, the de facto complainant came into contact with petitioner-accused No.1, who is the Managing Partner of M/s. Vision Ventures, which is an Unregistered Partnership Firm i.e., petitioner-accused No.2. The petitioner-accused No.1 represented that he was desirous to be a Facilitator in arranging lands in and around Hyderabad, especially in Maheshwaram for either purchase or development purposes. He further represented that he was holding Agreements of Sale in his favour in respect of certain agricultural lands situated in Maheshwaram, Ranga Reddy District; that he had earlier sold those lands to third parties and also shown Agreements of Sale to the de facto complainant.

3.3. Believing the representations of petitioner-accused No.1, the de facto complainant agreed to purchase the lands from him. Stating that the sale deeds would take time to get registered, the petitioner- accused No.1 induced the de facto complainant to enter into Memoranda of Understanding, dated 24.06.2019 and 19.09.2019 for Ac.36.00 guntas in Sy.Nos.280 and 281 and Ac.120.00 guntas in various survey numbers, respectively. Pursuant to these MOUs, the de facto complainant transferred Rs.3.42 crores into the bank account of petitioner-accused No.1.

3.4. After few days, the petitioner-accused No.1 informed the de facto complainant that he is developing another venture in respect of lands belonging to his son i.e., petitioner-accused No.3 along with a related firm namely M/s. Sri Sai Balaji Developers i.e., accused No.4 to an extent of 42,422 square yards. Trusting him, the de facto complainant entered into an Agreement of Sale of Properties, dated 04.10.2019, with petitioner-accused No.3 and accused No.4 and made a payment of Rs.1,00,00,000/- to them. However, upon receiving the said Agreement of Sale, the de facto complainant noticed that only Rs.90,00,000/- was recorded as payment, instead of Rs.1,00,00,000/-. On being questioned, the petitioner-accused No.1 assured that the accounts would be adjusted later, since the entire amount had been transferred through bank transactions.

3.5. Despite the payments and repeated assurances, petitioner- accused No.1 failed to transfer or register any land in favour of the de facto complainant. In the last week of November, 2019, the petitioner-accused No.1 informed the de facto complainant that he could not perform his obligations under the Memoranda of Understanding, dated 24.06.2019 and 19.09.2019, and agreed to repay Rs.3.42 crores within six months with 36% annual interest. In partial fulfillment, he had transferred Rs.40,00,000/- on 28.11.2019, 29.11.2019 and 05.12.2019 to UBRS.

3.6. Again in June, 2021, the petitioner-accused No.1 induced the de facto complainant to invest in lands owned by the Islamic Social Services Society (hereinafter referred to as ‘Society’), stating that it owns Ac.428.00 gts. in Maheshwaram Mandal, Ran