The distinction between civil breaches and concurrent criminal liabilities requires investigation to determine the presence of fraudulent intention.

ORAL ORDER

Petitioners being accused Nos.1 and 2 in Cr.No.59/2022 of CEN Crime police station, Mangalore city, registered for the offences punishable under Sections 406 , 409, 417, 418, 420 R/w Section 149 of the Indian Penal Code (for short 'the IPC ') pending on the file of the learned II Additional Senior Civil Judge and JMFC, Mangalore are seeking to quash the criminal proceedings initiated against the petitioners.

2. Brief facts of the case are that respondent No.2 as Developer, petitioner No.1 being the Company, accused No.2- petiitoner No.2 being the Managing Director of petitioner No.1 have entered into a Joint Development Agreement (hereinafter referred to as 'JDA') on 04.06.2015, whereunder petitioners have agreed to give 98.55 cents owned by them to permit respondent No.2 to put up residential apartment complex. As per the terms of 'JDA', respondent No.2 was required to complete the construction and get the completion certificate on or before 13.06.2019 and should have obtained occupancy certificate on or before 13.12.2019.

3. It is the contention of the petitioners that respondent No.2 had not put up any construction worth mentioning and therefore, the petitioners issued a legal notice dated 11.03.2022 demanding for rental compensation for violation of conditions mentioned in 'JDA'. Subsequently, petitioners filed the suit OS.No.255/2022 on 23.05.2022 against respondent No.2 claiming Rs.2.10 crores as compensation for the delay in completion of the project.

4. In the meantime, respondent No.2 filed the information with Urwastore Police Station on 01.03.2022 against the petitioners alleging commission of breach of trust and cheating. However, no FIR came to be registered immediately. An endorsement dated 24.07.2022 as per Annexure-D was issued by CEN crime police station, Mangalore stating that on the basis of the first information dated 01.03.2022 an enquiry was held and they found prima-facie materials for having committed cheating and called upon to file a complaint in that regard.

5. Pursuant to the same, respondent No.2 filed the complaint on 24.07.2022. Upon which, the FIR in Cr.No.59/2022 for the above said offences came to be registered by CEN crime police station, Mangalore city and investigation was undertaken. In the meantime, petitioners have approached this Court seeking to stay the criminal proceedings and an interim order staying the further proceedings was passed. Thus, practically no investigation was undertaken by the police after registration of the FIR.

6. Heard Sri.Anandarama K, learned counsel for the petitioners and Sri. Rangaswamy R, learned High Court Government Pleader for the respondent No.1 and Sri. S.Rajashekar, learned counsel for respondent No.2. Perused the materials on record.

7. In view of the rival contentions urged by learned counsel for both the parties, the point that would arise for my consideration is:

"Whether the petitioners have made out any grounds to allow the petition and to quash the criminal proceedings initiated against them?"

My answer to the above point is in the 'Negative' for the following:

REASONS

8. It is the contention of the petitioners that as per the terms of 'JDA' dated 04.06.2015, respondent No.2 undertook to complete the residential apartment complex on or before 13.06.2019 and get the occupancy certificate on or before 13.12.2019. Respondent No.2 has not carried on any construction work on site. Therefore, he is liable to pay compensation of over