A dispute arising from a lease agreement, where the landlord has received advance rent while executing the lease agreement without disclosing a mortgage and loan default on the property, may not amount to cheating under Section 420 of the IPC if the dispute is primarily of a civil nature and custodial interrogation of the landlord is not essential for the investigation.

ORDER

Dated this the 3rd day of January, 2022 Apprehending arrest in connection with Crime No.176 of

2021 of Elamakkara police station registered for the offences punishable under Section 420 of the Indian Penal Code,the petitioner has preferred this application under Section 438 of the Code of Criminal Procedure.

2. The petitioner is the owner of the 1st floor of a building by name 'Vithayathil Building' located in Edappally North ,Kochi. The defacto complainant is the partner of a clinic functioning on the ground floor of the building. The petitioner for unlawful gain , with the intention to cheat the defacto complainant entered into an agreement of lease making her to believe that the building owned by him is free from encumbrances and liabilities and he could rent out the same to her .So the monthly rent was fixed as Rs.67,500/- for a period of 5 years. Believing his words she paid a sum of Rs.7 lakhs as advance but later, Punjab National Bank and Allahabad bank had taken steps to take over the property to recover the money due to the respective banks as he defaulted the loan availed by him . Without disclosing the said loan transaction, the petitioner had entered into the agreement and received the advance amount as well the monthly rent of one month and thereby, cheated the defacto complainant.

3. Heard the rival contentions.

4. The learned counsel for the petitioner submits that the lease agreement dated 29.8.2019 was executed on mutual understanding for one year with a monthly rent of Rs.67,500/-. As per the agreement she had to pay the rent on before 15th day of every calendar year. She paid rent only for one month ie; for the month of January 2020. A notice was issued to her when the rent fell in arrears. To the notice she gave a reply raising untenable contentions with the intention to avoid payment of rent. Availing a loan by depositing the title deed of the property and leasing out the premises for rent do not come within the purview of cheating. Physical possession of the building was not taken over by the bank and there is absolutely no element of cheating. Moreover, at the maximum it can be treated as a civil dispute.

5. The learned counsel appearing on behalf of the defacto complainant contended that at the time of execution of the agreement itself the property was mortgaged and as the installments were defaulted, the bank had visited the premises and informed that possession will be taken over. She is the tenant of the ground floor of the building owned by the mother of the petitioner. When she demanded back the money paid by her as advance, he made the request for arrears of rent and then she filed the complaint and thus the case was registered. If he is granted pre arrest bail he will influence the witnesses and thus interfere with the investigation of the case. Hence opposed.

6. Admittedly ,the petitioner is the landlord of the building rented out to the defacto complainant for a monthly rent of Rs.67,500/-. The advance received by the petitioner from the defacto complainant is Rs.7 lakhs. The dispute is pertaining to the 1st floor of the building . The ground floor owned by his mother had already been rented out to her. Though the defacto complainant has a case that the bank authorities from where the petitioner had availed loan by mortgaging the property initiated steps to recover the arrears of loan, prima facie it could be seen that the agreement between this petitioner and the defacto complainant is only a lease arrangement. The lease agreement was entered into with specific terms and conditions. The loan was availed by the petitioner for construction of the building by mortgaging his title deed much before the lease agreement. Prima facie the transaction and the lease agreement entered into between the parties ,will not reveal the ingredients to attract an offence under Section 420 of the IPC . The petitioner could settle the arrears due to the bank at any moment. Moreover, the dispute between the partie