Fraudulent intent must be established for criminal liability under Section 420 IPC; mere breach of contract is insufficient for prosecution.

1. Criminal Revision Case No.592 of 2009 is preferred by A3 and Criminal Revision Case No.598 of 2009 is preferred by A1 and A2.

Since the revision petitioners are accused in C.C.No.562 of 2004, in which the revision petitioners were convicted, both the revisions are disposed of by way of this Common Order.

2. Briefly, the case of the prosecution is that A1 and A2 launched a scheme in the name of M/s.Sri Lakshmi Priya Nagar-II house sites scheme at the outskirts of the city in Abdullapurmet village of Hayathnagar Mandal. Wide publicity was given for sale of plots and accordingly several hundred members joined in the scheme and paid installment amounts, including registration charges.

Allegations are that; i) documents were not executed nor the money returned; (ii) though sale deeds were registered, possession was not given; (iii) A1 executed sale deeds in favour of some of the members as G.P.A holder. However, his GPA was cancelled subsequently; iv) Thereafter, A1 and A2 closed their office and absconded. A3 to A6 were also responsible for running the company and cheating the victims.

3. The trial Court examined P.Ws.1 to 37 and marked Exs.P1 to P133 on behalf of the prosecution. Exs.D1 to D33 were marked on behalf of the defence. The trial Court found A1 to A4 and A6 guilty and sentenced them to undergo rigorous imprisonment for a period of two years each for the offence under Section 420 IPC. They are also convicted under Section 120-B IPC and sentenced to undergo rigorous imprisonment for a period of one year vide judgment in C.C.No.562 of 2004 dated 25.10.2007 passed by the VI Additional Chief Metropolitan Magistrate, Hyderabad.

4. A1 and A2 preferred Criminal Appeal No.447 of 2007 and A3 preferred Criminal Appeal No.439 of 2007. Both the appeals were disposed of by the IV Additional Metropolitan Sessions Judge, Nampally on 07.04.2009, confirming the conviction under Section 420 IPC. However, accused were acquitted under Section 120-B IPC.

5. Learned counsel appearing for A1 and A2 submits that the charge framed against the accused is defective. The evidence adduced was pertaining to different venture, however charge framed was for another venture. It has caused prejudice to the accused for not framing charge with regard to the correct venture. Once the accused acquitted under Section 120-B IPC and no criminal conspiracy was found by the appellate Court, the question of cheating the victims with collusion with one another does not arise.

In fact, in the present facts, several members of the scheme who purchased plots filed civil suits and suits were decreed in their favour. It is not in dispute that there was no land, as such, transactions in question are purely civil in nature. If the amounts were paid and the plots were not registered, the members had to approach the civil Court by filing suit for specific performance. No case is made out for the offence under Section 420 IPC as none of the ingredients are satisfied.

6. Learned counsel for A3 would submit that the company was registered in November, 1993 and A3 was inducted as Director in the year 2000 and the question of colluding with the other directors in the company does not arise. In fact, acquittal was recorded by the Sessions Court for the offence under Section 120-B IPC. If the members were cheated by the company, the company had to be made as an accused and in the absence of making the company as accused, A3 cannot be prosecuted for the offence of cheating. When the civil suits are filed and decreed, it is for the members to seek remedy before the civil Court and it is not the case that the land was not available. Possession not being given is purely civil dispute.

Further, none of the witnesses have specifically stated that they were induced by A3 in any manner to join the scheme for purchase of plot or to make any payment towards purchase of plot.

7. Learned counsel relied on the judgment of Hon’ble Supreme Court in the case of N.Raghavender v. State of Andhra Pra