THE HONOURABLE SMT. JUSTICE K. SUJANA CRIMINAL PETITION No.3540 of 2025

ORDER:

This Criminal Petition is filed seeking to quash the proceedings against the petitioner/accused in C.C.No.10796 of 2022 on the file of the learned XII Additional Chief Metropolitan Magistrate, Nampally, Hyderabad, registered for the offences punishable under Sections 406 and 420 read with 34 of the Indian Penal Code, 1860.

2. The brief facts of the case are that on 15.09.2022 respondent No.2/de facto complainant lodged a complaint against the petitioner and other accused stating that he, along with his brothers, runs a readymade garments shop under the name "Step Up" at Ramgopalpet, Secunderabad. He has known Mr.Mohd.Hasan Ali and Mr.Mohd.Asad Ali, who are brothers and proprietors of "Abid Jewellers" at Gulzar House, Hyderabad, for about 30 years. In June 2021, the complainant informed Asad Ali of his interest in purchasing a property in the Baba Nagar area. Subsequently, Hasan Ali and Asad Ali offered to sell their property bearing H.No.18-1-350/22/157, admeasuring 200 sq. yards, situated at Phoolbagh, Kanchanbagh, Hyderabad, stating they required funds to expand their business. Following mutual discussions and site inspection, both parties agreed to a total sale consideration of Rs.2,75,00,000/-, of which Rs.2 crores was paid by the complainant and his brothers. An Agreement of Sale dated 13.10.2021 was executed, signed by Asad Ali and also by Hasan Ali and his wife, with a separate receipt acknowledging receipt of Rs.2 crores, with the balance to be paid at the time of registration.

3. Despite several requests by the complainant and his brothers to execute a registered Sale Deed, the sellers avoided compliance and eventually refused to sell the property, stating they no longer required funds and even issued threats. Though they later agreed to return the Rs.2 crores and issued cheques in the names of the complainant and his brothers, the cheques were dishonoured upon presentation. It was subsequently discovered that the sellers had mortgaged the said property to M/s. Ambit Finvest Pvt. Ltd. by executing a simple mortgage without possession, thereby causing wrongful loss of Rs.2 crores to the complainant.

4. Basing on the said complaint, the Police registered a case in Crime No.189 of 2022 before the EOW Team I, CCS DD Police Station, Hyderabad for the offences punishable under Sections 406 and 420 read with 34 of the Indian Penal Code, 1860 and after completion of investigation, they filed charge sheet vide C.C.No.10796 of 2022 before the learned XII Additional Chief Metropolitan Magistrate, Nampally, Hyderabad. Aggrieved thereby, the petitioner/accused No.1 filed the present criminal petition to quash the proceedings against him.

5. Heard Sri C. Sharan Reddy, learned counsel appearing on behalf of the petitioner as well as Sri M. Vivekananda Reddy, learned Assistant Public Prosecutor appearing on behalf of respondent No.1 - State and Sri P. Vamsheedhar Reddy, learned counsel appearing on behalf of respondent No.2.

6. Learned counsel for the petitioner submitted that the petitioner is innocent of the offences alleged against him and that the contents of the complaint do not disclose the ingredients necessary to constitute the offence of cheating or criminal breach of trust. He further submitted that there was no dishonest or fraudulent intention on the part of the petitioner at the inception of the transaction, which is a prerequisite to attract the provisions of Sections 406 and 420 IPC and that the mere dishonour of the cheques issued subsequently, in the absence of any specific allegation that the petitioner intended to cheat the complainants (LWs.1 and 2) from the very beginning, would not amount to a criminal offence.

7. Learned counsel for the petitioner contended that the dispute arising from the alleged failure to register the property in favour of the complainants gives rise to a purely civil cause of action and does not warrant criminal pros