(V. Gopala Gowda and Adarsh Kumar Goel, JJ.)
M. Suresh etc. ______________________________________ Appellant(s)
v.
State of A.P. & Another __________________________ Respondent(s)
Criminal Appeal Nos. 617-618 of 2016, decided on July 11, 2016
[Arising out of S.L.P. (Crl.) Nos. 5657-5658 of 2012]
The Order of the court was delivered by
Order
1. These appeals have been preferred against the order dated 30th March, 2012 passed by the High Court of Andhra Pradesh in Criminal Petition Nos. 7657 of 2009 and 7588 of 2010, whereby the High Court has declined to quash the proceedings initiated against the appellants by respondent No. 2 by filing a criminal complaint bearing CC No. 1736 of 2006 dated 26th June 2006 before the III Addl. Chief Metropolitan Magistrate at Hyderabad. The appellants are named as accused Nos. 1 and 2 respectively.
2. The case set out in the complaint is that accused No. 2 (A 2) introduced accused No. 1 (A 1) as owner of the land admeasuring 39 acres 19 guntas in the State of Karnataka. A-2 assured the complainant that A-1 was a genuine person and the complainant agreed to purchase the land in December, 2004 and paid Rs. 10 Lacs as advance. On 22nd January, 2005 a MOU was also entered into between the complainants and A-1. A-3 and A-4 were the witnesses. In all, a sum of Rs. 85 Lacs was paid by the complainant by way of demand drafts to A-1. The accused were to hand over the documents of the property before 15th April, 2015 to enable the complainant to arrange the loan from the banks. Since this was not done, the complainant asked the accused to either return his money or to comply with the commitments. A-1 paid two cheques dated 5th May, 2005 for Rs. 7 Lacs and Rs. 85 Lacs respectively but the cheques were dishonoured. Thereafter, negotiations took place between the parties and the complainant arranged bank draft of Rs. 1 crore on 5th September, 2005 to complete the deal on the condition that copies of documents will be made available to him. But when the complainant received no response, he believed that the appellants had cheated him by making him to pay Rs. 85 Lacs and further making him to arrange a sum of Rs. 1 crore. A-1 executed sale deeds in favour of A-2 pertaining to part of the said land which showed that A-1 was not going to complete the deal.
3. The appellant sought quashing of the criminal proceedings on the plea that it was a civil dispute and the appellants-accused had paid to the complainant an amount of Rs. 95 Lacs as follows:
Sl. No. | D.D. No. | Date | Amount |
1. | 005950 | 25-9-2006 | 10,00,000/- |
2. | 005951 | 25-9-2006 | 10,00,000/- |
3 | 005952 | 25-9-2006 | 10,00,000/- |
4. | 005954 | 25-9-2006 | 5,00,000/- |
5. | 005956 | 7-10-2006 | 22,00,000/- |
6. | 007556 | 7-10-2006 | 20,00,000/- |
7. | 007557 | 7-10-2006 | 8,00,000/- |
8. | 007560 | 7-10-2006 | 10,00,000/- |
Total amount | Rs. 95,00,000/- |
4. The above payment was against receipt of Rs. 85 Lacs by the appellants. According to the appellants the payment covered the principal as well as interest.
5. It was further submitted by the appellants that the deal between the parties could not materialize because of market conditions but no inference could be drawn that the appellants had the intention to cheat. Respondent No. 2 complainant had already received the entire amount paid by A-1 with interest and the MOU has been cancelled. The complainant also did not file any suit.
6. The High Court declined to quash the complaint. It held that the complainant had paid to the accused a sum of Rs. 85 Lacs. The accused issued two cheques of Rs. 7 Lacs and Rs. 85 Lacs for returning the said amount but the cheques were dishonoured. Thereafter, accused has paid a sum of Rs. 95 Lacs as against the amount of Rs. 85 Lacs paid by the complainant. Since the payment was made after filing of the complaint, a case of cheating was made out. The operative part of the order is as follows:
“The contention of the petitioners’ counsel cannot be accepted since the said cheques for Rs. 85,00,000/- and Rs. 7,00,000/- were dishonoured as the payment was stopped by the drawer and the payment of Rs. 95,00,000/- on different dates as mentioned in the petition is subsequent to filing of the complaint. Simply making of the payment of the amount subsequent to filing of the complaint does not absolve the criminal liability of the petitioner. Thus, the complaint filed by the respondent No. 2 prima facie establishes an offence under Section 420 IPC against the petitioners and the petitioners are not entitled for quashing of the proceedings as prayed for.”
7. When the appeals came up for hearing on 6th August, 2012, this Court has passed the following order:
“Issue Notice.
There shall be stay of further proceedings in the meantime.”
8. A counter affidavit has also been filed by the complainant.
9. We have perused the record and heard learned counsel for the State and the learned counsel for the complainant. It is patent that the dispute between the parties is purely of civil nature. Transaction of sale of the land was not finalized between the parties. As against the payment of Rs. 85 Lacs by the complainant, the A-1 has returned a sum of Rs. 95 Lacs which has not been disputed by the complainant. In the counter affidavit, it has been further stated that the complainant has executed a deal of cancellation of the agreement dated 9th October, 2006 under which the accused was to pay a sum of Rs. 1.25 Crores upon which the complainant was to withdraw the complaint. But, the two cheques of Rs. 15 Lacs each have been dishonoured and thus, a case for cheating has been made out.
10. We find from the documents on record, particularly the counter affidavit of the respondent himself and the cancellation deed dated 9th October, 2006 filed along with the counter affidavit that the dispute between the parties is purely of civil nature. Even the stand of the complainant is that the matter has already been resolved and the complainant has already received the amount of Rs. 95 Lacs against the payment of Rs. 85 Lacs. However, according to him, the appellants were liable to pay further sum of Rs. 30 Lacs as the cheques for the said amount have been dishonoured. Mere fact that the cheques have been dishonoured and the appellants may be liable to pay further amount to the complainant will not by itself make out a case of cheating. It is a dispute for which the respondent-complainant can take his remedies under the law. We are conscious that merely because a case involves a civil dispute does not by itself bar remedy under criminal law if a case is made out. At the same time, process of criminal law cannot be pressed into service merely for settling a civil dispute when no offence is committed. Law on the point is well settled in series of judgments of this Court including Hridaya Ranjan Pd. Verma v. State of Bihar1, Anil Mahajan v. Bhor Industries Ltd.2, Indian Oil Corporation v. NEPC India Ltd.3, Inder Mohan Goswami v. State of Uttaranchal4 and Chandran Ratnaswami v. K.C. Palanisamy5.
11. We are satisfied that in the present case the criminal complaint filed by respondent No. 2 is abuse of process of law and cannot be sustained.
12. Accordingly, while allowing these appeals we quash the impugned complaint and proceedings against the appellants in the said criminal case. This will, however, be without prejudice to any other remedies of respondent No. 2 under the law.
Petition(s) for Special Leave to Appeal (Crl.) No(s). 5657-5658/2012
M. Suresh etc _____________________________________ Petitioner(s)
v.
State of A.P. & Anr ______________________________ Respondent(s)
Date: 11/07/2016 These petitions were called on for hearing today.
(Before V. Gopala Gowda and Adarsh Kumar Goel, JJ.)
For Petitioner(s)
For Respondent(s) Mr. S. Udaya Kumar Sagar, Adv.
Mr. D. Mahesh Babu, Adv.
Ms. Tatini Basu, Adv.
UPON hearing the counsel the Court made the following
Order
13. Leave granted.
14. The appeals are allowed in terms of the signed order.
15. Pending application(s), if any, stand(s) disposed of.
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1 (2000) 4 SCC 168
2 (2005) 10 SCC 228
3 (2006) 6 SCC 736
4 (2007) 12 SCC 1
5 (2013) 6 SCC 740
