B. SURESH Y ADA V v. SHARIF BEE AND ANR

Citation: [2007] 11 S.C.R. 238

Court: Supreme Court of India

Bench: S.B. SINHA, H.S. BEDI

Case summary

B. SURESH Y ADA V v. SHARIF BEE AND ANR.pdf

Judgment text

B. SURESH YADAV v. SHARIFA BEE AND ANR. OCTOBER 12, 2007 [S. B. SINHA AND HARJIT SINGH BEDI, JJ. ] Penal Code, 1860-ss. 415 and 420-Cheating-Agreement of sale-Between the parties-Execution ofsale-Prior to execution, demolition of the construction on the property-Civil suit, for determining whether the construction was part ofthe property sold- During pendency ofthe suit, criminal complaint by vendee against vendor alleging offence ofcheating-Application for quashing the complaint dismissed by High Court-On appeal, held: Complaint liable to be quashed-No case made out against the accused/vendor- The stand ofthe complainantlvendee being inconsistent with her stand in the civil suit, is not reliable-Dispute being essentially ofcivil nature, has to be determined by competent civil court-Code of Criminal i Procedure, 1973-s. 482. Appellant sold certain land to the respondents. Sale deed in respect of the same was executed by the appellant.

One day prior to the execution of the sale deed, two rooms, allegedly, constructed on the said land was demolished. A suit was filed in respect of the dispute as to whether the property whereupon the two rooms were situated was the property forming subject matter ofthe deed ofsale. Respondent No. 1, in the written statement did not allege the demolition by the appellant. During pendency ofthe suit, respondent No. 1 filed a complaint alleging commission of offence by the appellant u/s 420 IPC. Appellant's application u/s 482 Cr. P. C. for G quashing the complaint was dismissed by High Court. Hence the present appeal The question for consideration was whether a case of cheating within meaning ofs. 415 IPC had been made out. ~ B. SURESH YADAVv. SHARIFABEE 239 _. / Allowing the appeal, the Court HELD: 1. While executing the sale deed, the appellant herein did not make any false or misleading representation.

There had also not been any dishonest act ofinducement on his part to do or omit to do anything which he could not have done or omitted to have done if he were not so deceived. Admittedly, the matter is pending bdore t a competent civil court. A decision of a competent court of law is required to be taken in this behalf. Essentially, the dispute between the parties is a civil dispute. [Para 12) [242-F-G] 2. For the purpose ofestablishing the offence ofcheating, the I complainant is required to show that the accused had fraudulent or dishonest intention at the time ofmaking promise or representa(ion. In a case ofthis nature, it is permissible in law to consider the stand taken by a party in a pending civil litigation. However, it does' not . mean that the liability ofa person cannot be both civil and crim~nal at the same time.

But when a stand has been taken in a complaint ;petition which is contrary to or inconsistent with the stand taken by him in a civil suit, it assumes significance. As the deed of sale was 't ~ -. executed on 30. 9. 2005 and the purported demolition took plac~ on 29. 9. 2005, it was expected that the complainant/first respon4ent would come out with her real grievance in the written statement filed by her in the suit. She, for reasons best known to her, did not choose to do so. Thus, in the facts and circumstances obtaining herein, no case has been made out for proceeding with the criminal case. [Paras 13 and 14) [242-H; 243-A-D] ,. , G. Sagar Suri and Anr. v. State ofUP. and Ors. , (2000] 2 SCC ~ . 636; Anil Mahajan v. Bhor Industries Ltd. and Anr. , [2005] 10 SCC 228 and Hira Lal Hari Lal Bhagwati v. CBI, New Delhi, [2003] 5 SCC 257, relied on Hira Lal Hari Lal Bhagwativ. CBI, New Delhi, (2005) 3 SCC 670 and Indian Oil Corporation v. NEPC India Ltd andOrs.

, [2006) 6 SCC -+ 736, referred to CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 1444 of 2007. From the Judgment and final Order dated 6. 11. 2006 of the High Court of Andhra Pradesh in Criminal Petition No. 3498 of2006. M. N. Rao, T. N. Rao, P. Sriniwas Reddy, Manjeet Kirpal and Paramjeet for the Appellant. Naveen R. Nath for the Respondent. + The Judgment ofthe Court was delivered by r"---- 1 S. B. SINHA, J. 1. Leave granted. 2. An application for quashing the complaint being CC No. 216 of 2006 filed in the Court of the Metropolitan Magistrate, Cyberabad_at Malkagiri filed the petitioner under Secti_Q'n 482 ofthe Code ofCriminal Procedure, has been dismissed_~y the High Court ofAndhra Pradesh by reason ofthe impugned judgment. 3. Basic fact ofthe matter is not in dispute. ~ 4. First respondent herein filed a complaint petition. The parties hereto entered into an agreement for sale in respect of a house ' -( admeasuring 350 square yards for a consideration ofRs. 23,80,000/-.

A sum of Rs. 5,00,000/- was paid by way of advance. A sale deed was executed on 30. 9. 2005 by the appellant herein on receipt ofthe balance sum ofRs. 18,79,000/-. 5. Indisputably on or about 29. 9. 2005, two rooms, allegedly, constructed on the said lands were demolished. A suit was filed in relation thereto. Respondent No. 1 was also defendant in the said suit. In the written 't statement, she stated : . "' "Whereas it is the Plainti. ffs who by demolishing existing stmcture when the defendant No. 2 and her family members are away and even the electricity connection meter was thrown away and in that regard this defendant No. 2 herein has reported the matter to the concerned police and this Plaintiffs herein have also filed a caveat +application having got signed the same in the affidavit. And whereas before this Hon'ble Court, the same Plaintiffs herein has put his thumb impression and the Plaintiffherein by taking advantage of B. SURESH YADAV v. SHARIFABEE [SINHA, J.

] 241 _J ad interim orders, are trying to forcibly encroach upon the suit schedule property. " 6. Respondent herein, in the said suit, inter alia, contended that the suit properties are different from the subject matter ofthe deed ofsale. Although the aforementioned written statement was filed only iri March, 2006, first respondent herein filed a complaint in the court ofMetropolitar;i Magistrate, Cyberabad at Neredmet alleging commission ofan offence 1 by the appellant purported to be under Section 420 ofthe Indian Penal Code. 7. Submission ofMr. M. N. Rao, learned Senior Counsel appearing on behalfofthe appellant, is that the allegations contained in the complaint petition, even ifgiven face value and taken to be correct in their entirety, do not disclose any offence. Learned counsel would contend that from perusal ofthe written statement filed by the first respondent, it would appear that she at all material times was aware ofthe purported demolition ofthe said rooms. ~ 8.

Section 415 of the Indian Penal Code reads thus : ) "Section 415 - "Cheating" Whoever, by deceiving any person, I"! fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit ifhe were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, min4 reputation or prope11y, is said to "cheat". "f t , Explanation,-A dishonest concealment of facts is a deception within the meaning ofthis section. " Section 415 of the Indian Penal Code is required to be read with the definition ofthe expression 'dishonestly' as contained in Section 24 thereof in terms whereof something must be done with an intention of causing wrongful gain to one person or wrongful loss to another. 9.

There exists a dispute as to whether the property whereupon the --r-·· A said two rooms were allegedly situated was the same property forming the subject matter ofthe deed ofsale or not. A civil suit has already been filed in relation thereto. Respondent No. I herein was aware ofthe fact that the said two rooms stood demolished. It is furthermore not in dispute that the demolition was not caused by the appellant herein. In her written B statement filed in the said suit, the first respondent did not make any allegation against the appellant herein. The High Court, in its judgment, + inter alia, opined that,primafacie, the appellant concealed the fa~t of demolition ofthe premises from the first respondent before execution of the aforementioned deed of sale. 10. The short question which arises for consideration is as to whether case ofcheating within the meaning of Section 415 ofthe Indian Penal Code has been made out or not. 11.

Ingredients ofcheating are : (i) deception ofa person either by making a false or misleading representation or by other action or omission; and (ii) fraudulent or dishonest inducement ofthat person to either deliver any property to any person or to consent to the retention thereofby any person or to intentionally induce that person to do or omit to do anything which he would not do or omit ifhe were not so deceived and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property. 12. While executing the sale deed, the appellant herein did not make any false or misleading representation. There had also not been any . -j dishonest act ofinducement on his part to do or omit to do anything which he could not have done or omitted to have done if he were not so deceived. Admittedly, the matter is pending before a competent civil court. G A decision of a competent court of law is required to be taken in this behalf.

Essentially, the dispute between the parties is a civil dispute. · 13. For the purpose of establishing the offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time ofmaking promise or representation. In a - -I case ofthis nature, it is permissible in law to consider the stand taken by a party in a pending civil litigation. We do not, however, mean to lay down a law that the liability ofa person cannot be both civil and criminal at the same time. But when a stand has been taken in a complaint petition which is contrary to or inconsistent with the stand taken by him in a civil s). lit, it assumes significance. Had the fact as purported to have been represented before us that the appellant herein got the said two rooms demolished and concealed the said fact at the time ofexecution ofthe deed ofsale, i the matter might have been different. As the deed ofsale was executed on 30. 9.

2005 and the purported demolition took place on 29. 9. 2005, it was expected that the complainant/first respondentwould come out with her real grievance in the written statement filed by her in the aforementioned suit. She, for reasons best known to her, did not choose to do so. 14. In this view ofthe matter, we are ofthe opinion that in the facts and circumstances obtaining herein, no case has been made out for proceeding with the criminal case. 15. In G. Sagar Suri & Anr. v. State of UP. & Ors. , [2000] 2 ..! ' SCC 636], this Court opined : . \ "8. Jurisdiction under Section 482 ofthe Code has to be exercised . with great care. In exercise ofits jurisdiction the High Court is q. ot to examine the matter superficially. It is to be seen ifa matter, which is essentially ofa civil nature, has been given a cloak ofcriminal offence. Criminal proceedings are not a short cut ofother remedies available in law. Before issuing process a criminal court has to exercise a great deal of caution.

For the accused it is a serious -. ( matter. This Court has laid certain principles on the basis ofwhich the High Court is to exercise its jurisdiction under Section 482 0f p. ' the Code. Jurisdiction under this section has to be exercised to prevent abuse ofthe process ofany court or otherwise to secure the ends ofjustice. Therein, having regard to the fact that a criminal complaint under - ,__. _ Section 138 ofthe Negotiable Instruments Act had already been pending, the criminal complaint under Section 406/420 found to be an abuse of the due process of law. 16. In Anil Mahajan v. Bhor Industries Ltd & Anr. , [2005] 10 sec 228], this Court held : "8. The substance ofthe complaint is to be seen. Mere use ofthe expression "cheating" in the complaint is ofno consequence.

Except mention ofthe words "deceive" and "cheat" in the complaint filed before the Magistrate and "cheating" in the complaint filed before the police, there is no averment about the deceit, cheating or + fraudulent intention ofthe accused at the time ofentering into MOU wherefrom it can be inferred that the accused had the intention to deceive the complainant to pay. According to the complainant, a sum ofRs. 3,05,39,086 out ofthe total amount ofRs. 3,38,62,860 was paid leaving balance ofRs. 33,23,774. We need not go into the question ofthe difference of the amounts mentioned in the complaint which is much more than what is mentioned in the notice and also the defence of the accused and the stand taken in reply to notice because the complainant's own case is that over rupees three crores was paid and for balance, the accused was giving reasons as above-noticed.

The additional reason for not going into these aspects is that a civil suit is pending inter se the parties for the arriounts in question. " 17. In Hira Lal Hari Lal Bhagwati v. CBI, New Delhi, [2003] 5 SCC 257, this Court opined: "It is settled law, by a catena ofdecisions, that for establishing the offence ofcheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time ofmaking promise or representation. From his making failure to keep promise subsequently, such a culpable intention right at the beginning that is at the time when the promise was made cannot be presumed. It is seen from the records that the exemption certificate contained necessary conditions which were required to be complied with after importation ofthe machine. Since the GCS could not comply with it, therefore, it rightly paid the necessary duties without taking advantage ofthe exemption certificate.

The conduct of the GCS clearly indicates that there was no fraudulent or dishonest intention of either the GCS or the appellants in their capacities as officebearers right at the time ofmaking application for exemption . As there was absence of dishonest and fraudulent intention, the question ofcommitting offence under Section 420 ofthe Indian Penal Code does not arise. " {See also Hira Lal Hari Lal Bhagwati v. CBI, New Delhi, [2005] 3 SCC 670 and Indian Oil C01poration v. NEPC India Ltd & Ors. , 1 [2006J 6 sec 736]}. 18. For the reasons aforementioned, the impugnedjudgment cannot be sustained. It is set aside accordingly. Appeal is allowed. No costs. K. K. T. Appeal allowed. ..