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W.P.No.57102/2016
1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 16TH DAY OF JULY 2021 BEFORE
THE HON’BLE MRS. JUSTICE K.S.MUDAGAL
WRIT PETITION No.57102/2016 (GM-RES)
BETWEEN:
M.B.RUDRAMUNI S/O LATE M BASAPPA AGED ABOUT 40 YEARS
M.B.RAJENDRA S/O LATE M BASAPPA AGED ABOUT 40 YEARS
BOTH ARE R/AT NO.480 5TH MAIN, 8TH CROSS VIJAYA BANK LAYOUT BILLEKALLY POST BANNERGHATTA ROAD BANGALORE - 560 076
…PETITIONERS
(BY SRI RAVI B NAIK, SENIOR COUNSEL FOR SRI S.B.TOTAD, ADVOCATE)
AND:
THE STATE BY HULIMAVU POLICE STATION REP. BY ITS STATE PUBLIC PROSECUTOR HIGH COURT BUILDING BANGALORE – 560 001
WINDSOR GARDEN PVT. LTD., NO.81, 36TH CROSS 6TH MAIN, 5TH BLOCK JAYANAGARA, BANGALORE – 560 041 REP. BY ITS MANAGING DIRECTOR …RESPONDENTS
(BY SRI K.S.ABHIJITH, HCGP FOR R1; SRI MANU.K, ADVOCATE FOR R2)
W.P.No.57102/2016
2 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA READ WITH SECTION 482 OF CR.P.C. PRAYING TO QUASH THE PROCEEDINGS IN PCR NO.7038/2016 (ANNEXURE-A) PENDING ON THE FILE OF THE IV ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU ETC.
THIS WRIT PETITION COMING ON FOR ORDERS THIS DAY, THE COURT THROUGH VIDEO CONFERENCE MADE THE FOLLOWING:
O R D E R
Though the matter is listed for hearing on the interim application, with consent of both side, the matter is taken up for final disposal.
Petitioners are accused Nos.1 and 2 in Crime No.509/2016 and Crime No.624/2016 of Hulimavu Police Station. Petitioner No.1 is the owner of agricultural land bearing Survey No.64/2 measuring 1 acres 14.08 guntas and petitioner No.2 is the owner of land bearing Survey No.48/3 measuring 20 guntas situated within Yelachenalli Village, Begur Hobli, Bengaluru.
On 08.08.2012, petitioner Nos.1 and 2 entered into two separate unregistered agreements of sale respectively in respect of the said lands with respondent No.2. On 10.08.2012 parties again entered into two
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3 separate agreement of sales in respect of the very same properties. Petitioner Nos.1 and 2 received part consideration of Rs.2,20,00,000/- and Rs.80,00,000/- respectively.
Respondent No.2 filed O.S.No.1001/2015 and O.S.No.1002/2015 against the petitioners before II Additional Senior Civil Judge, Bengaluru Rural District for specific performance of contract. On 05.07.2016, respondent No.2 filed complaint as per Annexure-A in PCR No.7038/2016 against the petitioners to prosecute them for the offences punishable under Sections 406 and 420 of IPC alleging that though the petitioners received Rs.3,00,00,000/- under registered agreement and Rs.1,00,00,000/- under unregistered agreement in all amounting to Rs.4,00,00,000/- have not executed the sale deed to cheat it.
Learned Magistrate acting under Section 156(3) of Cr.P.C. vide order Annexure-B referred the said complaint to respondent No.1 police for investigation. On that basis, respondent No.1 police registered first
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4 information report as per Annexure-C in Crime No.509/2016 against the petitioners for the offences punishable under Sections 406 and 420 of IPC.
In O.S.No.1001/2015 and O.S.No.1002/2015, the petitioners filed their written statements on 26.11.2015 and 06.01.2016 respectively. The petitioners claim that on 03.06.2016, one Muralidhar, General Power of Attorney Holder of respondent No.2 under the registered cancellation deed dated 03.06.2016 cancelled the agreement of sales entered into in favour of respondent No.2. On the same day, the petitioners sold the said properties to Nandi Housing Pvt. Ltd. Bengaluru.
On 29.09.2016, respondent No.2 filed another complaint before respondent No.1 police as per Annexure- D against the petitioners, said Muralidhar, the Senior Sub- Registrar, Begur and Director of Nandi Housing Pvt. Ltd. alleging that said Muralidhar was rank stranger to respondent No.2 company and in collusion with the said Muralidhar, Senior Sub-Registrar, Begur, Director of Nandi
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5 Housing Pvt. Ltd. the petitioners forged the cancellation deeds etc.
In the complaint Annexure - D respondent No.2 alleged that by forging such General Power of Attorney and cancellation deeds the petitioners and the other accused have cheated them of the sale consideration received by the petitioners and of the property.
Based on that complaint, respondent No.1 police registered first information report Annexure – E in Crime No.624/2016 for the offences punishable under Sections 120B, 406, 471, 468, 419 and 420 of IPC. In that first information report, the petitioners were arrayed as accused Nos.1 and 2, Muralidhar, the Senior Sub-Registrar and the Managing Director of Nandi Housing Pvt. Ltd., was arrayed as accused Nos.3, 4 and 5 respectively.
The petitioners seek quashing of the complaint as per Annexure – ‘A’, first information report Annexure – 'C’, the order of the learned Magistrate referring the first complaint to the police for investigation as per Annexure –
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6 ‘B’ and the 2nd complaint as per Annexure – ‘D’ and first information reports as per Annexure – ‘E’ on the following grounds: i) The reference of the first complaint by the learned Magistrate for investigation to the police is contrary to Sections 154 and 156 of Cr.P.C.; ii) The dispute between the parties is purely a civil dispute. Having filed the suits for specific performance, respondent No.2 could not maintain the complaint; and iii) On the same set of facts, the registration of the second complaint was not permissible.
Reiterating the petition averments, Sri Ravi B. Naik, learned Senior counsel appearing for Sri. S.B.Totad, advocate on record seeks quashing of Annexures – ‘A’ to ‘E’. 12. In support of his contentions, he relies on the following judgments: i) Inder Mohan Goswami and another vs. State of Uttaranchal and others1
1 (2007) 12 SCC 1
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7 ii) Rashmi Jain vs. State of Uttar Pradesh and another2
iii) Anju vs. State of Uttar Pradesh and another3
iv) T.T.Antony vs. State of Kerala and others4
iv) Thermax Limited and others vs. K.M. Johny and others5
v) Priyanka Srivastava and another vs. State of Uttar Pradesh and others6
Respondent No.2 files his statement of objections opposing the petition. Reiterating the averments in the statement of objections, Sri.Manu K., learned counsel for respondent No.2 opposes the petition on the following grounds:
i) Even if the facts alleged constitute both civil and criminal wrongs, if allegations prima facie make out an offence, there is no bar for availing the remedy under the criminal justice administration;
ii) When the first complaint was filed, respondent No.2 was not at all aware of the alleged cancellation
2 (2014) 13 SCC 553 3 (2013) 6 SCC 384 4 (2001) 6 SCC 181 5 (2011) 13 SCC 412 6 (2015) 6 SCC 287
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8 agreements dated 03.06.2016. Therefore, it could not state anything about that in the first complaint;
iii) Accused No.3 was a rank stranger to respondent No.2 and the General Power of Attorney was forged. They are all the matter of trial. The very fact of selling the property to respondent No.5 on the very date of cancellation deed in quick succession shows the fraudulent intention of all the accused. Under such circumstances, at this stage first information cannot be quashed; iv) The second complaint was based on the further development after the first complaint. Therefore, that constitutes the distinct and independent offences than the one alleged in the first complaint. Therefore, both the complaints are maintainable;
v) Respondent No.2 came to know about the cancellation deeds only when its establishment was raided by the Income Tax department and during those proceedings, the Income Tax Authorities divulged to respondent No.2 about the refund of sale consideration by cash. Respondent No.2 was penalized with Rs.90 lakhs for entering into cash transaction. Respondent No.2 has lost
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9 Rs.90 lakhs by way of penalty and part consideration paid to the petitioner as well as the property and made to litigate. If proceedings are quashed, respondent No.2 will be put to injustice.
In support of his contentions, he relied upon the following judgments: i) Ganga Dhar Kalita vs. State of Assam and others7
ii) Suryalakshmi Cotton Mills Limited vs. Rajvir Industries Limited and others8
iii) Awadesh Kumar Jha alias Akhilesh Kumar Jha and another vs. State of Bihar9
iv) Indian Oil Corpn. vs. NEPC India Ltd. and others10
Sri K.S.Abhijith, learned HCGP adopting the arguments of respondent No.2 further submits that the case is still at the investigation stage and the investigation cannot be scuttled at the inception only.
Reg. compliance of Sections 154 and 156 of Cr.P.C., in the order of reference Annexure – B:
The first complaint Annexure A was submitted before the IV Additional Chief Metropolitan Magistrate,
7 (2015) 9 SCC 647 8 (2008) 13 SCC 678 9 (2016) 3 SCC 8 10 (2006) 6 SCC 736
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10 Bengaluru. The learned Magistrate referred the said complaint to the police exercising its power under Section 156(3) of Cr.P.C. The offences alleged in the case were cognizable offences. Based on that, first information report Annexure – ‘C’ was registered for the cognizable offences.
In para 12 of the complaint, it was only stated that a complaint was also given to the jurisdictional police but police said that they need the Court’s direction for investigation. Section 154 (1) of Cr.P.C., states that when information is given to the police regarding cognizable offences, it is mandatory to register the first information report.
Section 154(3) of Cr.P.C., states that if the police officer refused to register the first information report the aggrieved person may send the substance of such information, in writing by post, to the Superintendent of Police concerned. If satisfied, such Superintendent of Police may himself investigate the case or direct any of his Subordinate officers to investigate the case.
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11 19. While considering whether the compliance of Section 154 (3) regarding sending of the complaint to the Superintendent of Police by post is optional or mandatory and whether the learned Magistrate can refer the complaint for investigation without compliance of Section 154(3) of Cr.P.C, the Hon’ble Supreme Court in para 31 of the judgment in Priyanka Srivastava’s case held as follows: “31. We have already indicated that there has to be prior applications under Section 154(1) and 154(3) while filing a petition under Section 156(3). Both the aspects should be clearly spelt out in the application and necessary documents to that effect shall be filed. The warrant for giving a direction that an application under Section 156(3) be supported by an affidavit is so that the person making the applications should be conscious and also endeavour to see that no false affidavit is made. It is because once an affidavit is found to be false, he will be liable for prosecution in accordance with law. This will deter him to casually invoke the authority of the Magistrate under Section 156(3). That apart, we have already stated that the varacity of the same can also be verified by the learned Magistrate, regard being had to the nature of allegations of the case. We are compelled to say to as a number of cases pertaining to fiscal sphere,
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12 matrimonial dispute/family disputes, commercial offences, medical negligence cases, corruption criminal prosecution, as are illustrated in Lalita Kumari are being filed. That apart, the learned Magistrate would also be aware of the delay in lodging of the FIR.” (Emphasis supplied)
In the case on hand, in the complaint Annexure – A there was no statement about respondent No.2 sending the complaint to the Superintendent of Police by registered post, the complaint was not accompanied with the proof of sending of complaint to the Superintendent of Police. In spite of such non-compliance of Sections 154 (1) and 154(3) and the guidelines laid down by the Hon’ble Supreme Court in Priyanka Srivastava’s case, the learned Magistrate referred the complaint to investigation under Order Annexure – ‘B’. Therefore, the said order is unsustainable in law.
Consequently, the complaint and first information report as per Annexures – ‘A’ and ‘C’ in Crime No.509/2016 are unsustainable. Under such circumstances, even if the investigation/prosecution is
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13 permitted to be continued in the said case, there is no chance of the conviction of the petitioners. Therefore, Annexures – ‘A’ to ‘C’ are liable to be quashed.
However, since the validity of second first information report Annexure – ‘E’ is still under consideration, the quashing of the first first information report in no way prejudices respondent No.2, if he succeeds in the second one.
In consideration of Annexure–‘E’ the second first information report and complaint Annexure – ‘D’, only the contention regarding the case being civil in nature survive. In view of the finding regarding Annexures -‘A’ to ‘C’ the maintainability of the second successive complaint does not survive for consideration. Reg. Civil dispute:
Basically, the contention of the complainant is that the petitioners entered into agreement of sale and received huge money without any intention to perform and complete the said contract and to dupe respondent No.2. The allegation is that with criminal intention, they created
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14 false power of attorney and cancellation deed dated 03.06.2016 and on the very same date sold the property to accused No.5.
It is contended that since respondent No.2 itself pursued the civil remedy in O.S.Nos.1001/2015 and 1002/2015, respondent No.2 seeking remedy under criminal justice administration is barred. The question is whether filing of the civil suits bars a person from seeking remedy under the criminal law.
The Hon’ble Supreme Court in that regard in para 12(v) of the judgment in Indian Oil Corpn.’s case referred to supra held as follows: “12(v) A given set of facts may make out:
(a) purely a civil wrong; or (b) purely a criminal offence; or (c) a civil wrong as also a criminal offence.
A commercial transaction or a contractual dispute, apart from furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. As the nature and scope of a civil proceeding are different from a criminal proceeding, the more fact that the complaint relates to a commercial transaction or breach of contract, for which a
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15 civil remedy is available or has been availed, is not by itself a ground to quash the criminal proceedings.
The test is whether the allegations in the complaint disclose a criminal offence or not.” ( Emphasis supplied )
The reading of the above judgment makes it clear that a person availing a civil remedy does not bar him from filing a complaint, if the complaint discloses the offences. The judgment in Indian Oil Corpn.’s case holds the field till this day.
In the case on hand, there are the allegations of forging of the power of attorney and the cancellation deeds through the alleged power of attorney i.e., accused No.3 without the knowledge of the complainant. The complainant has also alleged that there was fraudulent intention on the part of the petitioners since inception.
In Inder Manhan Goswami’s case relied upon by the learned Senior Counsel, it was held the dispute in question was purely civil in nature. But the allegations in the complaint and the suit of respondent No.2 prima facie make out the case of civil wrong as well as an offence
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16 both. In Rashmi Jain’s case there were no allegations of forgery. Therefore, even the said judgment is not applicable. Under the circumstances, this Court is not persuaded to accept the contention that the case is purely civil dispute, therefore, first information report and complaint are liable to be quashed.
Reg. maintainability of the second complaint:
It was contended that two complaints were filed on the same set of facts, therefore, second complaint and first information report in Crime No.624/2016 as per Annexures – ‘D’ and ‘E’ are not maintainable. In the above order, the first complaint is already quashed. Therefore, Annexures – ‘D’ and ‘E’ being the second complaint and second first information report does not survive for consideration.
Secondly, the complainant alleged that when he filed the first complaint, he was not aware of the forgery of power of attorney and cancellation deed. Therefore, apart from the allegation of fraud in not executing the sale deeds, there were further grounds of
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17 the offences of forgery, cheating and impersonation in the second complaint. In the light of the aforesaid facts, the contentions regarding Annexures – ‘D’ and ‘E’ being the second complaint on the same set of facts do not sustain and the judgments relied on the said points are not applicable.
The Hon’ble Supreme Court time and again has held that invoking the inherent powers under Section 482 of Cr.P.C., the High Court shall not quash the proceedings unless a manifest abuse of the process of the Court or failure of ends of justice is made out. In Inder Mohan Goswamy’s case relied upon by the learned Senior counsel itself it was held that inherent jurisdiction has to be exercised sparingly, carefully and with great caution.
In the case on hand, the alleged power of attorney holder is also made an accused. If at all the accused claim that there was a general power of attorney executed in favour of accused No.3, that is a matter of defence to the accused in the trial. On that ground itself
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18 the first information report cannot be quashed. Therefore, the petition is partly allowed. The proceedings in PCR No.7038/2016 as per Annexure – ‘A’, the order of the learned Magistrate dated 14.07.2016 under Annexure - ‘B’ referring the complaint to the jurisdictional police and first information report in Crime No.509/2016 as per Annexure – ‘C’ are hereby quashed. The petition with respect to quashing of Annexures – ‘D’ and ‘E’ is hereby dismissed.
Since the investigation was stalled due to interim stay granted in this case, the Investigating Office shall complete the investigation in Crime No.624/2016 expeditiously in accordance with law and submit the final report.
Sd/- JUDGE KSR/KG