HIGH COURT OF JUDICATURE AT ALLAHABAD Court No. - 41 AFR Case :- APPLICATION U/S 482 No. - 19266 of 2014 Applicant :- [ENTITY] And 2 Ors Opposite Party :- [ENTITY] And Another Counsel for Applicant :- [ENTITY], [ENTITY] Counsel for Opposite Party :- Govt. Advocate, [ENTITY], [ENTITY] Hon'ble [ENTITY], J.
Heard Sri [ENTITY] for the applicants; the learned AGA for the State; Sri [ENTITY] for the opposite party no.2 and perused the record.
The instant application under Section 482 [ACT] has been filed seeking quashing of the proceeding of [CASE NUMBER] (Uma Shankar Bhattacharya Vs. [ENTITY] and others), under [SECTION] and [SECTION] [ACT], police station Daraganj, district Allahabad, pending in the Court of Special Chief Judicial Magistrate, Allahabad.
Briefly stated the facts giving rise to this application are that the opposite party no.2 filed a complaint against the applicants alleging therein that [ENTITY] (applicant no.1) had entered into a registered agreement for sale dated 9th March, 2007 with the complainant thereby agreeing to execute sale deed in respect of her share in House no. 82/62, Matiyara Road for which the applicant no.1 took Rs.1 lac by way of earnest money and, thereafter, further sum of Rs.50,000/- was taken by her husband [ENTITY] (applicant no.2) and his brother [ENTITY] (applicant no.3), but despite having taken Rs.1,50,000/- they did not execute sale deed in favour of the complainant and, later, on 7th May, 2011, a sale deed was executed in favour of one [ENTITY] for a sum of Rs.6,50,000/-. Similar allegations have been made in the statements recorded under [SECTION] and [SECTION] [ACT].
The quashing of the complaint and the proceeding in pursuance thereof has been sought on the ground that the allegations made in the complaint only make out a civil cause of action, inasmuch as, there is nothing in the complaint or in the statement in support thereof to suggest that there had been a dishonest intention on the part of the applicants from the very beginning that is at the time of entering into agreement for sale. It has been submitted that in the agreement for sale, the total consideration for the sale was fixed at Rs.2,50,000/- and as balance payment was not made and more than three years passed from the date of the agreement, sale deed was executed in favour of third party. It has been argued that ordinarily where no date is fixed for execution of sale deed, the limitation for instituting a suit for specific performance on the agreement for sale would be three years from the date of execution of agreement and since, admittedly, no suit was instituted within the period of limitation, the complaint, which has been lodged after six years from the date of the agreement, is nothing but abuse of the process of law. It has also been pleaded that the complainant had failed to arrange for the balance amount therefore he cannot claim now that the applicants have failed to execute the sale deed despite promise. It has been submitted that the complaint has been lodged only after the civil proceeding had become barred by time, which clearly goes to show malicious intention on the part of opposite party no.2 in filing the complaint.
Some dispute with regards to the amount advanced to the applicants is also there but that is not relevant for deciding this case.
Learned counsel for the opposite party no.2 submitted that since the applicant no.1 had received part of the sale consideration and the applicant no.2 had, subsequently, received further amount of Rs.50,000/- and without returning back the money to the opposite party no.2, they have sold the property to a third party clearly shows that they had been dishonest.
Before the court proceeds to assess whether a case has been made out for quashing of the complaint, it would be useful to first discuss the law on the issue as to whether in a case of simple breach of contract an offence of cheating would be made out or not, if so, then under what circumstances. In the case Dalip Kaur v. Jagnar Singh, (2009) 14 SCC 696, the apex court, in paragraph 10 of the report, observed that: "If the dispute between the parties was essentially a civil dispute resulting from a breach of contract on the part of the appellants by non-refunding the amount of advance the same would not constitute an offence of cheating. Similar is the legal position in respect of an offence of criminal breach of trust having regard to its definition contained in [SECTION] of the [ACT]." Likewise in the case of Ajay Mitra v. State of M.P. (2003) 3 SCC 11, a three judges bench of the apex court, after noticing several judgments, held, that in order to constitute an offence of cheating the intention to deceive should be in existence at the time when the inducement was offered. Unless the complaint showed that the accused had dishonest intention at the time complainant parted with the money, it would not amount to an offence of cheating but may amount to a breach of agreement.
In view of the law noticed above, in a case of a breach of contract to make out a case for criminal prosecution of a person who is guilty of such breach for an offence of cheating what is essential to be alleged in the complaint/ statement made in support thereof or the police report, as the case may be, is that there had been a dishonest intention on the part of such person from the very beginning that is since the inception of the agreement. Existence of such dishonest intention can also be inferred from the conduct of the accused narrated in the complaint / statement made in support thereof or the police report, as the case may be.
Coming to the facts of the instant case, from a perusal of the complaint and the statement made in support thereof there is nothing to show that any false promise was made by the accused at the time of entering into the agreement so as to deceive or to induce the complainant to part with money for entering into an agreement to purchase the property. There is also nothing in the complaint or the statement made in support thereof to show that the accused had dishonest intention from the very beginning that is since the time of entering into the agreement in question. Mere non performance of an agreement for sale would not amount to commission of an offence of cheating in absence of any allegation that there had been dishonest intention since the very beginning. Such dishonest intention cannot also be inferred from the conduct of the accused inasmuch as they have transferred the property to a third party after three years from the date of the agreement for sale which, ordinarily, is the period of limitation to institute a suit for specific performance, unless there is some other date fixed for its performance. It has not been demonstrated either in the complaint or in the counter affidavit that there was some period fixed for performance under the contract and that third party sale took place within that period. Further, there is nothing in the complaint to show that within three years of the agreement for sale or within any stipulated period fixed by the agreement, on any specific date, effort was made to demand specific performance of the agreement by tendering the balance sale consideration to the applicants. The bald allegation that an additional Rs.50,000/- was taken by the accused is also not supported by mention of any date or written receipt. Under the circumstances, mere execution of sale deed in favour of third party after lapse of more than three years from the date of the agreement would not be sufficient to presume that there existed any dishonest intention on the part of the applicants at the time of entering into an agreement.
In view of the discussion made above, the complaint does not disclose commission of any offence except a simple breach of contract, which can be resolved in civil proceedings, if otherwise not barred by limitation. Accordingly, the impugned complaint as also the consequential proceeding would amount to abuse of the process of Court and, therefore, to secure the ends of justice the same deserves to be quashed.
The application is allowed. The complaint as well as the proceeding of [CASE NUMBER] (Uma Shankar Bhattacharya Vs. [ENTITY] and others), under [SECTION] and [SECTION] [ACT], police station Daraganj, district Allahabad, pending in the Court of Special Chief Judicial Magistrate, Allahabad are hereby quashed.
Order Date :- 5.5.2015 Rks.