IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 11-3-2011 CORAM THE HONOURABLE MR. JUSTICE G.M. AKBAR ALI CRL.O.P.No.5776 of 2007 T. Chandrasekhar .... Petitioner vs The State, rep by The Inspector of Police Central Crime Branch Land Grabbing Cell Thousand Lights P.S. Chennai-600 006 Crime No.735/2006 2. S. Ramasundaram (R2 impleaded as per order of the court in M.P.NO.1 of 2009 dated 8.10.2009) ... Respondents Criminal Original Petitions filed under Section 482 Cr.P.C. for the reliefs as stated therein. For petitioners : Mr.I. Subramanian, Senior Counsel for Mr.A. Govardhan Rao For 1st Respondent : Mr.S. Rajakumar Govt.Advocate (Crl.Side) For 2nd respondent : Mr.D. Veerasekaran ORDER By consent of both sides, the matter is taken up for final hearing. The petition is filed seeking a direction to call for the records in Cr.No.735 of 2006 on the file of the respondent police and quash the same. https://hcservices.ecourts.gov.in/hcservices/ 2. The brief facts of the case are as follows: The petitioner was carrying on the business in Real Estate under the name and style of Nature Development Company. One of their projects relates to Farm House Plots to be developed in and around Sholinganallur village, Tamabram Taluk. The petitioner had arrangements with various land owners when the land value was Rs.7 lakhs per plot measuring about 4 grounds. One Sri G. Balachander, IAS approached the petitioner and represented that some of IAS officers and IPS officers were also interested in buying the Farm House. After negotiation, those persons, who are interested, were asked to remit Rs.25,000/- as advance payment by demand draft in the name of the Company. However, the 2nd respondent, who was an IAS Officer, paid only a sum of Rs.10,000/- and plot nos.151 and 152 each measuring 4 grounds were earmarked for him. However, due to unforeseen development including the sudden spurt in real estate prices, the owners of the land refused to sell their lands . Some of the individuals, apprehending land acquisition proceedings, received back their advance amount. The petitioner by his letter dated 6.12.2005 informed all the prospective purchasers that the transaction of sale could not be gone through and requested them to collect the advance amount paid by them. However, the defacto- complainant sent a reply dated 24.3.2006 making allegations against the petitioner. He also lodged a complaint against the petitioner with the Thoraipakkam Police which was registered in Cr.No.813 of 2006 under Sec.417 and 420 IPC. The case was transferred to Central Crime Branch and was re-registered in Cr.No.735 of 2006. It is alleged that the petitioner having taken an advance amount of Rs.10,000/-, promising to convey two plots for Rs.7 lakhs each, did not conclude the transaction and thereby cheated him. 3. The petitioner approached this court for anticipatory bail and this Court directed the petitioner to return the amount received as advance. Some of the officers took back the advance. However, some of the officers refused to accept the advance amount, but insisted upon registering the document of sale. This Court directed the petitioner to deposit the amount and accordingly, the petitioner deposited the money. According to the petitioner the FIR is abuse of process of law on the ground that the matter is civil in nature and there is no element of cheating. 4. The 1st respondent has filed a counter stating that on a complaint given by the 2nd respondent, a case has been registered and investigated and according to the respondent, the investigation revealed that the petitioner had approached the complainant with an offer of house plots at the price of Rs.7 lakhs per plot and made the complainant to agree to purchase the plots and pay him https://hcservices.ecourts.gov.in/hcservices/ an advance with fraudulent representations. It is submitted that the petitioner had even identified the house sites and has represented to the defacto-complainant that several IAS and IPS officers have joined the scheme. 5. It is further submitted that knowing fully well that the enrolment of IAS and IPS officers would enhance the stake in the demand for lands, the petitioner had lured many IAS and IPS officers with this offer and it is further stated that investigation is still pending. 6. Mr.I. Subramanian, learned senior counsel who appeared for A. Govardhan Rao, learned counsel for the petitioner would submit that the entire transaction is civil in nature and the defacto-complainant having paid a meagre advance amount is harassing the petitioner when the scheme itself has not taken off due to unforeseen circumstances. The learned senior counsel submitted that the allegations do not constitute any offence and there is no dishonest intention at the inception to attract the offence under Secs.417 or 420 IPC. The defacto-complainant, using his high influence has chosen to register a criminal case against the petitioner, even when the allegations on the face of the record do not constitute an offence. Therefore, he would submit that the case in Cr.No.735 of 2006 on the file of the 1st respondent may be quashed as the allegation do not constitute prima facie an offence. 7. The learned senior counsel would further point out that the defacto-complainant is an IAS officer and his wife is an IPS Officer and with their exalted position, the petitioner being harassed. He also submitted that the scheme failed and the petitioner had offered to return back the advance amount which was refused by the defacto-complainant. According to the learned Senior Counsel the, in any event the mater is civil in nature. 8. The learned counsel relied on the following decisions: 2006 (2) crimes 21 SC Ram Biraji Devi and another vs Umesh Kumar Singh and another 2009 14 SCC 696 (Dalip Kaur and others vs Jagnar Singh and another) 2009 3 SCC 78 (V.Y. Jose and another vs State of Gujarat and another) 2010 (2) CTC 153 (Moosa Ahmed vs The Inspector of Police) https://hcservices.ecourts.gov.in/hcservices/ 9. On the contrary, Mr.D. Veerasekaran, learned counsel for the 2nd respondent would submit that it was the petitioner who approached the defacto-complainant with an offer for the sale of plots and represented that many IAS officers had already booked plots in the scheme by paying Rs.25,000/- as advance. The learned counsel pointed out that the petitioner had played a fraud and has been acting dishonestly from the inception and has cheated the defacto-complaint after receiving an advance amount. 10. Mr.Rajkumar, Govt. Advocate (Crl.Side) would submit that a case has been registered and a fair investigation has been carried out and such investigation must be allowed to be continued for its logical conclusions. 11. Heard and perused the materials available on record. 12. The law is well settled in the matter of quashing the FIR at the instance of the accused under Sec.482 of Cr.P.C. Quashing the FIR by exercising the inherent power of the High Court should be limited to very extreme instances. The investigating agency should have the freedom to go into the whole gamut of the allegation to reach a logical conclusion. 13. In order to prove the offence of cheating, it is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. One of the ingredients of cheating is the existence of fraudulent or dishonest intention. 14. In the celebrated case of State of Haryana and Others vs Bhajanlal and others, reported in 1992 Supp (1) SCC 335 , the Apex Court has clearly laid down the guidelines, where the inherent powers under Sec.482 of the Court could be exercised. "102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure https://hcservices.ecourts.gov.in/hcservices/ the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised. (1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused. (2) Where the allegations in the first information report and other materials, if any, accompanying, the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code. (3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused. (4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code. (5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused. (6) Where there is an express legal bar engrafted in any of the provisions of the https://hcservices.ecourts.gov.in/hcservices/ Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party. (7) Where a criminal proceeding is manifestly attended with malafide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge 15. In 2006 (2) crimes 21 SC Ram Biraji Devi and another vs Umesh Kumar Singh and another, is a csae where the complainant paid a sum of Rs.80,000/-and the accused alleged to have made a promise that he will execute the agreement and later flatly denied the acceptance of Rs.80,000/- and refused to transfer the plot in favour of the complainant. On a complaint, a case has been registered under SE.406, 419, 420 r/w 120-B IPC . The accused approached the High Court under Sec.482 Cr.P.C and the High Court dismissed the petition and on appeal, the Supreme Court held as follows: "11. There cannot be any disagreement to the well settled proposition of law that the High Court should exercise its inherent powers in extreme exceptions to quash an FIR or a complaint. The ratio as laid down in Trisuns Chemical Industry's case (supra) is of no help and assistance to the complainant in the facts and circumstances of the present case. The complaint instituted does not disclose that an offence under Section 420 is made out. Cognizance taken by the Magistrate thereon against the appellants for offence under Secs.406, 419, 420 and 120-B IPC are clearly an abuse of the process of court and interference by this Court is expedient in the interest of justice. This is a case of extreme exception where the High Court ought to have exercised its inherent jurisdiction and power to set aside the unwarranted and https://hcservices.ecourts.gov.in/hcservices/ unjustified order of the Magistrate impugned before it by the appellants. 16. 2009 3 SCC 78 (V.Y. Jose and another vs State of Gujarat and another) is also a case where for supply of machines, an advance was paid and when the machines were ready, it was found that it did not achieve the specification and a complaint was lodged for an offence under Sec.417 and 420 IPC. After considering the various aspects, the Apex Court has held as follows: "21. There exists a distinction between pure contractual dispute of a civil nature and an offence of cheating. Although breach of contract per se would not come in the way of initiation of a criminal proceeding, there cannot be any doubt whatsoever that in the absence of the averments made in the complaint petition where from the ingredients of an offence can be found out, the Court should not hesitate to exercise its jurisdiction under Section 482 of the Code of Criminal Procedure. 22. We may reiterate that one of the ingredients of cheating as defined in Section 415 of the Penal Code is existence of an (sic fraudulent or dishonest) intention of making initial promise or existence thereof from the very beginning of formation of contract". and held that " for failure to keep promise subsequently, such a culpable intention right at the beginning, cannot be presumed". 17. In 2009 14 SCC 696 (Dalip Kaur and others vs Jagnar Singh and another), the Apex Court has held as follows; " The High Court, therefore, should have posed a question as to whether any act of inducement on the part of the appellant has been raised by the second respondent and whether the appellant had an intention to cheat him from the very inception. If the dispute between the parties was https://hcservices.ecourts.gov.in/hcservices/ 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 405 of the Penal Code. 18. In 2010 (2) CTC 153 (Moosa Ahmed vs The Inspector of Police), this Court held that where a criminal proceedings is manifestly attended with malafides and where the proceeding is maliciously instituted with an ulterior motive for wrecking vengeance the proceedings could be quashed. Therefore, one of the ingredients of cheating as defined in Section 415 of the Penal Code is existence of an fraudulent or dishonest intention of making initial promise or existence thereof from the very beginning of formation of contract. Failure to keep promise subsequently, such a culpable intention right at the beginning, cannot be presumed. 19. On the above legal preposition, let us analyse the case on hand. It is admitted that the petitioner came up with a proposal for sale of plots measuring 4 grounds for the sale consideration of Rs.7 lakh for each plot. The petitioner would admit that he has received advance payment from various persons including the defacto-complainant. 20. In the complaint it is stated that the petitioner contacted defacto-complainant in May 2004 and informed that many IAS officers had already booked plots and an advance was paid after negotiation by the petitioner. It is alleged that the petitioner was not concluding the transaction inspite of many requests and all of a sudden sent a letter dated 6.12.2005 informing the difficulties in the scheme and later could not be contacted at all. It is alleged that the petitioner has cheated the defacto-complainant after receiving the advance amount. The complaint was given on 15.9.2006. 21. The petitioner seemed to have returned the amount and that too, on the direction of this Court while granting anticipatory bail. 22. The allegation is having received advance amount, the petitioner has not done anything for the completion of the transaction till a complaint is filed in the year 2006. After https://hcservices.ecourts.gov.in/hcservices/ sending a letter dated 6.12.2005, the petitioner is said to have evaded receiving any calls from the defacto-complainant and has not chosen to complete the transaction or to repay the meagre sum of Rs.10,000/-. 23.Interestingly in the counter filed by the first respondent it is stated that it is only the petitioner who approached the defacto complainant and made promises; petitioner had approached the complainant with an offer of house plots at the price of Rs.7 lakhs per plot and made the complainant to agree to purchase the plots and made him to pay an advance with fraudulent representations; the petitioner represented to the defacto-complainant that several IAS and IPS officers have joined the scheme; knowing fully well that the enrolment of IAS and IPS officers would enhance the stake in the demand for lands, the petitioner had lured many IAS and IPS officers with this offer; when the petitioner has not even purchased the properties from the land owners, has received various amounts from various persons and it is not a case of breach of contract simplicitor. Unfortunately, the complaint is silent in these aspects. In the complaint, after narrating the events, the single line of allegation is that the accused having received the advance has cheated the complainant. 24. The existence of an fraudulent or dishonest intention of making initial promise or existence thereof from the very inception is a condition precedent for an offence under section 420 IPC. When there is a failure to keep promise subsequently, such a culpable intention right at the beginning, cannot be presumed. 25. Therefore, in my considered view, it is a fit case the court can and should interfere by exercising the power under section 482 Cr.P.C., and the complainant is liable to be quashed. 26. Accordingly, the petition is allowed and the proceedings in Cr. No. Cr.No.735 of 2006 is quashed. Connected M.Ps. Are closed. Sd/ Assistant Registrar /True Copy/ Sub Assistant Registrar sr https://hcservices.ecourts.gov.in/hcservices/ To 1. The Inspector of Police Central Crime Branch Land Grabbing Cell Thousand Lights P.S. Chennai-600 006 2. The Public Prosecutor, High Court, Madras + 1 C.C. TO Mr. A. Govaradhan Rao, Advocate Sr.No.17681 Order in Crl.O.P.No.5776 of 2007 TS[CO] KS 31/03/2011 https://hcservices.ecourts.gov.in/hcservices/ https://hcservices.ecourts.gov.in/hcservices/