IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL CRIMINAL CRIMINAL APPELLATE JURISDICTION APPELLATE JURISDICTION APPELLATE JURISDICTION CRIMINAL CRIMINAL CRIMINAL WRIT PETITION NO.216 OF 2000. WRIT PETITION NO.216 OF 2000. WRIT PETITION NO.216 OF 2000. 1. M/s. Bhawani Builders. 2. Shri Madhusudan Balasaheb Kadam. ..Petitioners. versus 1. Mr. Prashant Vishnupant Ladkat. 2. Mrs. Pratibha Prashant Ladkat. 3. Mr. Balasaheb Digambar Kadam. 4. The State of Maharashtra. ..Respondents. .... Mr. Vinod Jadhav, i/b. Vijay Patil, for the Petitioners. Mr. Kuldeep Patil, i/b. Deepak Girme, for the Respondent Nos.1 and 2. Mr.D.P. Adsule, APP, for the Respondent-State. .... CORAM CORAM CORAM : A.S. OKA, J. : A.S. OKA, J. : A.S. OKA, J. DATE DATE DATE : 25TH AUGUST,2008. : 25TH AUGUST,2008. : 25TH AUGUST,2008. ORAL ORAL ORAL JUDGMENT : JUDGMENT : JUDGMENT : 1. The submissions of the learned Counsel appearing for the parties were fully heard. However, the Judgment was not dictated as the parties were granted time to explore the possibility of settlement. As amicable settlement is not arrived at, I am proceeding to deliver the Judgment. 2. The challenge by the Petitioners [who are first and the second accused] in this Petition under - 2 - Article 227 of the Constitution of India read with section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as "the said Code") is to the order issuing process by the learned Magistrate as well as confirmation of the said order in a Criminal Revision Application by the Sessions Court. 3. With a view to appreciate the submissions made by the learned Counsel appearing for the parties, it will be necessary to refer to the facts of the case in brief. 4. The first and the second Respondents are the original Complainants. According to the case of the first and the second Respondents, the third accused (Respondent No.3 herein) was the owner of an immovable property situated at Pune who entered into an agreement for the development of the property in favour of the Petitioners. According to the case of the first and the second Respondents, an agreement for sale dated 8th August 1991 was executed by the Petitioners in their favour by which the Petitioners agreed to sale Flat No.6 situated on the third floor of the building constructed on the property of the third Respondent. According to the first and the - 3 - second Respondents, total consideration was agreed to be Rs.2,49,150/- and they paid a sum of Rs.1,25,000/- to the Petitioners. It is asserted in the complaint that the first and the second Respondents desired to raise a loan for paying the balance consideration amount and the Petitioners had agreed to furnish necessary documents to enable the first and the second Respondents to obtain loan. The allegation is that the Petitioners intentionally and dishonestly avoided to furnish necessary documents. It is the case of the first and the second Respondents that somehow they managed to raise the balance consideration amount and offered the same to the Petitioners. However, the Petitioners refused to accept the balance consideration and also refused to hand over the possession of the flat. The allegation is that the accused in furtherance of the common intention fraudulently and dishonestly induced the first and the second Respondents to make payment of Rs.1,25,000/- and therefore, wrongful loss has been caused to the first and the second Respondents. It is alleged that flat no.6 has been sold by the Petitioners to the Maharashtra State Agricultural Marketing Board, Pune. The complaint refers to a civil suit filed by the first and the second - 4 - Respondents. The allegation in the complaint is of commission of offences under sections 403, 405, 406, 418, 420 and section 34 of the Indian Penal Code and under sections 8, 13(3) of the Maharashtra Ownership Flats (Regulation of the Promotion of construction, Sale, Management and Transfer) Act, 1963 (hereinafter referred to as "the said Act of 1963"). The learned Magistrate by order dated 8th September 1993 issued process under section 406 and section 420 read with section 34 of the Indian Penal Code as well as under section 13(3) of the said Act of 1963. A Revision Application was preferred by the Petitioners before the Sessions Court for challenging the order issuing process. The said Revision Application has been dismissed by the learned Sessions Judge, Pune. 5. The learned Counsel appearing for the Petitioners invited my attention to various assertions made in the private complaint filed by the first and the second Respondents. He pointed out that it is an admitted position that only a sum of Rs.90,000/- was paid by the first and the second Respondents to the Petitioners and not a sum of Rs.1,25,000/- as alleged in the complaint. He pointed out that the agreement for sale was executed - 5 - on 8th August 1991 and the complaint was filed on 8th September 1993. He also invited my attention to the verification of the first Respondent recorded by the learned Trial Judge. He submitted that on plain reading of the assertions in the complaint, no case is made out of proceeding against the Petitioners under section 406 and 420 of the Indian Penal Code as well as under section 13(3) of the said Act of 1963. He submitted that the assertions made in the complaint as regards breach of provisions of the said Act of 1963 are very vague. He has also relied upon a decision of the Apex Court in the Court of Madhavrao Jiwajirao Scindia v/s Sambhajirao Chandrojirao Angre [ 1988 (1) SCC 692 ]. He submitted that the act of filing of the complaint was nothing but an abuse of process of law. He invited my attention to the decision of the Apex Court in the case of Nageshwar Prasad Singh @ Sinha v/s Narayan Singh and another [ A.I.R. 1999 SC 1480 ] as well as the Judgment of the Single Judge of this Court in the case of Rameshkumar Bhandari and others v/s the State of Maharashtra and another [2003 All.M.R.(Cri.) 897]. 6. The learned Counsel appearing for the first and the second Respondents supported the impugned - 6 - orders and contended that as the averments made in the complaint make out a case for proceeding against the Petitioners, the process has been rightly issued by the learned Magistrate. Inviting my attention to reasons recorded by the learned Sessions Judge, he submitted that no case for interference was made out. 7. I have carefully considered the submissions. It must be noted here that in paragraph 7 of the judgment of the Sessions Court, the learned Judge has noted certain facts which are not disputed by any of the parties. In fact, the learned Judge has observed that the facts mentioned in paragraph 7 of the judgment can safely taken as proved by the evidence on record. Some of the admitted facts mentioned by the learned Sessions Judge are as under :- (1) There was an agreement for sale executed by the Petitioners in favour of the first and the second Respondents by which they agreed to sale flat no.6 to the first and the second Respondent at the cost of Rs.2,49,150/-. (2) Admittedly, the first and the second Respondents have paid a total consideration - 7 - of Rs.90,000/- to the Petitioners. (3) There is a suit for specific purpose filed by the first and the second Respondents in the year 1992 against the Petitioners and the same was pending. An application for temporary injunction filed by the first and the second Respondents in the said suit has been dismissed. 8. It will be also necessary to note that the third Respondent had filed a separate Criminal Revision Application before the Sessions Court for challenging the order issuing process. The present Petitioners were party Respondents to the said Revision Application. The said Revision Application was dismissed by the learned Additional Sessions Judge, Pune by holding that the same was not maintainable against an order issuing process. It appears that a submission was made by the Advocate for the first and the second Respondents before the Revisional Court in the Revision Application filed by the Petitioners that in view of dismissal of the Revision Application filed by the third Respondent, the Revision Application preferred by the present - 8 - Petitioners was not maintainable. It must be stated here that the learned Sessions Judge in the impugned judgment and order has referred to a decision of the Apex Court in the case of Rajendrakumar Sitaram Pande and others v/s Uttam and Another [ 1999 (2) Mh.L.J. 118 ] holding that a Revision Application under section 397 of the Code of Criminal Procedure, 1973 was maintainable against the order issuing process. 9. However, the learned Sessions Judge has observed that the Petitioners were parties to the Revision Application filed by the third Respondent and therefore, both the Revision Applications are the same. Therefore, the learned Sessions Judge has observed that the Revision Application preferred by the Petitioners was not maintainable. After making the said observation, the learned Judge has proceeded to consider the merits of the case and has come to the conclusion that the defences raised by the Petitioners can be considered by the learned Magistrate. 10. The order passed by the learned Sessions Judge on a Revision Application preferred by the third Respondent has been annexed to this Petition. - 9 - Perusal of the said order shows that the Revision Application was not dismissed on merits but the same was dismissed as not maintainable. The law is well-settled. This Court in the case of V.K.Jain and Others V/s. P.V. Padode and Another [ 2005 (3) Mh.L.J. 778 ] has held that a Revision Application under section 397 of the said Code for challenging the order of issue of process is maintainable. Therefore, the learned Sessions Judge could not have come to a conclusion that the Revision Application preferred by the Petitioners was not maintainable. Therefore, the aforesaid findings recorded by the Sessions Court is erroneous. 11. As the learned Sessions Judge after recording the aforesaid finding has considered the merits of the case, I am also dealing with the submissions made by the Advocate for the Petitioners on merits. As noted earlier, process has been issued for offences under section 406 and 420 of the Indian Penal Code. Perusal of the averments made in the complaint show that there is no specific assertion that there was any intention on the part of the Petitioners to deceive the first and the second Respondents at the inception of the transaction. There are no - 10 - assertions made contending that from the subsequent conduct of the Petitioners, it can be inferred that such intention to deceive was in existence right from the inception. 12. The verification of the first Respondent recorded by the learned Magistrate is very vague. In the verification of the first Respondent, he has referred to the agreement for sale dated 8th August 1991 and has stated that he had paid a sum of Rs.1,25,000/- to the Petitioners. He has further stated that the accused had agreed to deliver possession of the flat to the first and the second Respondents on or before 6th September 1991. The English translation of further part of the verification statement reads thus :- "However the accused has committed breach of agreement by entering into a transaction with the third party in respect of the said flat thereby deceiving me and they have misappropriated the amount of Rs.1,25,000/- paid by me by appropriating the said amount for their own purpose." - 11 - 13. It must be noted here that in paragraph 7 of the impugned Judgment and Order of the learned Sessions Court, it has been noted that admittedly only a sum of Rs.90,000/- was paid by the first and the Second Respondents to the Petitioners. Thus, the admitted position as noted by the learned Sessions Judge is that the first and the second Respondents have paid a sum of Rs.90,000/- to the Petitioners at the time of execution of the agreement for sale of the flat. The entire complaint proceeds on the footing that a sum of Rs.1,25,000/- was paid by the first and the second Respondents to the Petitioners and that there is misappropriation of the said amount by the Petitioners. In his statement on oath, the first respondent has come out with the case of payment of Rs.1,25,000/-. In clause (iv) of paragraph no.8 of the impugned order, the learned Sessions Judge has observed thus :- "(iv) It is a fact that the opponents-complainants did pay total amount of Rs.90,000/- to the applicants and this amount was forfeited by the applicants on the grounds that there was breach of agreement." - 12 - Here again, the learned Sessions Judge has recorded admitted position that only a sum of Rs.90,000/- was paid by the first and the second Respondents to the Petitioners and the said amount was forfeited by the Petitioners on the ground that there was a breach of agreement. 14. In paragraph 4 of the complaint, the Respondent Nos. 1 and 2 have asserted thus :- "4. That the accused had agreed to handover possession of the said flat no.6, situated at 3rd floor to Complainants on dt.6th Sept, 1991. The Complainants had somehow managed to raise the remaining consideration / price amount of Rs.1,24,150/- to pay to accused and offered the same to accused to complete the transaction and to get the possession of the said flat but accused illegally refused to accept the said amount of Rs.1,24,150/- and also refused to handover the possession of the said flat to Complainants and thereby cheated Complainants." 15. Thus, the specific case is made out in the - 13 - complaint is that the first and the second Respondents were liable to pay balance consideration of only Rs.1,24,150/- and that after raising the said amount, they had offered the same to the Petitioners. Thus, the said averments proceed on the assumption that the first and the second Respondents have paid a sum of Rs.1,25,000/- to the Petitioners and therefore, as per that agreement, only a sum of Rs.1,24,150/- remained payable by the first and the second Respondents. As pointed out earlier, before the learned Sessions Judge even the first and the second Respondents have admitted that a sum of Rs.90,000/- was paid by them to the Petitioners and not Rs.1,25,000/- as alleged in the complaint. Thus, going by their own case, what was offered by the first and the second Respondents to the Petitioners was not the entire balance amount but a part of the balance consideration inasmuch as the balance consideration of Rs.1,59,150/- was admittedly payable by the first and the second Respondents. 16. In absence of any assertion made in the complaint or in the verification statement that there was any intention to deceive on the part of the Petitioners at the time of entering into an - 14 - agreement, it is not possible to accept that a case of commission of offence under section 420 was made out in the complaints. As stated earlier, even going by the admitted position, the first and the second Respondents did not offer the entire balance consideration to the Petitioners and in fact, a civil suit for specific performance filed by the first and the second Respondents is pending in the Civil Court. Taking the averments in the complaint and averments in the verification statement for its face value, prima-facie case of cheating was not made out as there is no case made out of existence of an intention to cheat at the time of inception of a transaction. 17. The learned Sessions Judge has noted an admitted position that the first and the second Respondents have paid only a sum of Rs.90,000/- and the said amount is purportedly forfeited by the Petitioners on the ground of breach of terms and conditions of the agreement. In this behalf, it will be necessary to refer to the decision of the Apex Court in the case of Madhavrao Jiwajirao Scindia (supra). The paragraph no.8 of the said decision reads thus :- - 15 - "8. Mr.Jethmalani has submitted, as we have already noted, that a case of breach of trust is both a civil wrong and a criminal offence. There would be certain situations where it would predominantly be a civil wrong and may or may not amount to criminal offence. We are of the view that this case is one of that type where, if at all, the facts may constitute a civil wrong and the ingredients of the criminal offences are wanting." 18. It must also be noted here that the entire case of the first and the second Respondents in the complaint as well as in the verification made on oath proceeds on erroneous assumptions that the said Respondents had paid total amount of Rs.1,25,000/- to the Petitioners. The said statement is admittedly incorrect. The entire case of the first and the second Respondents proceeds on allegation that there was mis-appropriation of a sum of Rs.1,25,000/- by the Petitioners. In fact, the sum of Rs.90,000/- which is paid by the first and the second Respondents has been purportedly forfeited by the Petitioners on the ground of alleged breach of contract by the first - 16 - and the second Respondents. Whether the termination of the agreement was legal is an issue which will be decided in the pending suit. In the circumstances, no prima-facie case of commission of offence under section 406 was made out. 19. Process was also issued under section 13(3) of the said Act of 1963. Section 13 (3) of the said Act reads thus :- "13. (3) Any promoter who, without reasonable excuse, fails to comply with or, contravenes, any other provision of this Act or of any rule made thereunder, shall, if no other penalty is expressly provided for the offence, be punished, on conviction, with imprisonment for a term which may extend to one year, or with fine which may extend to ten thousand rupees, or with both." 20. In the present case, the process has been specifically issued under section 13(3) of the said Act of 1963. An offence under sub-section (3) of section 13 of the said Act of 1963 will be made out when a promoter without reasonable excuse fails to - 17 - comply with or contravenes any other provision of the said Act of 1963 or rules framed thereunder. Perusal of the averments made in the complaint shows that there is no specific case made out of breach or contravention of any specific provision of the said Act of 1963 or rules framed thereunder. However, on reading the complaint as it is, the case of breach appears to be based on averments made in paragraph 4 of the complaint. The grievance made is that the promoter has not discharged his obligation of handing over the possession of the flat in terms of the agreement. The said case is again based on the allegation that a sum of Rs.1,25,000/- was paid by the first and the second Respondents and only a sum of Rs.1,24,150/- remained payable. The grievance of the first and the second Respondents is that though they offered remaining consideration of Rs.1,24,150/-, the Petitioners declined to hand over possession of the flat. As is seen from the admitted position, what was payable by the first and the second Respondents was a sum of Rs.1,59,150/-. Thus, taking the averments made in the complaint as it is, the first and the second Respondents did not offer to pay the entire balance consideration to the Petitioners and there was a short-fall of - 18 - Rs.35,000/-. The only allegation made of commission of an offence under sub-section (3) of section 13 of the said Act of 1963 is that the possession of flat was not handed over to the first and the second Respondents. As stated earlier, an offence under sub-section (3) of section 13 of the said Act of 1963 is attracted when the promoter fails to comply without reasonable excuse. It may not be necessary for a complainant alleging commission of an offence under section 13(3) of the said Act of 1963 to specifically aver that breach or contravention committed by the promoter was without reasonable excuse. However, in the facts of the present case, taking the averments made in the complaint and in particular in paragraph 4 thereof as true, it is obvious that the first and the second Respondents did not offer the entire balance consideration to the Petitioners. Without receiving entire balance consideration, the Petitioners were under no obligation to deliver the possession. Therefore, taking the said averments as correct, it is not possible to come to a conclusion that even a prima-facie case for an offence under section 13(3) of the said Act of 1963 was made out. - 19 - 21. The net result is that the Petition must succeed. However, it must be clarified that the observations which are made in this Judgment are only for a limited purpose of considering the question whether a case was made out to proceed against the Petitioners for the offences complained of. The observations made in this Judgment shall not be construed as any finding on the merits of the civil suit pending between the parties and the pending civil suit is bound to be decided by the concerned Court without being influenced by the observations made in this judgment. 22. Subject to what is observed above, rule is made absolute in terms of prayer clause (a). [ A.S.OKA, J.] A.S.OKA, J.] A.S.OKA, J.]