IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 29.04.2011 CORAM THE HONOURABLE MS.JUSTICE R.MALA CRL.R.C.Nos. 1199 and 1200 of 2007 Sanjay Kumar Bagrecha .. Petitioner/Accused No.3 and 2 in both Crl.R.Cs. ..Vs.. State rep. by The Inspector of Police C.C.I.W. C.I.D., Dharmapuri. .. Respondent/complainant in both Crl.R.Cs. Prayer:- The Criminal Revisions are filed under Sections 397 read with 401 of Cr.P.C., to set aside the order of the learned Judicial Magistrate No.II, Hosur in Crl.M.P.Nos.2775 and 2778 of 2006 in C.C.Nos.282 and 283 of 2002, dated 16.07.2007 and consequently, to discharge the petitioner from the Cr.No.6/2001. For Petitioner : Mr.K.M.Vijayan Senior Counsel for M/S.La.Law For Respondent : Mr.S.Rajendiran Govt. Advocate (Crl.side) C O M M O N O R D E R The revisions have been preferred by the petitioner against the dismissal of discharge petitions, which were passed by the learned Judicial Magistrate No.II, Hosur, in Crl.M.P.Nos.2775 and 2778 of 2006 in C.C.Nos.282 and 283 of 2002, dated 16.07.2007, stating that prima-facie case has been made out against the petitioner to frame charges for the alleged offence under Sections 406, 408, 409, 420, 477A, 120B and 109 I.P.C. 2.The gist and essence of the petitions are as follows: (i)The petitioner/accused being the partner of the firm 'Sanjay Enterprises', has entered into an agreement of sale with the first accused, who was the President to sell 100 house plots at sale price of Rs.27/- per sq.ft. including the development charges. In pursuance of the sale agreement, piecemeal consideration has been paid and the petitioner received and passed receipts for the same and there is no mis-appropriation of any amount. https://hcservices.ecourts.gov.in/hcservices/ (ii)There are breach of conditions of the agreement by the society. The layout plan has been approved by the Director of Country and Town Planning in Pa.Mu.No.16048/93, L.A.3. Dated 30.11.1993, which has been ratified by HNDDA in Na.Ka.No.3278/93, A2 dated 24.01.1996 and as per the layout plan, layout roads, parks and places for public purpose were ear marked and gifted to the Commissioner, Panchayath Union, Hosur. (iii)As per the recital of the document, the sale price per sq.ft. is Rs.27/- and the total number of plots to be sold is 100 and out of the sale price of Rs.27/-, a sum of Rs.15/- shall be paid being the charge of development and registration shall be made at the guideline value of Rs.12/-. (iv)The layout of house plots formed in the year 1993. Mud roads and metal roads have been laid even in the year 1993, drainage work has also been done. The Society got the sale deeds for the amount released. It is mutually agreed that the sale deed will be executed at the guideline value to save stamp duty to the Society. (v)Plantation has been done and 50% of the trees grown up by the sides of the road. The development has been made as on funds available. The Society breached the conditions of the agreement. The Society has not paid for the balance sites. The pick and choose plots and the calculation of development by the Society is wrong. (vi)There is no false representation on the part of the petitioner and there is no dishonest concealment. There is no breach of terms of agreement on the part of the petitioner and breach of performance is no cheating. There is no entrustment of money to this accused. The amount paid was only a sale consideration in pursuance of agreement. The petitioner was not a paid servant and he has not maintained the Society accounts and there is no falsification of accounts. There is no criminal intention or mensrea on the part of the petitioner/accused. Hence, no prima-facie case has been made out for the offence under Sections 406, 408, 409, 420, 477A, 120B and 109 I.P.C. Hence, the petitioner prayed for discharging the charges levelled against him. 3.The gist and essence of the counter affidavit filed by the respondent/complainant are as follows: (i) The petitioner is the partner of the partnership firm 'Sanjay Enterprises' and they have entered into an agreement with the Society for sale of housing plots. The petitioner has falsely stated in the agreement that they have laid the roads, drainage, boundary stones and planted trees as per the approved layout plan. The Society was induced by the false representation of the petitioner herein and entered into the sale agreement and parted with huge sum of Rs.40,00,000/- including the development charges. (ii)The plots were not developed as per the representation made by the petitioner. The drainage was not constructed and the constructed roads were not formed. The members/purchasers, who https://hcservices.ecourts.gov.in/hcservices/ entered into an agreement with the Society to purchase have started asking for refund of the advance amount. Hence, the Society could not purchase the plots. (iii) It is true that the Society has not purchased the remaining plots as the development work as mentioned by the petitioner were not completed. It is true that as per the agreement, the sale price was fixed at Rs.27/- per sq.ft. including Rs.15/- per sq.ft. for development charges. The crux of the case is that they have without actually completing the development work made the Society to believe as if the entire development work was completed and on that belief Society was made to loose a sum of Rs.21,81,292/-. While in fact, no such development work was done causing financial loss to the Society. (iv)The petitioner herein along with other accused conspired and cheated the Society by making false representation as if the plots were developed. The Court at the stage of framing charges need not make elaborate enquiry and conduct a mini trial. Hence, he prayed for dismissal of the petitions. 4. The trial Court, after considering the arguments of both sides counsel, dismissed the petitions, stating that the ingredients of penal provisions have been made out only after deciding the oral and documentary evidence let in by the prosecution, against which, the revisions have been preferred by the petitioner/accused. 5.The learned counsel for the petitioner/accused submitted that the petitioner/accused is neither a Member nor an Office bearer of the Co-operative Society. After completion of an enquiry under Section 81 of the Tamilnadu Co-operative Societies Act, the complaint lodged against the petitioner and the other accused. But, here, the enquiry was not completed within the stipulated time. Admittedly, no loss caused by the petitioner/accused to the Society. The plots were purchased by the Society at lower price and sold the same at higher price. Hence, no prima-facie case has been made out against the petitioner/accused. He further submitted that in the proceedings dated 10.01.1996, an order was passed by the Registrar, Housing Board Co-operative Society, Hosur, in which, it was specifically mentioned that the sale price of 100 house plots owned by the petitioner was fixed as Rs.27/- per sq.ft. (i.e.) Rs.15/- as development charges and Rs.12/- for registration charges as per guideline value. In clause-5 of the said proceedings, it was mentioned that as per the certificate given by the Revenue Authority only, the sale price was fixed as Rs.27/- per sq.ft. After the said proceedings dated 10.01.1996, the petitioner has entered into a sale agreement with the Society on 24.04.1996, which was evidenced by agreement of sale. As per the condition imposed in the proceedings of the Registrar, Housing Board Co-operative Society, the guideline value certificate was obtained by the Tahsildar, in which, it was specifically mentioned that the market value of the https://hcservices.ecourts.gov.in/hcservices/ property is Rs.35 per sq.ft. On 13.08.1999, the Registrar of Co- operative Society has passed a proceeding, in which, it was specifically mentioned that 47 plots are yet to be sold and a permission has been accorded to sale ¼ share by cash and the balance ¾ share by 12 equal monthly installments. The learned counsel also relied upon the order passed by the learned Magistrate in Cr.M.P.Nos.1169 and 1170/2006 in C.C.No.297/2001, which have very same facts of the present case. The learned Magistrate discharged the charges levelled against the petitioner therein, one M/S.Pragathi Housing and Developers and Sunilkumar Patwa and others. But in this case, the learned Magistrate of the trial Court, has not followed the same dictum, dismissed the petitions. Hence, he prayed for setting aside the order and discharging the charges levelled against the petitioner/accused. 6.The learned Government Advocate (Crl.side) submitted that the Society has entered into the sale agreement only for the benefit of its members. Even though the petitioner/accused collected some amount as development charges, he has not done any development in the layout. He conspired with the President, Office bearers and Members of the Co-operative Society, obtained amount as development charges. So, prima-facie case has been made out against the petitioner/accused for the offences under Sections 406, 408, 409, 420, 477A, 120B and 109 I.P.C. He can very well prove his innocence at the time of trial. So there is no illegality or irregularity passed by the learned Magistrate and hence he prayed for dismissal of the revision. 7.Considered the rival submissions made on both sides and materials available on record. 8.In C.C.No.282 of 2002, a charge sheet was filed in Cr.No.6/2001 under Sections 406, 408, 409, 420, 477A, 120B and 109 I.P.C. against A1/President, A2/Secretary, A3/the revision petitioner herein, A4/Senior Inspector, A5/Deputy Block Development Officer and A6/Hosur Panchayat Union Commissioner. In C.C.No.283 of 2002, a charge sheet was filed in Cr.No.6/2001 under Sections 406, 408, 420, 477A, 120B and 109 I.P.C. against A1/President, A2/the revision petitioner herein, A3/Senior Inspector, A4/Deputy Block Development Officer and A5/Hosur Panchayat Union Commissioner. But, except the revision petitioner herein, all are members of the Hosur Housing Board as well as Hosur Panchayath Union. 9.While perusing the charge sheet, before entering into the sale agreement with the petitioner, the matter was placed before the competent authority (i.e.) the Registrar of Housing Board Co- operative Society, who passed an order dated 10.01.1996, in which, it was specifically mentioned as follows: https://hcservices.ecourts.gov.in/hcservices/ @ // xNh; Tl;Lw[t[ tPl;L trjp r';fk;. XNh; mUfpYs;s brd;dj;Jhh; fpuhk m";rypy;. JpU/r";ra;Fkhh; gf;hpr;rh vd;gtUf;F brhe;jkhd o/l;o/fp/gp/vd;/ 1202-93 ehs; 7/12/93y; xg;g[jy; bgw;w tiuglj;jpy; cs;s 100 kidfis (mjpakhd; efh; gFjp ) rJu mo xd;wpw;F U:/27-? tPjk; th';fp cWg;gpdh;fSf;F fPH;f;fz;l epge;jidfSf;Fl;gl;L nkw;go r';f jdp mYtyUf;F mDkjp tH';fg;gLfpwJ/ @ In clause-5 of the said proceedings, it was specifically mentioned that in respect of the market value, a certificate has to be obtained from the Revenue Authority. The Tahsildar has issued a certificate dated 25.03.1996, in which, he stated that the market value per sq.ft. is Rs.35/-. A permission has been accorded for purchasing the property is Rs.27/- per sq.ft. and in pursuance of that only, the petitioner and the Society entered into an agreement of sale on 24.04.1996. In the said sale agreement, it was stated as follows: ".. .. The revenue records, chitta and adangal stands in the name of Sanjay Bagrecha. As per the approved layout, the vendors laid the plots with boundary stones and formed layout roads and earmarked the place of public purpose as per the conditions laid out in the approval order. The vendors already laid the tar road to the layout, and other roads. .. The vendors have incurred an expenditure Rs.15/- per sq.ft. for the development. The guideline value per sq.ft., in the schedule layout is Rs.12/- per sq.ft." ..Whereas it is mutually agreed that the development charges of Rs.15/- per sq.ft. shall be paid directly to the vendors, since the vendors already spent the amount in development and the Registration of the sale deed will be on part with the guide line value of Rs.12/- per sq.ft. It is also agreed that the purchaser shall pay the development charges before registration of the sale deed. " So the above paragraph clearly shows that only after the property has been inspected by the Deputy Block Development Officer, Senior Inspector and the President, they entered into a sale agreement for purchasing 100 plots. But, admittedly all the 100 plots have not been purchased by Hosur Co-operative Housing Society Lilmited. At the time of filing charge sheet, 13 witnesses were cited and 26 documents were produced. https://hcservices.ecourts.gov.in/hcservices/ 10.It is pertinent to note that the order passed in Crl.M.P.Nos.1169 and 1170 of 2006 in C.C.No.297 of 2001, which was allowed and it is not a binding nature and it is not a condition precedent. The learned Magistrate has considered the facts and circumstances of the case and materials available on record, came to the conclusion that no prima-facie case has been made out against one M/S.Pragathi Housing and Developers and discharging the same. The said discharge petition allowed by the learned Magistrate could not create a condition precedent. Hence, the arguments of the learned counsel for the petitioner/accused that the learned Magistrate ought to have applied the same principle and allow the Crl.M.P.Nos.2775 and 2778 of 2006, does not merit acceptance. 11.Admittedly, the petitioner is a third party. Raja/A3 and A4, a Senior Inspector is responsible for supervising the income and expenditure of the Society and inspecting the vacant plots the Society is buying, looking of the societies loan collection, submitting quarterly and half years inspection report of the Society and also supervising the Society's over all functioning. In the charge sheet, it was specifically mentioned as " the accused No.2 is bound to obey the sale agreement between him and K.Rathinam Special Officer dated 24.04.96 and gift deed dated 4.7.94 executed by Sanjay Kumar Bagrecha (accused No.2) in favour of the Commissioner Panchayat Union and to fulfill the terms and conditions of the said documents. 12.At this juncture, it is appropriate to incorporate the sections 406, 408, 409, 420, 477A, 120B and 109 I.P.C. wherein the petitioner has been charged. 406.Punishment for Criminal breach of trust Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both. Ingredients: 1.Accused was entrusted with some property. 2.Accused had dominion over certain property. 3.Accused (i) misappropriated, (ii) converted to his own use, (iii) used or disposed off that property or wilfully suffered any person to dispose off that property. 4.Accused did in violation of (i) any direction of law, (ii) any legal contract express or implied relating to carrying out the trust. 5. He did so dishonestly. 408.Criminal breach of trust by clerk or servant Whoever, being a clerk or servant or employed as a clerk or servant, and being in any manner entrusted in such capacity with property, or with any dominion over https://hcservices.ecourts.gov.in/hcservices/ property, commits criminal breach of trust in respect of that property, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine. Ingredients: (i)Accused was a clerk or servant, (ii)Accused was entrusted with certain property or he had dominion over certain property which was not his own. (iii)He committed criminal breach of trust for the said property. 409.Criminal breach of trust by public servant, or by banker, merchant or agent: Whoever, being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent, commits criminal breach of trust in respect of that property, shall be punished with [imprisonment for life], or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine. Ingredients: 1.Accused is a Public servant, merchant, agent, a factor, broker or an attorney. 2.In his such capacity he was entrusted with some property or he gained dominion over such property. 3.He committed criminal breach of trust. 420.Cheating and dishonestly inducing delivery of property Whoever cheats and thereby dishonestly induces the person deceived any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine. Ingredients: (i)Accused cheated some person. (ii)Accused at the time of offence was bound by law, legal contract to protect the interest of the person whom he cheated. (iii)Obligation related to the transaction involving cheating. (iv)Accused knew that his act was likely to cause wrongful loss to that person whose interest he was bound to protect. https://hcservices.ecourts.gov.in/hcservices/ 477-A. Falsification of Accounts: Whoever, being a clerk, officer or servant, or employed or acting in the capacity of a clerk, officer or servant, wilfully, and with intent to defraud, destroys, alters, mutilates or falsifies any book, electronic record, paper, writing, valuable security or account which belongs to or is in the possession of his employer, or has been received by him for or on behalf of his employer, or wilfully, and with intent to defraud, makes or abets the making of any false entry in, or omits or alters or abets the omission or alteration of any material particular from or in, any such book, electronic record, paper, writing, valuable security or account, shall be punished with imprisonment of either description for a term which may extend to seven years, or with fine, or with both. Explanation-It shall be sufficient in any charge under this section to allege a general intent to defraud without naming any particular person intended to be defrauded or specifying any particular sum of money intended to be the subject of the fraud, or any particular day on which the offence was committed. Ingredients: (i)Accused was a clerk, officer or servant or employed or action in such capacity. (ii)He acted fraudulently or with intent to defraud, destroy, alter or falsify any Bank paper, writing, valuable security or Account, (i) belonging to or in possession of an employer, (ii) has been received for or on behalf of employer. (iii) Made or altered the making of any false entry in or omitted or altered or abetted the omission or alteration of the material particular from or in any such book paper, writing, valuable security or account. 120-B-Punishment of criminal Conspiracy: (1) Whoever is a party to a criminal Conspiracy to commit an offence punishable with death, imprisonment for life or rigorous imprisonment for a term of two years or upwards, shall, where no express provision is made in this Code for the punishment of such a Conspiracy, be punished in the same manner as if he had abetted such offence. (2) Whoever is a party to a criminal Conspiracy other than a criminal Conspiracy to commit an offence punishable as aforesaid shall be punished with imprisonment of either description for a term not exceeding six months, or with fine or with both. Ingredients: 1.Accused conspired with some other person or persons. https://hcservices.ecourts.gov.in/hcservices/ 2.Accused in conspiring either did or caused to be done- (i) an illegal act, or (ii) an act though not illegal, by illegal means. 3.The act so done or caused to be done was offence punishable under Penal Code, and 4.If the act so done was not an offence then also that an overtact had been done by one or more conspirators. 109.Punishment of abetment if the act abetted is committed in consequence and where no express provision is made for its punishment: Whoever abets any offence shall, if the act abetted is committed in consequence of the abetment, and no express provision is made by this Code for the punishment of such abetment, be punished with the punishment provided for the offence. Explanation: - An act or offence is said to be committed in consequence of abetment, when it is committed in consequence of the instigation, or in pursuance of the conspiracy, or with the aid which constitutes the abetment. 13.As per the penal provisions of Sections 406, 408 and 477A, the petitioner is neither a Clerk or Officer nor Servant or employed. He is the third party. Since Section 120B was incorporated, that can be decided only at the time of trial after considering the oral evidence let in by the prosecution. This Court has to decide that whether the ingredients of Section 420 has been made out. The ingredients of section 420 is the accused cheated some person. In pursuance of the order dated 10.01.1996 passed by the Registrar of Housing Board Co-operative Society, the property can be purchased from the revision petitioner/accused for Rs.27/- per sq.ft. after obtaining valuation certificate from the Revenue Authority. The Revenue Authority also issued a certificate stating that the market value of the property is Rs.35/- per sq.ft. After that only, both the parties are entered into the sale agreement. It is pertinent to note that the entire case is mainly focussing upon the development charges (i.e) Rs.15/- per sq.ft., it was not spent by the petitioner/accused herein for development. But, he has received the amount without completing the development work. In such circumstances, whether the development has been done in accordance with the sale agreement and the same has to be decided only at the time of trial, after letting oral evidence of the parties concerned. It is true that the revision petitioner/accused is not a Member or Office bearer of the Co-operative Society. However, the receipt of the amount for developing charges has not been denied by him. This conspiracy (i.e.) offence under Section 120B has been decided only on the evidence letting by the parties and has not been decided at the time of framing charges. In such circumstances, even though the petitioner is not a Clerk or Public Servant as per the https://hcservices.ecourts.gov.in/hcservices/ offence under Sections 406, 408, 409 and 477A, it has to be decided along with Section 120B I.P.C. that whether all the accused have conspired and whether they committed the offence and the same have to be decided after framing of charges and let in oral and documentary evidence. In the discharge petitions, the trial Court is not bound to decide that whether the sufficient materials available for concluding the conviction. At this stage, this Court has to decide that whether there is any prima-facie case made against the petitioner/accused. In such circumstances, it is premature to decide that no case has been made out against the petitioner/accused for conviction. So I do not find any illegality in the order passed by the trial Court. Hence, the criminal revisions deserve to be dismissed and hence, they are hereby dismissed. 14.In fine, • The Criminal Revisions are dismissed. • The order passed by the learned Judicial Magistrate No.II, Hosur is hereby confirmed. • Since the C.C.Nos.282 and 283 of 2002 are of the year 2002, the learned Judicial Magistrate is directed to proceed with the case, after framing issues on day to day basis and dispose the case within six months from the date of receipt of copy of this order. kj Sd/- Asst. Registrar //True Copy// Sub Asst. Registrar To 1.The Judicial Magistrate No.II, Hosur. 2.The Inspector of Police C.C.I.W. C.I.D., Dharmapuri. 3.The Public Prosecutor, High Court, Madras + 2 ccs to M/s. La Law, Advocate SR No. 30550 TEJ(CO) SR/13.5.2011 judgment in CRL.R.C.Nos. 1199 and 1200 of 2007 https://hcservices.ecourts.gov.in/hcservices/