THE HONOURABLE SRI JUSTICE N.RAVI SHANKAR CRIMINAL PETITION No. 4826 of 2008 BETWEEN: Bandlamudi Subbamma and another. ….PETITIONERS AND Kalasani Kutumbarao and another ….RESPONDENTS. THE HONOURABLE SRI JUSTICE N.RAVI SHANKAR CRIMINAL PETITION No. 4826 of 2008 ORDER: The point that arises for determination in this petition filed under Section 482 of Criminal Procedure Code (for short Cr.P.C.) is whether the criminal case i.e. Calendar Case No.522 of 2007 on the file of the Court of VII Munsif Magistrate, Guntur (Criminal Court) filed against petitioners should be quashed. 2. The point arises in the following circumstances. The petitioners herein are accused Nos. 1 and 2 in the above mentioned C.C.No.522 of 2007 and they are mother and son. The 1st petitioner herein is said to be the owner of Acs.3.00 Gts., of land and she is said to have executed an agreement of sale dated 07.02.1998 in favour of the 1st respondent herein agreeing to sell it to him for a consideration of Rs.3,19,500/-. It is the version of the 1st respondent that under the said agreement of sale, he has in all paid a sum of Rs.80,500/- i.e., initially Rs.30,000/- as earnest money to the 1st petitioner and later on various amounts on various dates to the 2nd petitioner who is the son of the 1st petitioner and the balance sale consideration was to be paid at the time of completion of the sale transaction. 3. The grievance of the 1st respondent is that subsequently the 1st petitioner did not keep her word and execute the sale deed as promised in the above sale agreement and that later on the 1st and 2nd petitioners herein intentionally brought into existence a nominal registered gift deed dated 06.04.2002 to show as if the 1st petitioner gifted the property covered by the above agreement of sale in favour of the 2nd petitioner and thus cheated him in order to defeat his rights under the sale agreement and misappropriated the money given by him. With the above allegations, the 1st respondent filed a private complaint before the criminal court alleging offences punishable under Sections 420, 405 and 421 of Indian Penal Code (for short, ‘IPC’) and the said court referred it to police for investigation and report. The concerned police i.e., Pattabhipuram Town Police Station, Guntur investigated the matter and ultimately the investigating officer filed charge sheet against the petitioners herein in the aforesaid criminal court and the said Court took cognizance of it for the offences under Sections 420 and 406 of IPC and issued process. The petitioners have now filed this criminal petition to quash that case. 4. The main plea of the petitioners is that as per the agreement of sale dated 07.02.1998 the 1st respondent has to pay the balance sale consideration by 25.03.1998 and obtain the sale deed, failing which the agreement of sale would stand cancelled and as the 1st respondent did not comply with that time schedule the agreement stood cancelled and therefore, they cannot be held guilty of any criminal breach of trust or cheating. They also pleaded that the allegations made by the 1st respondent in the complaint disclose only a civil dispute, but not criminal offences. It is also the version of the petitioners that earlier the 1st respondent filed a suit i.e., O.S.No.244 of 2005 for specific performance of the agreement of sale against both of them (petitioners) in the Court of Additional Senior Civil Judge, Guntur, and that suit is pending and that later on with an intention to harass them, the 1st respondent filed the present criminal complaint in the aforesaid criminal court in September, 2006 belatedly and this itself shows that the 1st respondent filed this complaint without any basis in order only to harass them. It is the specific case of the petitioners that the dispute between them and the 1st respondent is purely a civil dispute which has to be adjudicated in the specific performance suit and the 1st respondent has given a colour of criminal offence to it and therefore the criminal case in question should be quashed. 5. The learned counsel for the petitioners advanced his arguments on the above lines and also cited certain decisions and contended that since the dispute is purely a civil dispute the proceedings in the criminal case against petitioners should be quashed. On the other hand the learned counsel for the 1st respondent pointed out that this is a case where the concerned investigating officer investigated into the matter and filed charge sheet which discloses that both the petitioners committed the offences mentioned in the charge sheet and consequently there are no merits in this criminal petition. His contention is that the pleas of the petitioners are in the form of a defence which they can take in the criminal case and since this cannot be said to be a case where the allegations in the charge sheet if believed do not disclose an offence and consequently this court should not interfere under Section 482 Cr.P.C. In the light of the above contentions the point is now taken up. 6. It may be noted that the whole case of the 1st respondent in the criminal proceedings is based on the agreement of sale dated 07.02.1998 and the subsequent alleged gift deed dated 06.04.2002 said to have been executed by the 1st petitioner for the land in question in favour of the 2nd petitioner and the alleged breach of the agreement of sale by the 1st petitioner who is said to be the owner of said land. Even going by the case of the 1st respondent in the plaint in the specific performance suit a copy of which is filed in the material papers filed by the petitioners he made the last payment of Rs.5,000/- to the 2nd petitioner on 09.10.2000 and in the aggregate he paid only Rs.80,500/- by that date. He filed the specific performance suit i.e., O.S.No.244 of 2005 in the year 2005 as the year of the suit itself indicates. The 1st respondent has given his explanation for the delay in filing the suit. 7. A copy of the written statement filed by them in the suit is also made available in the material papers filed by the petitioners. Their 1st plea in the said written statement was that the 1st petitioner took the sum of Rs.30,000/- by way of loan and the 1st respondent took the signatures of the 1st petitioner on a blank stamp paper and he must have pressed into service that blank stamp paper to create the agreement of sale. Various other defences on the merits of the matter have also been taken and one of the defences is that the 1st respondent was not ready and willing to perform his part of the contract though the transaction was to be completed by 25.03.1998 and that the suit is also barred by time. The petitioners also pleaded in that written statement that the gift deed was executed on 06.04.2002 and it was a registered document and therefore the 1st respondent must be held to have constructive notice of it and the very fact that the suit is filed in 2005 itself shows that the 1st respondent is indulging in speculative litigation. Whether the suit is barred by limitation or not and whether there are any merits in it are all questions which have to be decided in that suit and not in these proceedings. 8. Thus the pleadings in the specific performance suit referred to supra would show that both the petitioners and the 1st respondent have already commenced litigation on the civil side. The 2nd petitioner as donee in the gift deed stands in the position of a gratuitous transferee and he would be liable to join in the execution of sale deed along with the 1st petitioner in case the 1st respondent’s specific performance suit is decreed. Thus what should be noted is this is not a case where immediately after the agreement of sale the 1st petitioner has executed the gift deed in question and it was executed on 06.04.2002 i.e., four years after the agreement of sale. The stand of the 1st petitioner is that since the 1st respondent did not come forward for completion of the transaction he must be held to have abandoned his claim under the agreement of sale and as the 2nd petitioner happens to be her only son she executed the gift deed in his favour. 9. It may now be noted that the present criminal complaint was filed sometime in September, 2006 i.e., about one year after the filing of the suit. Thus it is clear that the 1st respondent himself had nothing to suspect about the conduct of the 1st petitioner when she executed the agreement of sale and he went on paying the amounts to the 2nd petitioner even up to October, 2000, but he paid only paltry amounts on different dates. 10. I n Hridaya Ranjan Pd Verma and others Vs. State of Biharand another[1] relied upon by the petitioners’ counsel the Apex Court had an occasion to consider the distinction between a mere breach of contract and cheating. Laying down the criteria as to how that distinction should be made and how a breach of contract can amount to cheating or cannot amount to cheating the following proposition has been laid down. “The distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time of inducement which may be judged by his subsequent conduct but this subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is the time when the offence is said to have been committed. Therefore, it is the intention which is the gist of the offence. To hold a person guilty of cheating it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed”. 11. Thus what should be seen from the above proposition is whether there was fraudulent intention on the part of petitioners when the 1st petitioner executed the agreement of sale. The very fact that the 1st respondent kept quite till 2002 without suing for specific performance itself shows that there was no fraudulent intention on the part of the 1st petitioner or the 2nd petitioner when the agreement of sale dated 07.02.1998 was executed. It was only in 2002 the 1st petitioner executed the gift deed in favour of the 2nd petitioner who is none else than her son and the 1st petitioner was getting old. It is quite possible as the 1st respondent did not take any steps as believed by the 1st petitioner for getting the sale deed she has executed the gift deed in favour of her son and this act by itself cannot constitute cheating. Even otherwise the specific relief act provides that an agreement holder can get the relief from a gratuitous transferee. This is also not a case where the 1st petitioner parted the property in favour of a third party to make any gain. Thus in my opinion the acts of the 1st petitioner in simply executing a gift deed which is made the whole basis for the offences alleged cannot be held to be cheating or misappropriation or criminal breach of trust. 12. It may be noted that the pleadings in the specific performance suit and also the allegations in the complaint which are similar to the plaint allegations even if believed would only disclose a civil dispute and the proposition laid down in the above Apex Court decision, in my opinion, supports this view. The contention of the learned counsel for the 1st respondent that the allegations in the charge sheet disclose criminal offences and therefore this Court cannot interfere under Section 482 of Cr.P.C., cannot be accepted for the simple reason the said allegations even if believed would only disclose a civil dispute which is already pending adjudication in the specific performance suit. The learned counsel for the 1st respondent could not bring to my notice any other circumstance to differ from the above view and conclude in his favour. Thus to sum up, in my opinion, the allegations in the charge sheet even if believed in their entirety would only disclose a civil dispute and the 1st respondent has given the colour of a criminal case to them. 13. Accordingly, the point is decided in favour of the petitioners and this petition is allowed and the proceedings in the criminal case against them are quashed. ______________________ N.RAVI SHANKAR, J. 23rd March, 2011 CVRK [1] AIR 2000 SC 2341