C. SUBBIAH @ KADAMBUR JAYARAJ AND OTHERS versus THE SUPERINTENDENT OF POLICE AND OTHERS
[2024] 5 S.C.R. 813, Supreme Court of India, 2024
Outcome: Appeal(s) allowed (Granted)
Segment: Issues
* Author
[2024] 5 S.C.R. 813 : 2024 INSC 416
C. Subbiah @ Kadambur Jayaraj and Others 
v. 
The Superintendent of Police and Others
(Criminal Appeal No. 2582 of 2024)
15 May 2024
[B.R. Gavai and Sandeep Mehta,* JJ.]
Issue for Consideration
Matter pertains to the permissibility of suing the accused for a 
civil wrong, in relation to the benami transactions, as a corollary, 
allowing criminal prosecution of the accused in relation to the 
same cause of action.
Headnotes†
Benami Transactions (Prohibition), Act 1988 – s. 4 – Benami 
transaction – Initiation of civil suit/criminal proceedings by 
the real owner of the benami property – Permissibility  – 
Complainant-government teacher, previously doing real 
estate business, fraudulently allured and induced by the 
accused persons to invest in various land deals to earn high 
profits – Purchased properties not registered in complainant’s 
name despite the investments made by him and thereafter, 
the accused failed to deliver the plots or profits as agreed 
and thereby committed fraud and criminal breach of trust – 
Registration of FIR and filing of chargesheet – On the same 
set of allegations, the complainant filed civil suit against the 
accused persons, which is pending – Petition by the accused 
seeking quashing of the FIR and the chargesheet – Dismissed 
by the High Court:
Held: Dispute is regarding the quantification of profits and full 
satisfaction of the share claimed by the complainant proportional 
to the investments
made by him after sale of some plots – 
Complainant after being appointed in Government service would be 
conscious that indulging in land deals may land him in departmental 
proceedings, thus, must have agreed that the lands not be registered 
in his name – By virtue of s. 4(1) and 4(2), the complainant in 
spite of having made investments in the land deals in the names 
of other persons which were evidently benami transactions, was 
prohibited from instituting civil proceedings for recovery against
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the accused persons-appellants – As a corollary, allowing criminal 
prosecution of the accused in relation to the self-same cause of 
action would be impermissible in law – Thus, in view of the clear 
bar contained in s. 4, the complainant could not have sued the 
accused for the same set of facts and allegations which were 
made the foundation of the criminal proceedings – Since, if such 
allegations did not constitute an actionable civil wrong, allowing 
the prosecution of the accused for the very same set of facts, 
would tantamount to abuse of the process of law – Furthermore, 
no allegation to persuade the Court to hold that the intention of the 
accused was to defraud the complainant right from the inception 
of the transactions – Also necessary ingredients of the offences 
punishable u/ss. 406, 420, 294(b) and 506(ii) IPC not made out 
against the accused – Dispute which is purely civil in nature was 
given a colour of criminal prosecution alleging fraud, breach of 
trust and criminal intimidation by misusing the tool of criminal law – 
Criminal prosecution instituted against the accused in pursuance of 
the totally frivolous FIR tantamounts to sheer abuse of the process 
of law – Thus, the impugned order quashed and set aside. [Paras 
36, 38, 42-48]
Benami Transactions (Prohibition), Act 1988 – s. 4 – Benami 
transaction – Prohibition of the right to recover property held 
benami:
Held: s. 4(1) makes it clear that no
suit, claim or action to enforce 
any right in respect of any property held benami against the person 
in whose name the property is held or against any other person, 
shall lie or on behalf of a person claiming to be real owner of 
such property – Such person cannot raise a defence based on 
any right in respect of any property held benami either against the 
person in whose name the property is held or against any other 
person – s. 4(2) prohibits the institution of any suit, claim or any 
other action by and on behalf of a person claiming to be the real 
owner of such property. [Para 35]
Case Law Cited
State of Haryana and Others v. Bhajan Lal and Others [1990] 
Suppl. 3 SCR 259 : 1992 Supp. 1 SCC 335; Indian Oil Corpn. 
v. NEPC India Ltd. and Others [2006] Supp. 3 SCR 704 : (2006) 
6 SCC 736; Anand Kumar Mohatta and Another v. State(NCT 
of Delhi), Department of Home and Another [2018] 13 SCR
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C. Subbiah @ Kadambur Jayaraj and Others v. 
The Superintendent of Police and Others
1028 : (2019) 11 SCC 706; Union of India v. Ganpati Dealcom 
(P) Ltd. [2022] 12 SCR 320 : (2023) 3 SCC 315; Sarabjit Kaur 
v. State of Punjab and Anr., 2023 SCC OnLine SC 210; Vijay 
Kumar Ghai v. State of W.B. [2022] 1 SCR 884 : (2022) 7 SCC 
124 – referred to.
List of Acts
Penal Code, 1860; Code of Criminal Procedure, 1973; Prevention of 
Corruption Act, 1988; Benami Transactions (Prohibition), Act 1988.
List of Keywords
Civil wrong; Benami transactions; Criminal prosecution; Cause of 
action; Fraudulently allured and induced; Fraud; Criminal breach of 
trust; Departmental proceedings; Quantification of profits; Criminal 
intimidation; Abuse of the process of law.
Case Arising From
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 2582 
of 2024
From the Judgment and Order dated 23.04.2018 of the High Court of 
Judicature at Madras at Madurai in CRLOP No. 3846 of 2013
Appearances for Parties
Dama Seshadri Naidu, Sr. Adv., Pai Amit, Tushar Bakshi, Mrs. 
Naresh Bakshi, Abhiyudaya Vats, Ashish Jacob Mathew, Advs. for 
the Appellants.
D. Kumanan, Veshal Tyagi, M.P. Parthiban, Ms. Priyaranjani 
Nagamuthu, Ms. Shalini Mishra, R. Sudhakaran, T. Hari Hara Sudhan, 
Bilal Mansoor, Shreyas Kaushal, P.V.K. Deivendran, Advs. for the 
Respondents.
Judgment / Order of the Supreme Court
Judgment
Mehta, J.
1.	
Leave granted.
2.	
The instant appeal by special leave is filed against
the judgment dated 
23rd April, 2018 passed by learned Single Judge of the Madras High 
Court, Madurai Bench dismissing the CRL.O.P.(MD) No. 3846 of 2013
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preferred by the appellants herein seeking quashing of proceedings 
of Criminal Case No. 250 of 2012 pending in the Court of learned 
Judicial Magistrate No. II, Kovilpatti for offences punishable under 
Sections 420 read with Section 120B, Section 294(b), Section 506(ii) 
read with Section 114 of the Indian Penal Code, 1860(hereinafter 
being referred to as the ‘IPC’).	
Brief facts:-
3.	
Respondent No. 3(hereinafter being referred to as the ‘complainant’) 
lodged a complaint in the Court of learned Judicial Magistrate No. 
II, Kovilpatti alleging inter alia that he was having a qualification of 
M.Sc., MD Graduate. He was appointed as a Government teacher 
on 8th October, 2007. Before being appointed as a Government 
teacher, the complainant was doing real estate business for earning 
his livelihood for past 16 years.
4.	
The complainant was knowing Kannabiran(hereinafter being 
referred to as ‘A-3’) who was working as a Manager in the State 
Bank of India(SBI), Kovilpatti Branch. While being engaged in 
the real estate business, the complainant came into contact 
with Subbiah @ Kadambur Jeyaraj(hereinafter being referred to 
as ‘A-1’) and his wife A. Vijaya(hereinafter being referred to as 
‘A-2’). Through A-1 and A-2, the complainant came into contact 
with Chandrasekar(hereinafter being referred to as ‘A-4’), his 
son Pandiyaraj(hereinafter being referred to as ‘A-6’), his wife(S. 
Pandiyammal, hereinafter being referred
as ‘A-5’), and his brother 
(K.Shanmugiah, hereinafter being referred as ‘A-8’) who were also 
engaged in real estate business. 
5.	
The complainant claimed that he always trusted his partners in 
business. Taking undue advantage of the trusting nature of the 
complainant, the accused persons induced him to join their real estate 
business claiming that they had strong political connections. The 
accused allured and induced the complainant to enter into land deals 
with the intention to defraud the complainant right at the inception of 
the transactions. The complainant was told that the documents need 
not be registered in his own name and instead the registration may 
be carried out in the name of his sister-in-law. An alternative option 
was given that if the documents were registered in the names of the 
accused, the plots could be sold immediately to earn higher profits. 
By flaunting their political connections, the accused influenced the
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The Superintendent of Police and Others
complainant to make investments into lands assuring that he would 
reap huge benefits out of these deals. 
6.	
The complainant was also fraudulently induced to believe that out of 
the chunks of lands so purchased, smaller plots would be carved out 
and sold to different persons which would frequently require physical 
presence of the seller and since the complainant was a teacher, he 
would face inconvenience if the land parcels were to be registered 
in his name. In this manner, the complainant was not allowed to get 
the purchased properties registered in his name despite he making 
the investments. The complainant was given assurances that the 
plots would be sold for huge profit in a very short duration and he 
would be given his share. By using this mode of inducement, A-1, 
A-3, A-4, and A-6 infused a sense of trust in the complainant with 
the ulterior motive to defraud him and to commit breach of trust. 
7.	
It was further alleged that before the complainant had come in 
touch with the accused, he and his brother-in-law Chandrasekar, 
S/o Krishnasamy Naicker had entered into an agreement for sale 
with A. Sairam in respect of a chunk of land at Allampatti village, 
admeasuring 8 acres, but the sale could not be finalized because a 
suit was pending in the District Court, Tuticorin in respect of the said 
land. In the meantime, the complainant was appointed as a
teacher. 
The suit pending before the District Court, Tuticorin was disposed 
in favour of A. Sairam.
8.	
Having given the fraudulent allurements to the complainant, the 
accused got registered a sale deed in their name as Document No. 
1839 of 2008 dated 27th February, 2008 on the file of Sub Registrar 
Office, Kovilpatti in respect of some plots of land situated in the 
Allampatti village of total area 7.618 acres. The complainant invested 
a sum of Rs. 1,01,47,800/- towards this transaction whereas, the 
accused invested proportionately much lesser amounts in the said land 
deal. A-1, A-3, A-4, and A-6 along with the complainant, purchased 
the said parcel of land from A. Sairam for a total consideration of 
Rs. 3,08,33,600/-. However, as per the complainant, the accused 
never gave him the plots equivalent to the investment made by him 
and thereby, committed fraud and breach of trust. 
9.	
The complainant further alleged that A-2 and A-5 had conspired 
with A-1, A-3, A-4, and A-6 to cheat him. The accused made the 
complainant believe that the business of real estate is generally
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carried on by word of mouth and trust. However, at a later point of 
time, the accused started indulging in criminal breach of trust with 
the ulterior motive of cheating the complainant. 
10.	 A-1, A-3, A-4 and A-6 invested the amount provided by the 
complainant towards his share in the land deal and completed the 
sale of the suit property on 27th February, 2008 with A. Sairam. 
However, despite the assurances, the accused conspired and 
refused to give the due share of plots to the complainant thereby 
committing breach of trust. Therefore, a Panchayat meeting was 
convened on 19th July, 2010 and a settlement deed was also 
executed wherein, it was agreed that 52 plots admeasuring 256.51 
cents would be handed over by A-1 and A-2 to the complainant 
towards the investment made by him. 
11.	 Under the same settlement, A-4 and A-6 were given 45 plots to 
the extent of 233.50 cents for the investment made by them after 
deducting land to the extent of 16.50 cents towards the passages. 
On the very date of execution of the settlement deed, all the accused 
entered into an agreement with Dharamraj(hereinafter being referred 
to as ‘A-7’), brother-in-law of A-4 and executed a General Power of 
Attorney(GPA) in his favour after receiving a sum of Rs. 30,00,000/- 
towards plots Nos. 68, 69, 70 and 71 which were a part and parcel 
of the settlement deed. 
12.	 The complainant alleged that the accused failed to pay a sum of Rs.
19,00,000/- which would be the share amount due to the complainant 
out of the sale price of Rs. 30,00,000/-. Thus, the accused persons 
despite being signatories to the settlement deed did not act as 
promised under the settlement and thereby, committed breach of trust. 
13.	 The accused had also promised to execute the sale deeds of some 
plots in favour of the persons to be nominated by the complainant. The 
complainant provided names of three persons for these plots. Three 
sale deeds were got prepared on stamp papers worth Rs. 90,000/-. 
The accused gave their photographs and ID-proofs and signed the 
sale deeds, but they failed to appear at the Sub-Registrar Office, 
Kovilpatti at the scheduled time for registration of the sale deeds. 
When the complainant enquired from A-1 and A-3 as to why they 
were indulging in such fraudulent acts, they abused the complainant 
and threatened to get rid of him. A-1 threatened the complainant 
that if the matter is reported to the police, he would shoot and kill
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The Superintendent of Police and Others
the complainant and his family members by using a revolver. While 
saying so, A-1 brandished a revolver and handed it over to A-3. 
14.	 It was further alleged that A-1 further induced the complainant to pay 
a sum of Rs. 41,00,000/- on 14th November, 2011, whereafter, the 
sale deed for one of the properties forming a part of the settlement 
memorandum was executed. However, for some of the properties, 
the accused were not abiding by the terms of the memorandum and 
had fraudulently transferred the same to other investors. Some land 
brokers were also present at the time when this incident occurred. 
15.	 Being aggrieved of these continued criminal activities of the 
accused, the complainant submitted a complaint dated 29th June, 
2010 at the Kovilpatti West Police Station but no action was taken 
thereupon. Having failed to get any action on his complaint, the 
complainant approached the Madras High Court, Madurai Bench 
by filing CRL.O.P.(MD) No. 1396 of 2011 and as per the directions 
of the High Court, he submitted a fresh complaint to the District 
Superintendent of Police, Tuticorin, but still the FIR was not 
registered. Ultimately, the complainant was compelled to file a 
complaint in the Court of the Jurisdictional Magistrate with a prayer 
to forward the same to the police under Section 156(3) of Code of 
Criminal Procedure, 1973. 
16.	 Under the direction
of the learned Magistrate, the complaint was 
forwarded to Police Station Kovilpatti West, where FIR No. 305 of 
2011 dated 6th March, 2011 came to be registered. After investigation, 
the Investigating Agency, proceeded to file a charge sheet against 
eight accused with the following conclusions: -
“By these Criminal Acts accused 1 to 6 have made to 
believe the complainant by their honey coated words 
have purchased lands, along with the complainant, 
in Alampatti Village in Survey No.218/B - 1.5 Acres, 
Survey No. 219 - 2.74 Acres, Survey No.218/1 - 1 
Acre, Survey No.221/1 - 2.37 Acres totaling in all 7 
Acres 61 cents which are valued Rs.6,18,500/- as per 
guideline value but paid Rs.3,08,33,600/- and registered 
the sale deed as Doc.No.1839/08 on the file of SRO 
Kovilpatti, out of the said sale consideration have paid 
the complainant Rs.10,00,100/- as per his proportionate 
share of his investment and without paying the balance
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sale consideration of Rs.91,47,700/- towards his share 
received from the sale consideration or by not giving the 
proportionate land in alternate, they indulged in cheating 
activities. Therefore the acts committed by the accused 
or criminal nature and they appear to have committed the 
criminal acts which are punishable under the following 
Sections:
The 1st accused punishable under Section 420 IPC r/w. 
120(B) IPC and Section 294(b), 506(ii) of IPC.
The 2nd accused punishable under Section 420 IPC r/w 
Section 120(B) IPC.
The 3rd accused punishable under Section 420 IPC r/w. 
120(B) IPC and Section 294(b), 506(ii) of IPC r/w 114 of 
IPC.
The 4th accused punishable under Section 420 IPC r/w 
Section 120(B) IPC.
The 5th accused punishable under Section 420 IPC r/w 
Section 120(B) of IPC.
The 6th accused punishable under Section 420 IPC r/w 
Section 120(B) of IPC.
The 7th accused punishable under Section 420 IPC r/w 
Section120(B) of IPC.
The 8th accused punishable under Section 420 IPC r/w 
Section 120(B) of IPC.”
17.	 It may be mentioned that for the very same set of allegations, the 
complainant had also filed a civil suit by impleading A-1 to A-6 as 
defendants which is pending on the file of District Judge, Tuticorin 
in O.S. No. 06 of 2012. 
18.	 A-1, A-2, A-3, A-4, A-5, A-6, A-7, and A-8 being the appellants herein, 
approached the Madras High Court, Madurai Bench for assailing 
the FIR and the charge sheet by filing
a CRL.O.P.(MD) No. 3846 of 
2013. The learned Single Judge of Madras High Court proceeded 
to dismiss the said petition preferred by the appellants vide order 
dated 23rd April, 2018 which is subject matter of challenge in this 
appeal by special leave.
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C. Subbiah @ Kadambur Jayaraj and Others v. 
The Superintendent of Police and Others
Submissions on behalf of appellants: -
19.	 Learned senior counsel, Mr. Dama Seshadri Naidu representing 
the appellants vehemently and fervently contended that even if the 
allegations set out in the FIR and the charge sheet are treated to be 
true on the face of record, the same do not constitute the necessary 
ingredients of the offences alleged. He contended that looking at 
the admitted facts as set out in the complaint, the dispute, if any, 
between the parties is purely of civil nature and thus, continuance 
of the proceedings pursuant to the charge sheet filed against the 
accused appellants would tantamount to gross abuse of process 
of law. The charge sheet clearly spells out that a part of the sale 
proceeds from the land deals were paid to the complainant, but the 
entire amount as per his entitlement was not paid. Thus, as per Shri 
Naidu, for alleged part performance of contractual obligations, the 
tool of criminal law has been misused by the complainant. 
20.	 He further submitted that the complainant being a teacher serving in 
the Government establishment was not entitled to indulge in property 
transactions and thus, at his own risk, he made the investments 
through the accused appellants herein and when the profit sharing 
quotient towards the land deals did not work out to the complainant’s 
satisfaction, the process of criminal law was misused so
as to launch 
a purely frivolous prosecution against the accused appellants.
21.	 The contention of the learned senior counsel was that there is no 
material whatsoever on the record of the case to show that the 
intention of the accused appellants was to defraud the complainant 
right at the time of the inception of the transactions. Furthermore, 
since the allegation of the complainant is regarding disproportionate 
sharing of profits enuring from the land deals which he entered with 
the accused appellants with open eyes, the offence of criminal breach 
of trust would also not be made out against the accused appellants.
22.	 He urged that the essential ingredients of the offences alleged are 
not made out from the highest allegations levelled by the complainant 
as set out in the charge sheet warranting continuation of the criminal 
proceedings against the accused appellants. He placed reliance 
on the judgments of this Court in State of Haryana and Others v.
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Bhajan Lal and Others1; Indian Oil Corpn. v. NEPC India Ltd. and 
Others2 and Anand Kumar Mohatta and Another v. State(NCT 
of Delhi), Department of Home and Another3 in support of his 
contentions and buttressed that the criminal proceedings sought to 
be taken against the appellants as a consequence to the charge 
sheet are fit to be quashed as the same amount to a sheer abuse 
of process of Court apart from the fact that the charge sheet does 
not disclose the necessary ingredients of any cognizable offence.
Submissions on behalf of respondents-complainant and State:-
23.	 Per contra, learned counsel for the respondent complainant as well 
as the learned Standing Counsel representing the State vehemently 
and fervently opposed the submissions advanced by the learned 
counsel for the appellants. It was contended that, the accused 
appellants won over the trust of the complainant by using honey 
quoted language, and thereby, fraudulently induced him to make 
huge investments in land deals. The complainant was assured 
time and again by the accused that he would be given his due 
share of profits or the plots from the lands, as the case may be, 
which would be purchased in the name of the accused because the 
complainant being a Government teacher could not indulge into such 
transactions. The complainant fell for the allurements given by the 
accused appellants and invested huge sums of money for land deals 
placing blind
faith on the assurances given by accused. However, the 
accused appellants resiled from their promises and defrauded the 
complainant by failing to give him the requisite number of plots which 
would fall in his share commensurate with the investment made by 
him. The complainant was also deprived of his rightful share in the 
profits reaped after some of the plots had been sold.
24.	 They submitted that merely because the complainant has also availed 
civil remedy for the same grievances, that by itself cannot disentitle 
him from invoking jurisdiction of the criminal Court to prosecute the 
accused appellants for their fraudulent acts because the allegations set 
out in the complaint constitute both the civil wrong as well as criminal 
offences and thus parallel proceedings can continue. On these grounds, 
1	
[1990] Supp. 3 SCR 259 : 1992 Supp(1) SCC 335
2	
[2006] Supp. 3 SCR 704 : (2006) 6 SCC 736
3	
[2018] 13 SCR 1028 : (2019) 11 SCC 706
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C. Subbiah @ Kadambur Jayaraj and Others v. 
The Superintendent of Police and Others
learned counsel for the complainant and the learned Standing Counsel 
for the State implored the Court to dismiss the appeal.
Consideration of submissions and material on record: -
25.	 Heard the learned counsel for the parties at length and perused the 
impugned order as well as the complaint and the charge sheet filed 
against the accused appellants.
26.	 The arguments were heard, and the judgment was reserved on 16th 
February, 2024. Thereafter, we thought it fit to seek a clarification 
from the learned counsel for the parties because on going through 
the material available on record, we were prima facie of the opinion 
that the case presents sufficient material to direct inquiry under the 
provisions of Section 13(1)(b) and Section 13(2) of the Prevention of 
Corruption Act, 1988(hereinafter being referred to as ‘PC Act’) because, 
manifestly, the complainant being a public servant had indulged in 
large scale benami land transactions without disclosing the same to 
his employer. Accordingly, learned counsel for the complainant was put 
to notice and he has submitted a short clarificatory note mentioning 
therein that the complainant is an Income Tax assessee from the year 
2000. It is also submitted in the note that the complainant started 
the business of real estate from the year 2004 onwards and had 
acquired significant wealth during the course of this
business. The 
complainant was appointed as a teacher in the Government School 
only in the year 2007 when he was nearly 45 years of age. He has 
superannuated in the year 2022 without any pensionary benefits. Thus, 
it was submitted that whatever money the complainant invested in 
the disputed land deals entered into with the accused, were genuine 
investments made by using his valid and declared sources of income 
and savings. A chart was also set out along with this explanation 
regarding the sources from where the complainant received various 
amounts which he claims to have invested in the disputed land deals.
27.	 Being satisfied with the explanation so offered, we do not find any 
justifiable cause so as to direct an enquiry against the complainant 
for the offences under the PC Act.
28.	 Now, we proceed to appreciate the merits of the present appeal.
29.	 At the outset, we may note that the complainant has come out with 
a clear case that he was already involved in real estate business 
before being selected as a Government teacher in the year 2007.
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Hence, it can safely be assumed that he was well versed with the 
nitty gritties of such business and the innocence and ignorance 
feigned by him in the complaint qua pros and cons of fallouts of 
property dealings cannot ex facie be countenanced.
30.	 The complainant has alleged in the FIR, that the accused fraudulently 
allured him into buying the lands by using honey quoted words and 
that they also took advantage of the fact that the complainant was 
a teacher serving in a Government institution and hence he was 
persuaded to get the lands registered in the name of the accused. 
However, these allegations are one sided and do not present the true 
picture. The complainant after having been appointed in Government 
service would be conscious that indulging in land deals may land 
him in departmental proceedings. It was precisely for that reason, 
the complainant must have agreed that the lands to be purchased 
may not be registered in his name. On the face of the record, the 
property deals allegedly made in the names of other persons by 
using the funds partially provided by the complainant were benami 
transactions.
31.	 We may, at this stage, refer to the relevant provisions of the Benami 
Transactions (Prohibition), Act 1988(hereinafter being referred to as 
the ‘Benami Act’)(applicable at the time of the alleged transactions), 
and particularly Section 2(a), Section 2(c) and Section 4 thereof: -
“2. Definitions- In
this Act, unless the context otherwise 
requires,--
(a)	 benami transaction means any transaction in 
which property is transferred to one person for a 
consideration paid or provided by another person;
(b)	 …….
(c)	
property means property of any kind, whether movable 
or immovable, tangible or intangible, and includes 
any right or interest in such property
“4. Prohibition of the right to recover property held 
benami- 
(1)	 No suit, claim or action to enforce any right in respect 
of any property held benami against the person in 
whose name the property is held or against any other
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person shall lie by or on behalf of a person claiming 
to be the real owner of such property. 
(2)	 No defence based on any right in respect of any 
property held benami, whether against the person 
in whose name the property is held or against any 
other person, shall be allowed in any suit, claim or 
action by or on behalf of a person claiming to be the 
real owner of such property. 
(3)	 Nothing in this section shall apply,--
(a)	 where the person in whose name the 
property is held is a coparcener in a Hindu 
undivided family and the property is held 
for the benefit of the coparceners in the 
family; or 
(b)	 where the person in whose name the 
property is held is a trustee or other person 
standing in a fiduciary capacity, and the 
property is held for the benefit of another 
person for whom he is a trustee or towards 
whom he stands in such capacity.”
32.	 As per Section 2(a), any transaction in which property is transferred 
to one person for a consideration paid or provided by another person 
would be a “benami transaction”.
33.	 As per Section 2(c), “property” means property of any kind, whether 
movable or immovable, tangible or intangible, and includes any right 
or interest in such property. 
34.	 Sections 3 of the Benami Act have been declared unconstitutional 
by this Court in the case of Union of India v. Ganpati Dealcom (P) 
Ltd4. A review petition is,
however, pending against the said judgment. 
35.	 Section 4(1) of the Benami Act makes it clear that no suit, claim or 
action to enforce any right in respect of any property held benami 
against the person in whose name the property is held or against 
any other person, shall lie or on behalf of a person claiming to be 
real owner of such property. Such person cannot raise a defence 
4	
[2022] 12 SCR 320 : (2023) 3 SCC 315
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based on any right in respect of any property held benami either 
against the person in whose name the property is held or against 
any other person. Section 4(2) prohibits the institution of any suit, 
claim or any other action by and on behalf of a person claiming to 
be the real owner of such property.
(emphasis supplied)
36.	 It is, thus, clear that the complainant in spite of having made 
investments in the land deals which were evidently benami 
transactions, could not have instituted any civil proceedings for 
recovery against the person(s) in whose name, the properties were 
held which would be the accused appellants herein. Since by virtue 
of the provisions contained in Sections 4(1) and 4(2) of the Benami 
Act, the complainant is prohibited from suing the accused for a 
civil wrong, in relation to these benami transactions, as a corollary, 
allowing criminal prosecution of the accused in relation to the self-
same cause of action would be impermissible in law.
37.	 Going by the allegations as set out in the FIR and the charge sheet, 
it is apparent that it is the admitted case of the complainant that the 
accused appellants made over a part of the purchased lands/plots to 
the complainant and also paid a part of the profits to him. However, 
when the exact share of the investment on pro-rata basis was not 
being given to the complainant, he was compelled to convene a 
Panchayat meeting wherein a Memorandum of
Settlement was arrived 
at. Even despite the settlement, the actual share of the lands and 
profits enuring to the complainant was not paid to him. The relevant 
extract from the complaint is reproduced hereinbelow: -
“10. As a per the Memorandum of Settlement it has been 
ensured that a Plot measuring 169 cents in the Property Item 
No.5 should be given to the complainant for his investment. 
It is also been assured that 32 cents to the 3rd accused 
Kannabiran and 55.50 cents to the 1st accused Subbiah 
@ Kadambur Jeyaraj. Upon the continuous insistence of 
the complainant to register the sale on 169 cents in his 
favour, the 1st and 3rd accused and all other accused 
informed the complainant that they will come on 9.9.2010 
to register the complainant’s share. But on 9.9.2010 the 
3rd accused Kannabiran only came to the Sub - Registrar 
Office, Kovilpatti. The complainant asked the 3rd accused
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C. Subbiah @ Kadambur Jayaraj and Others v. 
The Superintendent of Police and Others
about the other accused, he replied that he did not know 
about them and he said the complainant pays the entire 
amount for 32 cents he is ready to execute the sale deed 
and therefore the complainant paid the entire amount for 
32 cents and after receiving the same on 09.09.2010 the 
3rd accused executed a sale deed in respect of his 1/4th 
undivided share and the same was registered as Doc. 
No.8124 of 2010 then he left. For the investment amount 
made by the complainant, he has to get 169 cents, adding 
the plots to the extent of 32 cents settled by the 3rd accused 
Kannabiran the complainant has to get in total 201 cents. 
Out of this Kannabiran has got right to sell his 1/4th undivided 
share which is equivalent to 103 cents only. The 1st accused 
C.Subbiah @ Kadambur Jeyaraj can execute the Plots only 
to an extent of 100 cents to the complainant. But having 
committed the breach of trust and cheating the complainant 
without coming to the Sub Registrar Office on 9.9.2010 
and keeping the 1 acre without executing in favour of the 
complainant, he is not only committing a breach of trust 
but also intimidating the complainant by threatening the 
complainant continuously with dire consequences that he 
is having political influence and no one can do anything.
11. Since the 1st Accused expressed his willingness to 
execute a sale deed in respect of the Property Item
No.2 in 
the Memorandum of Settlement dated 19.10.2010 which is 
plots situate in Nehru Maha College Road, Malumichampatti 
Village, Kovai Corporation, if the complainant pays a sum 
of Rs.41,00,000/- to the 1st Accused. Believing his words 
the complainant on 14.1.2011 paid a sum of Rs.41,00,000/- 
to the 1st Accused and completed the sale. And also 
gave an assurance that they will act in accordance with 
the Settlement and on the very same date executed an 
Agreement of Execution. But they have been cheating 
the complainant without transferring the complainant’s 
share in the Property Item No.5 as per the settlement 
dated 19.07.2010. Also it is found in the Memorandum of 
Settlement dated 19.7.2010 that as for as the Item No.1 
concern only the 1st accused has to get the release after 
paying Rs.31,52,000/- to the Complainant. The 1st accused 
is cheating even without executing the same. And as per
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the Memorandum of Settlement dated 19.7.2010 as for as 
the 3rd Item is concern they have to divide the property in 
proportionate to their respective investments. Item No.4 
has already been sold by the investors.”
38.	 It is thus clear that from the complaint, there is no such allegation 
therein which can persuade the Court to hold that the intention of 
the accused appellants was to defraud the complainant right from 
the inception of the transactions. The accused appellants have 
unquestionably, passed on some plots as well as part profits from 
the land deals to the complainant but the dispute is regarding the 
quantification of profits and full satisfaction of the share claimed by 
the complainant proportional to the investments made by him.
39.	 These allegations can at best give a cause to the complainant to 
sue the accused appellants in a civil Court. However, as discussed 
above, such remedy is barred by Section 4 of the Benami Act.
40.	 The complainant has clearly alleged that the accused caused him 
monetary loss because the appropriate share of profits was not 
passed on to him after some plots from the entire chunk had been 
sold. This Court in the case of Sarabjit Kaur v. State of Punjab 
and Anr5 observed that: -
 “A breach of contract does not give rise to criminal 
prosecution for cheating unless fraudulent or dishonest 
intention is shown right at the beginning of the transaction. 
Merely on the
allegation of failure to keep up the promise 
will not be enough to initiate criminal proceedings”. 
41.	 Similarly, in the case of Vijay Kumar Ghai v. State of W.B.6, this 
Court while tracing the earlier decisions on the subject observed 
as under:
24. This Court in G. Sagar Suri v. State of U.P. [G. Sagar 
Suri v. State of U.P., (2000) 2 SCC 636] observed that it 
is the duty and obligation of the criminal court to exercise 
a great deal of caution in issuing the process, particularly 
when matters are essentially of civil nature.
5	
2023 SCC OnLine SC 201 
6	
[2022] 1 SCR 884 : (2022) 7 SCC 124
[2024] 5 S.C.R. 
829
C. Subbiah @ Kadambur Jayaraj and Others v. 
The Superintendent of Police and Others
25. This Court has time and again cautioned about 
converting purely civil disputes into criminal cases. This 
Court in Indian Oil Corpn. [Indian Oil Corpn. v. NEPC India 
Ltd., (2006) 6 SCC 736] noticed the prevalent impression 
that civil law remedies are time consuming and do not 
adequately protect the interests of lenders/creditors. The 
Court further observed that : (Indian Oil Corpn. case [Indian 
Oil Corpn. v. NEPC India Ltd., (2006) 6 SCC 736)
“13. … Any effort to settle civil disputes and 
claims, which do not involve any criminal offence, 
by applying pressure through criminal prosecution 
should be deprecated and discouraged.”
42.	 Thus, we are of the firm view that the necessary ingredients of the 
offences punishable under Section 406 and Section 420 IPC are 
not made out against the accused appellants from the admitted 
allegations set out in the complaint and the charge sheet. It cannot 
be doubted that a dispute which is purely civil in nature has been 
given a colour of criminal prosecution alleging fraud and criminal 
breach of trust by misusing the tool of criminal law. 
43.	 The Investigating Officer has also applied offences under Section 
294(b) and Section 506(ii) read with Section 114 IPC in the charge 
sheet. On going through the entire charge sheet, we do not find 
any such material therein which can justify invocation of the offence 
under
Section 294(b) IPC which reads as below: -
“294. Obscene acts and songs.—Whoever, to the 
annoyance of others,
(a)	 ….
(b)	 sings, recites or utters any obscene song, ballad 
or words, in or near any public place,
Shall be punished with imprisonment of either 
description for a term which may extend to three 
months, or with fine, or with both.”
44.	 The complainant alleged that the accused abused him by using 
profane language. Section 294(b) IPC would clearly not apply to 
such an act. Apart from a bald allegation made by the complainant 
that A-1 abused him and intimidated him on 28th July, 2010, there is
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no material which can show that the accused indulged in criminal 
intimidation of the complainant so as to justify invocation of the 
offence punishable under Section 506(ii) IPC.
45.	 We have to be conscious of the fact that the complainant has tried 
to misuse the tool of criminal law by filing the patently frivolous FIR 
dated 6th March, 2011, wherein the allegation is levelled regarding 
the so-called incident of criminal intimidation dated 28th July, 2010. 
The said allegation otherwise is also belied for the reason that in the 
FIR, the complainant states that he filed a complaint dated 29th July, 
2010 in Kovilpatti West Police Station, but the RTI reply from the said 
police station clearly states that no such complaint was ever received.
46.	 Thus, we are persuaded to accept the contention of learned counsel 
for the accused appellants to hold that the criminal prosecution 
instituted against the accused appellants in pursuance of the totally 
frivolous FIR tantamounts to sheer abuse of the process of law. 
47.	 At the cost of repetition, it may be reiterated that in view of the 
clear bar contained in Section 4 of the Benami Act, the complainant 
could not have sued the accused appellants for the same set of 
facts and allegations which are made the foundation of the criminal 
proceedings. Since, if such allegations do not constitute an actionable 
civil wrong, in such circumstances, allowing the prosecution of the
accused appellants for the very same set of facts, would tantamount 
to abuse of the process of law.
48.	 Consequently, the impugned order whereby the petition filed by the 
appellants seeking quashing of the Criminal Case No. 250 of 2012 
and FIR No. 305 of 2011 was dismissed, does not stand to scrutiny, 
thus, the same is hereby quashed and set aside.
49.	 As a result, all proceedings sought to be taken against the appellants 
in pursuance of the charge sheet dated 10th August, 2011 are also 
quashed.
50.	 The appeal is allowed accordingly.
51.	 Pending application(s), if any, shall stand disposed of.
Result of the case: Appeal allowed.
†Headnotes prepared by: Nidhi Jain