Fakir Chandra Mahrotra vs State of U.P.and Another

S.K. Phaujdar, J.—The present application has invoked the power of this Court under Section 482, Cr. P.C. to quash an order dated 13795 passed by the IIIrd Judicial Magistrate, Allahabad, in Case No. 2916 of 1994 as also for quashing the entire criminal proceedings therein.

The aforesaid case was started on the basis of a report lodged by S.P. Gupta, the present opposite party No. 2, in his capacity as a Secretary, Surya Sahkari Avas Samiti Ltd., Allahabad. It was stated in the report dated 14893 that the present applicant, Fakir Chandra Mahrotra, was the owner of certain plots within police station Dhoomanganj, district Allahabad, he entered into an agreement with M/s. Surya Sahkari Avas Samiti for sale of these lands and the agreement was registered on 41090. The proposed vendor allowed the proposed vendee to open a Branch Office of the Society on the land proposed to be sold and the proposed vendee started development work thereon. The present applicant had received a sum of rupees two lacs from the aforesaid society. Subsequently the proposed vendee collected the rest of the consideration money and desired that the applicant should execute the saledeed and sent a notice therefor, the present applicant failed to execute the deed as agreed, rather he started interfering with the work of the aforesaid Society. Being apprehensive of the mala fides of Fakir Chandra Mahrotra the aforesaid society started making enquiry into the matter and could come to know that this very applicant had on 251082 entered into an agreement for sale of these very plots to another Housing Society and had taken an advance of rupees fifty thousand from them. At the time of the entering into the agreement with the complainant society the fact of the earlier agreement was completely suppressed. In addition thereto Fakir Chandra Mahrotra, in suppression of all these agreements, made an application to the Allahabad Development Authority indicating that he was having the aforesaid plots for being acquired by the AD. A. The matter is under enquiry by the A.D.A. The present applicant had played a deception on the complainantsociety and had taken money from them which was paid as a result of that deception. It was indicated that there was some dispute regarding possession of the property and the competent Executive Magistrate had started a proceeding under Section 145, Cr. P.C. and the land in question has been attached for maintaining peace.

Upon receipt of this report at Dhoomanganj police station, Case Crime No. 1018 of 1993, under Sections 420,467, 468 and 506 I.P.C. was drawn up which resulted in the aforesaid case after submission of the chargesheet. In the chargesheet the facts averred in the F.I.R. were mentioned. It was stated that by a forged agreement and by deception the applicant had allegedly received about three lacs rupees and the advance money was never returned.

It was the case of the present applicant in this application that the agreement with the complainantsociety had a clause of forfeiture of the earnest money if certain actions were not taken by the complainant within a certain period. It was stated that the failure to execute a saledeed was in terms of the agreement and if at all there could be any liability on the part of the present applicant it would be a civil one and not of a criminal nature. It was further contended that the agreement with the other Housing Society in 1982 was repudiated in terms of clauses in that agreement and almost seven years thereafter the present agreement was entered into with the complainantsociety and on that date there was no binding agreement between the other society and the applicant and as such there was no suppression of fact which could be termed as a deception.

Section 420, Indian Penal Code speaks of punishment for cheating. Cheating becomes punishable under this Act when it is associated with dishonest inducement of the person deceived to deliver any property to any person. Cheating has been defined in Section 415 I.P.C. which reads as follows:

Section 415 I.P.C. whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit, if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to cheat. An explanation to this Section states that a dishonest concealment of fact is a deception within the meaning of this section. Offences punishable under Sections 467 and 468 I.P.C. are of forgery of valuable security etc., and forgery for the purpose of cheating. Forgery has been defined in Section 463 I.P.C. its state that whoever makes any false document or part of a document, with intent to cause damage or injury to the public or to any person, or to support any claim or title, or to cause any person to part with property, or to enter into any express or implied contract, or with intent to commit fraud or that fraud may be committed, commits forgery. The next Section 464 states that a person is said to make false document, firstly, when he dishonestly or fraudulently makes signs, seals or executes a document or a part of a document, or makes any mark denoting the execution of a document, with the intention of causing it to be believed that such document or part of a document was made, signed, sealed or executed or by the authority of a person by whom or by whose authority he knows that it was not made signed, sealed, or executed, or at a time at which he knows that it was not made, signed, sealed or executed or secondly, when he without lawful authority dishonestly or fraudulently, by cancellation or otherwise, alters a document in any material part thereof, after it has been made or executed either by himself or by any other person, whether such person be living or dead at the time of such alteration or thirdly, when he dishonestly or fraudulently causes any person to sign, seal, execute or alter a document, knowing that such person by reason of unsoundness of mind or intoxication cannot, or that by reason of deception practised upon him, he does not know contents of the document or the nature of the alteration.

It is clear from a reading of the two Sections 463 and 464 I.P.C. that for the offences of forgery making of false document is a necessary ingredient. A false document is said to have been made only when one of the three ingredients mentioned in Section 464 I.P.C. is present. In the instant case the allegation is that there had been a statement in the agreement between the complainant and the present applicant that the plots proposed to be sold were free from encumbrances and it is stated that in view of the earlier agreement it was already under a contract for sale and as such the statement was not true and hence a dishonest statement and thus it was dishonest or fraudulent making of atleast a part of the document. Deception which is the root of an offence of cheating has also been alleged on this ground only as there had been a dishonest concealment of the tact of earlier contract.

A question, therefore, arises whether every misstatement could amount to deception and if at all the use of the words �free from encumbrances� in the light of the earlier agreement could be said to be a misstatement or concealment of fact. The other points that have been raised in this case are on the question of jurisdiction. The learned counsel for the respondents submitted that when upon submissions of the chargesheet the Court has already taken cognizance, it is not for the High Court to interfere with such order after looking to the defence case or to the defence papers.

Regarding the last mentioned point case laws were relied upon by the respondents. One of such decision stands (Minakshi Bala v. Sudhir Kumar and others) 3.T. 1994 (4) (SC) at page 158. It was a case where charge was framed by the trial Court and the High Court had intervened under Section 482 Cr. P.C. relying on documents other than those referred to under Sections 239 and 240 Cr. P.C. The Supreme Court held in this case that at the stage of the framing charges the High Court could not usurp the functions of a trial Court. It was further observed that the High Court was not justified in invoking its inherent jurisdiction to quash the charge except in those rare cases where forensic exigencies and formidable compulsions justify such a course. The problem before this Court is not really a reliance on the defence documents. This Court is confiscated with a question if on the face of the allegation in the EI.R. itself which has been reinforced by submission of a chargesheet, elements for the offences indicated in the chargesheet were to be fo und

Reliance was further placed on a decision of the Allahabad High Court as (Naresh Chandra v. State of U.P.), 1987 ALJ 1066 it was also a case where against the order of framing charges the High Court was approached in a criminal revision. The High Court was of the view that the order of discharge could not be passed if there was even the slightest evidence against the accused for framing charge. This case law again expresses a view on a point which is really not the point in controversy. To reiterate, this Court is to see, if the F.I.R. itself is devoid of allegations concerning the elements of deception and forgery.

The agreement for sale between the present applicant and the complainantsociety is in annexure C.A. No. 1 to the counter affidavit filed by the complainant. The society has been nominated as a second party in this agreement and a clause in page 3 of the agreement indicates that the second party, on coming to know about the willingness of the first party to sell the land along with the construction etc. standing thereon at a sum of rupees thirty lacs, offered the sum to the first party and none was prepared to offer any higher amount and thereupon the first party agreed to sell and the second party had agreed to purchase the land with construction. Regarding mode of payment it was accepted that rupees two lacs were paid on 11090 as earnest money. The agreement also stipulated as to how the rest of the sum was to be paid. The parties agreed that within 8 months of the agreement the second party would get the saledeed executed. The first party would comply with the formality of getting IncomeTax clearance certificate and thereafter he would inform the second party and if even after such information, the second party failed to complete the transaction, the agreement would stand cancelled. In a subsequent paragraph it was indicated that the first party was selling the land to the second party free from all kinds of encumbrances and if there was any untoward litigations with any person in future the first party will be liable for damages to the second party. It appears from what has been stated above that a payment by cheque was already made prior to the execution and registration of the document. It thus appears that the payment did not depend on the averments that the land proposed to be sold was free from encumbrances. Thus, it may not be concluded that the payment was made upon that statement only. Rather, the tenor of the agreement suggests that it was an open declaration for sale and the second party accepted the offer. The clause concerning absence of encumbrance was one to burden the first party for damages if any litigation was subsequently born with any third party. Payment being not depended upon the alleged deception by concealment may not be covered by Section 415 Cr. P.C. the of fence under Section 420 Cr. P.C. may not, therefore, be made.

Going to the question of making a false document, the question is whether the statement that the land was free from encumbrance was a dishonest statement and thereby the agreement was made dishonestly. The first agreement was of 1982. There is nothing in the complaint or even in the chargesheet to show if it was still in operation on the date of the second agreement with the complainant and in this light the defence argument that it stood repudiated in terms of its own clauses is absolutely relevant. �Encumbrance�, according to the Webster''s, means any burden, difficulty, responsibility or obligation that encumbers one or restricts one''s movement or freedom. Legally it means a claim on property. Whether the earlier agreement was inoperation or was repudiated would be a question for determination by the civil Court only and the mere existence of an earlier agreement or nonmentioning of such facts in a document executed about 8 years thereafter may not lead to the only conclusion that it was a dishonest concealment of fact.

Materials were placed before this Court by the parties wherefrom it can be gathered that the parties had been litigating in the civil Court also concerning enforcibility of the agreement. In the light of interpretation of the relevant sections of the I.P.C. and in the light of the submissions made here regarding pendency of the civil litigation it can only be held that the liability, if any, that may be fastened to the present applicant is of a civil nature and if a liability be of a civil nature, the easy course of coercing a person to pay back any sum under threat of a criminal case must not be allowed to be taken.

It is true that the inherent powers under Section 482, Cr. P.C. are not to be invoked ever now and then, but its exercise would always be necessary. When the Court feels that basically a civil liability has been dragged into the arena of a criminal litigation and that would be certainly an abuse of the process of the Court.

The present application stands allowed. The concerned criminal proceedings and all processes relating thereto are hereby quashed subject to decision of a competence Civil Court regarding the civil liability of the present applicant.

Application allowed.