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Judgment
H.S. GREWAL, J. (ORAL)
The present petition has been filed under Section 482 of the Code of Criminal Procedure, 1973 seeking quashing of Complaint No. 1071 dated 20.02.2017 under Sections 418, 420 and 120-B IPC read with Section 200 CrPC, the summoning order dated 02.08.2018 passed by the Judicial Magistrate First Class, Chandigarh, and all consequential proceedings arising therefrom.
Brief facts of the case are that the petitioner is the owner of Industrial Plot No. 131, Industrial Area, Phase-I, Chandigarh, measuring 10,250 sq. yds. On 12.08.2008, the respondent agreed to purchase 50% share in the said plot for ₹35 Crores and paid ₹2 Crores as earnest money, pursuant to an MOU executed between the parties. The MOU incorporated two supplementary agreements concerning repurchase of 1,500 sq. yds. from third parties and vacation of 1,100 sq. yds. occupied by other third parties, for which the petitioner had made onward payments of approximately ₹98 lakhs. The respondent was required to make further payments as per the agreed schedule, including ₹6 Crores on 02.12.2008, but failed to do so. Consequently, the petitioner was unable to make the corresponding payments to the third parties and the respondent also failed to pay the balance conversion charges to the Estate Officer. The respondent thereafter issued a legal notice dated 27.05.2009 alleging breach by the petitioner, which was replied to on 11.06.2009, whereby the petitioner rescinded the MOU and forfeited the earnest money on account of the respondent's breach. After remaining silent for approximately seven years, the respondent issued another legal notice dated 10.10.2016, which was replied to by the petitioner on 25.10.2016, asserting that the claim was barred by limitation. Subsequently, on 02.01.2017, nearly nine years after execution of the MOU, the respondent instituted a civil suit seeking recovery of ₹2 Crores along with interest. In the written statement dated 01.08.2017, the petitioner contested the suit primarily on the grounds of limitation, concealment of the earlier notice/reply dated 11.06.2009, and breach of the MOU by the respondent.
The petitioners will hereinafter be collectively referred to as "the petitioner ".
Learned counsel for the petitioner argued that the dispute is purely civil and contractual, arising out of the MOU dated 12.08.2008, and does not disclose the ingredients of cheating or criminal conspiracy. It was contended that the respondent itself breached the agreement by failing to pay the subsequent instalment of ₹6 crores and by not depositing the requisite conversion charges, which prevented the petitioner from performing his obligations under the supplementary agreements. Consequently, the MOU was lawfully rescinded on 11.06.2009 and the earnest money was validly forfeited. Counsel further submitted that after remaining silent for nearly nine years, the respondent initiated both a civil suit for recovery and the present criminal complaint only to exert pressure in a contractual dispute. It was also argued that the respondent suppressed material facts from the Magistrate, including the earlier legal notices, the pendency of the civil suit, and the closure report prepared by the police concluding that the dispute was civil in nature. Reliance was placed on R.K. Vijayasarathy v. Sudha Seetharam, Satishchandra Ratanlal Shah v. State of Gujarat, Surjit Singh v. State of Punjab, and Sanjay Kapoor v. State of Haryana to contend that a mere breach of contract does not amount to cheating unless dishonest intention existed from the very inception. Accordingly, continuation of the criminal proceedings was stated to be an abuse of the process of law.
Learned counsel for the complainant opposed the petition and contended that the petitioner acted with dishonest and fraudulent intention from the very inception of the transaction. It was argued that the petitioner induced the complainant to execute the MOU and obtained ₹2 crores as earnest money without intending to fulfil his contractual obligations. Counsel submitted that despite receiving the earnest money, the petitioner failed to take effective steps for obtaining the Change of Land Use (CLU) and did not complete the documentation necessary for conversion of the property from industrial to commercial use, thereby causing wrongful loss to the complainant and wrongful gain to himself.
It was further argued that the petitioner's continued retention of the earnest money constituted a continuing wrong, and the availability of a civil remedy does not bar criminal prosecution when the allegations disclose offences of cheating and criminal conspiracy. Lastly, it was contended that the complaint is supported by sufficient preliminary evidence and involves disputed questions of fact such as the parties' intention, performance of contractual obligations, CLU conversion, and the validity of forfeiture which can only be determined by the Trial Court after appreciation of oral and documentary evidence.
I have heard the counsel for the parties and perused the record.
Keeping in view the facts and circumstances of the case, this Court finds no ground to exercise its inherent jurisdiction under Section 482 CrPC. The allegations made in the complaint, if taken at their face value, disclose prima facie ingredients of the offences alleged. Whether the petitioner have dishonest intention from the inception and have deliberately failed to obtain CLU or complete the conversion process, and whether the retention of earnest money was lawful, are seriously disputed questions of fact which cannot be conclusively determined in proceedings under Section 482 CrPC. The pendency of a civil suit or the availability of a civil remedy does not, by itself, warrant quashing of criminal proceedings where the complaint independently discloses allegations constituting criminal offences. Similarly, the petitioner's reliance upon the police closure report, rescission of the agreement, limitation, and forfeiture of earnest money are matters of defence which are required to be proved during trial. Since the controversy requires appreciation of evidence to be produced by both the parties and adjudication on disputed facts, interference at the threshold by this Court would be unwarranted. Accordingly, the petition is dismissed.
Pending applications, if any, shall also stand disposed of.