Case Note & Summary
The judgment pertains to two connected criminal petitions filed by the accused persons (petitioners) seeking quashing of a complaint and FIR registered at Mulky Police Station in Crime No.62/2024 for offences under Sections 419, 420, 465, 467, 468, 471 read with 34 of the Indian Penal Code, 1860. The complainant, Harish Shetty B., alleged that the petitioners, who were hotel businessmen, had entered into an agreement to sell a hotel property to him for a total consideration of Rs.1,10,00,000/- and received an advance of Rs.25,00,000/-. However, the petitioners failed to execute the sale deed and instead allegedly created false documents to show that the property was already sold to a third party. The petitioners contended that the dispute was purely civil in nature, arising from a breach of contract, and that there was no fraudulent or dishonest intention at the time of entering into the agreement. They argued that the complainant had already filed a civil suit for specific performance, which was pending. The Court analyzed the allegations and found that the complaint did not disclose any criminal offence. The agreement to sell was admitted, and the only grievance was non-performance. The Court held that the ingredients of cheating under Section 420 IPC were not satisfied as there was no deception or fraudulent inducement at the inception. The allegations of forgery were also not substantiated. The Court observed that criminal proceedings cannot be used as a tool for recovery of civil dues. Accordingly, the Court allowed both petitions and quashed the complaint and FIR.
Headnote
A) Criminal Law - Quashing of FIR - Civil Dispute - Sections 419, 420, 465, 467, 468, 471 read with 34 of Indian Penal Code, 1860 - The petitioners sought quashing of FIR registered for cheating and forgery based on a complaint alleging that they failed to execute a sale deed after receiving advance consideration under an agreement to sell. The Court held that the dispute was purely contractual and civil in nature, as the agreement was admitted and the only allegation was non-performance. There was no fraudulent or dishonest intention at the inception of the transaction. The Court quashed the FIR and complaint, observing that criminal proceedings cannot be used as a tool for recovery of civil dues. (Paras 1-15) B) Criminal Procedure Code, 1973 - Section 482 - Inherent Powers - Quashing of FIR - The Court reiterated that the inherent power under Section 482 CrPC (and corresponding Section 528 BNSS) can be exercised to prevent abuse of process of court and to secure ends of justice. Where the allegations in the FIR do not disclose a criminal offence and the dispute is essentially civil, the FIR is liable to be quashed. (Paras 10-15)
Issue of Consideration
Whether the FIR and complaint alleging offences of cheating, forgery, and using forged documents as genuine can be quashed when the dispute arises out of a breach of a sale agreement and is essentially civil in nature.
Final Decision
The Court allowed both criminal petitions and quashed the complaint dated 07.06.2024 and the FIR in Crime No.62/2024 registered at Mulky Police Station for offences under Sections 419, 420, 465, 467, 468, 471 read with 34 of IPC.
Law Points
- Criminal prosecution cannot be used as a tool for recovery of civil dues
- breach of contract does not automatically constitute cheating
- ingredients of cheating under Section 420 IPC require fraudulent or dishonest intention at inception
- quashing of FIR under Section 482 CrPC or Section 528 BNSS is warranted when dispute is predominantly civil in nature
