Case Note & Summary
The Karnataka High Court heard a batch of criminal petitions filed under Section 482 of the Code of Criminal Procedure, 1973, seeking quashing of multiple First Information Reports (FIRs) registered against the petitioners, who were either former partners or directors of M/s Unishire Homes LLP, a real estate development firm. The complainants, various home buyers, alleged that the petitioners and other accused committed offences of cheating and criminal breach of trust under Sections 406, 420, 120B, 34, and other provisions of the Indian Penal Code, 1860. The common grievance was that despite entering into agreements of sale for apartments in a project developed on land at Sy.No.78, Thannisandra Village, K.R.Puram Hobli, Bangalore, the company failed to execute sale deeds or deliver possession, and in some cases, sold the units to third parties. The petitioners contended that they had resigned from the firm in 2015 and were not involved in its day-to-day affairs. They claimed that the company had entered into a joint development agreement and later a tripartite agreement with a financier and another entity to complete the project. The petitioners argued that the complainants themselves defaulted by not paying the balance sale consideration and not coming forward to register the sale deeds despite repeated demands. The disputes were, according to the petitioners, purely civil in nature and did not constitute criminal offences. The State and complainants opposed the petitions, maintaining that the elements of cheating and breach of trust were made out. After hearing detailed arguments from counsels for all parties, the court reserved its orders on 18th September 2024. The court noted that the facts in all petitions were similar, and it needed to determine whether the criminal proceedings should be interdicted under its inherent powers. The judgment, pronounced on 21st October 2024, contains findings on the core legal questions, but the provided excerpt only records the preliminary observations and the reservation of orders.
Headnote
A) Criminal Law – Quashing of FIR – Section 482 Cr.P.C. – Real Estate Dispute – Indian Penal Code, 1860 Sections 406, 420 – Petitioners sought quashing of FIRs registered by home buyers alleging cheating and criminal breach of trust in relation to sale of apartments – Petitioners claimed they had already resigned from the firm and that complainant failed to get sale deed registered despite notices – Court, after hearing arguments, reserved orders, indicating the matter required examination of whether the dispute was purely civil or attracted criminal liability (Paras 2-3).
Issue of Consideration
Whether the criminal proceedings initiated against the petitioners, former partners/directors of a developer firm, for offences under Sections 406, 420, 120B, 34 of IPC, arising out of alleged breach of agreements for sale of apartments, deserve to be quashed as being purely civil in nature or an abuse of process.
Final Decision
Not mentioned; the court reserved orders on 18.09.2024 and pronounced it on 21.10.2024, but the provided text only contains the preliminary narration and does not include the final operative part.
Law Points
- Section 482 Cr.P.C.
- quashing of FIR
- criminal breach of trust
- cheating
- civil dispute
- abuse of process
- real estate transaction
- joint development agreement
- tripartite agreement
- Limited Liability Partnership Act
- 2008
Case Details
2024 LawText (KAR) (10) 11
Criminal Petition No.6658 of 2024 c/w Criminal Petition No.5089 of 2024, Criminal Petition No.5807 of 2024, Criminal Petition No.5922 of 2024, Criminal Petition No.6166 of 2024, Criminal Petition No.6436 of 2024, Criminal Petition No.6766 of 2024, Criminal Petition No.6846 of 2024
G.S. Venkat Subba Rao, Venkatesh R. Bhagat, Shridhara K., Nayana Tara B.G., B.N. Jagadeesha (Addl. SPP), K.G. Aiyappa, Asim Malik
Sri Kirti K. Mehta and others, Abdul Latheef Jabbar and others, S. Abdul Khadar Jabbar, and others
State of Karnataka by Sampigehalli Police Station and various home buyers/complainants (Arshad Quasim Dabapu, Anurag Sharma, Indrani Sharma, Vijayalakshmamma M.S., Nivedita Desai, Swetha Tyagi, Kuldeep Chaudhary)
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Nature of Litigation
Criminal petitions under Section 482 Cr.P.C. seeking quashing of FIRs and complaints alleging cheating and criminal breach of trust in real estate transactions.
Remedy Sought
Petitioners (former partners/directors of developer firm) seek quashing of FIRs registered by Sampigehalli Police Station for various offences under the IPC, on the ground that the disputes are civil in nature and an abuse of process.
Filing Reason
Home buyers registered FIRs alleging that the developer company, after accepting payments under agreements of sale, failed to execute sale deeds, deliver possession, and in some cases sold the apartments to third parties, thereby committing cheating and criminal breach of trust.
Previous Decisions
Not mentioned, as the court had reserved its orders and the judgment text does not contain any prior adjudication on these FIRs.
Issues
Whether the dispute is purely civil in nature and the criminal proceedings are an abuse of process of law, warranting quashing of FIRs under Section 482 Cr.P.C.
Whether the allegations in the FIRs make out the essential ingredients of the offences of cheating (Section 420 IPC) and criminal breach of trust (Section 406 IPC) against the petitioners who claimed to have resigned from the company.
Submissions/Arguments
Petitioners contended that they had already resigned from the partnership in 2015 and were not involved in the day-to-day affairs of the company.
Petitioners argued that the complainants failed to come forward to get the sale deed registered and pay the balance sale consideration despite repeated notices, and therefore the developer sold the apartments to third parties.
Petitioners submitted that the entire matter arose out of a breach of contract and was civil in nature, not attracting criminal liability.
Respondents (complainants) maintained that the FIRs clearly disclosed the offences of cheating and criminal breach of trust, as the developers induced them to pay money with false assurances and then failed to fulfill their contractual obligations.
Judgment Excerpts
The petitioners in these cases are either developers or former Directors or those who have come into the shoes of developers. The complainants in all these cases are different home buyers from M/s Unishire Homes LLP.
The petitioners claim to have resigned from the partnership way back in the year 2015 and claim to be disassociated with the Company.
It is further averred that despite several requests and demands made by the Company, the complainant failed to get the sale deed registered in terms of the agreement of sale.
Procedural History
Multiple criminal petitions were filed under Section 482 Cr.P.C. before the Karnataka High Court seeking quashing of FIRs registered by Sampigehalli Police Station. All petitions involved similar facts and were clubbed together. The matters were heard together and reserved for orders on 18.09.2024. The judgment was pronounced on 21.10.2024.
Acts & Sections
- Indian Penal Code, 1860: 406, 420, 120B, 34, 417, 342, 506, 149
- Code of Criminal Procedure, 1973: 482
- Limited Liability Partnership Act, 2008: Not mentioned specifically
