Case Note & Summary
The present application was filed under Section 482 of the Code of Criminal Procedure, 1973 by three applicants (original accused) seeking quashment of FIR No. I-C.R. No.11191045200044 of 2020 registered with Sola High Court Police Station for offences punishable under Sections 406, 420, 467, 468, 471 and 120B of the Indian Penal Code. The FIR alleged that the accused persons, acting in collusion, obtained Rs.1,00,00,000/- from the complainant through cheque and cash and executed an agreement to sell (Banakhat) in favour of the complainant. Subsequently, without the complainant's knowledge, the same property was mortgaged with Bank of Baroda using bogus share certificates, and another Banakhat was executed in favour of Rajendrabhai Keshavlal Patel after receiving Rs.5,00,000/-. The applicants contended that the dispute was purely civil in nature arising from a breach of contract, and no criminal offence was made out. The respondent-complainant argued that the accused had fraudulent intention from the beginning. The court analyzed the allegations and found that the transaction was essentially a civil dispute regarding an agreement to sell property. The court held that there was no evidence of fraudulent intention at the inception of the transaction, and the allegations did not satisfy the ingredients of criminal breach of trust or cheating. The court also noted that the complainant had alternative civil remedies available. Consequently, the court allowed the application and quashed the FIR and all consequential proceedings.
Headnote
A) Criminal Law - Quashing of FIR - Section 482 CrPC - Civil Dispute - The court considered whether criminal proceedings for cheating and forgery should be quashed when the dispute arises from an agreement to sell and subsequent mortgage of property - Held that where the allegations disclose a predominantly civil dispute, criminal proceedings are an abuse of process and liable to be quashed (Paras 1-10). B) Indian Penal Code - Cheating - Section 420 IPC - Fraudulent Intention - The court examined whether the accused had fraudulent intention at the inception of the transaction - Held that mere breach of contract or failure to fulfill promise does not amount to cheating unless there is fraudulent or dishonest intention at the time of making the promise (Paras 5-8). C) Indian Penal Code - Criminal Breach of Trust - Section 406 IPC - Entrustment - The court analyzed whether there was entrustment of property or dominion over property - Held that in a transaction of sale of property, there is no entrustment of property within the meaning of Section 405 IPC, and thus no offence under Section 406 IPC is made out (Paras 6-9).
Issue of Consideration
Whether the FIR alleging offences under Sections 406, 420, 467, 468, 471 and 120B of the Indian Penal Code should be quashed under Section 482 of the Code of Criminal Procedure, 1973 on the ground that the dispute is essentially civil in nature.
Final Decision
The application is allowed. The FIR being I-C.R. No.11191045200044 of 2020 registered with Sola High Court Police Station and all consequential proceedings are quashed and set aside.
Law Points
- Criminal proceedings cannot be used as a tool for recovery of civil dues
- breach of contract does not automatically constitute criminal offence
- quashing of FIR under Section 482 CrPC when dispute is predominantly civil in nature
- distinction between civil wrong and criminal offence
- absence of fraudulent intention at inception negates cheating
