Allowed

M/S. Bhawani Builders through Its Proprietor andANR v. Prashant Vishnupant Ladkat, and Others .

Bombay HC25 Aug 2008WP/216/2000

Case brief

AI extract

What is this about?

The Court exercised its inherent jurisdiction under Article 227 Constitution and Section 482 CrPC to quash the process against petitioners in a complaint alleging cheating and breach of the Maharashtra Ownership Flats Act. The Court found no prima-facie case of cheating or offence under the Act due to lack of admitted intention to deceive at inception and disputed payment allegations.

What did the court decide?

Rule made absolute dismissing the complaints for lack of prima-facie case of commission of offence.

M/S. Bhawani Builders through Its Proprietor… — Contract and Commercial Disputes | Bombay HC (2008)

¶1

IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL WRIT PETITION NO.216 OF 2000.

¶2

M/s. Bhawani Builders.

¶3

Shri Madhusudan Balasaheb Kadam. ..Petitioners.

¶4

versus

¶5

Mr. Prashant Vishnupant Ladkat. 2. Mrs. Pratibha Prashant Ladkat. 3. Mr. Balasaheb Digambar Kadam. 4. The State of Maharashtra.

¶6

..Respondents.

¶7

Mr. Vinod Jadhav, i/b. Vijay Patil, for the Petitioners. Mr. Kuldeep Patil, i/b. Deepak Girme, for the Respondent Nos.1 and 2. Mr.D.P. Adsule, APP, for the Respondent-State.

¶8

CORAM : A.S. OKA, J. DATE : 25TH AUGUST,2008.

¶9

ORAL JUDGMENT :

¶10

The submissions of the learned Counsel appearing for the parties were fully heard. However, the Judgment was not dictated as the parties were granted time to explore the possibility of

¶11

settlement. As amicable settlement is not arrived

¶12

at, I am proceeding to deliver the Judgment.

¶13

The challenge by the Petitioners [who are first and the second accused] in this Petition under

¶14

¶15

Article 227 of the Constitution of India read with section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as "the said Code") is to the order issuing process by the learned Magistrate

¶16

as well as confirmation of the said order in a

¶17

Criminal Revision Application by the Sessions Court.

¶18

With a view to appreciate the submissions made by the learned Counsel appearing for the

¶19

parties, it will be necessary to refer to the facts

¶20

of the case in brief.

¶21

4.		The first	and the	second Res	ponden	ts are the
original	Co	mplainants	.	Accordi	ng	to the	case	of	the
first	and	the	second	Respo	ndents,	the	third	a	ccused
(Responden	t	No.3	herein	) was		the	owner	of	an
immovable		property	sit	uated a	t	Pune wh	o e	ntered	into
an	agreeme	nt for	the	develop	ment	of the	prop	erty	in
favour	of	the	Petition	ers.	Acc	ording to	the	case	of
the	first	and	the	second	Re	spondents,	an	agr	eement
for	sale	dated	8th	August	1991	was ex	ecuted	by	the
Petitioners		in t	heir	favour	by	which	the	Peti	tioners
agreed	to	sale	Flat	No.6	situat	ed on	the	third	floor
of	the	building	co	nstructed	on	the pro	perty	of	the
third	Respon	dent.		According	to	the first		and	the

¶22

¶23

second Respondents, total consideration was agree	d to
be Rs.2,49,150/- and they paid a sum of Rs	.1,25,000/-
to the Petitioners. It is asserted in the	complaint
that the first and the second Respondents desi	red to
raise a loan for paying the balance co	nsideration
amount and the Petitioners had agreed to	furnish
necessary documents to enable the first and	the
second Respondents to obtain loan. The allegati	on is
that the Petitioners intentionally and	dishonestly
avoided to furnish necessary documents. It is	the
case of the first and the second Respondents	that
somehow they managed to raise the	balance
consideration amount and offered the same to	the
Petitioners. However, the Petitioners refused	to
accept the balance consideration and also refus	ed to
hand over the possession of the flat. The	allegation
is that the accused in furtherance of the	common
intention fraudulently and dishonestly induced	the
first and the second Respondents to make payment	of
Rs.1,25,000/- and therefore, wrongful loss has	been
caused to the first and the second Respondents.	It
is alleged that flat no.6 has been sold by	the
Petitioners to the Maharashtra State A	gricultural
Marketing Board, Pune. The complaint refers t	o a
civil suit filed by the first and the	second

¶24

¶25

Respondents.			The	allegation	in	the	comp	laint is	of
commission		of	offen	ces u	nder	secti	ons 4	03, 405,	406,
418,	420	and	section	34	of	the	Indian	Penal Cod	e and
under	sec	tions	8,	13(3)	of	the	Maha	rashtra O	wnership
Flats	(Re	gulation	of	the	P	romotion	of	con	struction,
Sale,	Manage	ment	and	Tr	ansfer)	A	ct,	1963 (h	ereinafter
referred	to	as	"the	said	Act	of	1963").	The	learned
Magistrate		by	order	dated	8th	Sep	tember	1993	issued
process	und	er	section	406	and	sectio	n 420	read	with
section	34	of	the	Indian	Penal	Cod	e as	well as	under
section	13(3)		of th	e said	Act	of	1963.	A	Revision
Application		was	pre	ferred	by	the	Petiti	oners	before
the	Sessi	ons	Court	for	cha	llenging	the	order	issuing

¶26

process. The said Revision Application has been

¶27

dismissed by the learned Sessions Judge, Pune.

¶28

The learned Counsel appearing for the

¶29

Petitioners	inv	ited m	y attention		to	various
assertions	made	in the	private compla	int	filed by	the
first and		the second	Respondents.	He	pointed	out
that it	is	an admitte	d position that	only	a sum	of
Rs.90,000/-	was	paid	by the first	and	the	second
Respondents	to	the P	etitioners and no	t a	sum	of
Rs.1,25,000/-	as	alleged	in the	co	mplaint.	He
pointed	out	that the	agreement for	sale	was	executed

¶30

¶31

on 8th August	1991 and the complain	t was	filed	on	8th
September 1993.	He also invited	my	attention	to	the
verification of	the first Responden	t re	corded	by	the
learned Trial	Judge. He submitt	ed that	on		plain
reading of th	e assertions in the	complai	nt, no		case
is made o	ut of proceeding again	st	the	Pe	titioners
under section 406	and 420 of the	Indian	Penal	Cod	e as
well as under	section 13(3) of the	said	Act	of	1963.
He submitted	that the assertio	ns	made	in	the
complaint as reg	ards breach of pro	visions	of	the	said
Act of 1963	are very vague. He	has	also r	elied	upon
a decision of	the Apex Court	in	the	Court	of
Madhavrao Jiwa	jirao Scindia	v/	s	Sam	bhajirao
Chandrojirao Angre	[ 1988 (1)	SCC	692	].	He
submitted that the	act of filing of	the	comp	laint	was
nothing but an	abuse of process of	law.	He		invited
my attention to	the decision of the	Apex	Court	in	the
case of Na	geshwar Prasad Singh @	Sinha	v/s		Narayan
Singh and another	[ A.I.R. 1999 SC	1480	] as	we	ll as
the Judgment of	the Single Judge of	this	Court	in	the
case of Rameshk	umar Bhandari and	others	v/s	the	State

¶32

of Maharashtra and another [2003 All.M.R.(Cri.) 897].

¶33

The learned Counsel appearing for the first

¶34

and the second Respondents supported the impugned

¶35

¶36

orders and contended that as the averments made in the complaint make out a case for proceeding against the Petitioners, the process has been rightly issued by the learned Magistrate. Inviting my attention to reasons recorded by the learned Sessions Judge, he

¶37

submitted that no case for interference was made out.

¶38

on record. Some of the admitted facts mentioned by

¶39

the learned Sessions Judge are as under :-

¶40

(2) Admittedly, the first and the second

¶41

Respondents have paid a total consideration

¶42

¶43

of Rs.90,000/- to the Petitioners.

¶44

(3) There is a suit for specific purpose

¶45

filed by the first and the second Respondents

¶46

in the year 1992 against the Petitioners and the same was pending. An application for temporary injunction filed by the first and the second Respondents in the said suit has

¶47

been dismissed.

¶48

It will be also necessary to note that the

¶49

third	Respondent	had	filed a separate	Criminal
Revision	Applicat	ion	before the Sessions Court	for
challenging	the	order	issuing process. The	present
Petitioners	were	party	Respondents to the	said
Revision	Appli	cation.	The said Revision Ap	plication
was	dismissed	by	the learned Additional	Sessions
Judge,	Pune by	hold	ing that the same was	not
maintainable	again	st	an order issuing process.	It
appears	that	a sub	mission was made by the	Advocate
for	the first	and	the second Respondents before	the
Revisional	Court	in	the Revision Application filed	by
the	Petitioners	that	in view of dismissal of	the
Revision	Applic	ation	filed by the third Re	spondent,
the	Revision	Appli	cation preferred by the	present

¶50

¶51

Petitioners		was	not	main	tainable. It	mu	st be	stated
here	that	the	lear	ned	Sessions Judge	in	the	impugned
judgment		and	order	has	referred to	a de	cision	of the
Apex	Court	in	the	case	of Rajendrak	umar	Sitaram	Pande
and	others	v/s	Uttam	and	Another [	1999	(2)	Mh.L.J.
118	]	holding		that	a Revision	App	lication	under

¶52

section 397 of the Code of Criminal Procedure, 1973

¶53

was maintainable against the order issuing process.

¶54

9.	However, the learned Sessions Judge has
observed	that the Petitioners were parties to	the
Revision	Application filed by the third Re	spondent
and	therefore, both the Revision Applications are	the
same.	Therefore, the learned Sessions Judge	has
observed	that the Revision Application preferred	by
the	Petitioners was not maintainable. After	making
the	said observation, the learned Judge has p	roceeded
to	consider the merits of the case and has come	to
the	conclusion that the defences raised by	the

¶55

Petitioners can be considered by the learned

¶56

Magistrate.

¶57

10.		The order	passed	by the	learned Sessio	ns
Judge	on	a	Rev	ision	Application	prefer	red	by the
third	Res	pondent	has	been	annexed	to	this	Petition.

¶58

¶59

Perusal	of t	he said order	shows th	at the	R	evision
Application	was	not dismissed	on me	rits but	the	same
was	dismissed	as not m	aintainable.	The	law	is
well-settled	. This	Court in	the case	of V	.K.Jain	and
Others	V/s.	P.V. Padode	and Ano	ther [	2005	(3)
Mh.L.J.	778	] has held	that a	Revision	App	lication
under	section	397 of the	said Co	de for	chal	lenging
the	order of	issue of	process	is	maint	ainable.
Therefore,	the	learned Sessio	ns Judge	could	not	have
come	to a	conclusion th	at the	Revision	App	lication
preferred	by	the Petition	ers was	not	maint	ainable.
Therefore,	the aforesaid find	ings recorded by the

¶60

Sessions Court is erroneous.

¶61

11.	A	s the lear	ned Sessio	ns Judge	after record	ing
the	aforesaid		finding	has	consider	ed the	merits	of
the c	ase, I	am	also	dealing	with	the	submissions	made
by	the	Advocate	for	the	Petitioners	on	merits.	As
noted	earlier	, pro	cess	has	been	issued	for	offences
under	section	406	and	420	of the	Indian	Penal	Code.
Perusal	of	the	averments	mad	e in	the c	omplaint	show
that	there	is	no	specific	assertio	n that	there	was
any	intention	on	the	part	of	the	Petitioners	to
deceive	the	first	and	the	second	Responde	nts at	the
inception	of	the	tra	nsaction.		There	are	no

¶62

10 -

¶63

assertions made contending that from the subsequent conduct of the Petitioners, it can be inferred that

¶64

such intention to deceive was in existence right from

¶65

the inception.

¶66

12.	The ver	ification	of the first Respondent
recorded by	the	learned	Magistrate is very	vague.	In
the verific	ation	of	the first Respondent,	he	has
referred t	o the	agree	ment for sale dated	8th	August
1991 and	has	stated	that he had paid	a su	m of
Rs.1,25,000/-	to	the	Petitioners. He	has	further
stated that	the	ac	cused had agreed	to	deliver
possession	of	the	flat to the first and	the	second
Respondents	on	or	before 6th September	1991.	The

¶67

English translation of further part of the

¶68

verification statement reads thus :-

¶69

	"Howev	er	the	accused	has committed br	each of
agreement	by	en	tering	into	a transaction	with
the	third	party	in	respect	of the said	flat
thereby	dec	eiving		me	and they	have
misappropri	ated		the	amount	of Rs.	1,25,000/-
paid	by	me	by	appropriatin	g the said	amount
for		their			own	purpose."

¶70

11 -

¶71

It must be noted here that in paragraph 7 of

¶72

the	impugned Judgment and Or	d	er of	the learned
Sessions	Court, it has been n		oted that	admittedly
only	a sum of Rs.90,000/- was p	a	id by the	first and
the	Second Respondents to the	P	etitioners.	Thus, the
admitted	position as noted by		the learned	Sessions
Judge	is that the first and		the second	Respondents
have	paid a sum of Rs.90,000/-		to the	Petitioners at
the	time of execution of the		agreement for	sale of
the	flat. The entire complaint		proceeds	on the
footing	that a sum of Rs.1,25,000/	-	was paid	by the
first	and the second Respondents		to the	Petitioners
and	that there is misappropriation		of the	said amount
by	the Petitioners. In his	s	tatement on	oath, the
first	respondent has come out		with the	case of
payment	of Rs.1,25,000/-. In		clause	(iv) of

¶73

paragraph no.8 of the impugned order, the learned

¶74

Sessions Judge has observed thus :-

¶75

	"(iv)	It		is	a	fact that	the
opponents	-complainants			did	pay	total	amount
of	Rs.90,000/-		to	the	applic	ants and	this
amount	was f	orfeited		by	the	applicants on	the
grounds	that	there		was	brea	ch of agr	eement."

¶76

12 -

¶77

Here again, the learned Sessions Judge has recorded admitted position that only a sum of Rs.90,000/was paid by the first and the second Respondents to the Petitioners and the said amount was forfeited by the

¶78

Petitioners on the ground that there was a breach of

¶79

agreement.

¶80

In paragraph 4 of the complaint, the

¶81

Respondent Nos. 1 and 2 have asserted thus :-

¶82

Complainants."

¶83

Thus, the specific case is made out in the

¶84

¶85

13 -

¶86

complaint is th	at the first a	nd the	second
Respondents were	liable to pay	balance cons	ideration
of only Rs.1,24,150/-	and that after	raising the	said
amount, they had	offered the same	to the Pe	titioners.
Thus, the said	averments proceed on	the as	sumption
that the first and	the second Responde	nts have pa	id a
sum of Rs.1,25,0	00/- to the	Petitioners	and
therefore, as per	that agreement, only	a sum	of
Rs.1,24,150/- remained	payable by the	first and	the
second Respondents.	As pointed out	earlier,	before
the learned Sessio	ns Judge even the	first and	the
second Respondents	have admitted that	a sum	of
Rs.90,000/- was paid	by them to the	Petitioners	and
not Rs.1,25,000/- as	alleged in the	complaint.	Thus,
going by their	own case, what was	offered by	the
first and the s	econd Respondents to	the P	etitioners
was not the entire	balance amount but	a part of	the
balance consideration	inasmuch as	the	balance

¶87

consideration of Rs.1,59,150/- was admittedly payable

¶88

by the first and the second Respondents.

¶89

16.			In absence o	f any as	sertion made in	the
complaint		or	in	the	verification	statem	ent	that	there
was	any		intention	to	deceive on	the	part	of	the
Petitioners			at the	tim	e of	entering		into	an

¶90

14 -

¶91

agreeme	nt, it	is not	possible to	accept	that	a	case
of	commission	of of	fence under s	ection	420	was	made
out	in the	complaints.	As st	ated	earlier,	even	going
by	the	admitted	position, the	first	and	the	second
Respon	dents	did no	t offer	the	enti	re	balance
consider	ation to	the	Petitioners and	in	fac	t, a	civil
suit	for	specific	performance file	d by	th	e first	and
the	second Re	spondents	is pending	in	the	Civil	Court.
Taking	the	averments	in the c	omplaint	and	a	verments
in	the	verification	statement for	its		face	value,
prima-fa	cie case	of	cheating was	not	made	out	as
there	is no	case	made out	of	existe	nce of	an

¶92

intention to cheat at the time of inception of a

¶93

transaction.

¶94

The learned Sessions Judge has noted an

¶95

admitted posit	ion that the	first an	d	the	second
Respondents	have paid only	a sum of	Rs.9	0,000/-	and
the said	amount is pur	portedly fo	rfeited	by	the
Petitioners on	the ground	of breach	of	terms	and
conditions of	the agreement.	In this	beh	alf, it	will
be necessary	to refer to	the decision	of	the	Apex
Court in	the case of	Madhavrao	Jiwa	jirao	Scindia

¶96

(supra). The paragraph no.8 of the said decision

¶97

reads thus :-

¶98

15 -

¶99

"8. Mr.Jethmalani has submitted, as we have

¶100

already noted, that a case of breach of trust

¶101

is both a civil wrong and a criminal offence.

¶102

There would be certain situations where it

¶103

would predominantly be a civil wrong and may

¶104

or may not amount to criminal offence. We

¶105

are of the view that this case is one of that

¶106

type where, if at all, the facts may

¶107

constitute a civil wrong and the ingredients

¶108

of the criminal offences are wanting."

¶109

It must also be noted here that the entire

¶110

case of the	first an	d the second	Respondents	in	the
complaint as well	as	in the ver	ification made	on	oath
proceeds on	erroneous	assumptions	that	the	said
Respondents had	paid	total amount	of Rs.1,	25,000/-	to
the Petitioners.		The said	statement is	ad	mittedly
incorrect. The	entire	case of	the first	and	the
second Respo	ndents	proceeds on	allegation	that	there
was mis-appropria	tion	of a sum	of Rs.1,25,0	00/-	by
the Petitioners.	In	fact, the	sum of	Rs.9	0,000/-
which is paid	by the	first and	the second	Resp	ondents
has been	purportedly	forfeited	by the Pe	titioners	on
the ground of	alleged	breach of	contract by	the	first

¶111

16 -

¶112

and the second Respondents. Whether the termination of the agreement was legal is an issue which will be decided in the pending suit. In the circumstances,

¶113

no prima-facie case of commission of offence under

¶114

section 406 was made out.

¶115

Process was also issued under section 13(3)

¶116

of the said Act of 1963. Section 13 (3) of the said

¶117

Act reads thus :-

¶118

reasonable excuse, fails to comply with or, contravenes, any other provision of this Act or of any rule made thereunder, shall, if no other penalty is expressly provided for the offence, be punished, on conviction, with imprisonment for a term which may extend to one year, or with fine which may extend to ten thousand rupees, or with both."

¶119

In the present case, the process has been

¶120

specificall	y	issu	ed	under	sect	ion 13(3	) of		the	said
Act	of	196	3.	An	offence	under	sub-sect	ion	(3)	of
section	13	of	the	said	Act	of 1963	will	be	made	out
when	a		promo	ter	without	reasonable	exc	use	fails	to

¶121

17 -

¶122

comply with or	con	travenes any other provisi	on of	the
said Act of 19	63	or rules framed thereunde	r.	Perusal
of the averm	ents	made in the complaint	shows	that
there is no	spe	cific case made out of	breach	or
contravention of	an	y specific provision of	the	said
Act of 1963	or	rules framed thereunder.	Howeve	r, on
reading the	compl	aint as it is, the case	of	breach
appears to be	base	d on averments made in	paragra	ph 4
of the compl	aint.	The grievance made is	that	the
promoter has no	t	discharged his obligation	of	handing
over the posse	ssion	of the flat in terms	of	the
agreement. The	sa	id case is again based	on	the
allegation that	a	sum of Rs.1,25,000/- was	paid	by
the first and	the	second Respondents and only	a	sum
of Rs.1,24,150/-	re	mained payable. The	grievanc	e of
the first and	the	second Respondents is th	at	though
they offered		remaining considera	tion	of
Rs.1,24,150/-,	the	Petitioners declined to	hand	over
possession of the	flat.	As is seen from	the	admitted
position, what	was	payable by the first	and	the
second Respondents	was	a sum of Rs.1,59,150	/-.	Thus,
taking the ave	rments	made in the complaint	as	it is,
the first and t	he	second Respondents did n	ot offe	r to
pay the ent Petitioners and	ire t	balance consideration here was a sh	to ort-fall	the of

¶123

18 -

¶124

Rs.35,000/-. The only allega	tion made of co	mmission
of an offence under sub-section	(3) of section 1	3 of
the said Act of 1963 is that	the possession of	flat
was not handed over to the	first and the	second
Respondents. As stated earlie	r, an offence	under
sub-section (3) of section 13 of	the said Act of	1963
is attracted when the prom	oter fails to	comply
without reasonable excuse. It	may not be n	ecessary
for a complainant alleging com	mission of an	offence
under section 13(3) of the	said Act of 1963	to
specifically aver that	breach or contr	avention
committed by the promoter	was without re	asonable
excuse. However, in the facts	of the present	case,
taking the averments made in	the complaint and	in
particular in paragraph 4 th	ereof as true, it	is
obvious that the first and the	second Respondents	did
not offer the entire balance	consideration to	the
Petitioners. Without receiving	entire	balance
consideration, the Petitioners	were under	no
obligation to deliver the	possession. T	herefore,
taking the said averments as	correct, it is	not
possible to come to a	conclusion that eve	n a

¶125

prima-facie case for an offence under section 13(3)

¶126

of the said Act of 1963 was made out.

¶127

19 -

¶128

21.		The net r	esult is that the Peti	tion must
succeed.		However,	it mu	st be	clarified that	the
observations		which a	re made i	n this	Judgment are	only
for	a	limited	purpose of	consideri	ng the	question
whether		a case	was made	out to	proceed against	the
Petitioners		for	the offences	compla	ined of.	The
observations		made	in this	Judgment	shall not	be
construed		as any	finding on	the m	erits of the	civil
suit	pen	ding be	tween the	parties	and the	pending
civil	su	it is	bound to be	decided	by the	concerned

¶129

Court without being influenced by the observations

¶130

made in this judgment.

¶131

Subject to what is observed above, rule is

¶132

made absolute in terms of prayer clause (a).

¶133

[ A.S.OKA, J.]

M/S. Bhawani Builders through Its Proprietor andANR v. Prashant Vishnupant Ladkat, and Others .

Case brief

What is this about?

What did the court decide?

M/S. Bhawani Builders through Its Proprietor andANR v. Prashant Vishnupant Ladkat, and Others .

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Shri. S.R. Chitnis Vs the State of Maharashtra

Shankar Sakharam Kenjale (Since Decd. Thro. L.H. ) Sampat Shankar Kenjale Vs Narayan Krishna Gade

D.G. Banswal Vs the State of Maharashtra and Anr.

Shri Mrinal Jaswant Singh Bali . Vs the State of Maharashtra .

Mohd. Jahangir Shiakh Vs Executive Engineer, Bandra Div. M.H.D.A. and Ors.

Mohd. Zakir Farooqui Vs Executive Engineer, Bandra Div. M.H.D.A. and Ors.