Disposed

Sandhya Realtors Private Limited v. the State by Marathalli Police Station

Karnataka HC28 Nov 2023CRL.P/4510/2019

Case brief

AI extract

What is this about?

The High Court of Karnataka held that the petition to quash the FIR is not maintainable. The court observed that allegations of fraud regarding title and possession require police investigation. The petition is disposed of on terms directing the investigation officer to verify specific facts before proceeding further.

What did the court decide?

Petition disposed of directing the investigating officer to verify facts regarding newspaper publications and call upon the accused to produce title documents before proceeding with investigation.

Sandhya Realtors Private Limited Vs the State by… — Quashing and FIR | Karnataka HC (2023)

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1 - NC: 2023:KHC:43159 CRL.P No. 4510 of 2019

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28^TH DAY OF NOVEMBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE R. NATARAJ CRIMINAL PETITION NO. 4510 OF 2019

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BETWEEN:

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SANDHYA REALTORS PRIVATE LIMITED REGISTERED OFFICE AT SY. NO.86, 87, 90 & 91 SANDHYA TECHNO-1, OPP. SUNSHINE HOSPITAL, RAIDURG MAIN ROAD, HYDERABAD TG-500032 REPRESENTED BY ITS DIRECTOR SARANALA SREEDHAR

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Digitally signed by SUMA Location: HIGH COURT OF KARNATAKA

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SREEDHAR SARANALA DIRECTOR OF SANDHYA REALTORS PRIVATE LIMITED, REGISTERED OFFICE AT SY NO.86, 87, 90 & 91, SANDHYA TECHNO-1, OPP. SUNSHINE HOSPITAL, RAIDURG MAIN ROAD, HYDERABAD TG-500032

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SANDHYA SARANALA DIRECTOR OF SANDHYA REALTORS PRIVATE LIMITED,

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REGISTERED OFFICE AT SY NO.86, 87, 90 & 91, SANDHYA TECHNO-1, OPP. SUNSHINE HOSPITAL, RAIDURG MAIN ROAD, HYDERABAD TG-500032

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RAJA DUGGIRALA RAO DIRECTOR OF SANDHYA REALTORS PRIVATE LIMITED, REGISTERED OFFICE AT SY NO.86, 87, 90 & 91, SANDHYA TECHNO-1, OPP. SUNSHINE HOSPITAL, RAIDURG MAIN ROAD,

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HYDERABAD TG-500032

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JAYALAKSHMI SARANALA DIRECTOR OF SANDHYA REALTORS PRIVATE LIMITED, REGISTERED OFFICE AT SY NO.86, 87, 90 & 91, SANDHYA TECHNO-1, OPP. SUNSHINE HOSPITAL, RAIDURG MAIN ROAD, HYDERABAD TG-500032

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…PETITIONERS

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(BY SRI. VIGNESH SHETTY, ADVOCATE)

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AND:

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THE STATE BY MARATHALLI POLICE STATION REPRESENTED BY ITS PUBLIC PROSECUTOR, HIGH COURT OF KARNATAKA, BENGALURU-560001

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SAMRUDDHI REALTY LIMITED # 1, TATE LANE, RICHMOND ROAD CROSS, BENGALURU-560025 REPRESENTED BY ITS MANAGING DIRECTOR, RAVINDRA MADHUDI

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…RESPONDENTS

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(BY SRI. RAJAT SUBRAMANYAM, HCGP FOR R1;

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R2 IS SERVED)

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THIS CRL.P IS FILED U/S.482 CR.P.C PRAYING THAT TO QUASH THE PROCEEDINGS INITIATED VIDE PRIVATE COMPLAINT IN PCR.NO.53114/2019 AGAINST ALL THE PETITIONERS/ACCUSED NO.1 TO 5 PENDING ON THE FILE OF THE XLIII ADDITIONAL CJIEF METROPOLITAN MAGISTRATE COURT, BENGALURU (MAYO HALL) WHICH IS PRODUCED AS ANNEXURE-A AND ETC.,

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THIS PETITION, COMING ON FOR HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:

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3 - NC: 2023:KHC:43159 CRL.P No. 4510 of 2019

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ORDER

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The petitioners have challenged the registration of Crime No.231/2019 by the respondent No.1 for the offences punishable under Sections 420, 34 of IPC pending consideration before the XLIII Additional Chief Metropolitan Magistrate, Mayohall, Bengaluru.

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The respondent No.2 filed a private complaint in PCR No.53114/2019 contending that it approached the accused Nos.2 to 5 for joint development of a property bearing Sy.Nos.38/2, 38/3, 38/4, 38/5, 38/7, 38/9 and 38/10 totally measuring 2 acres 20 guntas situated at Amani Bellandur Khane, Varthur Hobli, Bengaluru East Taluk and Sy.No.49 measuring 4 acres situated at Devarabeesanahalli Village, Varthur Hobli, Bengaluru South Taluk. The respondent No.2 claims that all the accused Nos.2 to 5 agreed to enable the respondent No.2 to develop the property for mutual gain. The accused claimed that they would get the land converted for non residential purposes and that they are the owners of the aforesaid properties having valid title and they were in lawful possession of the said properties. The respondent No.2 claimed that based on such representation, the petitioners demanded a

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sum of Rs.1,00,00,000.00 and represented that they would execute a joint development agreement only after the said sum is paid. The respondent No.2 stated that the accused Nos.2 to 5 addressed a letter dated 31.07.2015 confirming the terms to be incorporated in the joint development agreement to be executed between the parties. The accused Nos.2 to 5 permitted the respondent No.2 to cause publication of a notice in the newspaper inviting objections from the general public against the proposed joint development agreement. The respondent No.2 claimed that owing to the demand made by the accused Nos.2 to 5, a sum of Rs.1,00,00,000.00 was transferred to the accused Nos.2 to 5 and the respondent No.2 got a notice published in the newspaper. It was then that the respondent No.2 came to know that the accused Nos.1 to 5 with an intention to cheat and enrich themselves had suppressed the fact that they did not possess valid title and thus they misrepresented about the title and possession of the properties. The respondent No.2 alleged that the accused Nos.1 to 5 had an intention to cheat respondent No.2 from the day they made a representation that they were desirous of getting the properties developed. The respondent No.2 further

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alleged that despite several request made by it to conclude the transaction, the accused Nos.1 to 5 failed to fulfill their part of the obligation. The respondent No.2 claimed that since it was convinced that the accused Nos.1 to 5 had cheated it, it lodged a complaint before the jurisdictional police who informed it to get the matter referred from the jurisdictional Court and refused to accept the complaint. The respondent No.2, therefore, requested the trial Court to take suitable action in accordance with law by referring the private complaint to the concerned police station for investigation. The trial Court in terms of the order dated 30.05.2019 referred the private complaint for investigation under Section 156(3) of Cr.P.C. The respondent No.1 registered Crime No.231/2019 for the aforesaid offences and took up investigation. Being aggrieved by the registration of Crime No.231/2019, the petitioners / accused Nos.1 to 5 have filed this petition.

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The learned counsel for petitioners contends that

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the First Information Report registered by the respondent No.1 is liable to be quashed on the following grounds:

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NC: 2023:KHC:43159 CRL.P No. 4510 of 2019

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That the proposed joint development agreement was entered into between the respondent No.2 and the petitioners on 04.09.2015. As per the terms of the memorandum of understanding, the project was supposed to be completed within three years from the date of receipt of all the required approvals from the concerned departments. The respondent No.2 was required to pay a sum of Rs.10,00,00,000/towards refundable security deposit and sum of Rs.10,00,00,000/- towards non-refundable security deposit of which, the respondent No.2 had paid only a sum of Rs.1,00,00,000.00 and the balance was to be paid within three months from the date of the execution of memorandum of understanding. He submits that the respondent No.2 having not taken any steps to conclude the joint development agreement by paying the refundable and nonrefundable security deposit, has misused the process of law by filing the private complaint.

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1. That before lodging the private complaint, the respondent No.2 has not complied with Section

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154(3) of Cr.P.C., and therefore, the trial Court could not have referred the matter for investigation under Section 156(3) of Cr.P.C. In this regard, he relied upon the judgment of the Hon’ble Apex Court in the case of Priyanka Srivastava and another v.

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State of Uttar Pradesh and others reported in (2015) 6 SCC 287 .

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1. That the respondent No.2 has lodged a private complaint after nearly four years from the date of entering into the memorandum of understanding and hence, the private complaint is a clear abuse of the process of law.

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1. That the respondent No.2 has attempted to give a criminal flair to a civil dispute and the process of Criminal Court cannot be used to recover the amount payable under memorandum of understanding. In this regard, he relied upon the following judgments of the Hon’ble Apex Court:

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i) Thermax Limited and others v. K.M.Johny and others reported in (2011) 13 SCC 412

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ii) Dalip Kaur and Others v. Jagnar Singh and another reported in (2009) 14 SCC 696

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iii) Hari Prasad Chamaria v. Bishun Kumar Surekha and others reported in (1973) 2 SCC 823

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iv) S.W.Palanitkar and others v. State of Bihar and another reported in (2002) 1 SCC 241

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Notice of this petition is served on respondent No.2,

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which is absent.

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The learned High Court Government Pleader for respondent No.1 on the other hand submitted that the respondent No.2 had alleged that pursuant to the paper publication, it had received various objections, which indicated that there was a defect in the title of the accused Nos.1 to 5 in respect of the properties sought to be developed. He therefore contends that this is a question of fact which has to be investigated by the jurisdictional police. He submits that if the investigating officer feels that this is a civil dispute, he would necessarily file a ‘B’ report. Therefore,

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he submits that this Court may not exercise jurisdiction under Section 482 of Cr.P.C.

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I have considered the submissions of learned

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counsel for petitioners as well as the learned High Court Government Pleader for the respondent No.1.

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A perusal of the private complaint indicates that the respondent No.2 and the petitioners had entered into an agreement to develop certain properties belonging to the accused / petitioners herein. The respondent No.2 claims that a sum of Rs.1,00,00,000.00 was paid to the petitioners/accused Nos.1 to 5 and thereafter, it caused a notice inviting objections if any, from the general public against entering into joint development agreement in respect of the properties mentioned above. The respondent No.2 claimed that it realized that the petitioners/ accused did not have any valid

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title and that they were not in possession of the properties mentioned above. The respondent No.2 alleged that it was induced to make huge payment of Rs.1,00,00,000.00 based on the representations made by the accused/petitioners. Therefore, he claims that the accused / petitioners had from

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the inception an intention to cheat the respondent No.2 and that they had falsely claimed that they had valid title and documents but which they failed to produce. The respondent No.2 also claimed that the attempts made by it demanding accused Nos.1 to 5 to conclude the transaction proved futile and therefore, lodged the private complaint. No doubt, as rightly contended by the learned counsel for petitioners, the respondent No.2 did not comply with Section 154(3) of Cr.P.C. Further, respondent No.2 had indeed lodged a belated private complaint after nearly four years from the date of entering into memorandum of understanding. It also appears that the respondent No.2 has given a criminal colour to an otherwise civil dispute. However, the fact that the accused Nos.1 to 5 have received a sum of Rs.1,00,00,000.00 is not much in dispute. The claim of the respondent No.2 is that it realised that the accused Nos.1 to 5 did not have title to the property in question and that they did not produce documents of title, is a matter that needs to be investigated by the jurisdictional police and this Court cannot investigate into the contentions urged by the petitioners / accused Nos.1 to 5. The contention of the learned counsel for petitioners that the respondent No.2 had

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failed to comply Section 154(3) of Cr.P.C, deserves to be negatived in view of the specific contention urged by the respondent No.2 that it had approached the jurisdictional police who referred it to the jurisdictional Court and refused to accept the complaint. Accordingly, the respondent No.2 has filed a private complaint. The fact situation in the case of Priyanka Srivastava stated supra does not appear in this case and this is a plain case where the respondent No.2 claims that it had paid consideration of Rs.1,00,00,000.00 to the petitioners/accused Nos.1 to 5 and that the petitioners had defrauded the respondent No.2 by representing that the accused No.1 had a clear marketable title while it did not.

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In the circumstances, no indulgence can be shown to the petitioners to quash the First Information Report registered in Crime No.231/2019. However, the respondent No.1 while conducting investigation shall be first satisfied whether any publication in the newspaper was caused by the respondent No.2 inviting objections from the general public and whether any person had raised any objection challenging the title and possession of the accused Nos.1 to 5 in respect of the properties mentioned above. It is only then, the respondent

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No.1 can proceed further to investigate the offences against the petitioners. For this purpose, the respondent No.1 shall also call upon the petitioners to produce all the documents of title in respect of the properties mentioned above and thereafter, consider whether further investigation into the offences is warranted or not. This petition stands disposed off on the above terms.

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For the purpose of investigation, a responsible person of the accused No.1 shall appear before the respondent No.1 and furnish all necessary documents and the respondent No.1 shall not insist upon all the directors of the accused No.1

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to be present before him for the purpose of conducting investigation.

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Sd/JUDGE

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List No.: 1 Sl No.: 7

Sandhya Realtors Private Limited v. the State by Marathalli Police Station

Case brief

What is this about?

What did the court decide?

Sandhya Realtors Private Limited v. the State by Marathalli Police Station

Case brief

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