High Court quashed criminal proceedings under Section 420 IPC initiated against petitioner for alleged cheating in an agreement to sell shares of a company, held to be a pure civil dispute.
Complaint dated 13.2.2010 and summoning order dated 12.11.2013 are quashed along with all subsequent proceedings arising therefrom.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
Crl. Misc. No. M-14537 of 2014
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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.
Crl. Misc. No. M-14537 of 2014 Date of Decision: 10.8.2015
Kamal Mehra
........Petitioner
Vs.
Manish Kumar .......Respondent
CORAM: HON'BLE MRS. JUSTICE SABINA
Present: Mr. Mayank Mathur, Advocate for the petitioner.
Mr. Ankit Jindal, Advocate for Mr. Tanmoy Gupta, Advocate for the respondent.
SABINA, J.
Petitioner has filed this petition under Section 482 of the Code of Criminal Procedure, 1973 for quashing of complaint dated 13.2.2010 titled 'Manish Kumar vs. Kamal Mehra' bearing No. RBT-355 of 15.2.2010 (Annexure P-2) and all the subsequent proceedings arising therefrom including the summoning order dated 12.11.2013 (Annexure P-1).
Case of the complainant as per the complaint Annexure P-2, in brief, is that petitioner had entered into an agreement to sell with the complainant on 26.2.2007 qua his land and had received ` 5,00,000/- by way of earnest money. In this regard, receipt had been executed by the petitioner. However, the petitioner had failed to return the amount paid by the complainant-respondent. Hence, the complaint in question
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Crl. Misc. No. M-14537 of 2014
was filed by the complainant-respondent.
In support of his complaint, respondent led his preliminary evidence. The Trial Court vide impugned order dated 12.11.2013 ordered the summoning of the petitioner qua commission of offence punishable under Section 420 of the Indian Penal Code, 1860. Hence, the present petition by the petitioner.
Learned counsel for the petitioner has submitted that a perusal of the receipt (Annexure P-3) showed that it could not be described as an agreement to sell. In fact, as per Annexure P-3, petitioner had agreed to sell his shares of Company M/s Arlington Spinning and Weaving Mills Limited for a consideration of ` 6,00,00,000/-. The dispute between the parties could be described to be purely civil in nature.
Learned counsel for the respondent, on the other hand, has opposed the petition and has submitted that in fact, an oral agreement to sell had been executed by the petitioner in favour of the respondent qua his land and receipt Annexure P-3 was executed in this regard.
In the case of State of Haryana vs. Bhajan Lal , , 1992 Supp(1) Supreme Court Cases 335 , the Apex Court has held as under:-
“The following categories of cases can be stated by
way of illustration wherein the extraordinary power under Article 226 or the inherent powers under Section 482, Cr.P.C. Can be exercised by the High Court either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise,
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clearly defined and sufficiently chennelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised:-
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(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceedings is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.
We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on
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the court to act according to its whim or caprice.” Annexure P-3 receipt in question reads as under:- “I Mr. Kamal Mehra s/o Late Shri. P.L. Mehra R/o 26/100 Shakti Nagar is selling the total shares of Company M/s Arlinton Spinning and Weaving Mills Limited and power of attorney of M/s Speedline Exports. Total sale consideration is 6 Cr. and total time of deed is two months. Purchaser Mr. Manish Kumar R/o Faridabad.
Payment schedule is as agreed.
Tokan -5 Lacs payment done After 10 days of tokan Advance -20% Agreement to sell Part payment after 10 days of advance Part payment-30% of total consideration Total payment after 30 days.”
A perusal of the above receipt does not lead to the inference that the same had been executed qua agreement to sell executed by the petitioner in favour of the respondent qua the land owned by the petitioner. As per Annexure P-3, petitioner had agreed to sell his total shares of company M/s Arlington Spinning and Weaving Mills Limited to the respondent. 5,00,000/- were paid by way of token money whereas the remaining payment was to be made in terms of Annexure P-3. The dispute between the parties can be said to be purely civil in nature. The respondent could have filed suit for recovery of 5,00,000/- received by the petitioner in terms of Annexure P-3,
if so advised. However, continuation of criminal proceedings
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against the petitioner would be nothing but an abuse of process of law.
Accordingly, this petition is allowed. Complaint dated 13.2.2010 titled 'Manish Kumar vs. Kamal Mehra' bearing No. RBT-355 of 15.2.2010 (Annexure P-2) and all the subsequent proceedings arising therefrom including the summoning order dated 12.11.2013 (Annexure P-1), are quashed.
(SABINA) JUDGE
August 10, 2015 Gurpreet
GURPREET SINGH 2015.08.13 15:58 I attest to the accuracy and authenticity of this document Chandigarh
3 issues framed by the court
Whether the complaint filed regarding alleged failure to return earnest money against an agreement to sell shares of a company constitutes an offence under Section 420 IPC or is a civil dispute.
Whether criminal proceedings in this case amount to an abuse of the process of the court and warrant quashing under Section 482 CrPC.
Whether the receipt in question pertains to the sale of land or shares of a company.
Colour shows how this judgement treated each authority
State of Haryana vs Bhajan LalApplied¶23
State of Haryana vs Bhajan Lal, 1992 Supp(1) Supreme Court Cases 335
3 provisions across 3 enactments
Kamal Mehra
Manish Kumar
Sabina
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
