DR. LAKSHMANversusTHE STATE OF KARNATAKA & ORS.

480                       [2019]
               SUPREME COURT     13 S.C.R. 480
                              REPORTS                     [2019] 13 S.C.R.


A                              DR. LAKSHMAN
                                        v.
                    THE STATE OF KARNATAKA & ORS.
                   (Criminal Appeal Nos. 1573-1575 of 2019)
B                             OCTOBER 17, 2019
            [R. BANUMATHI AND R. SUBHASH REDDY, JJ.]
            Penal Code, 1860 – ss.403, 406, 417, 418, 420, 506(B),
      422, 120(B) – Appellant-complainant case that respondent-accused
      entered into an agreement with appellant on 26.09.2012 to procure
C
      70 acres of agricultural land in favour of appellant and received
      an amount of Rs. 9 crores from him, however, respondents failed to
      perform the contract in terms of agreement – It was alleged that
      thereafter, they entered into another MOU dated 08.11.2012 with a
      schedule indicating the survey nos., the respondent represented that
D     they were in possession of 70 acres of land and 30 acres of converted
      land and promised to transfer the same to the appellant – It was
      alleged that respondents had already sold the land covered by the
      survey nos. 115 and 117 and later appellant was forced to sign the
      sale deed as a confirming party of the same survey nos. which were
      executed subsequently – Also, Respondents had issued two cheques
E
      as a security for the amount of advance paid by the appellant and
      when the said cheques were presented, it was alleged that account
      of which cheques were issued was closed – Appellant alleged
      cheating, fraud and criminal conspiracy in his complaints –
      Respondents filed petition u/s.482 Cr.P.C. to quash the complaints
F     filed by the appellant – High Court held there was novation of
      contract on 08.11.2012 – High Court also disbelieved the schedule
      attached to the agreement on the ground that additional pages were
      not paginated – Further, High Court quashed the proceedings on
      the ground that appellant had already filed a Civil suit for recovery
      of sum of Rs.9 crores and complaint u/s.138 Negotiable Instruments
G
      – On appeal, held: So far as pagination of the schedule is concerned,
      in a petition u/s.482 Cr.P.C. it is fairly well settled that it is not
      permissible for the High Court to record any findings, wherever
      there are factual disputes – Further, mere filing of the suit for
      recovery of money and complaint filed u/s.138 of Negotiable
H
                                       480
  DR. LAKSHMAN v. THE STATE OF KARNATAKA & ORS.                            481


Instruments Act by itself was no ground to quash the proceedings in        A
the complaints filed by the appellant – When cheating and criminal
conspiracy are alleged against the accused, for advancing a huge
sum of Rs.9 crores, it is a matter which is to be tried, but at the same
time the High Court has entered into the disputed area, at the stage
of considering the petitions filed u/s.482 Cr.P.C. – Whether there is
                                                                           B
novation of contract or not and the effect of such entering into a
contract is a matter which is required to be considered only after
trial but not at the stage of considering the application u/s. 482
Cr.P.C. – High Court committed error in allowing the petitions filed
u/s.482 Cr.P.C. – Accordingly, order of the High Court set aside.
      Allowing the appeals, the Court                                      C

        HELD: 1. It is not seriously disputed by the parties with
regard to the entering of the agreements for procuring the land
in favour of the appellant and respondents have received the
amount of Rs.9 crores by way of demand drafts and cheques. It
is the specific case of the appellant that there are schedules             D
mentioned to the agreements as per which respondents have
agreed to procure the land covered by Survey Nos.115 and 117
apart from other lands. In a petition under Section 482, Cr.P.C.
it is fairly well settled that it is not permissible for the High Court
to record any findings, wherever there are factual disputes.               E
Merely on the ground that there is no pagination in the Schedule,
the High Court has disbelieved such Schedule to the Agreements.
It is the specific case of the appellant that the lands covered by
Survey Nos.115 and 117 were sold even prior to the first
agreement, as such respondents have committed an act of
cheating. It is also the specific case of the appellant that two           F
cheques were issued by respondents-accused by way of security
for the amount of Rs.9 crores which is advance but the account of
such cheques was closed even prior to entering into the
Agreement itself. The second complaint filed by the appellant is
self-explanatory and he is forcefully made to sign the sale deed           G
which were executed subsequently for the lands covered by
Survey Nos.115 and 117. Mere filing of the suits for recovery of
the money and complaint filed under Section 138 of the N.I. Act
by itself is no ground to quash the proceedings in the complaints
filed by the appellant herein. When cheating and criminal
                                                                           H
482            SUPREME COURT REPORTS                     [2019] 13 S.C.R.


A     conspiracy are alleged against the accused, for advancing a huge
      sum of Rs.9 crores, it is a matter which is to be tried, but at the
      same time the High Court has entered into the disputed area, at
      the stage of considering the petitions filed under Section 482,
      Cr.P.C. It is fairly well settled that power under Section 482
      Cr.P.C. is to be exercised sparingly when the case is not made
B
      out for the offences alleged on the reading of the complaint itself
      or in cases where such complaint is filed by way of abuse of the
      process. Whether any Schedules were appended to the
      agreement or not, a finding is required to be recorded after full
      fledged trial. Further, as the contract is for the purpose of
C     procuring the land, as such the same is of civil nature, as held by
      the High Court, is also no ground for quashing. Though the
      contract is of civil nature, if there is an element of cheating and
      fraud it is always open for a party in a contract, to prosecute the
      other side for the offences alleged. Equally, mere filing of a suit
      or complaint filed under Section 138 of the N.I. Act, 1881 by itself
D
      is no ground to quash the proceedings. While considering the
      petition under Section 482 of Cr.P.C., this Court is of the view
      that the High Court also committed an error that there is a
      novation of the contract in view of the subsequent agreement
      entered into on 08.11.2012. Whether there is novation of contract
E     or not and the effect of such entering into the contract is a matter
      which is required to be considered only after trial but not at the
      stage of considering the application under Section 482, Cr.P.C.
      [Para 9] [486-B-H; 487-A-C]
            S.W. Palanitkar and Ors. v. State of Bihar and Anr.
F           (2002) 1 SCC 241 : [2001] 4 Suppl. SCR 397 ; Anil
            Mahajan v. Bhor Industries Ltd. and Anr. (2005) 10
            SCC 228 ; Inder Mohan Goswami and Anr. v. State of
            Uttaranchal and Ors. 2007 (12) Scale 15 – referred
            to.
G                           Case Law Reference
      [2001] 4 Suppl. SCR 397        referred to            Para 10
      (2005) 10 SCC 228              referred to            Para 10
      2007 (12) Scale 15             referred to            Para 10
H
  DR. LAKSHMAN v. THE STATE OF KARNATAKA & ORS.                             483


      CRIMINAL APPELLATE JURISDICTION : Criminal Appeal                     A
Nos. 1573-1575 of 2019.
      From the Judgment and Order dated 28.04.2017 of the High Court
of Karnataka at Bengaluru in Criminal Petition Nos. 2383 of 2017, 7976
of 2013 and 7161 of 2016.
     Arun Joshi, Ankolekar Gurudatta, Chandan Malapur, Mukesh               B
Kumar Singh, Mohit Kaushik, Rajendra Koushik, Advs. for the Appellant.
      R. Basant, Sr. Adv., Anand Sanjay M. Nuli, Sunil Rao, Dharm
Singh, Nanda Kumar K.B., Prawal Mishra, Suraj Kaushik, Manu Krishna
(for M/S. Nuli & Nuli), V. N. Raghupathy, Md. Apzal Ansari, Advs. for
the Respondents.                                                            C

      The Judgment of the Court was delivered by
      R. SUBHASH REDDY, J.
      1. Leave granted.
                                                                            D
      2. These criminal appeals are filed by the complainant, aggrieved
by the judgment and order dated 28th April, 2017 passed by the High
Court of Karnataka at Bengaluru in Crl.P Nos.2383 of 2017, 7976 of
2013 and 7161 of 2016. By the aforesaid order, the High Court has
allowed the petitions filed by the respondents-accused under Section
482 of Cr.P.C. and quashed the complaint bearing P.C.R. No.12317 of         E
2013 filed before the IV ACMM, Bangalore, and complaint bearing P.C.R.
No.14420 of 2015, filed before the VIII ACMM, Bengaluru, as well as
the order dated 27th November, 2015 (wrongly mentioned as 27th July,
2015) passed by the VIII ACMM, Bengaluru, in P.C.R.No.14420 of
2015, directing the Sanjaya Nagara Police Station to investigate the
                                                                            F
matter.
       3. The appellant herein has filed complaint on 29th April, 2013
before the Chief Metropolitan Magistrate, Bangalore, which is registered
as P.C.R. No.12317 of 2013 against the accused A1 to A5, namely (1)
M/s. Pramila Santhosh Land Developers and Builders Pvt. Ltd., (2)
D.T. Santhosh (3) D.C. Thamanna (4) Smt. K.G. Pramila and (5) M/s.          G
Sri Sai Developers for the alleged offences under Sections 403, 406,
420, 506(B) of the Indian Penal Code. There is also a susequent complaint
by the same complainant on 27th November, 2015 which is registered as
P.C.R. No.14420 of 2015, which is subseqently numbered as CC No.54
                                                                            H
484             SUPREME COURT REPORTS                          [2019] 13 S.C.R.


A     of 2016 (after filing of the chargesheet dated 22nd December, 2015)
      against the accused therein namely (1) M/s. Pramila Santhosh Land
      Developers and Builders Pvt Ltd. (2) D.T. Santhosh and (3) Smt. K.G.
      Pramila for the alleged offences under Sections 417, 418, 420, 422,
      120(B) read with Section 34 of IPC and for offences under the Prevention
      of Money Laundering Act.
B
             4. The first complaint dated 29th April, 2013 was filed alleging that
      the respondents-accused made a representation that they are owners
      and are absolutely seized and possessed of land at Ballur village, Attibele
      Hobli, Anekal Taluk and promised to procure an extent of 70 acres of
      land and entered into an agreement with the appellant-complainant on
C     26th September, 2012 and received an amount of Rs.9 crores (Rupees
      Nine crores) by way of cheques and demand drafts. It is alleged that the
      extent and survey nos. of land mentioned in the Schedule appended to
      the Memorandum of Understanding (MOU) were to be procured in
      favour of the complainant. It was further pleaded that there were two
D     cheques issued by the accused as security for the amount of advance
      paid by the appellant-complainant. It was the case of the complainant
      that subsequent to agreement dated 26 th September, 2012, the
      respondents-accused having failed to perform the contract in terms of
      agreement, have entered into another MOU on 8th November, 2012,
      representing that they are in possession of 70 acres of agricultural land
E     and 30 acres of converted land and they promised to transfer such land
      in favour of the appellant. To the MOU dated 8th November, 2012 M/s.
      Sri Sai Developers was added as a party. As per the complaint, there is
      also a Schedule indicating the survey nos. and extent of lands to the
      second MOU. In the complaint filed on 29th April, 2013 it was alleged
F     that though the respondents have already sold the land covered by Survey
      Nos.115 and 117 to M/s. Sri Sai Developers on 7th June, 2012, with a
      dishonest intention respondents have played fraud and cheated the
      appellant by receiving huge sum of Rs.9 Crores (Rupees Nine crores),
      by including the lands covered by Survey Nos.115 and 117 also. Further
      alleging that when the demand was made to comply with the terms of
G     the contract, the respondents have threatened the complainant, as such
      the respondents are liable to be punished for offences under Sections
      403, 406, 420, 506(B) of IPC.
             5. Further alleging that after filing of the first criminal complaint,
      the respondents have threatened and pressurised the appellant and the
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   DR. LAKSHMAN v. THE STATE OF KARNATAKA & ORS.                                485
              [R. SUBHASH REDDY, J.]

second complaint was filed. In the second complaint, it was alleged that        A
one of the accused, by name, D.C. Thamanna also gave an undertaking
in writing stating that from 16th May, 2013 onwards they would start
registering the sale deeds but they failed to do so. It was further alleged
that instead of abiding by such undertaking, the appellant was forced to
enter into an addendum dated 30th May 2013. In the second complaint,
                                                                                B
it is alleged that all the accused have told the appellant that lands bearing
Survey Nos.115 and 117 are not available for sale, as such they will
compensate in other lands and made a request to become confirming
party to sale deed dated 6.7.2013 executed in favour of the trust. It is
stated in the complaint that though the purchaser of the lands covered
by Survey nos.115 and 117 was not known to the appellant, he was                C
made to sign the sale deed as a confirming party which is also a
conspiracy of all the accused to avoid performance of the contract entered
into by the accused with the appellant and to retain the amount of Rs.9
crores (Rupees Nine crores) with them illegally. In the second complaint,
it was further the case of the appellant that when the cheques, which
                                                                                D
were given by the accused as security, were presented, it was learnt
that the account of which cheques were issued was closed even prior to
entering into the agreement dated 26.9.2012. Alleging that there is a
fraud, cheating and conspiracy, it is pleaded that the respondents are
liable to be prosecuted for the offences under Sections 417, 418, 420,
422 and 120(B) read with Section 34, IPC and the provisions of Prevention       E
of Money Laundering Act.
       6. At this stage, it is to be noticed that in the second complaint,
after investigation, chargesheet is also filed and C.C. is numbered.
       7. The High Court has allowed the petitions filed under Section
482, Cr.P.C. by the respondents-accused mainly on the ground that in            F
view of the agreement entered into on 08.11.2012, there is a novation of
the contract between the parties. Further the High Court has disbelieved
the Schedule to the MOU dated 08.11.2012 on the ground that the
additional pages were not paginated. Further on the grounds that the
appellant has already filed a civil suit for recovery of advance paid by        G
him for a sum of Rs.9 crores (Rupees Nine crores) and the appellant
has filed complaint for offence under Section 138 of the Negotiable
Instruments Act, 1881, the appellant has joined in the sale deed for lands
covered by Survey Nos.115 and 117 of Ballur Village, has allowed the
petitions and quashed the proceedings.
                                                                                H
486             SUPREME COURT REPORTS                         [2019] 13 S.C.R.


A           8. Having heard Sri Arun Joshi, learned counsel for the appellant
      and Sri R. Basant, learned senior counsel assisted by Mr. Anand Sanjay
      M. Nuli, Advocate, appearing for the respondents, we have perused the
      impugned order passed by the High Court and other materials placed on
      record.
B            9. It is not seriously disputed by the parties with regard to the
      entering of the agreements for procuring the land in favour of the appellant
      in Ballur Village, Anekal Taluk, Bangalore Urban District and respondents
      have received the amount of Rs.9 crores by way of demand drafts and
      cheques. It is the specific case of the appellant that there are schedules
      mentioned to the agreements as per which respondents have agreed to
C     procure the land covered by Survey Nos.115 and 117 of Ballur Village
      apart from other lands. In a petition under Section 482, Cr.P.C. it is
      fairly well settled that it is not permissible for the High Court to record
      any findings, wherever there are factual disputes. Merely on the ground
      that there is no pagination in the Schedule, the High Court has disbelieved
D     such Schedule to the Agreements. It is the specific case of the appellant
      that the lands covered by Survey Nos.115 and 117 of Ballur Village
      were sold even prior to the first agreement, as such respondents have
      committed an act of cheating. It is also the specific case of the appellant
      that two cheques were issued by respondents-accused by way of security
      for the amount of Rs.9 crores which is advance but the account of such
E     cheques was closed even prior to entering into the Agreement itself.
      The second complaint filed by the appellant is self-explanatory and he is
      forcefully made to sign the sale deed which were executed subsequently
      for the lands covered by Survey Nos.115 and 117 of Ballur Village.
      Mere filing of the suits for recovery of the money and complaint filed
F     under Section 138 of the N.I. Act by itself is no ground to quash the
      proceedings in the complaints filed by the appellant herein. When cheating
      and criminal conspiracy are alleged against the accused, for advancing
      a huge sum of Rs.9 crores, it is a matter which is to be tried, but at the
      same time the High Court has entered into the disputed area, at the
      stage of considering the petitions filed under Section 482, Cr.P.C. It is
G     fairly well settled that power under Section 482 Cr.P.C. is to be exercised
      sparingly when the case is not made out for the offences alleged on the
      reading of the complaint itself or in cases where such complaint is filed
      by way of abuse of the process. Whether any Schedules were appended
      to the agreement or not, a finding is required to be recorded after full
H
    DR. LAKSHMAN v. THE STATE OF KARNATAKA & ORS.                              487
               [R. SUBHASH REDDY, J.]

fledged trial. Further, as the contract is for the purpose of procuring the    A
land, as such the same is of civil nature, as held by the High Court, is
also no ground for quashing. Though the contract is of civil nature, if
there is an element of cheating and fraud it is always open for a party in
a contract, to prosecute the other side for the offences alleged. Equally,
mere filing of a suit or complaint filed under Section 138 of the N.I. Act,
                                                                               B
1881 by itself is no ground to quash the proceedings. While considering
the petition under Section 482 of Cr.P.C., we are of the view that the
High Court also committed an error that there is a novation of the contract
in view of the subsequent agreement entered into on 08.11.2012. Whether
there is novation of contract or not and the effect of such entering into
the contract is a matter which is required to be considered only after         C
trial but not at the stage of considering the application under Section 482,
Cr.P.C.
        10. Learned senior counsel Sri R. Basant appearing for the accused,
in support of his case, relied on the judgment of this Court in the case of
S.W. Palanitkar and Ors. vs. State of Bihar and Anr.1 and submitted            D
that every breach of contract may not result in a penal offence, but in
the very same judgment, this Court has held that breach of trust with
mens rea gives rise to a criminal prosecution as well. In a given case,
whether there is any mens rea on the part of the accused or not is a
matter which is required to be considered having regard to the facts and
circumstances of the case and contents of the complaint etc. In the            E
case on hand, it is clearly alleged that even before entering into the
agreement dated 26.09.2012, lands were already sold to third party, which
were agreed to be procured in favour of the appellant. Not only that, it
is the specific allegation of the complainant that the cheques were issued
towards security from the account which was also closed much earlier           F
to the date of Agreement itself. Learned counsel also relied on judgment
in the case of Anil Mahajan vs. Bhor Industries Ltd. and Anr.2 but
in the very same judgment it is also held that where there exists a
fraudulent and dishonest intention at the time of the commission of the
offence, law permits the victim to proceed against the wrongdoer for
having committed an offence of criminal breach of trust or cheating. In        G
another case relied on by the learned counsel, viz., Inder Mohan
Goswami and Anr. vs. State of Uttaranchal and Ors.3 this Court has
1
  (2002) 1 SCC 241
2
  (2005) 10 SCC 228
3
  2007 (12) Scale 15                                                           H
488                SUPREME COURT REPORTS                       [2019] 13 S.C.R.


A     reiterated the scope of power of the High Court under Section 482 Cr.P.C.
      Having regard to the facts of the case, we are of the view that the said
      judgments relied on by the learned counsel would not support the case
      of the respondents. It is also to be noticed that in the complaint filed in
      P.C.R.No.14420 of 2015, investigation has been completed and
      chargesheet was also filed on 22nd December 2015.
B
             11. For the aforesaid reasons, we are of the view that the High
      Court has committed an error in allowing the petitions filed under Section
      482, Cr.P.C. by the respondents-accused. Accordingly, these criminal
      appeals are allowed and impugned common order dated 28.4.2017 passed
      by the High Court of Karnataka at Bengaluru is set aside. It is made
C     clear that the findings recorded in this judgment are confined only for
      these appeals and the same cannot be construed as an expression of
      opinion on merits of the matter and it is open for the trial court to proceed
      in accordance with law and decide the complaints on their own merits.

D
      Ankit Gyan                                                    Appeals allowed.




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