R. Subhash Reddy, J.— Leave granted. These criminal appeals are filed by the complainant, aggrieved by the judgment and order dated 28-4-2017 passed by the High Court of Karnataka at Bengaluru in Pramila Santhosh v. State of Karnataka 2017 SCC OnLine Kar 4257. By the aforesaid order, the High Court has allowed the petitions filed by the respondent-accused under Section 482 CrPC and quashed the complaint bearing PCR No. 12317 of 2013 filed before the IVth ACMM, Bangalore, and complaint bearing PCR No. 14420 of 2015, filed before the VIIIth ACMM, Bengaluru, as well as the order dated 27-11-2015 (wrongly mentioned as 27-7-2015) passed by the VIIIth ACMM, Bengaluru, in PCR No. 14420 of 2015, directing Sanjaya Nagara Police Station to investigate the matter.
2. The appellant herein has filed complaint on 29-4-2013 before the Chief Metropolitan Magistrate, Bangalore, which is registered as PCR No. 12317 of 2013 against the accused A-1 to A-5, 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 Sri Sai Developers for the alleged offences under Sections 403, 406, 420, 506-B of the Penal Code. There is also a subsequent complaint by the same complainant on 27-11-2015 which is registered as PCR No. 14420 of 2015, which is subseqently numbered as CC No. 54 of 2016 (after filing of the charge-sheet dated 22-12-2015) 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 IPC and for the offences under the Prevention of Money Laundering Act.
3. The first complaint dated 29-4-2013 was filed alleging that the respondent-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 ac of land and entered into an agreement with the appellant complainant on 26-9-2012 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 numbers 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 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 26-9-2012, the respondent-accused having failed to perform the contract in terms of agreement, have entered into another MoU on 8-11-2012, representing that they are in possession of 70 ac of agricultural land and 30 ac of converted land and they promised to transfer such land in favour of the appellant. To the MoU dated 8-11-2012, M/s Sri Sai Developers was added as a party. As per the complaint, there is also a schedule indicating the survey numbers and extent of lands to the second MoU. In the complaint filed on 29-4-2013 it was alleged that though the respondents have already sold the land covered by Survey Nos. 115 and 117 to M/s Sri Sai Developers on 7-6-2012, with a dishonest intention the 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 the contract, the respondents have threatened the complainant, as such the respondents are liable to be punished for the offences under Sections 403, 406, 420, 506-B IPC.
4. Further alleging that after filing of the first criminal complaint, the respondents have threatened and pressurised the appellant and the second complaint was filed. In the second complaint, it was alleged that one of the accused, by name, D.C. Thamanna also gave an undertaking in writing stating that from 16-5-2013 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 30-5-2013. In the second complaint, 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 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 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 the Prevention of Money Laundering Act.
5. At this stage, it is to be noticed that in the second complaint, after investigation, charge-sheet is also filed and CC is numbered.
6. The High Court has allowed the petitions filed under Section 482 CrPC by the respondent-accused mainly on the ground that in view of the agreement entered into on 8-11-2012, there is a novation of the contract between the parties. Further, the High Court has disbelieved the schedule to the MoU dated 8-11-2012 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 him for a sum of Rs 9 crores (Rupees nine crores) and the appellant has filed complaint for the 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.
7. Having heard Shri Arun Joshi, learned counsel for the appellant and Shri R. Basant, learned Senior Counsel assisted by Mr Anand Sanjay M. Nuli, Advocate, appearing for the respondents, we have perused the impugned order 2017 SCC OnLine Kar 4257 passed by the High Court and other materials placed on record.
8. 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 the 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 the respondents have agreed to procure the land covered by Survey Nos. 115 and 117 of Ballur Village apart from other lands. In a petition under Section 482 CrPC 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 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 the respondents have committed an act of cheating. It is also the specific case of the appellant that two cheques were issued by the respondent-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 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 under Section 138 of the NI 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 CrPC. It is fairly well settled that power under Section 482 CrPC 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-fledged trial. Further, as the contract is for the purpose of 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 NI Act, 1881 by itself is no ground to quash the proceedings. While considering the petition under Section 482 CrPC, 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 8-11-2012. 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 trial but not at the stage of considering the application under Section 482 CrPC.
9. The learned Senior Counsel Shri R. Basant appearing for the accused, in support of his case, relied on the judgment of this Court in S.W. Palanitkar v. State of Bihar (2002) 1 SCC 241 and submitted 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 case on hand, it is clearly alleged that even before entering into the agreement dated 26-9-2012, 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 to the date of agreement itself.
10. The learned counsel also relied on the judgment in Anil Mahajan v. Bhor Industries Ltd. (2005) 10 SCC 228 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 another case relied on by the learned counsel viz. Inder Mohan Goswami v. State of Uttaranchal (2007) 12 SCC 1 this Court has reiterated the scope of power of the High Court under Section 482 CrPC. 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 PCR No. 14420 of 2015, investigation has been completed and charge-sheet was also filed on 22-12-2015.
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 CrPC by the respondent-accused. Accordingly, these criminal appeals are allowed and the impugned common order dated 28-4-2017 2017 SCC OnLine Kar 4257 passed by the High Court of Karnataka at Bengaluru is set aside. It is made 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.