Dr. Lakshman vs The State of Karnataka & Ors.

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 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 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 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 – 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 Instruments Act by itself was no ground to quash the proceedings in 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 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

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 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. 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 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 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 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 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 N.I. Act, 1881 by itself 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 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. (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.