CRL.MC NO. 4201 OF 2016

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MR.JUSTICE ZIYAD RAHMAN A.A.`** ``` THURSDAY, THE 18[TH] DAY OF NOVEMBER 2021 / 27TH KARTHIKA, 1943 ``` ## **`CRL.MC NO. 4201 OF 2016`** ## **`CRIME NO.457/2016 OF Nedumangad Police Station, Thiruvananthapuram PETITIONERS/ACCUSED:`** - **`1 RAJASREE C.R. W/O.DR.HARIKUMAR,CHITHIRA, TC NO.1947(4),AMBALAMUKKU,KOWDIAR.P.O, THIRUVANANTHAPURAM.`** ``` 2DR.HARIKUMAR CHITHIRA,TC NO.1947(4),AMBALAMUKKU, KOWDIAR.P.O,THIRUVANANTHAPURAM. ``` ``` BY ADVS. ``` ``` SRI.S.RAJEEV SRI.K.K.DHEERENDRAKRISHNAN SRI.V.VINAY ``` ## **`RESPONDENTS/STATE/COMPLAINANT:`** - **`1 STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA,ERNAKULAM-682031, (CRIME NO.457/2016 OF NEDUMANGAD POLICE STATION, THIRUVANANTHAPURAM).`** ``` 2T.V.VIJAYKUMAR S/O.THRIVIKRAMAN NAIR,HARISREE, ANADU VILLAGE, PAZHAKUTTI.P.O, NEDUMANGAD,THIRUVANANTHAPURAM. ``` ``` BY ADV. SRI.SASTHAMANGALAM S. AJITHKUMAR SRI.ARAVIND MATHEW, PUBLIC PROSECUTOR ``` ``` THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON ``` ``` 11.11.2021, THE COURT ON 18.11.2021 PASSED THE FOLLOWING: ``` ``` CRL.MC NO. 4201 OF 2016 ``` ``` 2 ``` ## **`ORDER`** The petitioners are the husband and wife and accused 1 and 2 in Crime No.457/2016 of the Nedumangad Police Station. Annexure III is the FIR filed in the said case for the offences punishable under Sections 420, 406, 427 read with Section 34 of IPC. 2. The aforesaid case was registered on the basis of a complaint submitted by the 2[nd] respondent. The allegation against the petitioners is that they entered into an agreement with the 2[nd] respondent and entrusted him the construction of their residential building in the property of the 1[st] petitioner, but the 1[st] petitioner violated the terms of the agreement. Even though the 2[nd] respondent had spent an amount of Rs.1,30,59,167/(Rs. One crore thirty lakhs fifty nine thousand one hundred and sixty seven only) for the construction of the said residential building, the 1[st] accused had handed over only Rs.96 Lakhs and thus they have committed the offences mentioned above. 3. The prayer sought for by the petitioners in this case is to quash Annexure III FIR and all further proceedings pursuant thereto by invoking powers of this Court under Section 482 of Cr.P.C. 4. Heard Sri.K.K. Dheerendra Krishnan, learned counsel for the ``` CRL.MC NO. 4201 OF 2016 ``` ``` 3 ``` petitioners and Sri.Aravind Mathew, learned Public Prosecutor and Sri.Sasthamangalam S. Ajithkumar, learned counsel for the 2[nd] respondent. 5. Learned counsel for the petitioners would contend that the transaction which is the subject matter of the dispute in Annexure III FIR is a pure civil dispute and under no circumstances the offences mentioned therein are attracted. The learned counsel points out that initially an agreement of construction of residential building in the property of the petitioners were entered into with the 2[nd] respondent. The aforesaid document is Annexure I, wherein the total cost of the work agreed to be completed by the 2[nd] respondent was shown as Rs.62 Lakhs. As against the said amount, they have already paid an amount of Rs.96 Lakhs, but despite the same, the 2[nd] respondent did not complete the construction as per the terms and conditions of Annexure I agreement. Being aggrieved by the same, the petitioners have submitted Annexure II complaint before the Police. In the said complaint they have stated that without completing the work, the 2[nd] respondent abandoned the property and they were forced to complete the work by engaging another contractor. However, the 2[nd] respondent was ``` CRL.MC NO. 4201 OF 2016 ``` ``` 4 ``` demanding exorbitant amounts and trying to interfere with the construction, which was being carried on by the petitioners through another contractor. According to the petitioners they have prepared an estimate of the total work done by the 2[nd] respondent through an expert and upon such estimation it was revealed that the total cost of construction carried out by the 2[nd] respondent is only Rs.88 Lakhs, whereas he has already received Rs.96 Lakhs from the petitioners. Even though Annexure II complaint which was submitted on 23.07.2015 as evidenced by the receipt produced along with the said document, no action was taken by the Police thereon. Thereafter, on 10.03.2016 a complaint was submitted by the 2[nd] respondent before the Police alleging the offences mentioned above and acting upon the same Annexure III FIR was registered by the Police. The learned counsel for the petitioners points out that the submission of complaint, registration of Annexure III FIR and all further proceedings pursuant thereto are clearly abuse of process of law. At the most it is a civil dispute which has to be adjudicated before a competent court and under no circumstances, any culpability can be attributed to the petitioners. In such circumstances, the above Crl.M.C. was filed. ``` CRL.MC NO. 4201 OF 2016 ``` ``` 5 ``` 6. On the other hand, the learned counsel for the 2[nd] respondent would seriously oppose the said contentions. The learned counsel for the 2[nd] respondent brought my attention to the counter affidavit filed by him and Annexure R2(a) document, which is the valuation report submitted by the Assistant Executive Engineer, PWD Building Sub Division, Nedumangad which was obtained at the instance of the Police. By relying upon the contents of the said document, it is contended that an amount of Rs.1,30,59,167/- (Rs. One crore thirty lakhs fifty nine thousand one hundred and sixty seven only) is due to the 2[nd] respondent, out of which, only Rs.96 Lakhs was paid by the petitioners. It is contended that the aforesaid acts of the petitioners are amounting to cheating and criminal breach of trust and therefore, the offences mentioned in Annexure III FIR are attracted. Hence, they seek for dismissal of this Crl.M.C. 7. The crucial question that emerges from the facts of this case is as to whether a case is made out to attract the offences of Sections 406, 420, 427 read with Section 34 of IPC. As regard to the offence under Section 427, going by the contents of Annexure III First Information Statement there is absolutely no statement to the effect that ``` CRL.MC NO. 4201 OF 2016 ``` ``` 6 ``` an act of mischief was committed by the petitioners. In such circumstances, the aforesaid offence is not at all attracted. 8. The remaining offences are under Sections 420 and 406 of IPC. As regard to the offence under Section 420, it is a well settled position of law that in order to attract the same it should be shown that the accused had the intention to cheat the party right from the inception. In this case even though there is an averment in Annexure III complaint that even while entering into the agreement they had the intention to cheat the 2nd respondent, the documents produced along with the aforesaid complaint would go against the said averment. It is an admitted fact that the transaction between the parties was commenced on the basis of an agreement dated 04.01.2012 (Annexure I) entered into between the parties. The reading of the same would reveal that it was entered into between the parties for the purpose of construction of a residential building in the property of the petitioners. The total cost of construction estimated in the said contract is Rs.62 Lakhs. In Annexure III complaint itself the 2nd respondent had stated that he has received an amount of Rs.96 Lakhs from the petitioners and thus admittedly the complainant received more amounts than mentioned in Annexure I. If ``` CRL.MC NO. 4201 OF 2016 ``` ``` 7 ``` the petitioners were having any intention to deceive the defacto complainant right from the inception, such payments would not have made by them. In such circumstances, it cannot be contended that the petitioners had any dishonest intention to induce the 2nd respondent to deliver anything to the petitioners. The contents of Annexure I agreement would reveal that it is a simple contract for construction of a building which contains several mutual terms and conditions. It is obvious that there arose some dispute between the parties with the regard to the compliance of the terms and conditions therein. Merely because of the reason that there were breach of conditions by either party, a criminal offence cannot be attributed to one party by the other party. In International Advanced Research Centre for Powder Metallurgy and New Materials (ARCI) and Others V. Nimra Cerglass Technics (P) Ltd. And Another reported in 2016 (1) SCC 348 it was observed by the Hon’ble Supreme Court in paragraph 14 as follows: _“14. Distinction between mere breach of contract and the cheating would depend upon the intention of the accused at the time of alleged inducement. If it is established that the intention of the accused was dishonest at the very time when he made a promise and entered into a transaction with the complainant to part with his property or money, then the liability is criminal and the accused is guilty of the offence of cheating. On the other hand, if all that is established that a representation made by the accused has subsequently not been kept, criminal liability cannot be foisted on the accused and the only right which the complainant acquires is the remedy for breach of contract in a Civil Court. Mere breach of contract cannot give rise to criminal_ ``` CRL.MC NO. 4201 OF 2016 ``` ``` 8 ``` _prosecution for cheating unless fraudulent or dishonest intention is shown at the beginning of the transaction.”_ Similarly, in _**Arun Bhandari v. State of U.P. and Others**_ [2013 KHC 4027] it was held that to hold a person guilty of offence of cheating it has to be shown that his intention was dishonest at the time of making the promise and such a dishonest intention cannot be inferred from the mere fact that he could not subsequently fulfill the promise. 9. Even going by the averments contained in Annexure III, it can be seen that the basic allegation of the 2nd respondent is that an amount of Rs.1,30,59,167/- (Rs. One crore thirty lakhs fifty nine thousand one hundred and sixty seven only) was due from the petitioners. The payment made by them was only Rs.96 Lakhs. Even if the said allegation was accepted to be true, the same would not attract any culpability on the part of the petitioners. At the most it would indicate the non-fulfillment of an obligation on the part of the petitioners. Admittedly, there are disputes between the parties as to the amount to be paid towards the value of the works carried out by the 2nd respondent pursuant to Annexure I agreement. Under no circumstances non-payment of any amount by the petitioners pursuant to the terms and conditions of the said agreement can be treated as an act which would ``` CRL.MC NO. 4201 OF 2016 ``` ``` 9 ``` attract any criminal offences. The transaction as evidenced by Annexure I and other documents are evidently based on agreement between the parties and the petitioners have admittedly made substantial payments, which is much higher that the amount specified in the original agreement, which is Annexure I. If at all there is any breach of the same, that would attract only civil consequences and the remedy of the 2nd respondent, if aggrieved, would be to invoke the same. The 2[nd] respondent, would not be entitled to set criminal law into motion for redressal of such civil grievances. 10. Similarly, the contents of Annexure III FIR would not indicate any entrustment of property or dishonest misappropriation of the same, so as to attract the offence of 406 IPC . On the other hand, it was the petitioners who have entrusted the obligation upon the 2[nd] respondent to carryout the construction of a residential building in the property belonging to the petitioners on the basis of Annexure I agreement which contains specific terms and conditions. Under no circumstances any breach of such terms and conditions contained in the said agreement can be treated as a breach of trust as defined under Section 405 and hence no offence under Section 406 is attracted. ``` CRL.MC NO. 4201 OF 2016 ``` ``` 10 ``` 11. Thus, on an overall analysis of the materials available on record, I am of the view that there are absolutely no grounds to allow the proceedings to continue on the basis of Annexure III First Information Report. The contents of the same does not attract any of the offences alleged and the attempt of the 2[nd] respondent is evidently to impute culpability upon the petitioners unnecessarily, presumably, to pressurize the petitioners to come to a settlement with him. The entire proceedings based on Annexure III are therefore a clear abuse of process of law. In such circumstances, I am of the firm view that the petitioners are entitled to succeed. Accordingly, this Crl.M.C. is allowed and Annexure III FIR in Crime No.457/2016 of Nedumangad Police Station, Thiruvananthapuram and all further proceedings pursuant thereto are hereby quashed. **Sd/-** ``` ZIYAD RAHMAN A.A. JUDGE ``` SCS ``` CRL.MC NO. 4201 OF 2016 ``` ``` 11 ``` ## **`APPENDIX OF CRL.MC 4201/2016`** ``` PETITIONER ANNEXURE ``` ``` ANNEXURE I ``` ``` TRUE COPY OF THE AGREEMENT ENTERED INTO BETWEEN THE FIRST PETITIONER AND THE SECOND RESPONDENT DATED 04.01.2012 ``` ``` ANNEXURE II ``` ``` TRUE COPY OF THE COMPLAINT DATED 23.07.2015 SUBMITTED BY THE PETITIONER BEFORE THE CIRCLE INSPECTOR OF POLICE, NEDUMANGAD,ALONG WITH ACKNOWLEDGMENT RECEIVED ``` ``` ANNEXURE IIICERTIFIED COPY OF THE FIRST INFORMATION REPORT ALONG WITH FIRST INFORMATION STATEMENT IN CRIME NO.457/2016 OF NEDUMANGAD POLICE STATION. ``` ``` RESPONDENT ANNEXURES ``` ``` ANNEXURE R2(a) ``` ``` TRUE COPY OF THE VALUATION DETAILS SUBMITTED BY THE ASSISTANT EXECUTIVE ENGINEER, BEFORE THE POLICE INSPECTOR, NEDUMANGAD DATED 28.06.2016 ```