VARGHESE KURIAN and ROSILY VARGHESE v. STATE OF KERALA and ABRAHAM JACOB

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE ASHOK MENON** **WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941** **Crl.MC.No.3090 OF 2015** **AGAINST THE ORDER/JUDGMENT IN CC 3500/2014 OF JUDICIAL MAGISTRATE OF FIRST CLASS ,AMBALAPUZHA** **CRIME NO.532/2014 OF Edathua Police Station , Alappuzha** ## **PETITIONERS/ACCUSED:** - **1 VARGHESE KURIAN AGED 69 YEARS S/O.KURIAN,KADUMMATHIL HOUSE,ANAPARAMBAL NORTH P.O, THALAVADI,ALAPPUZHA DISTRICT, PIN 689 577.** **2 ROSILY VARGHESE AGED 63 YEARS W/O. VARGHESE KADUMATHIL HOUSE,ANAPARAMBAL NORTH P.O, THALAVADI,ALAPPUZHA DISTRICT PIN 689 577** **BY ADVS. SRI.K.N.RADHAKRISHNAN(THIRUVALLA) SRI.CIRIL.T.EAPEN** ## **RESPONDENTS/STATE & COMPLAINANT:** - **1 STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR,HIGH COURT OF KERALA, ERNAKULAM** - **2 ABRAHAM JACOB AGED 69 YEARS S/O.JACOB CHERIAN, ILLAPALLIL HOUSE, KOZHIMUKKU THEKKEMURI, EDATHWA, ALAPPUZHA DISTRICT.** **R2 BY ADV. SRI.R.ANAS MUHAMMED SHAMNAD R2 BY ADV. SRI.MANJU ANTONEY** ## **OTHER PRESENT:** ## **SMT. M.K. PUSHPALATHA, PP** **THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 7.1.2020, THE COURT ON 18.03.2020 PASSED THE FOLLOWING:** Crl.MC 3090/2015 2 ASHOK MENON, J. -----------------------------------Crl.MC No.3090 of 2015 ------------------------------------Dated this the 18[th] day of March, 2020 ## O R D E R The petitioners are husband and wife implicated as accused in Crime No.532/2014 of Edathwa Police Station for having allegedly committed offences punishable under Section 420 read with Section 34 IPC and also under Section 3 read with Section 17 of the Kerala Money-Lenders Act, 1958 and under Section 9(a) of the Kerala Prohibition of Charging Exorbitant Interest Act, 2012 ['Interest Act', for short]. The crime was registered on the basis of a complaint filed by the second respondent herein and his wife to the Superintendent of Police, Alappuzha, produced here as part of Annexure-1. After investigation, final report was filed before the Judicial First Class Magistrate's Court, Ambalappuzha and taken cognizance of as CC No.3500/2014. 2. The facts in the complaint and the final Crl.MC 3090/2015 3 report filed by the prosecution in brief are thus: The second respondent and his wife had 3 hectares and 15 ares of land in Edathwa Village. In 1994, they borrowed some amount under MPDA Project from Thiruvalla Federal Bank mortgaging the property. For the purpose of realising that loan, the Federal Bank had initiated proceedings before the Debt Recovery Tribunal, Madras. The petitioners allegedly approached the second respondent and his wife with help to overcome the financial crises and offered to advance amount towards the outstanding debt, which was deposited in the Bank and the loan discharged. In consideration of having discharged the debt, the petitioners dishonestly induced the second respondent and his wife to execute a sale deed in their favour, and accordingly two documents bearing Nos.2174/2003 and 2175/2003 were executed by the second respondent in favour of the petitioners with respect to 3 hectares and 15 ares of land in Edathwa Village for Rs.38 lakhs, on an oral undertaking that the land would be sold by the petitioners for a higher consideration, and after Crl.MC 3090/2015 4 realising the sum expended by the petitioners, the balance would be paid to the second respondent. The petitioners also sought return of their amount together with interest @ 20% per annum. Thereafter, the petitioners allegedly insisted that more properties be assigned to them and accordingly, the second respondent as the Power of Attorney Holder of his brother, assigned 81 ares of land to the first petitioner vide sale deed No.1950/2004. No sale consideration was received on the sale of that property. The petitioners were still not satisfied, and insisted on more properties and accordingly, the second respondent as the Power of Attorney Holder of his mother, assigned two acres of his mother's property to the second petitioner vide registered sale deed No.510/2006. The complainant realised that he has been cheated by the petitioners when they sold 3 hectares and 15 ares of land on 26.12.2013 for a fair-value of Rs.99 lakhs to one Milan Thomas but actually received a sale consideration of Rs.2.70 crores. The petitioners are conducting money-lending business without any Crl.MC 3090/2015 5 licence and are charging exorbitant interest. The defacto complainant and his wife filed a complaint before the Superintendent of Police under Operation KUBERA, in consequence of which, the criminal case was registered. 3. The petitioners would contend that they had purchased the properties from the defacto complainant in the years 2003, 2004 and 2006 for valuable consideration, mutation was effected, and possession handed over to them. The fact that the petitioners sold a portion of the property for higher consideration is admitted. The defacto complainant got jealous because the property was sold for a higher sale consideration, which was due to escalation of land value in that area, in passage of time. The petitioners were implicated in a false case after a long lapse of 12 years of purchasing the land. The petitioners would contend that the inordinate delay in initiating proceedings itself would indicate the mala fide intention of the defacto complainant in filing the complaint. The petitioners would also contend that the Crl.MC 3090/2015 6 prosecution is barred by limitation under Section 468 Cr.PC, and going by the accusations made against the petitioners in the complaint and the final report, no offence under Section 420 IPC is attracted, much less an offence under Section 3 read with Section 17 of the Kerala Money-Lenders Act, 1958 or the offence under the Interest Act. The learned counsel for the petitioners also points out that the Interest Act came into force only in 2012 and has no retrospective effect. The petitioners therefore seek quashing the entire proceedings against them under Section 482 Cr.PC. 4. Heard Adv.K.N.Radhakrishnan, learned counsel appearing for the petitioners, Adv.Manju Antony, learned counsel appearing for the second respondent and the learned Senior Public Prosecutor appearing for the State. 5. The learned counsel appearing for the petitioners relies on a catena of decisions in support of his contention that in the absence of any material to support charges levelled against the accused, final report needs to be quashed under Section 482 Cr.PC Crl.MC 3090/2015 7 [Sarabjit Singh v. State of Punjab and Others : 2013 KHC 4459 (SC)]. It is also stated that when the dispute is purely civil in nature and still the defacto complainant chooses to initiate criminal proceedings, it can be quashed under Section 482 Cr.PC [Tamil Nadu Mercantile Bank Ltd. v. State : 2013(4) KLT SN 143 (C.No.156) SC] . The learned counsel also submits that the offence of cheating is not attracted when it is a mere breach of contract and there can be no cheating unless fraudulent and dishonest intention is shown at the inception of the transaction [International Advanced Research Centre for Powder Metallurgy and New Materials (ARCI) and Others v. Nimra Cerglass Technics (P) Ltd. and Another : 2015 KHC 4633] . In a more recent decision, Vijayasarathy R.K. (Prof) and Another v. Sudha Seetharam and Another [2019 KHC 6181 (SC)] , it is held that criminal proceedings can be quashed where allegations made in the complaint do not disclose commission of an offence under the Penal Code, and that High Court can examine whether the matter which is essentially of civil nature, has been given a cloak of Crl.MC 3090/2015 8 ## a criminal offence. 6. Per contra, the learned counsel appearing for the second respondent submits that where the accused seeks quashing of the final report invoking inherent jurisdiction of the High Court, it is wholly impermissible for the High Court to enter into the factual arena to adjudge the correctness of the allegations in the complaint [Ravi Kumar V. v. State, Rep. By Inspector of Police, District Crime Branch, Salem, Tamil Nadu and Others : 2018 KHC 7004 (SC)] . 7. In the instant case, it is pertinent to note that the defacto complainant did not file any civil suit for cancellation of the documents which were allegedly got executed by the petitioners by dishonestly inducing the defacto complainant and his wife with the intention to cheat them. 8. While exercising jurisdiction under Section 482 Cr.PC, it is required to examine whether the averments in the complaint constitute ingredients essential to attract an offence alleged under the Penal Code. If the averments taken on their face value do Crl.MC 3090/2015 9 not constitute the ingredients to attract an offence under the Penal Code, the criminal proceedings may be quashed under Section 482 Cr.PC. Hence, the complaint must be examined as a whole, without evaluating the merits of the allegation. Its veracity and possibility of whether it would end in acquittal or conviction. The complaint and the allegations made by the complainant and the prosecution must, at least, contain the basic facts necessary to make out an offence under the Penal Code. 9. In the instant case, the allegation is that the petitioners committed an offence punishable under Section 420 read with Section 34 IPC. To attract an offence under Section 420 IPC, the prosecution or the complainant is liable to prove that an offence of cheating was committed. The ingredients to constitute an offence of cheating as defined in Section 415 IPC are thus: - (i) Fraudulent or dishonest inducement of a person by deceiving him. (ii) (a) The person should be intentionally Crl.MC 3090/2015 10 induced to deliver any property to any person or to consent that any person shall retain any property. (b) The person cheated should be intentionally induced to do or to omit to do anything which he would not do or omit if he were not so deceived. - (iii) The aforementioned act or omission should be such as to cause or likely to cause damage or harm to the person deceived in body, mind, reputation or property. 10. The punishment Section is Section 420 IPC and to attract that penal Section, the offender must commit an offence of cheating as defined in Section 415 and the person alleged must be dishonestly induced to deliver any property to any person or to make, alter or destroy a valuable security, or anything signed or sealed or capable of being converted into a valuable security. 11. The most essential condition to constitute an offence of cheating under the Penal Code is the Crl.MC 3090/2015 11 dishonest inducement of the defacto complainant by the accused. 12. In the instant case, the second respondent was admittedly having a huge liability on his properties. The Bank had proceeded against the properties before the Debt Recovery Tribunal, Madras. The petitioners came to help the defacto complainant and instead of going for a distress sale, he preferred to sell his property to the first petitioner who was his schoolmate, and because he had come forward to purchase the property with an undertaking that after purchasing the property he would sell it for a higher price and on getting the higher price, he would hand over the appreciated amount to the complainant after appropriating the amount due towards discharge of the debt of the second respondent. This undertaking was allegedly made by the first petitioner to dishonestly induce the second respondent to sell his property. Thereafter, the defacto complainant waited for about 12 long years to realise that the petitioners were not going to sell the property and pay him his money and Crl.MC 3090/2015 12 therefore he filed the complaint alleging the offence of cheating. There is no allegation that at the inception of the alleged sale of the properties, the petitioners had the dishonest intention of cheating. It is well settled that when the terms of disposition of a property is reduced to writing, no evidence shall be given in proof of the terms of such disposition, except such document itself under Section 91 of the Evidence Act. The second respondent's allegation that there was an oral agreement describing the terms of the written sale deed is therefore not acceptable. He would say that the petitioners had demanded interest @ 20% per annum. For that also, there is no material produced. The fact that the defacto complainant waited for 12 years has resulted in bar of limitation to claim back the property. He could not have gone to the civil court with a litigation to realise his amount. There is also no material produced by the defacto complainant to indicate that the properties which were sold to the petitioners in the years 2003, 2004 and 2006 were under valued or that there was no consideration received. It Crl.MC 3090/2015 13 is an admitted fact that the defacto complainant had cleared all his debts. It is with the money that was provided by the petitioners on sale of the properties that the debts were cleared. The petitioners admit that they sold a portion of the property for a higher price in 2013. There is no doubt that the land value in Kerala has gone up manifold in a decade's time. The defacto complainant cannot therefore aspire to get a portion of the sale consideration received by the petitioners on sale of the property, ten years after it was sold. The contention of the petitioners is that the complaint was motivated due to jealousy because the petitioners had made a good profit out of sale of the property. 13. The contention that the petitioners are moneylenders is also not acceptable because Section 17 of the Kerala Money-Lenders Act will not be attracted in solitary transactions, even if the alleged transaction between the petitioners and the defacto complainant is accepted to be a loan advanced by the petitioners. In a catena of decisions, the Kerala High Court has held Crl.MC 3090/2015 14 that to define a person as a money-lender, it must be proved by the prosecution that he is a person engaged in the business of money-lending as his primary or secondary business.(See Vimal v. State of Kerala and other 2015(1)KLT524 ) There is not a scintilla of material produced by the prosecution in this regard. 14. In order to attract an offence under the Interest Act, it must be proved that the accused was charging interest at a rate higher than the maximum rate of interest charged by commercial Banks on loans granted by them. It is also pertinent to note that the Interest Act had come into effect only on 27.8.2012 and the alleged transactions between the petitioners and the defacto complainant in the instant case took place in 2003, 2004 and 2006. There is no other material indicating that the petitioners had actually demanded or realised any interest. Being a penal consequence, the Interest Act which came into effect only in the year 2012 cannot be attracted as it does not have any retrospective effect, in this case. The contention that the prosecution is barred by limitation under section Crl.MC 3090/2015 15 468 Cr.PC; is however not acceptable as the allegation is one of cheating punishable under section 420 IPC. After having bestowed my anxious considerations to all the materials produced in this case, I find that the case against petitioners is not sustainable as it would only amount to abuse of process of law. In the result, the Criminal MC is allowed and the entire proceedings as against the petitioners herein in CC No.3500/2014 on the files of the Judicial First Class Magistrate's Court, Ambalappuzha shall stand quashed under Section 482 Cr.PC and the petitioners/accused are discharged. **Sd/-** ## **ASHOK MENON** **JUDGE** jg Crl.MC 3090/2015 16 ## **APPENDIX** **PETITIONER'S/S EXHIBITS:** **ANNEXURE 1** **CERTIFIED COPY OF FIR CHARGE IN C.C NO 3500/2014 OF THE JFCM AMBALAPUZHA** **RESPONDENTS' EXHIBITS:** **ANNEXURE R2(a)** **TRUE COPY OF LICENSE AGREEMENT DATED 28.6.2014 EXECUTED BY ME TO TAKE A BUILDING ON RENT.** **ANNEXURE-R2(b)** **TRUE COPY OF COMPLAINT DATED 20.6.2014 FILED BY ME BEFORE THE SUPERINTENDENT OF POLICE, ALAPPUZHA WITH ITS RECEIPT DATED 20.6.2014.** ## **ANNEXURE-R2(c)** **TRUE COPY OF OA NO.1418/98 WITH THE SUMMONS TO ME DATED 01.09.1998 FILED BEFORE THE DEBTS RECOVERY TRIBUNAL AT CHENNAI BY FEDERAL BANK LTD. AGAINST ME AND OTHERS.**