S.P.Gupta vs Ashutosh Gupta

February, 2008, passed by the learned Single Judge 2

of the Delhi High Court in Crl.M.C. No.847 of 2005,

dismissing the Petitioner's application under

Section 482 Cr.P.C. for quashing of the Criminal

Complaint No.932 of 1992, instituted against the

Petitioner and the other co-accused by the

Complainant (father of the Respondent) under

Section 420 read with Section 120-B of the Indian

Penal Code.

2. By an order dated 7th April, 1992, the learned

Metropolitan Magistrate, New Delhi, issued summons

to the Petitioner, Accused No.1 Smt. Motian Devi

Lamba and Accused No.4 Shri G.R. Singhal under

Section 420 read with Section 34 IPC. The Revision

Petition filed against the said order issuing

summons having been dismissed by the Additional

Sessions Judge, New Delhi, on 8th February, 2005,

the Petitioner moved the Application under Section

482 Cr.P.C. before the High Court.

3

3. Having regard to the allegations in the

complaint, the learned Single Judge of the High

Court dismissed the said application upon holding

that upon reading the complaint, it was not

possible to conclude that not even a prima facie

case had been made out against the Petitioner for

the offence under Section 420 read with Section 34

IPC. The High Court took note of the fact that

having regard to the role attributed to each of the

accused which had been noticed by the learned

Magistrate, summons had been issued to only three

of them and that as far as the Petitioner was

concerned, the narration in the complaint showed

that he was integral to all the transactions that

had taken place between the complainant and the

Accused No.1 as he was the constituted attorney of

the said accused. The learned Single Judge also

observed that whether the Petitioner had acted with

dishonest intentions or as to whether he was

unaware of the dishonest intentions of the Accused 4

No.1 or that he himself held out no assurance as to

the title of the Accused No.1 at the time the

agreement for sale was executed or whether he acted

beyond the scope of his authority under the power

of attorney, were matters that raised triable

issues and could only be determined by leading

evidence at the trial.

4. Mr. Aman Lekhi, learned Senior Advocate

appearing in support of the Special Leave Petition,

urged that all the three Courts below had

completely misconstrued the material available for

the purpose of taking cognizance on the complaint

filed by Chat Ram Gupta, the father of the

Respondent Ashutosh Gupta. Mr. Lekhi urged that as

the holder of the Power of Attorney for the Accused

No.1, the Petitioner had merely carried out the

instructions given to him from time to time by the

Accused No.1 which he was required to follow in

keeping with the powers vested in him under the 5

Power of Attorney. Mr. Lekhi urged that the

Petitioner was merely an agent appointed to carry

out certain directions and that he had no personal

knowledge of the status of the properties involved

in the transaction.

5. Mr. Lekhi submitted that if the Petitioner had

no dishonest intention to defraud or cheat the

father of the Respondent, he would not have handed

over possession of the property in question to the

father of the Respondent. In fact, the Petitioner

received the consideration amount on behalf of

Accused No.1 and made over the same to her while

making over possession of the land to the

complainant.

6. Mr. Lekhi submitted that the Petitioner was

unaware of the manner in which the property had

been acquired by the Accused No.1 or that the same

belonged to a Hindu Undivided Family (HUF) and had

no dishonest intention to either defraud or cheat 6

the father of the Respondent and accordingly, at

best a suit of a civil nature could have been filed

on account of the transaction and the issuance of

summons on the complaint filed by the complainant

(father of the Respondent) was not justified in the

facts of the case.

7. Mr. Lekhi submitted that the facts, as

disclosed, do not bring the actions of the

Petitioner within the ambit of the expression

"misrepresentation" as defined in Section 18 of the

Indian Contract Act, 1872, since neither did he has

any intention to deceive the father of the

Respondent, nor did he gain any advantage in acting

as the agent of the Accused No.1 for the sole

purpose of receiving the consideration money and

making over possession of the land to the father of

the Respondent, it could not be said that he had

committed any offence, as alleged, and the summons 7

issued on the said complaint under Section 482 read

with Section 34 IPC were liable to be quashed.

8. In support of his submissions, Mr. Lekhi

referred to a Three-Judge Bench decision of this

Court in Nageshwar Prasad Singh vs. Narayan Singh

[(1998) 5 SCC 694], in which a similar question

fell for consideration and relying on Illustration

(g) of Section 415 of the Indian Penal Code, it was

held that an agreement for sale of land and the

earnest money paid to the owner as part

consideration and possession of the land having

been transferred to the purchasers/complainants and

the subsequent unwillingness of the owner to

complete the same, gave rise to a liability of a

civil nature and the criminal complaint was,

therefore, not competent.

9. Mr. Lekhi submitted that in the facts of the

present case, which are almost identical to the 8

facts of the aforesaid case, the summons issued to

the Petitioner was liable to be quashed.

10. Opposing Mr. Lekhi's submissions, Mr. Ashok

Gurnani, Advocate for the Respondent, contended

that as had been indicated by the High Court, the

question as to whether the Petitioner had any

dishonest and/or fraudulent intention or whether he

had deliberately misrepresented the facts relating

to the status of ownership of the land would become

clear once evidence had been led in regard to the

circumstances in which he had represented to the

father of the Respondent that the land was free

from all encumbrances and that the Accused No.1 was

the sole owner of the property. Mr. Gurnani

submitted that had the Petitioner not made such a

representation to the father of the Respondent, he

may not have proceeded with the transaction. It was

urged that it was too early for an assumption to be

drawn that the Petitioner had no dishonest 9

intention in representing to the father of the

Respondent that the property was free from all

encumbrances and that the Accused No.1 was the sole

owner of the property.

11. Referring to the submissions made by Mr. Lekhi

on Section 18 of the Indian Contract Act, 1872, Mr.

Gurnani urged that Sub-Section (1) of Section 18

was quite clear as to what constituted

misrepresentation.

12. As far as the decision in Nageshwar Prasad

Singh's case (supra) was concerned, Mr. Gurnani

submitted that the facts of the said case and the

present case, though similar, could be

distinguished having particular regard to

Illustration (g) of Section 415 IPC. It was

submitted that if no dishonest intention could be

shown at the very initial stage when the agreement

was arrived at, the Court would be justified in

holding that there was no misrepresentation and the 10

dispute involving the refusal of one party to

complete the transaction would be a dispute of a

civil nature, which was not so in the instant case.

Mr. Gurnani urged that the order of the High Court

or that of the other fora below did not warrant any

interference and the Special Leave Petition was

liable to be dismissed.

13. Having carefully considered the submissions

made on behalf of the respective parties and the

complaint filed by the father of the Respondent, we

are inclined to agree with the views expressed by

the High Court that a prima facie case had been

made out to go to trial. There is a positive

assertion in the complaint that an assurance had

been given by the Petitioner to the complainant

that the property in question was free from all

encumbrances and that the Accused No.1 was the sole

owner of the property. It has been mentioned in

the complaint that had not such a representation 11

been made relating to the status of ownership of

the property in question, the complainant may not

have entered into the transaction at all. Whether

or not the Petitioner was truly mistaken with

regard to the information given by him is a

question of utmost importance in answering a charge

of the nature indicated in the complaint. Merely

because the Petitioner had received part payment of

the consideration amount and had made over the same

to the Accused No.1 and merely because possession

of the land had been handed over by him to the

complainant, cannot form the basis of a presumption

that he had no knowledge that there was a dispute

regarding the ownership of the property, as to

whether the same belongs to a HUF or not. It is

true, as pointed out by Mr. Lekhi, that Section 415

IPC, which defines the offence of cheating,

provides in Illustration (g) as follows :

"(g). A intentionally deceives Z into a belief that A means to deliver to Z a 12

certain quantity of indigo plant which he does not intend to deliver, and thereby dishonestly induces Z to advance money upon the faith of such delivery, A cheats;

but if A, at the time of obtaining the money, intends to deliver the indigo plant, and afterwards breaks his contract and does not deliver it, he does not cheat, but is liable only to a civil action for breach of contract."

However, the aforesaid provision clearly

indicates that if at the very initiation of the

negotiations it was evident that there was no

intention to cheat, the dispute would be of a civil

nature. But such a conclusion would depend on the

evidence to be led at the time of trial. In the

instant case, the complaint does not make out a

prima facie case to go to trial. The Petitioner may

have discharged his functions as a constituted

attorney for the Accused No.1 by acting as a

liaison between the Accused No.1 and the father of

the Respondent, but that does not in itself

indicate that he did not have any knowledge of the 13

status of ownership of the land forming the subject

matter of the transaction.

14. We are not, therefore, inclined to interfere

with the order of the High Court impugned in the

Special Leave Petition and the same is,

accordingly, dismissed.

................................................J. (ALTAMAS KABIR)

................................................J. (ANIL R. DAVE) New Delhi Dated:13.05.2010.