Karun Madan vs Vinod Kumar Thapar and Others

Kanwaljit Singh Ahluwalia, J.—The present petition has been filed u/s 482 Cr.P.C. seeking quashing of the orders dated 4.4.2000

(Annexure P4), passed by the Court of Judicial Magistrate 1st Class, Ludhiana, whereby the Court came to conclusion that no charge can be

framed against respondent No. 1-Vinod Kumar and had discharged him. The impugned order (Annexure P4) was made subject matter of the

revision petition. The Revisional Court also concurred with the findings returned by the trial Court and held that no offence has been committed by

respondent No. 1. In the present petition, the orders dated 4.4.2000 (Annexure P4), passed by the Court of Judicial Magistrate 1st Class,

Ludhiana and the order of affirmation dated 5.5.2001 (Annexure P5), passed by the Court of Sessions Judge, Ludhiana, are being assailed.

The grievance of the petitioner can be summed up from the complaint dated 19.12.1998 (Annexure P1). It is stated therein that

accused/respondent No. 1 -Vinod Kumar had executed two agreements to sell dated 10.10.1997 and 3.4.1998 (Annexures P6 and P7),

respectively, with the petitioner and received earnest money. As per the deal, the sale deed was to be executed on or before 31.10.1998 on

payment of the balance sale consideration. The case of the petitioner is that instead of performing his part of the agreement, respondent No. 1 -

Vinod Kumar had executed the sale deed dated 18.11.1998 (Annexure P8) in favour of respondent No. 2-Ashok Kumar. It is stated that the

breach of agreements to sell (Annexures P6 and P7) amounts to cheating as respondent No. 1 retained the earnest money, which was paid by the

petitioner through cheque. Thus, according to learned counsel for the petitioner, respondent No. 1 had committed offence falling u/s 420 read with

Section 120B IPC.

The trial Court, while discharging respondent No. 1, held that the breach of agreement will fasten respondent No. 1 with civil liability and no

criminal case is made out. The following findings, returned by the trial Court, are required to be noticed:-

The Honourable Supreme Court of India referring to illustration (g) in the Section 415 of IPC made it clear that liability if any, arising by the

breach of agreement is civil in nature and not criminal and set aside the order of the Honourable High Court and the proceedings before the learned

Magistrate were quashed with costs of ''10,000 in favour of the applicant.

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In the case at my hands, it has not been disputed that the accused Vinod Kumar Thapar was fully competent to sell the property in dispute and

has allegedly executed above referred two agreements. Therefore, the facts of this case are different from the facts of the aforesaid case.

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As discussed above, the case law referred to by the counsel for accused is fully applicable to the facts of he present case. The submission

made by the APP that the accused Vinod Kumar has sold the property even before the stipulated date for execution of sale deed in favour of the

complainant, to other person namely Ashok Kumar and rendering himself handicapped shows that the accused Vinod Kumar has intended to

cause cheating to the complainant is not tenable as it has been made clear by the Honourable Supreme Court of India in the case of Nageshwar

Prasad Singh (supra) wherein while referring to illustration (g) of Section 415, the Honourable Apex Court has observed in clear words that such

transaction was purely within the purview of civil liability.

The Revisional Court below upheld the above findings and observed as under:-

7...In Hridaya Ranjan Pd. Verma and Others Vs. State of Bihar and Another, it was held by the Hon''ble Supreme Court that mere breach of

contact cannot give rise to criminal prosecution for cheating unless the intention is shown right at the beginning of the transaction. It was further laid

down in that case that to hold a person guilty of cheating it is necessary to show that he had a fraudulent or dishonest intention at the time of making

the promise. Further that intention from the beginning cannot be attributed on mere failure to keep up the promise subsequently. Another ruling of

the Hon''ble Supreme Court in Nageshwar Prasad Singh alias Sinha Vs. Narayan Singh and Another, also relied upon to the same effect. The

above quoted rulings are fully applicable to the facts of the present case. In the instant case as stated above accused Vinod Kumar had admittedly

title in the disputed property agreed to be sold and there was no dispute about the same. There also did not appear to be any fraudulent intention

on his part at the time of execution of the impugned agreements when he had title in the disputed property. As stated above, the complainant is

stated to have since filed a suit for specific performance of the impugned agreements of sale made by accused Vinod Kumar in his favour. In case

accused Vinod Kumar allegedly subsequently sold that property in favour of Ashok Kumar in breach of the conditions of those agreements of sale

the remedy available to the complainant was purely of civil in nature especially when it was also mentioned in the agreement that upon failure of

accused Vinod Kumar to execute the sale deed in terms of the agreements he was liable to pay interest on the earnest money as specified in the

agreements. During the course of arguments the learned Public Prosecutor for the state relied upon a ruling of the Hon''ble Supreme Court in M/s.

Medchl Chemicals and Pharma P. Ltd. Vs. M/s. Biological E. Ltd. and Others, . wherein it was held that simply because there was a remedy

provided for breach of contract that did not by itself close the Court to come to the conclusion that the civil remedy is the only remedy and that

both criminal law and civil law remedy can be perused in diverse situations. There is no dispute regarding the legal proposition laid down by Apex

Court but as stated above accused Vinod Kumar had admittedly title in the disputed property agreed to be sold and there was hardly any element

of cheating at the time to execution of the impugned agreement. The rights and interests of the parties will be determined in the suit for specific

performance already filed by the complainant in the case. However, keeping in view the facts and circumstances discussed above the accused or

any of them hardly appeared to have committed any offence in the case when the dispute between the parties regarding alienation of the disputed

property in breach of the impugned agreements was merely of civil nature and the accused hardly appeared to have committed any offence by the

same. In these circumstances the impugned order of the learned trial Magistrate ordering discharge of the accused respondents in the case do not

in any way suffer from any factual or legal infirmity for which to interfere in this revision and the revision petition is hereby dismissed.

The present petition was listed for arguments and it was adjourned sine die to await the outcome of the civil suit. Learned counsel for the

petitioner submits that civil suit has not yet been decided.

This Court, in Lakhbir Singh Vs. State of Punjab and Others, had dealt with the argument that whether criminal proceedings should be stayed

during the pendency of civil suit or not and relying upon five Judges'' Bench of Hon''ble the Apex Court in M.S. Sheriff Vs. The State of Madras

and Others, , another five Judges'' Bench in Iqbal Singh Marwah and Another Vs. Meenakshi Marwah and Another, , has observed as under:-

Coming to the last contention that an effort should be made to avoid conflict of findings between the civil and criminal Courts, it is necessary to

point out that the standard of proof required in the two proceedings are entirely different. Civil cases are decided on the basis of preponderance of

evidence while in a criminal case the entire burden lies on the prosecution and proof beyond reasonable doubt has to be given. There is neither any

statutory provision nor any legal principle that the findings recorded in one proceeding may be treated as final or binding in the other, as both the

cases have to be decided on the basis of the evidence adduced therein. While examining a similar contention in an appeal against an order directing

filing of a complaint u/s 476 of old Code, the following observations made by a Constitution Bench in M.S. Sheriff Vs. The State of Madras and

Others, give a complete answer to the problem posed:

(15) As between the civil and the criminal proceedings we are of the opinion that the criminal matters should be given precedence. There is some

difference of opinion in the High Courts of India on this point. No hard and fast rule can be laid down but we do not consider that the possibility of

conflicting decisions in the civil and criminal Courts is a relevant consideration. The law envisages such an eventuality when it expressly refrains

from making the decision of one Court binding on the other, or even relevant, except for certain limited purposes, such as sentence or damages.

The only relevant consideration here is the likelihood of embarrassment.

(16) Another factor which weighs with us is that a civil suit often drags on for years and it is undesirable that a criminal prosecution should wait till

everybody concerned has forgotten all about the crime. The public interests demand that criminal justice should be swift and sure; that the guilty

should be punished while the events are still fresh in the public mind and that the innocent should be absolved as early as is consistent with a fair

and impartial trial. Another reason is that it is undesirable to let things slide till memories have grown too dim to trust.

This, however, is not a hard and fast rule. Special considerations obtaining in any particular case might make some other course more expedient

and just. For example, the civil case or the other criminal proceeding may be so near its end as to make it inexpedient to stay it in order to give

precedence to a prosecution ordered under S. 476. But in this case we are of the view that the civil suits should be stayed till the criminal

proceedings have finished.

A Full Bench of Lahore High Court to which this Court is a successor, in AIR 1945 23 (Lahore) has already held that except in the cases which

are specified in Section 41 of the Indian Evidence Act, the findings of Civil Court are not binding on the criminal Court as both Civil and Criminal

Courts act in their own domain. Hence, this Court has proceeded to decide the present case on merits without awaiting final outcome of the civil

suit.

Learned counsel for the petitioner to buttress his argument that the offence of cheating has been committed and the judgment of both the Courts

below cannot sustain in the eyes of law, has relied upon M/s Jnana Mandal Limited versus Amrit Paper Limited 2000 (1) RCR (Crl.) 716, wherein

it was held that civil liability and criminal liability may co-exist, therefore, the complaint can be maintained. Further reliance has been placed upon a

Single Bench judgment of this Court rendered in Bipin Kumar Bhatnagar versus Pt. Raghbir Saran 1992 (1) RCR (Crl.) 424 to say that for breach

of agreement to sell, offence u/s 420 IPC is made out. However, learned counsel for the petitioner, while relying upon these judgments has made

no efforts to distinguish the judgment rendered by Hon''ble the Apex Court in Nageshwar Prasad Singh alias Sinha Vs. Narayan Singh and

Another, upon which reliance was placed by the trial Court. Learned counsel for the petitioner has further submitted that during the subsistence of

agreements (Annexures P6 and P7), accused/respondent No. 1-Vinod Kumar had executed the agreement to sell with respondent No. 2-Ashok

Kumar and received a sum of Rs. 2,00,000 through cheque, therefore, it should be construed that he had entertained the dishonest intention at the

time when the agreements to sell (Annexures P6 and P7) were executed.

In Suresh Vs. Mahadevappa Shivappa Danannava and Another, , it was held that where sale deed, in pursuance of an agreement to sell, has not

been executed, it will amount to a dispute which is civil in nature and it cannot be said that at the time of execution of agreement to sell, the accused

had an intention to cheat. Similar view has been reiterated by the Single Bench of this Court in Raghbir Singh Vs. State of Punjab and Another,

after taking into consideration the case law on the subject.

Thus, taking totality of circumstances into consideration, this Court is of the view that there is no infirmity in the impugned order dated

4.4.2000 (Annexure P4), passed by the Court of Judicial Magistrate Ist Class, Ludhiana and the order of affirmation dated 5.5.2001 (Annexure

P5), passed by the Revisional Court. Hence, no interference is warranted in the present petition and the same is hereby dismissed.