“In a case involving trade and commerce, the Supreme Court dismissed the State’s appeal and held that the State of Arunachal Pradesh has been relieved to have escaped an unnecessary criminal prosecution.”
Case Name: The State of Arunachal Pradesh v. Kamal Agarwal
Case No.: SLP(Crl.) Nos.8663-8665 of 2023
Dated On: April 18, 2024
Quorum: Justice Vikram Nath and Justice K. V. Viswanathan
FACTS OF THE CASE:
The First Information Report is the source of the two appeals listed above. The above case was dealt along with another case, Chandra Mohan Baday v. The State of Arunachal Pradesh (SLP(Crl.) No. 7301 OF 2022). Three petitions for special leave have been filed by the state of Arunachal Pradesh.
A plea for the quashing of the FIR was filed with the Gauhati High Court by three of the accused, Chandra Mohan Badaya and Respondent Nos. 3 and 4, Shashi and Rajesh Natani. One crore rupees was transferred in 2016 by M/s Shiv Bhandar, the proprietorship in question, to the accounts of Chandra Mohan Badaya, two of his proprietorships, and Rajesh Natani in four equal transactions of twenty-five lakhs apiece.
In contrast to the complainant, who claims that the payments were made for the acquisition of a building located between plots Nos. A-47 to A-55, Sikar House, near Chandpole, Jaipur, Rajasthan, the appellant Chandra Mohan Badaya claims that the amount was transmitted as a loan.
It is crucial to note that there is no formal contract pertaining to the reason for the money transfer, be it a loan or a down payment for the previously mentioned building or piece of land. It is important to remember that there is no official contract regarding the purpose of the money transfer—whether it is a loan or a down payment for the building or property that was previously indicated. The said amount was later repaid in 2016/17.
According to Chandra Badaya, he executed two sale deeds for two properties located in Chaksu, Jaipur, in the names of the complainant proprietor’s wife, Smt. Shalini Agarwal, and sister-in-law, Smt. Jaya Agarwal, as well as Shri Anil Agarwal, the holder of the power of attorney. Even though both sale deeds had a total sale consideration of Rs. 1.08 crores, the petitioner only received a total of Rs. 54 lakhs, or Rs. 27 lakhs each.
The Chief Judicial Magistrate took cognizance and filed a case based on the aforementioned chargesheet. Following that, two sets of petitions were submitted to the Rajasthan High Court and the Gauhati High Court, two separate high courts.
CONTENTIONS OF THE APPELLANT:
The appellants contended that Rajesh Natani and Chandra Mohan Badaya contacted the complainant company and asked to be considered for an exchange of land or building in Rajasthan for a sum of Rs. one crore.
As full payment for the sale of the aforementioned land/building, the aforementioned sum was deposited in four instalments on July 19, 2016, July 20, 2016, July 22, 2016, and July 25 in the accounts of Shri Ram Enterprises, A.R. Properties and Colonisers, Shashi Natani w/o Rajesh Natani, and Chandra Mohan Badaya.
When the accusers saw the structure or plot of land, they refused to give it to the complaint. Since the accused had caused pain, mental anguish, and financial loss, it was evident that they had cheated. Further, the accused refused to turn over the land/building when the complaint was inspected. Because of this, it was evident that the accused had cheated, causing pain, suffering, and financial loss.
CONTENTIONS OF THE RESPONDENTS:
The State of Arunachal Pradesh appealed the Rajasthan High Court’s ruling in Special Leave Petition Nos. 8663–8665 of 2023, which it filed with the Supreme Court. Interestingly, the complainant did not challenge the Rajasthan High Court’s decision to quash the proceedings.
The accused individuals have amassed substantial wealth through illicit means; but rather than keeping their word, they have threatened the complainant with dire repercussions. Upon identifying no other course of action, the formal complaint was filed in order to take suitable measures against the individuals involved.
The address provided in the First Information Report (FIR) for the complainant, Mr. Anil Agrawal, is the address of the company M/s Shiv Bhandar in Pasighat, East Siang District, Arunachal Pradesh. However, the residential address of Anil Agarwal was not mentioned.
It was also contended that Jaipur, Rajasthan is also home to the property for which it is said that a payment of Rs. 1 crore was made. The FIR makes no mention of the transaction involving the bank data.
Arunachal Pradesh is the state in where the complainant is allegedly located, however other than that, no additional information related to the alleged offence is stated to be in or within the state; still, a FIR was filed there. It is obvious that the accused parties’ refusal to carry out the sale deed for which they had accepted the Rs. 1 crore sale consideration was the primary motivation behind filing the FIR.
LEGAL PROVISIONS:
- Section 34 of the Indian Penal Code: Acts done by several persons in furtherance of common intention. When multiple people commit a crime together to accomplish their shared goal, each of them bears the same liability as if they had committed the crime alone.
- Section 120B of the Indian Penal Code: Punishment of criminal conspiracy. In the absence of a specific provision in this Code regarding the punishment of criminal conspiracies, any individual involved in a criminal conspiracy that involves the commission of an offence punishable by death, life imprisonment, or rigorous imprisonment for a term of two years or more will face the same punishments as if they had assisted in the commission of the offence.
- Section 420 of the Indian Peanl Code: Cheating and dishonestly inducing delivery of property. Anyone who deceives someone by cheating and then dishonestly persuades that person to give up property to someone else, create, alter, or destroy all or a portion of a valuable security, or sign or seal anything that could be turned into a valuable security, faces up to seven years in prison of any kind in addition to a fine.
COURT’S ANALYSIS AND JUDGMENT:
The court was of the view that the issue was exclusively of a civil nature. It was a situation where money was advanced without a formal document being signed to specify its purpose or significance. It is unclear from records whether this money was advanced for a loan or as an advance payment for the transfer of property, which was land or a building located in Jaipur.
Based on the complainant’s assertion that it was for the transfer of property for the land/building specified above would be the subject of evidence presented and proven in a court of law, not by the police conducting an investigation and making a determination. The complainant’s claim in the FIR is not that the land or plot they claimed was going to be transferred to them either didn’t exist or had been sold to another party; rather, it is that the accused parties engaged in some form of deception.
The court held that a capable Civil Court could hear arguments on all these points. It is not possible to call it cheating. Even though Chandra Mohan Badaya, the appellant, has attempted to clarify that he has already transferred Rs. 37 lakhs to the complainant via bank transfer and has also completed two transfer deeds in favour of Anil Agrawal’s wife and sister-in-law, the holder of the power of attorney, valued at a total of more than Rs. 1.45 crores.
The court observed that the Rajasthan High Court correctly concluded, after taking into account all relevant circumstances, that any offense—though none is shown to exist—would fall under the territorial jurisdiction of Rajasthan and not Arunachal Pradesh.
The court pronounced that after eliminating a needless criminal case that was filed and tried in Arunachal Pradesh, the State of Arunachal Pradesh should have been pleased.
When the complainant in a case involving a civil or business dispute does not come forward to defend its FIR, which has been quashed by the said State, it is equally incumbent upon the said State to explain why it has contacted this Court.
As a result, the court reversed the Gauhati High Court’s ruling, granted Chandra Mohan Badaya’s appeal, and halted all legal actions related to FIR No. 227 of 2017. The court also rejected the three appeals that the State of Arunachal Pradesh had submitted.
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Judgment reviewed by Riddhi S Bhora.
