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Karnataka High Court Grants Anticipatory Bail in Alleged Forgery and Cheating Case: Property Sale Transaction

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Karnataka High Court Grants Anticipatory Bail in Alleged Forgery and Cheating Case: Property Sale Transaction

Case title: SUMAN @ SUMAN N P VS STATE OF KARNATAKA

Case no.: CRIMINAL PETITION NO.4180 OF 2024

Dated on: 16nd May 2024

Quorum:  Hon’ble. MR JUSTICE H.P. SANDESH

FACTS OF THE CASE

THIS CRL.P IS FILED U/S.438 CR.P.C PRAYING TO ENLARGE THE PETITIONER ON BAIL IN THE EVENT OF HIS ARREST IN CR.NO.116/2024 OF JAYANAGAR P.S., BENGALURU CITY FOR THE OFFENCES P/U/S 419, 420, 467, 468, 471 R/W 34 OF IPC AND ETC. This petition is filed by the petitioner/accused No.1 seeking the relief of anticipatory bail under Section 438 of Cr.P.C in the event of his arrest in Cr.No.116/2024 of Jayanagar police station, Bengaluru City for the offences punishable under Sections 419, 420, 467, 468, 471 read with Section 34 of IPC.

ISSUES

  1. Whether the petitioner is entitled to anticipatory bail under Section 438 of the Criminal Procedure Code (Cr.P.C) in connection with Crime No. 116/2024 of Jayanagar police station, Bengaluru City.
  2. Whether the petitioner, as a consenting witness in the sale transaction, has any involvement in the alleged offences under Sections 419, 420, 467, 468, 471 read with Section 34 of the Indian Penal Code (IPC).
  3. Whether the payment of Rs. 20 lakhs as sale consideration implicates the petitioner in the alleged offences.
  4. Whether the conditions imposed for granting anticipatory bail are appropriate and sufficient to ensure compliance with legal procedures.

LEGAL PROVISIONS

Indian Penal Code (IPC)

Section 419 – Punishment for cheating by personation: This section penalizes the act of cheating someone by pretending to be another person. The punishment can include imprisonment for up to three years, a fine, or both.

Section 420 – Cheating and dishonestly inducing delivery of property: This section deals with cheating and inducing someone to deliver property or alter or destroy valuable security. The punishment can include imprisonment for up to seven years and a fine.

Section 467 – Forgery of valuable security, will, etc.: This section addresses the act of forgery related to valuable securities, wills, and other significant documents. The punishment can be life imprisonment or imprisonment for a term which may extend to ten years, and also a fine.

Section 468 – Forgery for purpose of cheating: This section pertains to forgery committed specifically with the intent to cheat. The punishment can include imprisonment for up to seven years and a fine.

Section 471 – Using as genuine a forged document or electronic record: This section penalizes the use of any forged document or electronic record as if it were genuine. The punishment corresponds to the same as if the person had forged the document themselves.

Section 34 – Acts done by several persons in furtherance of common intention: This section addresses acts committed by multiple persons in furtherance of a common intention, making each person involved liable as if they had committed the act individually.

Criminal Procedure Code (Cr.P.C)

Section 438 – Direction for grant of bail to person apprehending arrest:

This section allows a person to seek anticipatory bail if they anticipate being arrested for a non-bailable offense. The court can grant bail with specific conditions to ensure the person complies with legal procedures.

CONTENTIONS OF THE APPELLANT

The learned counsel appearing for the petitioner herein submits that there was a lease agreement in respect of the property which is the subject matter of the sale agreement executed by the original owner in favour of the complainant wherein this petitioner signed the said document as consenting witness, but not received any amount as alleged in the complaint. The counsel for the petitioner has produced the copy of the absolute sale deed dated 15.02.2022 executed by the petitioner herein as a Power of Attorney holder on behalf of M/s Ramky Estate and Farms Private Limited in favour of one Smt. Nanjamma who represented by her GPA holder Sri Prakash H N and the said amount of Rs.20/- lakh has been paid as sale consideration in respect of the sale deed dated 15.02.2022. The counsel would vehemently contend that except the payment of Rs.20/- lakh towards sale consideration from the account of the mother-in-law of the complainant, this petitioner has not received any amount. Hence, false allegation is made against this petitioner. Hence, the counsel for the petitioner prays to enlarge the petitioner on anticipatory bail.

CONTENTIONS OF THE RESPONDENTS

The learned HCGP appearing for the respondent/State would vehemently contend that the amount of Rs.20/- lakh has been paid in favour of this petitioner. Having heard the learned counsel appearing for the respective parties and also on perusal of the material available on record, prima facie it discloses that the amount of Rs.20/- lakh was paid in respect of the sale transaction and this petitioner is only a consenting witness to the said transaction since this petitioner is in occupation of the subject matter of the sale transaction in terms of the sale agreement executed by the Power of Attorney of the original owner. Hence, there is a force in the contention of the counsel for the petitioner that this petitioner has signed the sale agreement as consenting witness in view of possession is vested with him as a lease holder. Hence, it is a fit case to exercise the powers under Section 438 of Cr.P.C to enlarge the petitioner on anticipatory bail.

COURT’S ANALYSIS AND JUDGEMENT

The petition is allowed. Consequently, the petitioner/accused No.1 shall be released on bail in the event of his arrest in connection with Crime No. Cr.No.116/2024 of Jayanagar police station, Bengaluru City for the offences punishable under Sections 419, 420, 467, 468, 471 read with Section 34 of IPC, subject to the following conditions: –

  • The petitioner shall surrender himself before the Investigating Officer within ten days from the date of receipt of a certified copy of this order and shall execute a personal bond for a sum of Rs.1,00,000/- (Rupees One Lakh only) with two sureties for the like-sum to the satisfaction of the concerned Investigating Officer.
  • The petitioner shall not indulge in tampering the prosecution witnesses.
  • The petitioners shall not leave the jurisdiction of the Court without prior permission till the disposal of the case.

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Judgement Reviewed by – HARIRAGHAVA JP

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Civil disputes cannot be resolved through the criminal prosecution: Supreme Court of India.

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Case Title: Jay Shri v. The State of Rajasthan

Case No: Criminal Appeal No. _ of 2024 (arising out of SLP(Crl.) No. 14423 of 2023)

Decided on:   19th January, 2024

CORAM: THE HON’BLE MR. JUSTICE SANJIV KHANNA AND HON’BLE MR.  JUSTICE DIPANKAR DATTA

Facts of the Case

The accused individuals were accused of entering into a sales agreement with the complainant, receiving Rs. 80 Lacs, and subsequently failing to complete the registration or refund the money. Consequently, an FIR was filed against them under Sections 420 and 120-B (criminal conspiracy) of the Indian Penal Code. The Supreme Court heard a criminal appeal challenging the order issued by the Jodhpur bench of the Rajasthan High Court.

Dissatisfied with the outcome, the accused sought anticipatory bail from the High Court. In their plea, among other arguments, they asserted that the matter pertained to a breach of contract and fell within the domain of civil disputes. Despite their contentions, the High Court rejected their bail plea, prompting them to file the current appeal.

Issue

The matter at hand involves assessing the practice of employing criminal prosecution as a means to settle disputes that are purely of a civil nature.

Legal Provision

Section 420 in the Indian Penal Code deals with Cheating and dishonestly inducing delivery of property. It states that whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.

Section 120-B of the Indian Penal Code makes it a punishable offence for a person to be a party to a criminal conspiracy to commit an offence that is punishable with death, imprisonment for life, or rigorous imprisonment for a term of two years or more.

Court’s analysis and decision

The Supreme Court made a preliminary observation stating that a mere violation of a contract does not constitute an offense of cheating or breach of trust under the Indian Penal Code unless there is evidence of fraudulent or dishonest intent.

Furthermore, the Division Bench, comprising Justices Sanjiv Khanna and Dipankar Datta, disapproved of the transformation of purely civil disputes into criminal cases. Drawing on the precedent set in Indian Oil Corporation v. NEPC India Ltd. and Others, the Court emphasized that any attempt to resolve civil disputes and claims, devoid of any criminal wrongdoing, by exerting pressure through criminal prosecution should be criticized and discouraged.

After careful consideration, the Court found merit in the appellants’ request for anticipatory bail. Consequently, the Court approved their bail, explicitly stating that the observations made during this decision should not influence the final determination of the case.

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Written by- Afshan Ahmad

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