Criminal Petition No. 13735 of 2024 · The High Court · 2025

2. Prathipati Shiva Shankar, S/o. Srinivasa Rao, Age: 39 years, Occ: Business, Rl/o. Plot No391E-1 1 1, Road No81 Jubilee Hills, Hyderabad. ...Petitioners AND 1 State of Telangana, Telangana. Represented by its Public Pros: ;utor. High court ot

2. K. Ashok Kumar, S/o Ramulu, Age: 43 years, Occ: Btr iness, Rl/o H.No.0'1- 7612511120 & 21 Beside DMart Line, Vaishnoi Enclil e, Petbasheerbagh, Qutbullapu r. ... Respondents Petition under Section 528 of BNSS praying that ir the crrcumstances stated in the lVemorandum of Grounds of Criminal Petition .he High Court may be pleased to quash the proceedings in C.C.No.18512024 Jls 420,5O4, rlw 34 IPC on the file of Principal Junior Civil Judge-Cum-Jud iciit Magistrate of First Class, lrledak. l.A. NO: 2OF 2024 Petition under Section 528 of BNSS praying that ir the clrcumstances stated in the lVlemorandum of Grounds of Criminal Petition .he High Court may be pleased to stay all proceedings including appearance r f the Petitioners in C.C.No.1B5/2024 on the file of Principal Junior Civil Judge-Cum-Judicial lt/lagistrate of First Class, [\4edak, pending disposal of the Crir inal Petition. l.A. NO: 3 OF 2024 Petition under Section 528 of BNSS praying that r the circumstances stated in the Memorandum of Grounds of Criminal Petition .he High Court may be pleased to dired the respondent not to take any coert ) steps against the petitioners in C.C.No.1B5 o'f 2024 on the file Principal Juni: " Civil Judge- Cum- Judicial lvlagistrate of First Class, Medak, pending dispr);al of the Criminal Petition. l.A. NO: 1OF 2025 Between: K. Ashok Kumar, S/o Ramulu, Age: 43 years, Occ: Bus ness, Rt/o H.No.01- 7612511120 & 21 Beside DMart Line, Vaishnoi Enclar:, Petbasheerbagh, Qutbullapur. ...Petitioner/Resp,) rdent No.2 in CRLP AND 1 Vegesina Nagasurendra, S/o Srinivas Raju, Age: 33 ye r s, Occ: Employee in Prathipati Estate, R/o. H.No1-98, Alluri Sitaramaraju Street, Kodurapadu, Mallavaram Mandal, East Godavari District, Andhra Prarl, ,sh. Prathipati Shiva Shankar, S/o. Srinivasa Rao, Age: 39 y;ars, Occ: Business, Rl/o. Plot No391E-1 1 1, Road No81 Jubilee Hills, Hydera I rd. 2 ...Respondents/Petitionr: Nos.1 & 2 in CRLP 3. State of Telangana, Represented by its Public Prosec r tor, Through S.H.O. P.S. Manoharabad, High court of Telangana. ...Respondents/Re ;pondents in CRLP Petition under Section 482 of Cr.P.C|S2B of BNSS praying that in the circumstances stated in the Memorandum of Grounds of Criminal Petition,the High Court may be pleased to vacate the lnterim Order dated: 1 3/1 1/2024 passed in l.A. No: 2 of 2024 in C.R.L.P No: 13740 of 2024. This Petition coming on for hearing, upon perusing the l/lemorandum of Grounds of Criminal Petition and upon hearing the arguments of trilr. Avinash Desai, Senior Counsel representing tt/r. Vimal Varma Vasireddy, Advocate for the Petitioners and the Mr. lvl. Ramachandra Reddy, Additional Public Prosecutor on behalf of the Respondent No.1 and of Mr. P. Raja Sripathi Rao, Senior Counsel representing Mr. Ramavaram Chandrashekar Reddy, Advocate for the Respondent No.2. The Court made the following: COMMON ORDER IN THE HIGH COURT FOR THE STATE OF TE- qNGANA AT HYDERABAD THE HONOURABLE SMT. JUSTICE JUWAD SRIDEVI CRIMINAL PETITION Nos.13763 13735 and 137 {O of 2024 16TH DEcEMBER,2025 Between: Prathipati Swathi and four others The State of Telangana Rep. by its Public Prosecutor and another AND )etitioners R:spondents : COMMON ORDER: These Criminal Petitions are filed under iection 528 of Bharatiya Nagarik Suraksha Sanhita, 2023 (for short 'Bl{SS') (pi-eviously Section 482 of Ci'.P C.) by the petitioners-r,, cused Nos.1 to 5, seeking to quash the proceedings against them ir C.C.No.185 of 2024 pending on the file of the learned Principal Jur or Civil Judge- cum-Judicial [Vlagistrate of First Class at Medak, rerr istered for the offences under Sections 420 and 504 rlw.34 of the lni an penal Code (for short'lPC') 2 Since all the three criminal petitions are, apisi6g or1 ot C.C.No.'185 of 2024, they are heard together and dis: >sed of by way of this common order. 3 Heard N4r. Avinash Desai, learned {i lnior Counsel representing Mr. Virnal Varma Vasireddy, learned < cunsel for the 2 petitioners in Crl.P.Nos.13763 and 13740 of 2024 and tVlr. Appasani Ram Dheeraj, learned counsel for the petitioner in Crl.p.No.13735 of 2024, Mr. P.Raja Sripathi Rao, Iearned Senior Counsel representing lt/lr. Ramavaram Chandrashekar Reddy, . respondent No.2-de faclo complainant in Crl.P.Nos.13763 and 13740 learned counsel for of 2024 and [/r. L.Preetham Reddy, Iearned counsel for respondent No.2-de facto complainant in Crl.P.No.13735 of 2024, and [Vlr. M.Ramachandra Reddy, learned Additional Public Prosecutor appearing for respondent No.'1 -State. 4 The facts of the case

4.1 . The de faclo complainant is engaged in real estate business and is the Managing Partner of Ira lnfrastructure and Developers Company

4.2. The de facfo complainant, petitioners-accused Nos.1 to 5 and [//s. Yellow Stone Estates Private Limited and 15 others are the owners and possessors of land admeasuring Ac.52.08 guntas in Sy.Nos.209, 210, 211, 231, 233, 234, 235, 236, 237 , 238, 239, 240, 241 , 242 and 243 of Kallakal Village, Manoharabad tvlandal, Medak District. They have jointly obtained permission from HMDA and developed a layout in the name of 'Green Hub'. 3

4.3. Thereafter, a Partition Deed bearing docLr tent No.672 of 2022, dated 12.12.2022 was entered into by the '19 pa tners, in which, M/s. Prathipati Estatqs Private Limited represented I t its authorized signatory petitioner-accused No.4, M/s. yellow Stone Fstates Private . Limited represented by its authorized signatory pr: itioner-accused No.5 and petitioner-accused No.3, were allotted .17,7€ 5 square yards in Plot Nos.'1 , 83, 84, 85 and 104 in Sy.Nos.209/F, 210tP,211tP, 231 I p, 233t p, 234 tp, 235 tp, 236t p, 237 tp, 238/p, 239 t I ,240tP,241tP, 2421P and 243lP situated at Kallakal Village, l/lanohr rabad Mandal, Medak District. The petitioners-accused Nos.i and 2 a e the Directors of I\4/s. Yellow Stone Estates private Limited anci V/s Prathipati Estates Private Limited respectively and the petitionerr; accused Nos.4 and 5 are their representatives.

4.4. The petitioners-accused Nos.1 to 5 agreed t: sell their entire share of 17,765 square yards to the de faclo complil consideratron of Rs.19,49,00,0001. Accordingly, rant for a sale he de facto complainant's Company has entered into a [/€ morandum of Understanding, dated 08.02.2023 with M/s. prathipati istates Private ' Limited represented by its authorized signatory pet tioner-accused No.4, M/s. Yellow Stone Estates private Limited re6rt -'sented by its authorized signatory petitioner-accused No.5 and pet tioner-accused 4 No.3 (hereinafter referred to as 'First Party'), for the said extent, in the presence of elders

4.5. As per the terms of the lt/lOU, upon payment of the amount in five tranches, within (60) days, with a grace period of (15) days from the date of MOU, the plots of equal value shall be registered in favour of the de facfo complainant. Additionally, it was also confirmed that amount of Rs.1 9,49,00,000/- was excluded from the amounts to be paid with regard to the land admeasuring Ac.02.15 gts. in Sy.No.255 of Kallakal Village, l/anoharabad lr4andal, Medak District. lt was further agreed by the First Party that the said land should be surveyed by a Government Surveyor and physical possession shall be handed over to the de facto complainant in the presence of adjacent land owners in order to avoid future disputes on the 75th day of the MOU.

4.6. ln accordance with the terms of the tt/OU, the de facto complainant paid Rs.15,00,00,000/- in four tranches and got registered the plots of equal value. The timelines in the MOU were extended by both the parties and based on the revised timelines the entire transaction must be concluded on or before 21-08.2023.

4.7 . When the de facto complainant arranged the amount for the fifth tranche, the petitioners-accused Nos.1 to 5 and accused No.6 5 produced a two yeai old land map pertaining to r,c.02.15 gts. in Sy.No.255 on the 75th day and forced the de facto cor rplainant to buy' the said land, according to that outdated map. Wll rn the de faclo complainant insrsted on adherence to the terms o1 the IMOU, the accused, in violation of the agreed terms, refusec to conduct the survey and forced the de facto complainant to purch;l ;e the said land according to their convenience.

4.8. Subsequently, the de faclo complainant ca r re to know that the petitioners-accused Nos.1 to 5 and accused No 6 were not the original owners of Ac.02.'15 guntas in Sy.No.255 of (allakal Village, and that they had crirninally trespassed into adjacenr and, altered the boundaries, and erected new boundaries with an inter :ion of including that land rnto their land. As such, the original owner{i cf the said land lodged a complaint against the accused, leading rc registration of Crime No.179 of 2023 of tr/lanoharabad Police Statiorr br the offences punishable under Sections 447,427 and 504 rlw.34 cf IPC.

4.9. Furthermore, five plots bearing Nos.'l ,83 31, 85, and 104, which were to be registered in favour of the de fac&r complainant as per the terms of the MOU, were registered in the r; me of accused No.6 and another. When the de facto complainant questioned the petitioners about the same and asked them to register he said plots in ,, '1 6 his name, they demanded an additional amount of Rs.5,00,00,000/- By doing so, the petitioners committed criminal breach of trust and cheated lhe de facto complainant without registering the plots and land in accordance with the agreed terms under the MOU Followin are the submissions of learned Senior Counsel for the petitioners:

5.1 . The petitioners-accused Nos. l and 2 are the Directors of the Companies i.e., M/s. Yellow Stone Estates Private Limited and l\ills. Prathipati Estates Private Limited resppctively. The petitioner- accused No.3 owns a share of land sought to be sold to the de facfo complainant. The petitioners-accused Nos.4 and 5 are the authorized signatories of the Companies i.e., M/s. Prathipati Estates Private Limited and [Vl/s. Yellow Stone Estates Private Limited respectively The petitioners-accused Nos.1 to 3 and 5 are the family members

5.2. The petitioners are innocent and have been falsely implicated in the case. They are in no way concerned with the offences alleged. Clauses (5) and (6) of the MOU clearly stipulate that the de facto complainant shall make a payment of Rs.19,49,00,0001 to the petitioners within (60) days with a grace period of (15) days. lt further stipulates that, in the event lhe de facto complainant fails to make -,," ,/ 7 payment within the agreed period of (75) days, the ,etitioners shall have the absolute right to hold and sell the plots tc hird parties, to which the de facto complainant agreed. Even as per tl- : complaint the de facto complainant had paid Rs. 15 crores in fo I tranches and obtained registration of plots equivalent to the said arn: lnt 5 3 As per Clause (5) of the IVOU, it is eviden hat the sale of Plot No.1 by the petitioners to the de facto complainant s subject to his purchasing 4c.2.15 gts. in Sy.No255 and upon tf( survey to be conducted by the petitioners. Clause (4) of the ti/OtJ makes it clear that the survey pertains only to the land admeasurin l Ac.2 15 gts. in Sy.No.255, ancl not to any other extent.' ln complianc : with the said clauses, the petitioners have performed their part of he contract by conducting the survey through a private surveyor ar( measured the land in the presence of representatives of lhe de fact rcomplainant's Company. Despite this, the de facto complainant's C,) npany failed to purchase the said land. Therefore, as per Clause (5) c f the MOU, the petitioners are under no obligation to sell Plot No.1 o the de facto com plainant.

5.4. Alleging non-compliance of the terms of MO J, the de facto complainant filed O.S.No.34 of 2023 before the Cr> rrt of principal District and Sessions Judge at Medak, against the petit oners-accused r I Nos,1 to 3, M/s. Yellow Stone Estates private Limited, M/s. prathipati Estates Private Limited and accused No.6 on 25,09.2023, seeking specific performance of lr/OU, dated 08.02.2023, perpetual injunction restraining the defendants therein and cancellation of Agreement of Sale-cum-General Power of Attorney documents bearing Nos.35g5 and 3596 ot 2023, dated 01 .09.2023 and 02.09.2023 respectively. Notably, the de facto complainant has not sought any relief in respect of land in Sy.No.255. Since no interim order was granted in his favour, the de facto complainant resorted to initiation of the present criminal proceedings on 13.10.2023, in order to arm-twist them and only to settle civil disputes.

5.5. The third party by name [Vlr. Surya Narayana Keriya has lodged a complaint against the petitioners-accused Nos. l, 2 and 5 herein and another, which was registered as a case in Crime No.179 of 2023 for the offences punishable under Sections 447, 427 and 504 rlw.34 of lPC. After completion of investigation, the Police filed charge sheet against the accused therein before the Court concerned. The same was taken cognizance of and numbered as C.C.No.27 of 2024. The accused therein have filed quash petitions before this Court and this Court, vide order, dated 24.01 .2025 in Crt.p.Nos.gSO and 357 of 2025 granted stay of all further proceedings against them, holding that I the petitioners have purchased the land in Sy.No 255 after due diligence by getting the land demarcated

5.6 The sale deeds bearing document Nos.909 )10 and 914 of 2004, dated 31 .01 .2004 clearly reflects that the Company i.e., l\//s. Prathipati Estates Private Limited is the absc I tte owner and possessor of the land admeasuring Ac.O.13% gts., A(;. 1.07% gts. and Ac.0.13% gts in Sy.No.255/3. The sale deed bea'ing document No.4162 of 2005, dated 30.06.2005 reflects that M/s Sri Janahitha Estates, represented by l\4rs. P.T.Venkayamma, who i the mother of petitioners-accused Nos.1 and 2 herein, is the owner a r d possessor of Iand admeasuring Ac.0.10 gts. in Sy.No.255l3lE anc 4c.0.10 gts. in Sy.No.255/3/EE.

5.7. AII the allegations pertain to the C;r mpanres l_e., M/s. Prathipati Estates Private Limited and [Vl/s. Yello,n Stone Estates Private Limited. The IVIOU was also entered into by t re Companies. As such, the said Companies were arrayed as defenrl rnts in the civil suit. However, without arraying the said Companies ar; accused in the present criminal case, the de facto complainant has c rosen to array the petitioners-accused Nos. l, 2, 4 and 5 as accused, , /ho are merely the Directors and authorized signatories of the Conrl anies, against whom no specific or individual allegations are levelled n the absence \ 10 of Companies being arrayed as accused, the proceedings against the petitioners are not maintainable. ln support of this contention, learned Senior Counsel relied on the judgment of the Hon'ble Supreme Court in Maksu d' y:::,::* :1"2'i::::::: "?!!f,[i' -i!?!Jifl of this Court to paragraph No.13, which is as follows: attention

13. Where a jurisdiction ls exerc,sed on a complaint petition filed in terms of Section 156(3) or Section 200 of the Code of Criminal Procedure, the Magistrate is required to apply h$ mind. The Penal Code does not contain any provision for attaching vicarious liability on the paft of the Managing Director or the Directors of the Company when the accused is the Company. The learned Magistrate failed Io pose unto himself the correct question viz. as to whether the complaint petition, even if given face value and taken to be correct in its entirety, would lead to the conclusion that the respondents herein were personally liable for any offence. The Bank is a body corporate- Vica'rious liability of the Managing Director and Director would arise provided any provision exists in that behalf in the statute. Sfafutes indisputabty must contain provision fixing such vicarious liabilities. Even for the said purpose, it is obligatory on the paft of the complainant to make requisite allegations which would attract the provisions con stituti ng v icario u s I i abi I ity.

5.8. The essential ingredients of the offence under Section 420 of IPC are wholly absent in the present case. There is no false or misleading representation on the part of the petitioners, nor is there any inducement that led the de facto complainant to part with the property. lt is well settled that dishonest intention from the inception is an essential ingredient foi constituting the offence of cheating. ' lzoot) s scc oos '11 However, a careful reading of the complaint as we I as the charge sheet does not disclose any such misrepresentation. I the petitioners had any dishonest intention to cheat lhe de facto c r nplainant, they would not have registered plots in his favour for the er1 tivalent amount of Rs.15 crores

5.9. The c;ore grievance of the de facto compla rant appears to be that, although he was willing to make the paymenl cf fifth tranche, the petitioners have sold the lands pertaining to last lr rnche in favour of a third party. Even assuming that the petitioners l-i ve violated the terms of MOU , it does not amount to cheating, b I comes under criminal breach of the ierms of the MOU, which may , ive rise to civil consequences. A breach of contractual terms cannot be elevated to the level of criminality in the absence of induceme r t or fraudulent intention from the inception

5.'10. ln support of the above contention, learned jenior Counsel relied on the judgment of the Hon'ble Supreme Court ir lnternational Advanced Research Centre for Powder Metall,t-gy and New Materials (ARCI) and others v. Nimra Cerglass Te:hnics private . 12 Limited and anothef , wherein, at paragraph Nos.15 and 16, it is held as follows "15. The essenfia/ ingredients to attract Section 420 IPC are: (i) cheating; (ii) dishonest inducement to detiver propeiy or to make, alter or destroy any valuable security or anylhing which is sealed or srgned or is capable of being convefted into a valuable security; and (iii) mens rea of the accused at the time of makng the nducementr Ihe makuq of-a fals€.repre.*ntatien 4$-one of the essential ingredients to constitute the offence of cheating under Section 420 lPC. ln order to bnng a case for the offence of cheating, it is not merely sufficient to prove that a false representation had been made, but, it is fu her necessary to prove that the representation was false to the knowledge of the accused and was made in order to deceive the complainant.

16. The distinction between mere breach of contract and the cheating would depend upon the intention of the accused at the tinte of alleged inducemenl lf I is estab//shed that lhe intention of the accused was dishonest at the very time when he made a'promise and entered into a lransaction with the complainant to parl with his propedy or money, then the liability is cnminal and the accused is guilty of the offence of cheating. On the other hand, if all that is established is that a representation made by the accused has subsequently not been kept, criminal liability cannot be foisted on the accused and the only right which ' the complainant acquires is the remedy for breach of contract in a civil court. Mere breach of contract cannot.give rise to criminal prosecution for cheating unless fraudulent or dishonesl intention ls shown at the beginning of the transaction. ln S.W. Palanitkar v. State of Bihar. this Couft held as under: (SCC p. 250, para 21) "21 . ... ln order to constitute an offence of cheatng, the intention to deceive should be in existence at the time when the inducement was made. if is necessary to show that a person had fraudulent or dishonest intentnn at the time of making the promise, to say that he committed an act of cheating. A mere failure to keep up promise subsequently cannot be presumed as an act leading to cheating." '1zoto; t scc:ae 13 The abot,e view in Palanitkar case [(2002) 1 :'( C 2n1 : 2002 SCC (Cri) 1291 was referred to and h.l twed in Rashnt Jain v Stafe of U.P. K2014) 73 S() ) 553 r (1t014) 5 SCC (Cri) 7511"

5.1 1 . ln support of the above contention, he a r o relied on the judgment of the Hon'ble Supreme Court in Hridaya Ranjan Prasad Verma and others v. State of Bihar and anoth rl, wherein, at' paragraph No.15, it was held as follows: "15. ln determtning the qLlestion it has to be ke) that tlte distitlction between mere breach of cott, the offence of cheating is a fine one lt dept:'t the intention of the accused at the time of inl which ntay be Judged by hls subsequent conrltt this subsequent conduct is not the so/e li,: breach of contract cannot give rise to p;osecution for cheating unless fraudulert or :i intentrcn rs shown right at the beginnin, r tt ansadian. Lltat is il)e \me vvlten the offencc t. have been committed. Therefore it ts the intenliL is lhe glst of the offence To hold a persatl cheating it is necessary to show that he had ir or dishonest i enlion at the tinte of making th( From his ntere failure to keep up promlse sul)s such a culpable intentiort right at the beginnrnl when he ntade the prcmise cannot be presurnec 5.12 He also relied on the judgment of the ll )n'ble Supreme ir mind 'act itnd ls Ltpot) ,cement I but for I Mere crintinal shonesl ,tf the sr/(/ lo n wltich TLulty of udulent t omise ryuently is, .,lltal Court in Vesa Holdings Private Limited and anat 1er v. State of Kerala and othersa, and drawn attention of this Crr rt to paragraph Nos.12 and 'l 3, wherein, it was held as follows: '.trcr t1l ln.r r)fian.c, ,s rno lt tttr\/ .1r "12. From the decisions cited by the appelt m| the settled proposition of law is that every breach c.f :ontract would not give rise to an offence of cheating a t I only in ! (t 4aU1 a nar.at t ' izooo; ,r scc tos n (2015) 8 scc 291 l, 14 fhose cases breach of contract would amount to cheating where there was any deception played at the very inception. lf the intention to cheat has developed later on, the same cannot amounl to cheating. ln other words for the purpose of constituting an offence of cheating, the complainant is required to show that the accused had haudulent or dishonest intention at the time of nlaking promise or represenlation. Even in a case where allegations are made in regard to failure on the paft of the accused to keep his promise, in the absence of a culpable intention at the time of making initial promise being absent, no offence under Section 420 of the Penal Code, 1860 can be said to have been made ouL

13. lt is true that a given sel of facls may make out a civil wrong as also a criminal offence and only because a civil remedy may be available to the corhplainant that itself cannot be a ground to quash a criminal proceeding. The real test is whether the allegations in the complaint disc/ose lhe criminal offence of cheating or not. ln the present case there is nothing to show that at the very inception there was any intention on behalf of the 4ccLlscC persons [o cheat whicli is a condition precedent for an offence under Section 420 lPC. ln our view the complaint does r)ot dlsc/ose any criminat olfence at atl. The criminal proceedings should not be encouraged when it is found to be mala ftde or otherwise an abuse of the process of the court. The superior couds while exercising this power should also strive to serve the ends of justice. ln our opinion, in view of fhese facfs allowing the pohce investigation to continue would amount to an abuse of the process of lhe coui and the High CourT committed an error in refusing to exercise the power under Section 482 of the Criminal Procedure Code to quash the proceedings."

5.1 3. The dispute between the parties is purely civil in nature however the present complaint was lodged by the de facto complainant giving a cloak of criminal offence. He relied on the judgment of the Hon'ble Supreme Court in lndian Oil Corporation v. 15 NEPC lndia Limited and otherss, wherein, the parallr aph No.8 of the judgment of the Hon'ble Supreme Court in Sagar 5 uri v. State of lJttar Pradesho was referred to, which is as follows: "8 lt is to be seen if a matter. which ls esse, i civil nature, ltas been given a cloak of crimina, Criminal proceedings are not a shotl cLtt ( remedies available in law. Before issuing p r criminal coLtrT has to exercise a great deal ol Fc)r the accused rl ls a serioas matter. This ( r latd ceftan principles on fhe bas,s of which tt CoutT is to exercise its jurisdictrcn under Sectk t the Code. Jurisdtction under this section lti: exercised to prevent abuse of the process of irt or othetwise to secure the ends of justice.' lly of a 'ffence. 'ollter ,'ess a 'aution. ui has e Hrgh 482 of to be y coutT

5.14. He also relied on the judgment of the Fr n'ble Supreme Court in Shai/esh Kumar Singh alias SharTesh R. Sl rgh v. State of lJttar Pradesh and othersT and drawn attention : this Court to paragraph No.1 1, which is as follows: "11. The entire case is squarely covett recent pronoLrncentent of thts Court in the casc r Race Club (1940) Limited y. State of uttar ,) repofted h (202a) 10 SCC 690. ln the said dec,s entire law as to what co,sl/Tutes cheating ano breach of trust respectively has been exht explained. lt appears that this very decision w 't upon by the learned counsel appearing for the l)t before the High Courl. However, instead of laL)k the matter on its own merits, the High Couri lhoLr! direct the petitioner to go for mediation and thni making payment of Rs. 25,00,000/- to the 4th re:1 as a condition precedent. We fail to understat)d High Court should undeftake such exercise. ll Couft may either allow the petition saying t offence is disclosed or may reject the petition say no case for quashing is made out. Why should tt " Delhi adesh" ct1, the rinlinal tstively , relied litioner tg into ht lit to too by indent /hy the High = lat no ry that e High 5 lzooo; o scc z:o n (zooo) z scc e:o 'zo25 INSC 869 r l I Couft make an attempt to help the complainant to recover the amount due and payable by the accused. lt is for the Civil Couft or Commercial Cburl as fhe case may be to look into in a suit that may be filed for recovery of money or in any other proceedings, be it under the Arbitration Act, 1996 or under the provisions of the lB Code, 2016."

5.1 5. Neither the complaint nor the charge sheet contains any specific abusive words uttered by the petitioners against lhe de facto complainant, hence, the ingredients of the offence under Section 504 of IPC are not made out

5.16. Relying on the said judgments, learned Senior Counsel appearing for the petitioners prayed to quash the proceedings against the petitioners

6. Followinq are the submissions of learned Senior Counsel appearinq for respondent No.2-de /acfo complainant

6.1. lt is alleged that the petitioners have induced the de facto complainant to purchase the land admeasuring Ac.2.15 gts. in Sy.No.255, situated at Kallakal Village, Manoharabad Mandal, Medak District, despite the fact that the said land did not have properly demarcated boundaries. Though the petitioners initially assured the de facto complainant that the said land would be registered in his name, they have failed to honour their promise after collecting substantial amounts from him. Thereafter, the petitioners began to \ 17 blackmail the cie facto complainant by coercing him c purchase the said land on the terms dictated by them. The petil oners failed to register plot Nos.1, 83, 84,85 and 'l 04 in favour f lhe de facto complainant even after receipt of considerable amoun s from him and sold the same to accused No.6 and another, who lnowingly have entered into such sale transactions. The petitionen; accused Nos.4 and 5 are the representatives of accused Nos.1 to 3, vr ro always acted ' on their instructions, being fully aware of the conse: tences, for the reasons best known to them.

6.2. At the time of payment of the fifth tranclr r. the de facto complainant expressed his willingness to purchar r ali the plots mentioned in the last tranche and requested to condu: a Government Survey in Sy.No.255. However, the petitioners failed o produce any document eviOenling if," r"t"r, survey with proper c emarcation, as was agreed in the MOU, and further threatenec hrm with dire consequences. Since no survey was conducted by th: petitioners, the de facto complainant was not under an obligation to p: .chase the land in Sy.No.255. Despite this, the petitioners immediately ;old the plots in the last tranche to the third parties through Agreem<: rt of Sale-cum- General Power of Attorney documents bearing Nos.3rj )5 and 3596 of 2023, dated 01.09.2023 and 02.09.2023 respec ivety, thereby 18 C breaching the trust reposed in them and cheating the de facto complainant

6.3. A third party, namely Mr. Surya Narayana Keriya, lodged a complaint against the petitioners-accused Nos.1, 2 and 5 herein and another on 06.10.2023, which was registered as a case in Crime No.179 of 2023 for the offences punishable under Sections 447, 427 and 504 rlw. 34 of lPC. Following the completion of investigation, the Police filed a charge sheet against the accused therein. Although the petitioners have produced certain documents showing that they are the owners and possessors of land in Sy No.255/3, the MOU does not specify any bye-numbers.

6.4. Clause (5) of the MOU clearly stipulates that the final sale of Plot No.1 by the petitioners to the de facto complainant was conditional upon the latter purchasing the land admeasuring Ac.2.15 gts. in Sy.No.255, subject to conducting proper survey. Hence, it is clearly established that the petitioners have misrepresented from the inception and attempted to fraudulently sell the land over which they did not have valid right and title.

6.5. ln support of his contention, he relied on the judgment of the Hon'ble Supreme Court in Syed Askari Hadi Ali Augustine v. State \ i ,l I 19 (Delhi Administration) and anothef, wherein, at paragraph No.9, it was held as follows

9. lndisputably, in a given case, a civi! J:'L ceeding as also a criminal proceeding may proceed stnt ltant:ously. Cognizance in a criminal proceeding can be t ken by the criminal cottrt upon arriving at the satisf actt) t that' there exists a prima facie case." 66 Serious allegations are levelled agarr st the petrtroners herein. All the allegations levelled in the complain as well as in the charge sheet are subject matter of trial, and hence his is not a fit case to quash the proceedings at this stage 6 7. Hence, he prayed to dismiss the petition Learned Additional PubIc Prosecutor rppearing for the State, contended that specific allegations are ltt,elled against the petrtioners, which is a subject matter of trial. l-lt: rce, he prayed to dismiss the petition B B 1 ANALYSIS FINDINGS AND CON CLUSI, -N Upon careful consideration of the submir; ;ions advanced by the learned counsel on both sides and the material 1 laced on record, it is evident that the dispute between the parties e r ses purely out of contractual obligations and is essentially civil i- nature. lt is an admitted fact that the petitioners and the de fact<t complainant have 'lzoooy s scc szt 20 Ci entered into a lvlemorandum of Understanding, dated 08.02.2023. lt is not in dispute that the de facto complainant paid Rs.15,00,00,0001 to the petitioners in four tranches, pursuant to which land equivalent to the said value was registered in his favour

8.2. The allegation against the petitioners IS that they have induced the de facto complainant to purchase land admeasuring 4c.2.15 gts. in Sy.No.255 of Kallakal Village, Manoharabad Mandal, IVledak District, which does not belong to them, and that they failed to fulfill their obligations under the MOU by registering Plot Nos 'l , 83, 84, 85 and 104 in favour of the de faclo complainant. lnstead, they sold the same in favour of accused No.6 and another- However, it is also an admitted fact that the de facto complainant had already instituted a civil suit questioning the alleged non-performance of the contractual terms in the MOU by the petitioners. The said suit is pending adjudication, and no interim relief has been granted in favour of the de facto com plainant.

8.3. lt is to be noted that the registration of plots in the final tranche was expressly made subject to purchase of land admeasuring Ac.2.15 gts. in Sy.No.255. The civil suit, which is the appropriate forum for resolution of contractual disputes, does not contain any claim, relief, or issue in respect of the said land, although there is a reference 21 to the same in the pleadings. Despite being the mair rllegation in the present complaint, its conspicuous absence from the p 'ayer in the civil suit casts a serious doubt on the genuineness of the a legations made by the de facto complainant in the complaint. I the de facto complainant had genuinely believed that the petiticr ers lacked title over the land in Sy.No.255 and had deceived him. he would have sought appropriate declaratory or consequential reliel n that regard in the civil proceedings. The failure to do so suggests j rat the present complaint has been made as an attempt to give a c,r what is essentially a civil dispute arising out rt minal colour to alleged non- performance of contractual obligations. Significanfly e ven though the registration of plots in the final tranche was subject to 6 urchase of land in Sy.No.255, the de facfo complaindnt, without se r king any relief whatsoever in respect of the said land has confined hi: claim solely to the registration of plots in the final tranche.

8.4. The petitioners have placed on record the registered sale deeds bearing document Nos.909, 910, 914 of 2OO4 a,r j 4162 of 2005, which reveals that the petitioners are the lawfr- owners and possessors of land admeasuring Ac.O.13% gts., \c.1 .07% gts., Ac.O.13T+ gts., Ac.0.10 gts. and Ao.0.10 gts., aggreg€ ting to Ac.2.15 gts. situated in Sy.No.255/3. These registered documer ts, being public 22 c documents carrying a statutory presumption of validity, prima facie establish the petitioners' laMul title and possession over the land admeasuring Ac.2.15 gts. in Sy.No.25513 ll is also pertinent to note that the MOU, dated 08.02.2023 does not contain any reference to sub-divisions or bye-numbers of land admeasuring Ac 2.15 gts in Sy.No.255, nor does it indicate any specific extent allegedly not owned by the petitioners. Since the II/OU itself does not stipulate any sub- numbers or disputed extents, the petitioners' ownership, as supported by the registered sale deeds, cannot be discredited on the basis of vague and unsubstantiated allegations made by the de faclo complainant. Therefore, the atlegation that the petitroners have induced the de facto complainant by misrepresenting their ownership over the land in Sy.No.255 cannot be accepted.

8.5. Significantly, when the material on record demonstrates prima facie lavvful title in favour of the petitioners and does not disclose any misrepresentation as to ownership from the inception, the ingredient of dishonest intention, which is a sine qua non for the offence of cheating, is conspicuously absent. From the inception if such dishonest or fraudulent intention truly existed, the petitioners would not have registered equivalent land in favour of lhe de facto complainant for the amount paid by him 23

8.6. lt is the contention of the de facto com6lainant that the oblrgation to purchase land in Sy.No.255 would aris only after the = petitroners conducting a proper survey, but without ;onducting such survey, the petitioners compelled him to purchase t re said land by showing an outdated map. ln contrast, it is the <;, rntention of the petitioners that a survey was indeed conducted, and rs per the terms of MOU, the purchase of land in Sy.No.255 was a cor Cition precedent for the de facfo complainant to secure registration of plot No.1 in the final tranche. As the de facfo complainant failed to p,r rchase the said land within stipulated time, it was sold to accused N r .6 and another, strictly in accordance with the terms of the lVlOU.

8.7 Even assumrng that the petitioners sold the r ands relating to the last tranche to third pa(ies, such conduct woul(j at the highest, amount to breach of contractual obligations under the I 40U, which falls squarely within the domain of civil law and does no liability. A mere breach of contract, in the abserr attract criminal rce of material establishing dishonest or fraudulent intention from th: inception, does not constitute an offence of cheating under Section t20 lPC. These matters require adjudication in a civil forum and canr lt be converted into criminal proceedings in the absence of the basic r gredients of the offence of cheating. A mere allegation that the petiti: rers threatened -/ 24 t the de facto complainant does not satisfy the ingredients of Section 504 of lPC, as no specific abusive words have been mentioned in the complaint. ln the absence of such explicit averments, the essential ingredients to constitute the offence under Section 504 of IPC are not made out. The judgments relied on by the learned Senior Counsel appearing for the petitioners are squarely applicable to the facts of the present case

8.8. Furthermore, alleging criminal trespass and mischief over the land in Sy.No.255, third parties have lodged a complaint against the petitioners-accused Nosrl , 2 and 5 herein and another, resulting in registration of Crime No.179 of 2023 for the offences punishable under Sections 447,427 and 504 r/w. 34 of lPC. The said crime was taken cognizance of and numbered as C.C.No.27 of 2024. Upon the petitioners filing quash petitions, this Court, by order, dated

24.01 .2025, granted stay of all further proceedings, holding that the petitioners are the owners and possessors of the land in Sy.No.255

8.9. A perusal of the charge sheet further reveals that the MOU was executed by the Companies i.e., M/s. Prathipati Estates Private Limited and M/s. Yellow Stone Estates Private Limited. Specific allegations are levelled against the Companies and their Management. Hqwever, the present complaint was lodged only against the petitioners-accused Nos.1 , 2, 4 and 5, who are t 1 ) Directors and authorized signatories, in their individuar capacity, lir thout arraigning the companies as accused and without attributing ar'specific rore to the petitioners-accused Nos.1, 2, 4 and 5. ln such cir :umstances, no vicarious liability can be fastened upon the petitio,:rs, without the Companies being arrayed as accused. B 10. ln view of the foregoing discussion, this lourt is of the considered opinion that there was no dishonest or frar dulent intention on the part of the peti.tioners from the inception, particrr larly when they were having valid tifle over the land in Sy.No.255. - he allegations, , even if taken at face value, disclose a dispute relatit g to breach of contractual obligations and do not satisfy the essentie I ingredients of cheating. Significanfly, a civil suit has already been i de facto complainant against the petitioners ar adjudication. The dispute between the parties is, therrr rstituted by the d is pending cre, purely civil in nature, which has been given a criminal comptexior with a view to settle civil disputes through criminal proceedings.

8.11. ln Paramjeet Batra v. Sfate of lJttarakhance, at paragraph No.7, the Hon'ble Supreme Court helct as follows: t lzot:; t I scc ozs 26 a "7. While exercising its jurisdiction under Section 482 of the Code the High Coud has to be cautious. This power is to be used sparingly and only foi the purpose of preventing abise of the process of any coud or otherwise to secure bnds of justice..Whether a complaint dr,sc/oses a criminal offence or not depends upon the nature of facts alleged therein. Whether essentia/ ingredients of criminal offence are present or not has to be judged by the High Court. A complaint disclosing civil transactions may also have a criminal texture. But the High Courl mus, see whether a dispute which is essentially of a civil nature is given a ctoak of crimnal offence. ln such a situation, if a civil remedy is available and is, in fact, adopted as has happened in this case. the High Court should not hesitate to quash criminal proceedings to prevent abuse ofprocess of court." 8.12. Applying the above principle to the present case, I am of the considered view that this case is a fit one to exercise the inherent powers under Section 528 of BNSS, in order to prevent abuse of the process of the Court and to meet the ends of justice 9 Accordingly, all the Criminal Petitions are allowed, quashing the proceedings against the petitioners-accused Nos.1 to 5 in C.C.No.'185 of 2024 pending on the file of the learned Principal Junior Civil Judge-cum-Judicial ttlagiskate of First Class at tt/ledak Pending miscellaneous applications, if any, shall stand closed //TRUE COPY// Sd/. M. OSMAN ALt BAIG ASSISTANT REGISTRAR 6 SECTION OFFICER To,

1. The Principal Junior civil Judge-cum-Judicial Magistrate of First class, Medak.

2. The Station House officer, Manoharabad Police station, Medak District. 3. Two CCs to the Public Prosecutor, High court for the state of Telangana at Hyderabad. [OUTI

4. One CC to Mr. Vimal Varma Vasireddy, Advocate [OPUC] 5. One CC to Mr. Ramavaram Chandrashekar Reddy, Advocate IOPUCI 6. One CC to Mr. Appasani Ram Dheeraj, Advocate [OPUC] 7. One CC to Mr. L. Preetham Reddy, Advocate IOPUC] 8. Two CD Copies HIGH COURT DATED:1611212025 (.-. O) s *$(o :.r * H9 Q:o J- COMMON ORDER CRLP.Nos .13763,13735 and 1 374O of 21t24 ALLOWING THE CRIMINAL PETITIONS ( + \to