Ltd. and others v. State of U.P. and another

1. Heard Sri Shad Khan, Advocate holding brief of Sri R.C. Pal, learned counsel for the applicant, Sri Jyoti Kumar Singh, learned A.G.A. for the State-O.P. no.1 and perused the record.

2. The present application under Section 482 Cr.P.C. has been filed by the applicant with a prayer to quash summoning order dated 10.09.2024 passed by Additional Civil Judge (Junior Division)/Judicial Magistrate, Court no.03, Ghaziabad as well as the entire proceedings of Criminal Complaint Case no.740 of 2023, under section 406 and 420 IPC or to stay the further proceedings of aforesaid case during the pendency of the present application.

3. The instant application has been preferred by the applicant, who is builder, and O.P. no.2 is flat buyer. When O.P. no.2 came to know that the builder (applicant) has done illegal construction without sanction of the map, he demanded his money back to which he replied that his money will only be refunded back after selling his flat to another person. Thereafter, O.P. no.2 has lodged a complaint against the applicant on 03.11.2023 with the allegation of defrauding him, wherein the court below has issued summoning order on 10.09.2024, which has been assailed in this application.

4. Learned counsel for the applicant submitted that O.P. no.2 has also moved an application before the Consumer Forum with the same allegation as made in the complaint and the applicant is ready to pay all the money to O.P. no.2 subject to order to be passed by the Consumer Court. He next submitted that O.P. no.2 has initiated two parallel proceedings against the applicant for the same cause of action. He submitted that the applicant has been falsely implicated in the present case due to ill motive. He further submitted that proceedings for offence u/s 420 and 406 IPC cannot go on simultaneously. In support of his submissions, he has placed reliance on judgment passed by Hon'ble Supreme Court in Delhi Race Club (1940) Ltd. and others vs. State of U.P. and another, 2024 SCC OnLine SC 2248:2024 INSC 626. At last, he submitted that the dispute between the parties is purely of civil nature and if the instant criminal prosecution against the applicant is allowed to continue, the same would amount to gross abuse of process of law, hence, the impugned summoning order as well as the entire proceedings of complaint case are liable to be set aside.

5. Per contra, learned counsel A.G.A. submitted that it is prima facie clear cut case of cheating where the applicant had sold off the flat to O.P. no.2 with assurance that he will legally construct the flat and after taking money, some construction has been carried out without taking permission and as such, O.P. no.2 has been cheated.

6. Heard learned counsel for the parties and perused the record.

7. It is an admitted case that the applicant knowing very well that there was no sanction of the map, but still he has sold off the flat to gullible buyer (O.P. no.2) after taking money from him. Apparently, it is a clear case of cheating, where the builder has induced O.P. no.2 to buy a flat, which was not sanctioned and had also taken money for it. Hon'ble Supreme Court in the matter of Central Bureau of Investigation vs. Maninder Singh, (2016) 1 SCC 389 has held that criminal prosecution can go on in cases of economic offences. Paragraph 11 of aforesaid judgment is extracted below for ready reference:- "11. The inherent power of the High Court Under Section 482 Code of Criminal Procedure should be sparingly used. Only when the Court comes to the conclusion that there would be manifest injustice or there would be abuse of the process of the Court if such power is not exercised, Court would quash the proceedings. In economic offences Court must not only keep in view that money has been paid to the bank which has been defrauded but also the society at large. It is not a case of simple assault or a theft of a trivial amount; but the offence with which we are concerned is a well planned and was committed with a deliberate design with an eye of personal profit regardless of consequence to the society at large. To quash the proceeding merely on the ground that the accused has settled the amount with the bank would be a misplaced sympathy. If the prosecution against the economic offenders are not allowed to continue, the entire community is aggrieved."

8. Further, in the matter of Punit Beriwala vs The State of NCT of Delhi and others, 2025 INSC 571, Hon'ble Supreme Court has held as under :- "It is trite law that mere institution of civil proceedings is not a ground for quashing the FIR or to hold that the dispute is merely a civil dispute. This Court is various judgments, has held that simply because there is a remedy provided for breach of contract, that does not by itself clothe the Court to conclude that civil remedy is the only remedy, and the initiation of criminal proceedings, in any manner, will be an abuse of the process of the court. This Court is of the view that because the offence was committed during a commercial transaction, it would not be sufficient to hold that the complaint did not warrant a further investigation and if necessary, a trial. [See: Syed Aksari Hadi Ali Augustine Imam v. State (Delhi Admin.) (2009) 5 SCC 528, Lee Kun Heed v. State of UP (2012) 3 SCC 132 and Trisuns Chemicals vs. Rajesh Aggarwal (1999) 8 SCC 686.]

9. Similar view has been taken by Hon'ble Supreme Court in Dinesh Sharma vs. Emgee Cables and Communication Ltd. and another, 2025 INSC 571.

10. In the instant case, O.P. no.2 has invested his hard earned money to buy a flat and the applicant has cheated him.

11. In view of aforesaid discussions as well as the settled principles of law laid down by Hon'ble Apex Court as enumerated above, I see no illegality in the impugned summoning order.

12. The instant application lacks merit and is, accordingly, dismissed. Order Date :- 17.5.2025 Manish Himwan

1. Heard Sri Shad Khan, Advocate holding brief of Sri R.C. Pal, learned counsel for the applicant, Sri Jyoti Kumar Singh, learned A.G.A. for the State-O.P. no.1 and perused the record.

2. The present application under Section 482 Cr.P.C. has been filed by the applicant with a prayer to quash summoning order dated 10.09.2024 passed by Additional Civil Judge (Junior Division)/Judicial Magistrate, Court no.03, Ghaziabad as well as the entire proceedings of Criminal Complaint Case no.740 of 2023, under section 406 and 420 IPC or to stay the further proceedings of aforesaid case during the pendency of the present application.

3. The instant application has been preferred by the applicant, who is builder, and O.P. no.2 is flat buyer. When O.P. no.2 came to know that the builder (applicant) has done illegal construction without sanction of the map, he demanded his money back to which he replied that his money will only be refunded back after selling his flat to another person. Thereafter, O.P. no.2 has lodged a complaint against the applicant on 03.11.2023 with the allegation of defrauding him, wherein the court below has issued summoning order on 10.09.2024, which has been assailed in this application.

4. Learned counsel for the applicant submitted that O.P. no.2 has also moved an application before the Consumer Forum with the same allegation as made in the complaint and the applicant is ready to pay all the money to O.P. no.2 subject to order to be passed by the Consumer Court. He next submitted that O.P. no.2 has initiated two parallel proceedings against the applicant for the same cause of action. He submitted that the applicant has been falsely implicated in the present case due to ill motive. He further submitted that proceedings for offence u/s 420 and 406 IPC cannot go on simultaneously. In support of his submissions, he has placed reliance on judgment passed by Hon'ble Supreme Court in Delhi Race Club (1940) Ltd. and others vs. State of U.P. and another, 2024 SCC OnLine SC 2248:2024 INSC 626. At last, he submitted that the dispute between the parties is purely of civil nature and if the instant criminal prosecution against the applicant is allowed to continue, the same would amount to gross abuse of process of law, hence, the impugned summoning order as well as the entire proceedings of complaint case are liable to be set aside.

5. Per contra, learned counsel A.G.A. submitted that it is prima facie clear cut case of cheating where the applicant had sold off the flat to O.P. no.2 with assurance that he will legally construct the flat and after taking money, some construction has been carried out without taking permission and as such, O.P. no.2 has been cheated.

6. Heard learned counsel for the parties and perused the record.

7. It is an admitted case that the applicant knowing very well that there was no sanction of the map, but still he has sold off the flat to gullible buyer (O.P. no.2) after taking money from him. Apparently, it is a clear case of cheating, where the builder has induced O.P. no.2 to buy a flat, which was not sanctioned and had also taken money for it. Hon'ble Supreme Court in the matter of Central Bureau of Investigation vs. Maninder Singh, (2016) 1 SCC 389 has held that criminal prosecution can go on in cases of economic offences. Paragraph 11 of aforesaid judgment is extracted below for ready reference:- "11. The inherent power of the High Court Under Section 482 Code of Criminal Procedure should be sparingly used. Only when the Court comes to the conclusion that there would be manifest injustice or there would be abuse of the process of the Court if such power is not exercised, Court would quash the proceedings. In economic offences Court must not only keep in view that money has been paid to the bank which has been defrauded but also the society at large. It is not a case of simple assault or a theft of a trivial amount; but the offence with which we are concerned is a well planned and was committed with a deliberate design with an eye of personal profit regardless of consequence to the society at large. To quash the proceeding merely on the ground that the accused has settled the amount with the bank would be a misplaced sympathy. If the prosecution against the economic offenders are not allowed to continue, the entire community is aggrieved."

8. Further, in the matter of Punit Beriwala vs The State of NCT of Delhi and others, 2025 INSC 571, Hon'ble Supreme Court has held as under :- "It is trite law that mere institution of civil proceedings is not a ground for quashing the FIR or to hold that the dispute is merely a civil dispute. This Court is various judgments, has held that simply because there is a remedy provided for breach of contract, that does not by itself clothe the Court to conclude that civil remedy is the only remedy, and the initiation of criminal proceedings, in any manner, will be an abuse of the process of the court. This Court is of the view that because the offence was committed during a commercial transaction, it would not be sufficient to hold that the complaint did not warrant a further investigation and if necessary, a trial. [See: Syed Aksari Hadi Ali Augustine Imam v. State (Delhi Admin.) (2009) 5 SCC 528, Lee Kun Heed v. State of UP (2012) 3 SCC 132 and Trisuns Chemicals vs. Rajesh Aggarwal (1999) 8 SCC 686.]

9. Similar view has been taken by Hon'ble Supreme Court in Dinesh Sharma vs. Emgee Cables and Communication Ltd. and another, 2025 INSC 571.

10. In the instant case, O.P. no.2 has invested his hard earned money to buy a flat and the applicant has cheated him.

11. In view of aforesaid discussions as well as the settled principles of law laid down by Hon'ble Apex Court as enumerated above, I see no illegality in the impugned summoning order.

12. The instant application lacks merit and is, accordingly, dismissed. Order Date :- 17.5.2025 Manish Himwan