Final Order 1

Order Details: Order Below EX 1
Pdf Text: C. C. No. 2170 PW 2023 State Vs Kiran and ors.
CNR-MHMM18-009423-2023
COMMON ORDER BELOW EXHS.10 TO 13
1. Perused charge sheet/final report of investigation and other
material produced on record. Perused all these applications, say filed by
first informant, Exhs.13-A, 14, 15 and 16, and say of Ld. A.P.P., Exh.17.
2. Heard Ld. Advocate for the accused persons, hereinafter referred
as applicants. Heard Ld. A.P.P. and Ld. Advocate for Mr. Moij Saifuddin
Rajkotwala, hereinafter referred as informant.
3. The brief facts leading to filing of these applications are as -
On 31.03.2022, the informant, approached Bandra Police Station,
Mumbai, and lodged report stating that, in the month of February 2010,
he came across Mr. Ranjeev Zangiyani, a director of real estate company
named as Bramhesh Agentia Pvt. Ltd., who informed that his company is
partner of a firm M/s Sankalp Developers. Then Mr. Zangiyani,
introduced informant to it’s other partners i.e. applicants Mr. Kiran Patil,
Mr. Deepak Rawate and Mr. Rajesh Rane. Applicants informed that they
had undertook a construction project for residence at Bandra West,
Mumbai. If informant purchased some flats in it and made investment he
will receive good returns. Informant persuaded his close relative Mr.
Hyder Lakadawala and his partner Mr. Kishor Kawale, for purchase of
flats in it. After discussions with applicants through informant both of
them agreed to purchase two flats, for an amount of Rs.5,40,00,000/- per
flat i.e. they have to pay the total consideration of both the flats an
amount of Rs.10,80,00,000/-. Mr. Hyder Lakadawala, paid an amount of
Rs.60,00,000/- by way of cheques and Mr. Kishor Kawale, paid an
amount of Rs.10,00,000/- through his wife Smt. Vibha Kawale. Thus,
both of them paid total amount of Rs.70,00,000/- to the applicants.
Then in another meeting dated 28.06.2010, at the office of Sankalp
Developers, at Vile Parle, Mumbai, applicants asked for 30% amount out
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of the amount of total consideration of both the flats Rs.10,80,00,000/-,
i.e. Rs.3,20,00,000/-. Both the purchasers agreed to it and paid
Rs.2,30,00,000/- to applicants in cash, in four installments, of different
amounts, respectively on 31.06.2010, 02.07.2010, 16.07.2010 and
19.11.2010. Then from time to time the applicants were asked to
complete the transactions and repeatedly asked to execute sale deed and
perform other part of their contract, but they failed in it. Therefore, on
31.03.2022, the crime was registered against applicants, for offences
punishable under Sections 406, 409 and 420 r/w.34 of Indian Penal Code
and Sections 3 and 4 r/w.13 of MOFA.
Grounds pleaded for discharge
4. By way of these detailed applications, applicants sought their
discharge from the prosecution, as per Section 239 of Code of Criminal
Procedure, on various grounds, which can be summarized as follows -
i. There is unexplained delay of twelve years or more in registration of the offence, a
long period of time, during which first informant, even not bothered to approach the
police for alleged acts of cheating, etc.
ii. The informant has no authority and consequent locus standi to initiate legal
proceedings against the applicants.
iii. There is no sufficient evidence on record about the alleged payments made or to
draw any inference of payment against applicants. The informant suppressed material
facts from the Investigating Officer and the court. By misleading the court the present
offence was registered and charge sheet has been filed wrongly.
iv. The informant being third person, no provisions of Maharashtra Ownership of
Flats Act, 1963, hereinafter referred as MOFA, can be invoked, as informant is a third
person not connected with the alleged transaction and not covered by the provisions of
the said Act.
v. All the allegations are false and misleading. They are, even if, accepted as it is,
does not inspire confidence and no conviction is warranted. In the alternative, the
allegations even if accepted as they are, the cause of action accrues is of civil nature.
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vi. The First Information Report, is offshoot of the rejection of complaint filed by Mr.
Hyder Lakadawala and Mrs. Vibha Kawale, preferred before Maharashtra Real Estate
Regulatory Authority, hereinafter referred as MahaRERA.
Objections raised by informant and prosecution
5. While objecting the above contentions, the Ld. A.P.P. and the
informant denied each and every ground of discharge of the applicants,
vide their say, Exhs.13-A to 17. Those objections can be summarized, as -
i. The offence is serious. The accusations are well founded based on cogent material,
on the basis of which the positive inference of all the offences against applicants can
be drawn.
ii. The applicants are partners of disputed firm and obtained huge amounts from
informant and witnesses. The material collected incriminating the applicants and it
can be inferred from the material on record that applicants has committed the offence.
iii. The evidence can not be marshaled in detail at this stage of framing of charge.
The contents of First Information Report, statements of various witnesses, the
documentary evidence collected and other material produced needs to be taken into
account in whole context of each other. Such consideration leads to inference of
involvement of accused persons in the cheating of informant and witnesses.
iv. There is no deliberate delay on the part of informant. It occurred on account of
false representations and assurances made by applicants.
v. The prosecution can not be said to be vitiated only on the ground of locus
standi, as anyone can set criminal law into motion.
vi. The issue needs to be put on trial and applicants can not be discharged on the
basis of grounds pleaded.
vii. The remedies sought before MahaRERA and criminal court are different and
can be availed simultaneously.
viii. The material constitutes criminal act and it can not be said to be of civil nature
and prosecution can be continued.
ix. The applicants are joint as well as in personal capacity also liable for the
criminal act committed by them.
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Submissions of both the parties
6. The Ld. Advocate for the applicants made his submissions at
length. He mainly relied on the contents of the charge sheet and various
acts occurred before the registration of First Information Report and drew
attention towards the grounds assigned in these applications. He
submitted that informant has no right to file the report. There is no direct
connection between informant and the applicants. There is unexplained
delay in lodging of report. While lodging report material facts were
concealed by informant leading to inference that there is no such payment
made as alleged by the informant. The dispute is purely of civil nature.
There is no evidence to draw the inference of transactions alleged by the
informant which should be in the form of documents. He relied on the
observations of the Sessions Court in an order granting anticipatory bail
to the applicants and submitted that those observations may not be
binding on this court, but crux/matrix of the matter is still intact as the
allegations purely constitutes civil transactions and basic ingredients of
offence of cheating, etc. are not satisfied. The Ld. Advocate also relied on
certain documents particularly the orders of MahaRERA and several
judgments of Supreme Court, discussed in later part of this order with
their respective relevance and prayed for discharge of the applicants.
7. In reply Ld. A.P.P. and Ld. Advocate for the informant relied on
their respective objections and submitted that allegations are serious and
there is enough evidence on record to support the prosecution case. On
the basis of such evidence charge can be framed as the material can not
be marshaled in detail at this stage. About the status of the informant as
third person to the cause of action, they submitted that anyone can set
criminal law in motion. The delay is not relevant in view of the
seriousness of the offence and punishment provided for it. They also
relied on certain judgments, wherein it is observed that evidence can not
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be marshaled in detail at the stage of framing of charge. Describing
limitations to exercise jurisdiction under Section 239 of Code of Criminal
Procedure, it is submitted that the trial needs to be faced by applicants.
Law pertaining to discharge of accused
8. Before proceeding further with the order it is necessary to bear
upon the relevant provision and the law developed on the point of
discharge. Section 239 of Code of Criminal Procedure, runs as follows -
Section 239 - If upon considering the police report and the documents sent
with it under Section 173 and making such examination, if any, of the accused as
the Magistrate thinks necessary and after giving the prosecution and the accused an
opportunity being heard, the Magistrate considers the charge against the accused to
be groundless, he shall discharge the accused, and record his reasons for doing so.
The basic requirements gathered from this provision, are that, First,
if upon considering the material produced before Magistrate, Second, if
Magistrate thinks charge to be groundless, he shall discharge the accused
and shall also record reasons for doing so. Third, further, Magistrate must
hear the prosecution before passing such order.
9. This provision is now discussed and interpreted by Supreme Court
itself, in it’s several judgments and the principles of law for discharge of
accused from the prosecution, are now settled across years. Considering
the above statutory provision and precedential law developed, Supreme
Court, recently in the case of Vikramjit Kakati Vs State of Asam (2022 SCC
OnLine 967), carved out certain basic legal principles to consider the plea
of discharge, as follows -
Para. 10. Before we proceed to examine the matter on merits any further, it will be apposite
to take note of the legal principles applicable seeking discharge, for which we may refer to a
judgment of this Court in P. Vijayan v. State of Kerala & Another, which has been further
reiterated by this Court in the recent judgment in M.E. Shivalingamurthy v. Central Bureau
of Investigation, Bengaluru and discerned the following principles:
“17.1. If two views are possible and one of them gives rise to suspicion only as distinguished
from grave suspicion, the trial Judge would be empowered to discharge the accused.
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17.2. The trial Judge is not a mere post office to frame the charge at the
instance of the prosecution.
17.3. The Judge has merely to sift the evidence in order to find out whether or not there is
sufficient ground for proceeding. Evidence would consist of the statements recorded by the
police or the documents produced before the Court.
17.4. If the evidence, which the Prosecutor proposes to adduce to prove the guilt of the
accused, even if fully accepted before it is challenged in cross-examination or rebutted by the
defence evidence, if any, “cannot show that the accused committed offence, then, there will
be no sufficient ground for proceeding with the trial”.
17.5. It is open to the accused to explain away the materials giving rise to the grave
suspicion.
17.6. The court has to consider the broad probabilities, the total effect of the evidence and
the documents produced before the court, any basic infirmities appearing in the case and so
on. This, however, would not entitle the court to make a roving inquiry into the pros and
cons.
17.7. At the time of framing of the charges, the probative value of the material on record
cannot be gone into, and the material brought on record by the prosecution, has to be
accepted as true.
17.8. There must exist some materials for entertaining the strong suspicion which can form
the basis for drawing up a charge and refusing to discharge the accused.”
10. Again recently in another judgment of State of Tamil Nadu Vs S.
Saundirarasu and ors. ((2023) 6 SCC 768), Supreme Court further elaborated
the importance of the stage of the framing of charge and role to be played
by court while performing said duty. It is laid down by Supreme Court
that court should evaluate the prima facie evidence and must come to the
logical conclusion that there are grounds exists for framing of charge. It
observed that -
Para.61. Section 239 envisages a careful and objective consideration of the question whether
the charge against the accused is groundless or whether there is ground for presume that he
has committed an offence. What Section 239 prescribed is not, therefore, an empty or
routine formality. It is a valuable provision to the advantage of the accused, and its breach is
not permissible under law. But if the Judge, upon considering the record, including the
examination, if any, and the hearing, is of the opinion that there is “ground for presuming”
that accused has committed the offence triable under the Chapter, he is required by Section
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240 to frame in writing a charge against the accused. The order for the framing of charge is
also not an empty or routine formality. It is of a far-reaching nature, and it amounts to a
decision that the accused is not entitled to discharge under Section 239, that there is, on the
other hand, ground for presuming that he has committed an offence triable under Chapter
XIX and that he should be called upon to plead guilty to it and be convicted and sentenced
on that plea, or face the trial. (See : V. C. Shukla Vs State, 1980 Supp SCC 92).
Para.62. Section 239 of Cr.P.C. lays down that if the Magistrate considers the charge against
the accused to be groundless, he shall discharge the accused. The word “groundless”, in our
opinion, means that there must be no ground for presuming that the accused has committed
the offence. The word “groundless” used in Section 239 of Cr.P.C. means that the material
placed before the court do not make out or are not sufficient to make out a prima facie case
against the accused.
11. The guidelines or principles laid down in above cases, can be
summarized in a sense that the framing of charge is not mere empty or
routine formality. Court is not mere post office to frame the charge fo
prosecution. While doing so court must sift evidence and found material
constituting grounds for presuming that accused has committed offence.
While sifting such material, court should come to logical conclusion that
give rise to grave suspicion against accused persons that they had
committed offence. While drawing such inference court must apply test
that if such material is accepted by accused as it is before challenging it in
cross examination or rebutting it in defence evidence, it’s probative value
is such that no conviction is warranted, then accused can be discharged.
12. Now this test needs to be applied to present matter and it needs to
be scrutinized whether applicants can be discharged or not?
The basic ingredient Dishonest intention, is missing in evidence produced
13. The gist/crux of the contents of basic allegations are described in
opening paragraph of this order. If those allegations summarized, it
reflects that as per informant, he came into contact with applicants
through their common friend. Applicants informed about their proposed
construction of building and possible profits. Then informant persuaded
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his close relative and another friend to purchase two flats in it for certain
amount. Initially the amount of Rs.70 lacs by way of cheques and an
amount of Rs.2.30 crores was paid in cash to the applicants. But
applicants not honored contract despite repeated and continuous
pursuance.
14. On the basis of these averments the crime for the offences of
criminal breach of trust and cheating, besides offences punishable under
MOFA was registered. Thus, though nothing gathered from the contents
of the First Information Report or material produced, the charge sheet
was filed in respect of offence of criminal breach of trust and cheating
punishable under Sections 406 and 420 of Indian Penal Code,
respectively.
No offences of criminal breach of trust made out
15. There mentioned nothing in First Information Report, about the
dishonest intention either before or after the transaction, on the part of
applicants. It simply describes the case of failure of promises on their
part. To constitute either of the offences i.e. criminal breach of trust or
cheating, the basic constituent ingredient is dishonest intention on the part
of accused, accrued respectively after the transaction or before the
transaction, is missing in the First Information Report and the remaining
material collected during investigation after it’s registration.
16. Whole charge sheet i.e. evidence collected subsequent to the
registration of First Information Report, shows that in support of it’s
contents, the statements of just three witnesses, excluding one of the main
payee Mr. Hyder Lakadawala, were recorded and photocopies of certain
documents of transactions were collected.
17. To attract the punishment for offence of criminal breach of trust
there must be entrustment of property and in violation of terms of
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entrustment the accused must dishonestly misappropriate that property or
convert it to his own use. From the contents of the present First
Information Report, as discussed above it shows that the disputed amount
was paid or entrusted for the purchase of flats voluntarily by the persons
mentioned themselves. However, applicants neither completed
transaction nor refunded the amount. It is just a case of failure of
promises for which amount was entrusted. It is not the case of the
informant that the amount was entrusted for particular purpose and
applicants for their own use dishonestly violated the terms of contract.
The element of dishonest intention is totally missing. As such the offence
of criminal breach of trust not made out.
The offences under Sections 406 and 420 of IPC, can not co-exist
18. There is another legal hindrance in invoking both the punishing
provisions of Section 406 and Section 420 of Indian Penal Code. It is now
settled that both these offences can not co-exist. The offence may be
either under of criminal breach of trust or cheating.
19. The Delhi High Court, in the case of Wolfgang Reim and ors. Vs
State and anr. ((2012) SCC OnLine Delhi 3341), after analyzing the
basic ingredients of both these offences, observed as -
Para. 34. Further, a person cannot be charged with the offence of cheating and criminal
breach of trust simultaneously for the same transaction because for the offence of cheating,
it is a prerequisite that dishonest intention must exist at the inception of any transaction
whereas in case of criminal breach of trust, there must exist a relationship between the
parties whereby one party entrusts another with property as per law, therefore, for
commission of criminal breach of trust, the dishonest intention comes later, i.e, after
obtaining dominion over the property by the accused person whereas for commission of
cheating, dishonest intention of the accused has to be present at the inception of the
transaction.
20. This view was reiterated by Supreme Court, in it’s several
judgments including judgment of Lalit Chaturvedi and ors. Vs State of Uttar
Pradesh and anr. ((2024) SCC OnLine SC 171), and it is observed as follows -
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Para. 10. The chargesheet also refers to Section 406 of the IPC, but without pointing out how
the ingredients of said section are satisfied. No details and particulars are mentioned. There
are decisions which hold that the same act or transaction cannot result in an offence of
cheating and criminal breach of trust simultaneously. For the offence of cheating, dishonest
intention must exist at the inception of the transaction, whereas, in case of criminal breach of
trust there must exist a relationship between the parties whereby one party entrusts another
with the property as per law, albeit dishonest intention comes later. In this case entrustment
is missing, in fact it is not even alleged. It is a case of sale of goods. ………..
21. As charge sheet is filed for both the offences, in view of the above
legal position based on basic ingredients of the offence, the applicants can
not be charged and tried for both the offences. There must be material to
constitute any one of these offences. The invocation of both these
provisions by the prosecution, itself shows that Investigating Officer
himself was in doubt about the exact nature of offence.
22. For the reasons discussed in above paragraphs it is clear that the
transaction is simply a case of agreement of sale of flats and failure of
promises by the applicants. The element of intention to deceive is
missing. If this aspect collectively considered with the confusing or
contradictory charges invoked, it further supports the conclusion that no
offence of criminal breach of trust made out.
The offence of cheating also not made out
23. Regarding the another offence of cheating also the law is now very
much settled. To constitute cheating, the element of deception i.e.
intention to defraud or dishonest intention must exist from very
beginning/inception of the transaction and the allegations constituting
such deception must be specifically averred by the complainant. There are
several judgments on this point.
24. Supreme Court, since long back in the year 2000 itself, in the case
of Hridaya Ranjan Prasad Verma and ors. Vs State of Bihar and anr. ((2000) 4
SCC 168) as follows -
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Para. 11. The question is whether the case of the appellants comes under any of the
categories enumerated in State of Haryana v. Bhajan Lal. Is it a case where the allegations
made in the first information report or the complaint, even if they are taken at their face
value and accepted in entirety do not make out a case against the accused? For
determination of the question it becomes relevant to note the nature of the offences alleged
against the appellants, the ingredients of the offences and the averments made in the
complaint.
12. On a reading of the complaint portions of which have been extracted earlier, it is clear
that the main offence alleged to have been committed by the appellants is 'cheating'
punishable under Section 420 IPC.
13. Cheating is defined in Section 415 of the Code as:
“415. Whoever, by deceiving any person, fraudulently or dishonestly induces the person so
deceived to deliver any property to any person, or to consent that any person shall retain
any property, or intentionally induces the person so deceived to do or omit to do anything
which he would not do or omit if he were not so deceived, and which act or omission causes
or is likely to cause damage or harm to that person in body, mind, reputation or property,
is said to ‘cheat’.
Explanation - A dishonest concealment of facts is a deception within the meaning of this
section.”
The section requires - (1) Deception of any person; (2) (a) Fraudulently or dishonestly
inducing that person (i) to deliver any property to any person, or (ii) to consent that any
person shall retain any property; or (b) intentionally inducing that person to do or omit to
do anything which he would not do or omit if he were not so deceived, and which act or
omission causes or is likely to cause damage or harm to that person in body, mind,
reputation or property.
14. On a reading of the section it is manifest that in the definition there are set forth two
separate classes of acts which the person deceived may be induced to do. In the first place he
may be induced fraudulently or dishonestly to deliver any property to any person. The
second class of acts set forth in the section is the doing or omitting to do anything which the
person deceived would not do or omit to do if he were not so deceived. In the first class of
cases the inducing must be fraudulent or dishonest. In the second class of acts, the inducing
must be intentional but not fraudulent or dishonest.
25. In another judgment of V. Y. Jose and anr. Vs State of Gujarat and anr.,
((2009) 3 SCC 78), Supreme Court clarified the position in detail, follows -
Para. 14. An offence of cheating can not be said to have been made out unless the following
ingredients are satisfied: (i) deception of a person either by making a false or misleading
representation or by other action or omission; (ii) fraudulently or dishonestly inducing any
person to delivery any property; or to consent that any person shall retain any property and
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finally intentionally inducing that person to do or omit to do anything which he would not do
or omit. For the purpose of constituting an offence of cheating, the complainant is required
to show that the accused had fraudulent or dishonest intention at the time of making
promise or representation. Even in a case where allegations are made in regard to failure on
the part 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 can
be said to have been made out.
22. We may reiterate that one of the ingredients of cheating as defined in Section 415 of the
Penal Code is existence of an (sic fraudulent or dishonest) intention of making initial
promise or existence thereof from the very beginning of formation of contract.
24. It is one thing to say that a case has been made out for trial and as such the criminal
proceedings should not be quashed but it is another thing to say that a person should
undergo a criminal trial despite the fact that no case has been made out at all.
29. An offence of cheating may consist of two classes of cases :
(1) Where the complainant has been induced fraudulently or dishonestly. Such is not the
case here; (2) When by reason of such deception, the complainant has not done or omitted
to do anything which he would not do or omit to do if he was not deceived or induced by
the accused.
26. Thus, two basic requirements to attract the offence of cheating
which must be satisfied, are that the dishonest intention must exist from
very inception/beginning of the transaction and the complainant must
aver/plead specific facts leading to inference that such basic ingredient of
offence i.e. dishonest intention can be inferred from such averments.
27. At the cost of repetition, if we go through the contents of or
averments made in first information report, as stated above, it is alleged
that informant came into contact with applicants through their common
friend. Applicants informed about their proposed construction of building
and possible profits. Then informant persuaded his close relative and
another friend to purchase two flats in it for certain amount. Initially the
amount of Rs.70 lacs by way of cheques and an amount of Rs.2.30 crores
in cash was paid to the applicants. But they had not completed the
transaction.
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28. The whole set of facts constituting allegations narrated in the First
Information Report, shows that there mentioned nothing on the basis of
which the dishonest intention can be gathered. The facts averred shows
that simple contract of sale was entered into, between third persons and
applicants. However, the transaction was failed on account of failure on
the part of applicants to honour it’s terms. The mens rea i.e. intention to
defraud is totally missing.
29. Surprisingly it is noticed that in the First Information Report, about
the initial amount of Rs.70,00,000/- it is mentioned that it was paid by
Mrs. Kawale and Mr. Lakadawala, through their bank accounts by issuing
cheques. But about the remaining main chunk of the amount it is nowhere
mentioned that who had paid those amounts. Interestingly, the statements
of the witnesses are also silent on this point. It is also noticed that in the
First Information Report, the amounts and details of payment made are
mentioned by the informant, who has played no role except mediator and
has no interest in the matter. The statement of one of the main witness,
who paid substantial part of the amount, Mr. Hyder Lakadawala, has not
been recorded by the Investigating Officer and is not on record. All these
aspects also lead to inference that the transactions are purely of civil
nature and no offence transpired on the basis of allegations. By no stretch
of imagination those can be said to be cheating as the element of
dishonest intention is missing from the whole record.
30. In view of background facts alleged in the First Information
Report, after commencement of investigation it is expected that the
Investigating Agency should collect evidence to come to proper
conclusion. The evidence must be collected during investigation to
remove this basic defect. However, if we go through the whole charge
sheet i.e. evidence collected subsequent to the registration of First
Information Report, it shows that in support of the contents of First
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Information Report, Investigating Officer just recorded statements of
three witnesses, i.e. statement of Mr. Kishor Dattaram Kawale, his wife
Mrs. Vibhawari Kishor Kawale, and a third person Mr. Ranjeev Mohan
Zangiyani, and produced on record the copies of documents pertaining to
disputed transaction.
31. The record reflects that though the disputed stake involved is very
high investigation is done in a very casual manner, without taking into
consideration the basic ingredients of the offences and evidence to prove
the charge in respect of those offences. Surprisingly even the statement of
one of the main payee Mr. Hyder Lakadawala, who paid main part of the
disputed amount, was also not recorded by the Investigating Officer.
Except recording statements of three witnesses mentioned above and
collecting photocopies of certain documents pertaining to transactions
Investigating Officer took no pain to remove the above mentioned basic
defect. It is also necessary to mention that these three witnesses,
mentioned above, reproduced the contents of First Information Report, as
it is, in their statements/evidence recorded by Investigating Officer. In
those statements also, the basic ingredients of offence are missing.
32. From the above discussed various legal and factual aspects of the
matter it is clear that the basic requirements to constitute offence of
cheating that dishonest intention from very inception of the transaction on
the basis of averments to that effect are missing from the matter. As such
from the above discussion, it can be inferred, without any doubt that no
offence of cheating punishable under Section 420 of I.P.C. also made out.
The offences under MOFA, also does not survive
33. In view of above conclusions, it needs to be seen whether offences
punishable under Sections 3 and 5 r/w.13(1), (2) and (3), of MOFA, are
made out?
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33A. Status of informant
34. One of the main ground on which discharge is sought is that the
informant is not competent to lodge the First Information Report, as he
has neither authorized to initiate the prosecution nor he is aggrieved
person/victim of alleged cheating. In reply it is submitted that anyone can
set criminal law into motion. This analogy perhaps can be applied to
invocation of offences punishable under Indian Penal Code, which covers
general offenses, however, it can not be applied to special statute i.e.
MOFA, where the victims/aggrieved persons are particular persons who
entered into specific nature of transactions with the promoters for
purchase of flats/blocks in the apartment to be constructed by promoter
having special knowledge of facts of the matter. Thus, transaction is a
private transaction leading to accrue a private cause of action in favour of
such persons only.
35. The penal statutes needs to be interpreted strictly. There is no scope
for liberal interpretation. Third person not directly connected with the
transaction having no knowledge of it can not invoke any provisions and
that too penal provisions of MOFA. In the present matter admittedly, the
informant, is a third person who played no role except mediator. He is not
directly connected with the main transaction, in such a way that he will
accrue any special knowledge of transaction and such transaction will
confer any right to invoke prosecution on it’s basis.
36. Thus, the informant is a third person. He is pursuing the cause for
the other persons and he is having no interest in the matter. The evidence
about the main transaction of payment and other acts, has not brought on
record through main victims. As such the informant has no locus standi to
prosecute the cause. As such the very prosecution under the provisions of
MOFA, is vitiated and can not be allowed to proceed further. Allowing
such prosecution is nothing but abuse of process of law as informant is
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neither aggrieved person nor having special knowledge of facts
constituting offence. He has no right to prosecute the applicants for the
claim of others under MOFA.
33B. Absence of Evidence
37. Let us consider the situation in the alternative. If it is presumed that
informant is competent to lodge the report under MOFA and prosecute
the applicants, despite that prosecution fails. It is so because, as observed
above the investigation done after the registration of offence, has been
done in very casual manner. There is no evidence on record collected by
the Investigating Officer, he has not even recorded the statement of one of
the main victim who has paid main chunk of the disputed amount.
38. The informant is a third person having no special knowledge of
facts. His evidence seems inadmissible. After going through the First
Information Report, minutely, it is noticed that about the initial amount of
Rs.70,00,000/- it is mentioned that it was paid by Mrs. Kawale and Mr.
Lakadawala, through their bank accounts by issuing cheques. But about
the remaining main chunk of the amount of Rs.2,30,00,000/-, it is
nowhere mentioned that who had paid those amounts. The statements of
the witnesses are also silent on this point. Thus, so far as prosecution
under MOFA is concerned, there is no direct evidence on record to
prosecute the applicants. The various aspects also discussed in reasoning
about status of the informant, Para. Nos.34 to 36, of this order. As such,
the situation, even if, considered in the alternative, that informant can
initiate the prosecution, it can not be said on the basis of evidence
collected accused can be convicted, even if, the said evidence is admitted
by applicants, as it is.
33C. Certain other aspects suppressed in investigation
39. In addition to it, it is also necessary to mention certain admitted
facts having strong bearing on the fate of the matter, which are pleaded
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and relied by applicants and are also noticed by this court. It is contended
that both the purchasers approached MahaRERA, for ventilation of their
grievances against the applicants. Their claims however, were rejected by
the said competent authority by it’s order dated 27.10.2021, passed in
Complaint No.CC006000000171796. The copy of the said order is
produced with the charge sheet at Page Nos.650 to 659 of it.
40. In the said order it is observed that no relief as per Section 13 of
MahaRERA can be granted for want of privity of contract as both the
persons who allegedly paid amounts to the applicants are not buyers
defined as an allottee under Section 2(g) of RERA. Those observations
are made on the basis of the fact that both the buyers not executed any
agreement with the applicants. The minutes of proceeding about the
meeting of purchase of flat was done and entered into by informant who
is not party to the transaction. The provisions of MahaRERA are not
applicable as transactions are of prior period, to which MahaRERA can
not be applied retrospectively and are covered by MOFA. The required
part of consideration amount towards purchase of flat to be paid to
promoter, is not paid and the claim is barred by limitation. The said order
is also maintained in the appeal. It is also observed in the said order that
proper remedy is before civil court.
41. Thus, the informant approached MahaRERA on behalf of
purchasers. He himself entered into all transactions on their behalf with
the promoter/applicants. This fact supports the observations made in
preceding Para. No.29, wherein it is observed that the informant can not
prosecute the claim on behalf of purchasers. The same analogy is
applicable to the present matter as well, as the MOFA and RERA are
special statutes, complementary to each other, came into force one after
another. As such for this reason also, no offence under MOFA, under
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42. In this respect, last but not least it is also necessary to mention that,
as the principle offences punishable under provisions of Indian Penal
Code, not made out, these supplementary offences also can not be carved
out and tried because one of the basic ingredient of these supplementary
offences, as per Section 13 of MOFA, is also criminal breach of trust in
respect of amount paid to promoter is missing. As observed above
paragraphs the said offence of criminal breach of trust not made out.
Therefore, punishing provisions of MOFA also can not be said to be
made out.
Other important aspects, having strong bearing on the above findings
43. Though there are certain limitations to consider or appreciate the
evidence at this very initial stage of framing of charge, certain important
aspect having strong bearing on the above findings needs some additional
discussion as none of the offence for which charge sheet has been filed,
has been transpired. This discussion is necessary as the court is not mere
post office to frame the charge for prosecution. Framing of charge is not
mere formality, rather it is serious duty to be performed with due
diligence and required sifting of evidence to draw the inference of
reasonable grounds to frame charge.
44. The aspects pertaining to following basic deficiencies if
collectively read with above conclusions that none of the offences
transpired the following aspects also falsifies the case of the prosecution
and negates the possibility of conviction, as other basic deficiencies
noticed by this court going to the root of the matter, which are supporting
the above conclusions. These deficiencies are as follows -
i. In the First Information Report, about the initial amount of Rs.70,00,000/- it is
mentioned that it was paid by Mrs. Kawale and Mr. Lakadawala, through their bank
accounts by issuing cheques. But about the main chunk of the amount it is nowhere
mentioned that who had paid those amounts. Interestingly, the First Information
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Report and the statements of the witnesses are silent on this point. It appears that it is
done with deliberate intention to suppress certain material aspects.
ii. The informant, who played no role except of mediator, is pursuing the cause for the
other persons, having no interest in the matter. This fact is against the prudence of
common man. No doubt anyone can set criminal law into motion. But this principle
law is having some logical basis. It can not be stretched beyond the prudence of
human being. As stated above, except the role of mediator informant has nothing to do
with the matter. It is difficult to believe in today’s busy and hectic world that the
people will pursue the cause of others without having any or at least a least reasonable
interest in it.
iii. In respect of main chunk of the amount of Rs.2,30,00,000/- allegedly paid in the
cash to the applicants, it is contended that out of the said amount Rs.80 lacs were paid
on 31.06.2010, at the office of Sankalp Developers. However, no such a date comes in
calender year. The judicial notice of this fact needs to be taken without formal proof
of it. It creates doubt about the whole payment allegedly made in cash.
iv. Further, it is also necessary to mention that the dispute started since long back in
the year 2010, itself. The persons who paid amounts approached MahaRERA and
filed Complaint No. CC006000000171796, before it. The final order in this matter
was passed on 27.10.2021. In the said complaint, it is mentioned that these persons
had paid total amount of Rs.70 lacs only. Both these purchasers remained silent and
pleaded nothing in this matter about the main chunk of the amount of Rs.2,30,00,000/-
allegedly paid in the cash by them to the applicants. This is a basic flaw in the
prosecution case. The judicial notice of the order in this regard can also be taken
without need of formal proof and as such it can be inferred that no such amount has
been paid to the applicants.
v. It is contended by the applicants that there is delay in the lodging of report and the
false report is filed to extract money from them as proceedings before RERA failed.
vi. The Investigating Officer has not recorded the statement of the main witness who
has paid large portion of the disputed amount. The record reflects that he came in no
contact either with the informant or the Investigating Officer. Then question arises
how the informant came in possession with the disputed receipts of payments made to
applicants? This aspect also creates doubt about the very nature of allegations.
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vii. The factor of unexplained delay and these factual aspects if collectively
considered, this supports, the conclusions drew above and leads to inference that
though no case was made out, the informant to pressurize the applicants and to
enforce the liability of payment of money made to applicants manipulated the facts
and it seems that he lodged false report.
45. The summary of the above discussion is that the whole prosecution
case even if accepted by applicants no offence made out as dispute is
purely of civil nature. Further, if this fact of basic nature of the dispute
taken into account with the deficiencies discussed in preceding
paragraphs, these goes to the root of the matter and leads to mandatory
inference that there is no point in prosecuting the applicants. They can not
be compelled to face the ordeal of trial for want of reasonable grounds to
proceed further as mandated by Section 239 of Code of Criminal
Procedure. They needs to be discharged. Accordingly, following order -
ORDER
Applications, Exhs.10 to 13, are allowed. Further order passed
below, Exh.1.
MUMBAI (KOMALSING RAJPUT)
DATE – 05.12.2024 J.M.F.C., 12TH COURT, BANDRA, MUMBAI
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