Land dispute cloaked as criminal case: Supreme Court imposes ₹10 lakh costs

The Supreme Court on Friday ruled that a land dispute, which is civil in nature, cannot be turned into a criminal case simply to pressurise the other side [Mala Chowdhary vs State of Telangana].

The Bench of Justices Vikram Nath and Sandeep Mehta made the observation while quashing a first information report (FIR) registered in Telangana.

The Court said that the first information report revealed that a dispute involving non-execution of a registered sale deed was given the cloak of a criminal case.

The complainant manipulated and distorted the facts and used influence for getting an FIR registered against the appellants, the Bench said.

“This is a classic case of the complainant misusing the process of police investigation so as to entangle the accused-appellants in a totally false and frivolous prosecution,” the Court observed while also imposing ₹10 lakh as costs on the complainant.

The Court was dealing with an appeal filed by a 70-year-old woman and her daughter from Delhi (appellants) who had been booked by the Telangana police in a cheating case over an oral agreement to sell a plot in Gachibowli.

The charges included Sections 406 and 420 of the IPC, relating to breach of trust and cheating.

The Telangana High Court had declined to quash the FIR prompting the appeal before the Supreme Court.

The apex court said that the case was an abuse of the legal process.

The land transaction, according to the appellants, had fallen through because the buyer didn’t pay the full amount in time. Despite this, they were dragged into a criminal case and the 70-year-old appellant was arrested and kept in custody for eight days, the Court noted.

The complainant, an agent of a real estate firm, had also filed a civil suit seeking specific performance of the deal.

The FIR, however, went further and added allegations of threats, extending the scope to multiple properties, and even suggesting involvement of a third-party neighbour.

The Court took note of these contradictions.

“There is a drastic variance in the complainant’s allegations qua the oral agreement as narrated in the FIR vis-a-vis as set out in the plaint," the court stated.

The Bench said that such inconsistencies undermined the credibility of the criminal case.

The Court stated this was a private contractual dispute at best, and did not contain any of the elements required to attract criminal liability.

"On a bare reading of the FIR, it is clear that a plain and simple dispute involving non-execution of a registered sale deed in terms of so-called oral agreement to sell has been given the cloak of a criminal case by misusing the criminal machinery," the Court said.

It also said that the High Court had failed to apply its mind and its decision was "perfunctory".

"The approach of the High Court in throwing out the quashing petition in such a cursory manner cannot be appreciated," the top court stated.

In view of the above, the FIR and all related proceedings were set aside.

“The FIR and all proceedings sought to be taken in furtherance thereof are declared to be gross abuse of the process of law," the Court held.

The appellants said that they were still willing to return the ₹4.05 crore they had received through bank transactions but the complainant refused and demanded interest.

The two-judge bench rejecting the demand by the complainant outright and proceeded to impose costs of ₹10 lakh and directed that the amount be transferred to the appellants within 30 days.

“Rather than awarding interest to the complainant, it is a fit case wherein the complainant should be penalized with exemplary costs," the Court made it clear.

It also asked the police to provide protection to the appellants whenever they visit Hyderabad to manage their property.

Senior Advocate Vanshaja Shukla along with advocates Divya Jyoti Singh and Vineet Nagar appeared for the petitioners.

Advocates Devina Sehgal, Yatharth Kansal, Tadimalla Bhaskar Gowtham, Ekta Swarup, Abishek S and Sandeep Singh appeared for the respondents.

[Read Judgment]