शुद्ध सिविल विवाद पर आपराधिक छाया: सुप्रीम कोर्ट ने GPA धारक के विरुद्ध FIR रद्द की

Supreme Court: In a case concerning the alleged criminalisation of a purely civil dispute arising out of a sale of land, a Division Bench of Satish Chandra Sharma* and Nongmeikapam Kotiswar Singh, JJ., held that the criminal proceedings against the petitioner, a general-power-of-attorney (GPA) holder and confirming party to the subsequent sale, could not be sustained when the FIR against the landowners had already been quashed. Emphasising that the foundational ingredients of cheating were absent and that the petitioner’s culpability could not be stretched beyond that of the landowners, the Court observed that the case was a classic instance of “casting the shadow of criminality on a pure civil dispute” and reiterated the principle of judicial consistency and propriety in quashing the FIR against the petitioner as well.

Background

The case arises out of a dispute concerning land bearing Survey No. 115, admeasuring 4 acres 19 guntas, situated at Channasandra Village, Karnataka. After the death of G, the land devolved upon his wife and other legal heirs (landowners), who entered into an agreement for sale dated 5 October 2012 in favour of the petitioner and also executed a GPA inplaintiff’s favour. Acting through the petitioner as GPA holder, the landowners thereafter entered into another agreement for sale dated 19 November 2012 with Respondent 2 and KS (prospective buyers). Under the said agreement, the prospective buyers were required to pay the balance sale consideration and execute the sale deed within 7 months, but they failed to do so. Even thereafter, the petitioner and the landowners waited till the expiry of the limitation period for seeking specific performance and ultimately sold the subject land to GB by sale deed dated 11 February 2016. Thereafter, the prospective buyers instituted a civil suit for specific performance and also lodged a criminal complaint, resulting in registration of FIR No. 121/2016 under Sections 420, 423, 120-B read with Section 34, Penal Code, 1860 (IPC) against the petitioner and the landowners. The High Court subsequently quashed the FIR qua the landowners, but dismissed the petitioner’s quashing petition on merits. Aggrieved thereby, the petitioner approached the Supreme Court contending that the dispute was purely civil in nature and that the petitioner was similarly placed with the landowners, being merely a GPA holder and confirming party in the subsequent sale. The respondents, on the other hand, alleged that the petitioner was a principal actor, had received the sale consideration, and that the subsequent sale was effected by concealing the pre-existing agreement in favour of the prospective buyers.

Analysis

The Court held that the High Court had fallen into grave error in distinguishing the petitioner’s case from that of the landowners. The FIR alleged criminality against both the landowners and the petitioner on the basis of the execution of the sale deed, which was executed by the landowners themselves, while the petitioner was only a confirming party. Since no criminality could be attributed to the landowners by virtue of the execution of the sale deed, the same could not be sustained against the petitioner, there being no aggravated role attributable. The fact that the sale consideration was physically received by the petitioner did not place him on a different pedestal, as the consideration was received collectively on behalf of the landowners and the petitioner. Likewise, the agreement dated 19 November 2012 was executed by the petitioner as power-of-attorney (PoA) holder on behalf of the landowners, with no allegation that the petitioner had acted in violation of the authority conferred upon him or by keeping the landowners in the dark.

The Court further held that the property being sold at a lesser price was a speculative circumstance and could not be treated as an incriminating circumstance against the petitioner, particularly when the landowners themselves were not incriminated on that basis. The High Court also erred in raising a hypothetical question as to whether the sale consideration had been transmitted by the petitioner to the landowners, when there was no allegation of misappropriation by the landowners against the petitioner.

The Court further observed that the foundational ingredient of the offence of cheating was absent. The amount paid by Respondent 2 under the agreement dated 19 November 2012 was not delivered on the basis of any deception, as the property could legitimately have been transferred in petitioner’s favour at that point of time. The subsequent sale took place almost 4 years later. Section 423 IPC was also held to be mis-invoked, as there was no false statement as to consideration in the agreement or sale deed. The Court characterised the case as a classic instance of “casting the shadow of criminality on a pure civil dispute”. It reiterated that the petitioner’s culpability could not be stretched beyond that of the landowners and that the High Court ought to have adhered to the principle of judicial consistency and propriety.

Decision

The Court accordingly allowed the petition and set aside the impugned judgment dated 19 September 2022 passed by the Karnataka High Court. Consequently, the proceedings arising out of FIR/Crime No. 121/2016 registered at PS Kadugodi, along with all consequential proceedings, were quashed. The Court held that there was no reason to deprive the petitioner of the same relief which had already been granted to the landowners.

The Court clarified that it was not expressing any view on the merits of the civil suit for specific performance, which was for the civil court to decide.

[Sudha Rakesh v. State of Karnataka, 2026 SCC OnLine SC 2062, decided on 5-10-2026]

*Judgment authored by: Satish Chandra Sharma

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