Summary
Complaints alleged that developers received Rs.9 crore for land already sold and supplied security cheques drawn on an account previously closed. The High Court quashed the proceedings on grounds including contractual novation and parallel civil and cheque remedies. The Supreme Court held that disputed documents, coercion and fraudulent intention required trial, restored the proceedings and left the merits open.
Issues
- Whether the contractual character and parallel remedies justified quashing the alleged cheating and conspiracy complaints.
Held
- A contract’s civil nature does not preclude criminal proceedings where the complaint alleges the elements of cheating or fraud. Filing a recovery suit or a section 138 complaint is not itself a ground to quash those separate allegations. (¶¶ 9, 10)
- The High Court could not reject the disputed agreement schedules merely for lack of pagination or decide at this stage that the later agreement effected novation. Their existence and legal effect, and the alleged coercion surrounding the sale deed, required trial. (¶¶ 7, 9)
- The specific allegations of prior sale of promised land and security cheques drawn on an already closed account warranted examination of fraudulent intent. The Court’s conclusion concerned the propriety of quashing and was not a finding of guilt. (¶¶ 4, 5, 9, 10, 11)
Result
The criminal appeals were allowed and the High Court’s common quashing order set aside. The Trial Court could proceed according to law and determine the complaints on their own merits, uninfluenced by observations confined to these appeals.