Bombay High Court refuses to quash case alleging builders used forged plans to sell the same flat areas to multiple buyers

The Petitioners sought to quash C.R. No. 5 of 2020, registered at Govandi Police Station, initially under Sections 420, 409 read with 34 IPC and Sections 3–5 of the Maharashtra Ownership Flats Act, 1963 (MOFA); offences under the MPID Act and Sections 465, 467, 468, 471 and 472 IPC were later added.

Respondent No. 2 alleged that, after being shown a plan depicting penthouses on the 11th and 12th floors, he paid ₹3.77 crore towards their purchase; a portion of the area was later carved out and sold to another purchaser as Flat No. 1103.

Other purchasers alleged similar dealings, including the carving out and resale of areas attached to their flats.

The investigating officer was informed by the municipal authority that the plan relied upon had not been issued by the Corporation.

The Petitioners argued that the dispute was contractual and civil, and that the alleged offences were not made out.

The Court permitted the affected purchasers to be heard as victims and dismissed the quashing petition.

Whether the FIR and investigation disclosed a prima facie case for the alleged offences warranting continuation of the criminal proceedings, or whether they should be quashed under Section 482 CrPC and Article 226 of the Constitution.

Whether the civil nature of the underlying transactions, and the pendency of civil or regulatory proceedings, justified quashing the criminal proceedings.

Whether the affected flat purchasers could be heard in the quashing petition as victims.

The Court considered the High Court’s inherent jurisdiction under Section 482 CrPC (now Section 528 BNSS) and its writ jurisdiction under Article 226, which are to be exercised cautiously and in exceptional cases to prevent abuse of process or secure the ends of justice; quashing is not warranted where the allegations and material disclose a prima facie offence.

It applied the categories in State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335, as the framework for determining when criminal proceedings may be quashed.

It also relied on Jagjeet Singh v. Ashish Mishra, (2022) 9 SCC 321, for the victim’s right to be heard in criminal proceedings.

It also relied on Manohar Bhimji Mahale v. State of Maharashtra, 2020 SCC OnLine Bom 368, for the proposition that money paid by flat purchasers may fall within the definition of “deposit” under the MPID Act.

The Court further held that civil and criminal proceedings may proceed on the same facts, provided the material independently discloses a criminal offence.

The Court found that the allegations and record indicated that purchasers had paid substantial sums on the basis of a plan the municipal authority said it had not issued; areas allegedly included in previously allotted flats were subsequently carved out and sold to others, and some sales were made when the relevant floors were not yet sanctioned.

These circumstances, considered at the quashing stage, prima facie supported the allegations of dishonest inducement, double sale, breach of trust and forgery; the Court treated the Petitioners’ explanations as matters for trial rather than grounds to terminate the prosecution.

It rejected the contention that civil or RERA proceedings barred criminal prosecution, and found that the alleged repeated transactions and the municipal authority’s response concerning the plan took the case outside the Bhajan Lal categories for quashing.

The Court also held that the affected purchasers were entitled to be heard as victims.

It dismissed the writ petition, leaving the allegations and the Petitioners’ defences to be determined in the criminal proceedings.