Bombay High Court refuses to quash FIR over alleged forged plans and resale of flat areas to multiple buyers

The petitioners, developers of “Srushti Enclave”, sought to quash an FIR registered under Sections 420, 409 read with Section 34 of the Indian Penal Code, 1860 (IPC), and Sections 3–5 of the Maharashtra Ownership Flats Act, 1963 (MOFA); Sections 3–5 of the Maharashtra Protection of Interest of Depositors Act, 1999 (MPID Act), and IPC offences relating to forgery were later added.

Respondent No. 2 alleged that, after being shown a plan depicting two penthouse flats on the 11th and 12th floors, he paid ₹3.77 crore towards their purchase, but the petitioners did not execute an agreement or deliver possession. He further alleged that part of the area allotted to him was carved out and sold to another purchaser as Flat No. 1103.

Other purchasers alleged similar misrepresentations and resale of areas forming part of flats or terraces already allotted to them; the State reported eight purchasers and aggregate payments of ₹7,39,19,294.

The petitioners characterised the dispute as contractual and sought quashing under Section 482 of the Code of Criminal Procedure, 1973 (CrPC) and Article 226 of the Constitution.

The Court permitted the affected purchasers to be heard as victims.

1. Whether the affected flat purchasers could be heard in the petition to quash the FIR as victims of the alleged offences.

2. Whether the allegations and investigation material disclosed a prima facie case warranting continuation of the criminal proceedings, or whether the FIR should be quashed as a purely civil dispute.

3. Whether the petitioners had established a basis for the High Court to exercise its inherent jurisdiction under Section 482 CrPC and its writ jurisdiction under Article 226.

Section 482 CrPC preserves the High Court’s inherent power to prevent abuse of process and secure the ends of justice; it is exercised sparingly, and quashing is warranted only within the recognised principles in State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335.

The existence of civil proceedings does not, by itself, bar criminal proceedings where the allegations independently disclose criminal offences.

For cheating, the relevant question includes whether dishonest or fraudulent intent existed at the inception; criminal breach of trust requires entrustment, while forgery concerns the making or use of a false document.

The Court also applied Manohar Bhimji Mahale v. State of Maharashtra, 2020 SCC OnLine Bom 368, which held, in its factual context, that money paid by flat purchasers to a financial establishment may fall within the MPID Act’s definition of “deposit”.

Under Jagjeet Singh v. Ashish Mishra, (2022) 9 SCC 321, a victim has a substantive right to be heard in criminal proceedings.

The Court further relied on Padal Venkata Rama Reddy v. Kovvuri Satyanarayana Reddy, (2011) 12 SCC 437, for the principle that the discretionary jurisdiction under Section 482 may be refused where a party has not approached the Court with clean hands.

The Court found that the investigation material prima facie supported the allegation that the plan shown to the purchasers was not issued by the municipal authority, and that the same plan was used in allotments to multiple purchasers.

It also noted that substantial sums had been accepted for flats in floors not then covered by the relevant permissions, and that areas already allotted were allegedly carved out and resold without the original purchasers’ knowledge or consent.

These circumstances, considered together, were sufficient at the quashing stage to support prima facie allegations of dishonest inducement, forgery and criminal breach of trust; the petitioners’ explanations were matters for trial, not grounds to terminate the prosecution at this stage.

The Court rejected the contention that civil or RERA proceedings precluded criminal prosecution, and considered the petitioners’ alleged suppression of prior third-party rights and non-compliance with court undertakings relevant to their claim for discretionary relief.

It dismissed the writ petition and disposed of both intervention applications; the criminal proceedings were not quashed.