Gujarat HC Quashes Land-Sale Cheating FIR Against One Applicant, Citing Acre-Versus-Bigha Price Dispute Pending In Civil Court

The complainant alleged that he and his partner agreed to purchase agricultural land in Sapa village through the applicants and other brokers.

After paying a token amount and further part-consideration totalling Rs.32,63,109, the complainant alleged that the landowners failed to execute the registered sale deed, threatened him, and entered into subsequent agreements with third parties.

The complainant had filed a civil suit for specific performance in 2012; the FIR was registered in 2015 for offences under Sections 406, 420, 467, 468, 471, 120B, 34 and 114 IPC.

The High Court noted that the application had abated as to the other applicants and considered it only as to applicant No. 4.

The Court exercised its inherent jurisdiction under Section 482 of the Code of Criminal Procedure, 1973, to prevent abuse of process and secure the ends of justice.

Relying on Indian Oil Corpn. v. NEPC India Ltd., (2006) 6 SCC 736, it stated that criminal proceedings should not be used to pressure parties in disputes that are essentially civil.

For cheating under Section 420 IPC, the Court applied the rule that dishonest or fraudulent intention must exist at the inception of the transaction, relying on Hriday Kumar Das v. State of W.B., (2000) 4 SCC 168, and Uma Shankar Gopalika v. State of Bihar, (2005) 10 SCC 336.

For criminal breach of trust under Sections 405–406 IPC, it required entrustment followed by dishonest misappropriation, relying on Velji Raghavji Patel v. State of Maharashtra, AIR 1965 SC 1433, and Radheyshyam v. State of Rajasthan, 2024 Supreme (SC) 681.

For forgery under Sections 467, 468 and 471 IPC, the Court required the making of a “false document” within Sections 463–464 IPC, relying on Mohammed Ibrahim v. State of Bihar, (2009) 8 SCC 751.

It treated the derivative allegations under Sections 120B, 34 and 114 IPC as not sustainable once the alleged substantive offences were not made out.

The Court considered the dispute to arise from agreements to sell land, with the parties contesting the agreed rate and the performance of the transaction; a suit for specific performance was already pending.

It viewed the FIR, registered years after the civil suit was filed, as an afterthought seeking to give a civil dispute a criminal character.

The sellers’ written statement in the civil suit admitted the agreement and receipt of money, which the Court considered inconsistent with dishonest intention at inception; it also held that advance consideration paid under a sale agreement was not entrusted property.

The alleged subsequent agreements, executed by the applicants in their own names, did not amount to making false documents on the allegations before the Court.

It therefore found that the essential ingredients of the alleged substantive offences were not disclosed and that the related conspiracy and common-intention allegations could not sustain the prosecution.

It clarified that the civil court must decide the pending specific-performance suit independently and uninfluenced by the judgment.