Karnataka High Court refers alleged ₹30 lakh cash payment in property dispute to Income Tax Commissioner for inquiry

Respondent No. 2 alleged that he agreed to purchase sites from the petitioner and paid amounts towards the transactions, including ₹14,80,000 by RTGS and a disputed ₹30,00,000 in cash.

He further alleged that, when he sought execution of sale deeds, the petitioner and others assaulted and threatened him and forcibly took cheques from him.

The petitioner denied the allegations and asserted that the amounts had been repaid in cash.

After the complaint was lodged, police registered Crime No. 117/2025 under Sections 318(4), 316(2), 351(2), 352, 115(2), 126(2) and 3(5) of the Bharatiya Nyaya Sanhita, 2023.

Respondent No. 2 also filed a suit for specific performance.

The petitioner sought quashing of the FIR under Section 482 CrPC, stated in the petition to be filed under Section 528 BNSS.

Whether the FIR should be quashed where the dispute arose from sale agreements and the parties gave conflicting accounts of payment and repayment.

Whether the allegations of assault, intimidation and forcibly taking cheques required investigation notwithstanding the pending civil dispute.

The petition invoked the High Court’s inherent jurisdiction under Section 482 CrPC (identified in the filing as Section 528 BNSS) to seek quashing of the FIR.

The Court applied the principle that, at the quashing stage, it should not conduct a mini-trial or resolve disputed questions of fact; allegations requiring factual investigation should not be rejected merely because a civil dispute also exists.

The offences alleged were under Sections 318(4), 316(2), 351(2), 352, 115(2), 126(2) and 3(5) of the BNS.

The Court also referred to The Correspondence, RBANMS Educational Institution v. B. Gunashekar & Anr., 2025 INSC 490, as the basis for referring the matter for an Income Tax Department enquiry.

The Court treated the sale transactions and the competing claims about payment and repayment as disputed questions of fact that could not be conclusively determined on the quashing petition.

The separate allegations that the petitioner assaulted and threatened respondent No. 2 and that cheques were forcibly taken gave the dispute a criminal dimension and required investigation; the pending specific-performance suit did not establish that the complaint was false.

As the allegations were not shown to be inherently improbable and the Court could not determine the rival versions at this stage, it declined to quash the FIR.

It also referred the matter to the Chief Commissioner of Income Tax, Bengaluru Division, for an enquiry, and directed the Registrar (Judicial) to forward a copy of the order and the entire file to the Chief Commissioner, Income Tax Department, Karnataka region.