Later cancellation of a development agreement does not warrant quashing prosecution for prior alleged cheating.

The petitioners, accused Nos. 4–6, were landowners who had entered into a joint development agreement and executed a power of attorney in favour of a developer, followed by an addendum.

The developer later assigned the development work to another company.

The complainant alleged that his daughter paid instalments towards a proposed apartment after seeing the project’s advertisement and receiving a welcome letter and demand for further payment, but construction did not proceed and the company’s site office closed.

The petitioners maintained that they had neither received the complainant’s payments nor dealt with him, and that they terminated the development arrangements in 2012 after the developer’s alleged breach.

After investigation, a charge sheet was filed against the petitioners and others. The petitioners sought to quash the proceedings under Section 482 of the Code of Criminal Procedure.

1. Whether the criminal proceedings against the petitioners should be quashed because they did not directly receive the complainant’s money and had no direct contractual relationship with him.

2. Whether the petitioners’ later termination of the development arrangements, and their dispute with the developer, warranted quashing the proceedings concerning payments made before termination.

The petition invoked the High Court’s inherent jurisdiction under Section 482 of the Code of Criminal Procedure to quash the proceedings. The case concerned allegations of offences under Sections 406 and 420 of the Indian Penal Code; the petition also referred to Section 120-B read with Section 149 IPC.

The Court’s reasoning applied the principle that disputed questions— including whether the accused shared an intention to cheat, whether there was a conspiracy, and the effect of the parties’ competing claims—could be considered at trial rather than determined in the quashing petition.

The judgment cited no precedent.

The Court noted that the petitioners’ development agreement, power of attorney and addendum were undisputed, and that the complainant’s payments were made while those arrangements remained in force, before the petitioners’ termination notices in February 2012.

The alleged payments, project representations and subsequent failure to proceed with construction were sufficient, in the Court’s view, for the prosecution to continue.

The absence of direct payment to the petitioners and the asserted lack of contractual privity were matters for trial, as were the questions of conspiracy and intent at the time money was collected.

The later termination and the petitioners’ separate case against the developer did not, at this stage, displace the complainant’s allegations.

It dismissed the criminal petition; the proceedings in C.C. No. 8921 of 2019 were not quashed.