Non-payment of land consideration coupled with non-compliance of statutory safeguards for ST land attracts criminal prosecution.

The petitioners filed a petition under Section 482 of the Cr.P.C. to quash FIR No. 1021/2023 for alleged offences under Sections 420 and 120-B of the IPC and Section 3(1)(f) of the SC/ST Act.

The complainant (Respondent No. 2), a member of a Scheduled Tribe, agreed to sell agricultural land to the petitioners.

The transaction was subject to statutory restrictions requiring permission from the Collector, which was granted on 15.05.2019 with a specific payment schedule.

The complainant alleged that the petitioners paid only an initial amount of Rs. 25 lakhs and thereafter used dilatory tactics and a secondary, deviating agreement dated 03.07.2019 to avoid paying the full consideration while obtaining mutation and selling the land to third parties.

The petitioners contended the dispute was purely civil and related to a breach of contract.

1. Whether the allegations in the FIR constitute a purely civil dispute arising from a breach of contract or prima facie disclose criminal offences of cheating and statutory violations under the SC/ST Act.

2. Whether the High Court should exercise its inherent powers under Section 482 Cr.P.C. to quash the proceedings when fraudulent intent is alleged from the inception of the transaction.

The court applied the principles governing Section 482 of the Cr.P.C., stating such powers must be used sparingly and only to prevent abuse of the process of law.

It relied on Hridaya Ranjan Prasad Verma v. State of Bihar and ARCI v. Nimra Cerglass Technics Pvt. Ltd., which distinguish between a mere breach of contract and cheating based on the existence of fraudulent intent at the inception.

The court also noted Dahiben v. Arvindbhai Kalyanji Bhanusali regarding non-payment of consideration.

Avitel Post Studioz Limited v. HSBC PI Holdings (Mauritius) Ltd., which holds that the existence of a civil remedy does not bar criminal prosecution if fraudulent intent is alleged.

The court reasoned that while a mere breach of contract is not criminal, the specific facts of this case indicated a "preconceived design" to deprive a Scheduled Tribe member of his property without full payment.

The court observed that the petitioners prima facie bypassed the mandatory payment schedule prescribed by the Collector’s order, thereby defeating statutory safeguards.

It found that the execution of a subsequent agreement to "adjust" land value, followed by the mutation and sale of plots to third parties without settling the complainant's dues, suggested dishonest inducement and misrepresentation at the outset.

The Court determined that these allegations involve disputed questions of fact that require a trial and cannot be adjudicated in a quashment petition.

Consequently, it is not a fit case for quashment under Section 482 Cr.P.C. The petition was dismissed.