Legal Implications of Quashing FIR and Charge Sheet in Property Dispute

The case of Anand Kumar Mohatta and Anr. vs. State (Govt. of NCT of Delhi) Department of Home and Anr. highlights the complexities of criminal cases arising out of civil disputes. This judgment focuses on whether the allegations constituted a criminal breach of trust under Section 406 of the Indian Penal Code (IPC).

The appellants had entered into a property development agreement with the respondent company in 1993. Due to regulatory changes prohibiting high-rise constructions in Lutyens Bungalow Zone, the agreement could not be executed. The respondent later filed a complaint alleging fraudulent transfer of property and misappropriation of Rs. One Crore by the appellants, leading to an FIR and subsequent charge sheet.

Arguments by the Petitioner

The petitioner argued that the dispute was of a civil nature and did not warrant criminal charges. The agreement itself specified conditions under which the deposit would be refunded. Since the contractual conditions for refund had not materialized, there was no case of criminal breach of trust. The petitioners contended that the FIR was filed with malafide intent to pressurize them into accepting unfavorable terms.

Arguments by the Respondent

The respondent contended that the appellant had fraudulently transferred the property to his wife to avoid fulfilling contractual obligations. The retention of Rs. One Crore was termed as criminal misappropriation.

Judgment by the Court

The Supreme Court quashed the FIR and charge sheet, holding that:

• The allegations primarily raised a civil dispute and could not constitute an offense under Section 406 IPC.
• The FIR, filed 21 years after the agreement, was intended to harass the appellants.
• The complainant had not pursued civil remedies for recovery of Rs. One Crore, indicating an attempt to misuse criminal proceedings.

The court reiterated that criminal law should not be used to settle civil disputes and quashed the FIR and charge sheet against the appellants.

Petitioner Name: Anand Kumar Mohatta and Anr..
Respondent Name: State (Govt. of NCT of Delhi) Department of Home and Anr..
Judgment By: Justice S.A. Bobde, Justice L. Nageswara Rao.
Place Of Incident: New Delhi.
Judgment Date: 15-11-2018.

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