LEGAL ISSUE: Whether a criminal complaint for cheating is maintainable in a property dispute where the complainant is not the purchaser, and the dispute is primarily civil in nature.
CASE TYPE: Criminal Law – Property Dispute
Case Name: Jit Vinayak Arolkar vs. State of Goa & Ors.
[Judgment Date]: January 6, 2025
Introduction
Date of the Judgment: January 6, 2025
Citation: 2025 INSC 31
Judges: Abhay S. Oka, J., Ujjal Bhuyan, J.
Can a criminal case be initiated for a property dispute that is essentially civil in nature? The Supreme Court of India recently addressed this question, focusing on whether a First Information Report (FIR) for cheating can stand when the complainant is not the purchaser of the property and the dispute revolves around ownership rights. The Court, in this case, examined the boundaries between civil and criminal law, particularly concerning property transactions. The judgment was delivered by a bench comprising Justice Abhay S. Oka and Justice Ujjal Bhuyan.
Case Background
The case revolves around a property dispute concerning land in Dhargalim Village, Pernem, Goa, known as “CAPN IVORIL GUERA”, “CAPNIVORIL MOLLY” or “KAPNI VARIL GHERA”. The 4th respondent claimed an undivided share in the property, asserting that he inherited it from his father. On October 16, 2018, the 4th respondent filed twelve civil suits in Goa, seeking a declaration of his ownership. The appellant, Jit Vinayak Arolkar, filed a written statement on September 1, 2020, claiming that the property was originally owned by one Sacarama Sadassiva Natecar. Subsequently, on October 23, 2020, the 4th respondent filed a criminal complaint alleging that the appellant had sold a portion of the property without the consent of all legal heirs. This led to the registration of the impugned FIR. The appellant was granted anticipatory bail on February 10, 2021. Aggrieved, the appellant filed a writ petition before the High Court for quashing the FIR, which was dismissed on March 1, 2023.
Timeline
| Date | Event |
|---|---|
| October 16, 2018 | 4th respondent filed twelve civil suits claiming ownership of the property. |
| September 1, 2020 | Appellant filed a written statement in the civil suits. |
| October 23, 2020 | 4th respondent filed a criminal complaint against the appellant. |
| February 10, 2021 | Appellant was granted anticipatory bail. |
| October 23, 2021 | Appellant filed a writ petition before the High Court for quashing the FIR. |
| March 1, 2023 | High Court dismissed the appellant’s writ petition. |
| January 6, 2025 | Supreme Court sets aside the High Court order and quashes the FIR. |
Arguments
The appellant’s counsel argued that the appellant, as the constituted attorney of Vidhya Natekar and Sanjay Natekar, had the right to sell the property. They contended that the 4th respondent had acknowledged the co-ownership of the vendors in the sale deeds. The appellant pointed out that the complaint was filed more than two years after the civil suits were initiated, indicating a mala fide intention. The appellant relied on the documents from 1928 and 1929 to establish the ownership of Sacarama Sadassiva Natecar, the predecessor of the vendors, and highlighted that the vendors claimed a half share in the property due to the communion of assets regime in Goa. The appellant also emphasized that a public notice was issued on May 10, 2013, inviting objections. The appellant argued that the ingredients of cheating under Section 415 of the Indian Penal Code, 1860 were not met and relied on the cases of R.K. Vijayasarathy and Anr. v Sudha Seetharam and Anr. [(2019) 16 SCC 739] and Mohd. Ibrahim v State of Bihar [(2009) 8 SCC 751].
The 4th respondent’s counsel argued that the appellant had dishonestly misappropriated the property, knowing that the 4th respondent was a co-owner. They stated that the appellant sold the property to third parties. The 4th respondent’s counsel relied on the case of M/s Neeharika Infrastructure Pvt. Ltd. v State of Maharashtra and Ors. [(2021) 19 SCC 401], arguing that the investigation should not be stopped at the initial stage. They also contended that the consideration from the sale deed was transferred to the appellant, not to the Natekar family. They argued that the pendency of civil suits does not prevent criminal proceedings if the conduct amounts to an offense, citing Amit Kapoor v Ramesh Chander and Anr. [(2012) 9 SCC 460].
Submissions
| Appellant’s Submissions | Respondent’s Submissions |
|---|---|
| ✓ Appellant is the constituted attorney of the vendors. | ✓ Appellant tried to misappropriate the property. |
| ✓ 4th respondent accepted co-ownership of vendors. | ✓ Appellant sold the property to third parties. |
| ✓ Complaint filed two years after civil suits. | ✓ Supplementary statement of the 4th respondent was recorded. |
| ✓ Ownership based on documents from 1928 and 1929. | ✓ Investigation could not be carried out due to Covid-19. |
| ✓ Vendors claimed a half share due to communion of assets. | ✓ FIR is not an encyclopedia. |
| ✓ Public notice issued on May 10, 2013. | ✓ Consideration under the sale deed was transferred to the appellant. |
| ✓ Ingredients of cheating under Section 415 of the Indian Penal Code, 1860 are not met. | ✓ Pendency of civil suits is not a ground to quash criminal proceedings. |
| ✓ Registration of FIR was mala fide. | ✓ Opportunity may be granted to the police to complete the investigation. |
Issues Framed by the Supreme Court
The Supreme Court considered the following issues:
- Whether the High Court was correct in dismissing the writ petition filed by the appellant for quashing the impugned FIR.
- Whether the ingredients of the offence of cheating under Section 415 of the Indian Penal Code, 1860 were made out against the appellant.
Treatment of the Issue by the Court
| Issue | Court’s Decision |
|---|---|
| Whether the High Court was correct in dismissing the writ petition filed by the appellant for quashing the impugned FIR. | The Supreme Court held that the High Court was not correct in dismissing the writ petition. The FIR was quashed. |
| Whether the ingredients of the offence of cheating under Section 415 of the Indian Penal Code, 1860 were made out against the appellant. | The Supreme Court found that the ingredients of cheating under Section 415 of the Indian Penal Code, 1860 were not made out against the appellant. |
Authorities
The Court considered the following authorities:
- R.K. Vijayasarathy and Anr. v Sudha Seetharam and Anr. [(2019) 16 SCC 739] – Supreme Court of India.
- Mohd. Ibrahim v State of Bihar [(2009) 8 SCC 751] – Supreme Court of India.
- M/s Neeharika Infrastructure Pvt. Ltd. v State of Maharashtra and Ors. [(2021) 19 SCC 401] – Supreme Court of India.
- Amit Kapoor v Ramesh Chander and Anr. [(2012) 9 SCC 460] – Supreme Court of India.
- Section 415 of the Indian Penal Code, 1860 – Definition of Cheating.
Authorities Considered by the Court
| Authority | How it was used |
|---|---|
| R.K. Vijayasarathy and Anr. v Sudha Seetharam and Anr. [(2019) 16 SCC 739] – Supreme Court of India | Cited by the appellant to argue that the ingredients of cheating were not met. |
| Mohd. Ibrahim v State of Bihar [(2009) 8 SCC 751] – Supreme Court of India | Relied upon to highlight that a sale deed by a person not owning the property does not necessarily constitute cheating, unless the purchaser is defrauded. |
| M/s Neeharika Infrastructure Pvt. Ltd. v State of Maharashtra and Ors. [(2021) 19 SCC 401] – Supreme Court of India | Cited by the respondent to argue against interfering with the investigation at the initial stage. |
| Amit Kapoor v Ramesh Chander and Anr. [(2012) 9 SCC 460] – Supreme Court of India | Cited by the respondent to argue that the pendency of civil suits does not prevent criminal proceedings. |
| Section 415 of the Indian Penal Code, 1860 | The Court analyzed the definition of cheating to determine if the ingredients were met. |
Judgment
How each submission made by the Parties was treated by the Court?
| Party | Submission | Court’s Treatment |
|---|---|---|
| Appellant | Appellant is the constituted attorney of the vendors and had the right to sell the property. | Accepted. The Court noted that the appellant acted as an attorney and the sale deeds transferred the rights of the vendors. |
| Appellant | The 4th respondent accepted co-ownership of the vendors in the sale deeds. | Accepted. The Court acknowledged the 4th respondent’s admission of co-ownership in the complaint. |
| Appellant | Complaint was filed two years after the civil suits, indicating a mala fide intention. | Accepted. The Court noted the delay and the suppression of the fact that civil suits were pending. |
| Appellant | Ingredients of cheating under Section 415 of the Indian Penal Code, 1860 are not met. | Accepted. The Court found that the appellant did not deceive the 4th respondent and the elements of cheating were not satisfied. |
| Respondent | Appellant tried to misappropriate the property. | Rejected. The Court found no evidence of misappropriation that constituted cheating under Section 415 of the Indian Penal Code, 1860. |
| Respondent | Appellant sold the property to third parties. | Acknowledged but found not to be an offense under Section 415 of the Indian Penal Code, 1860 as the complainant was not the purchaser. |
| Respondent | Pendency of civil suits is not a ground to quash criminal proceedings. | Rejected. The Court held that in this case, the criminal proceedings were an abuse of process due to the civil nature of the dispute. |
| Respondent | Opportunity may be granted to the police to complete the investigation. | Rejected. The Court found that the FIR itself did not disclose any offense under Section 415 of the Indian Penal Code, 1860. |
How each authority was viewed by the Court?
- R.K. Vijayasarathy and Anr. v Sudha Seetharam and Anr. [(2019) 16 SCC 739]: The Court agreed with the principle that the ingredients of cheating were not met in the given facts.
- Mohd. Ibrahim v State of Bihar [(2009) 8 SCC 751]: The Court relied on this case to clarify that selling a property not belonging to oneself is not necessarily cheating unless the purchaser is defrauded, and a third party cannot complain of cheating in such a situation.
- M/s Neeharika Infrastructure Pvt. Ltd. v State of Maharashtra and Ors. [(2021) 19 SCC 401]: The Court distinguished this case, stating that it pertains to the initial stage of investigation, which is not applicable here as the FIR itself does not disclose any offense.
- Amit Kapoor v Ramesh Chander and Anr. [(2012) 9 SCC 460]: The Court distinguished this case, stating that in the present matter, the criminal proceedings were an abuse of process due to the primarily civil nature of the dispute.
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the following factors:
The Court emphasized that the dispute was fundamentally civil in nature, revolving around property rights and ownership. The Court noted that the 4th respondent’s complaint was filed two years after the institution of civil suits and suppressed the fact that these suits were pending. The Court found that the ingredients of cheating under Section 415 of the Indian Penal Code, 1860 were not met as the appellant did not deceive the 4th respondent, nor did the appellant purport to transfer the rights of the 4th respondent. The Court also highlighted that the 4th respondent was not the purchaser in the sale deeds and therefore, could not claim to have been cheated by the appellant. The Court deemed that the initiation of criminal proceedings in this context was an abuse of the process of law.
Sentiment Analysis of Reasons Given by Supreme Court
| Reason | Percentage |
|---|---|
| Primarily Civil Dispute | 40% |
| Delay and Suppression of Facts | 30% |
| No Deception or Transfer of Rights | 20% |
| Complainant Not the Purchaser | 10% |
Fact:Law Ratio Analysis
| Category | Percentage |
|---|---|
| Fact | 40% |
| Law | 60% |
Logical Reasoning
Issue: Whether ingredients of cheating under Section 415 of the Indian Penal Code, 1860 are met?
Court considers: Did the appellant deceive the 4th respondent?
Analysis: Appellant did not deceive the 4th respondent, nor did the appellant purport to transfer the rights of the 4th respondent.
Further Analysis: 4th respondent is not the purchaser, hence, cannot claim to be cheated.
Conclusion: Ingredients of cheating not met. Dispute is fundamentally civil.
Decision: FIR quashed.
The Court reasoned that the core issue was a property dispute of a civil nature. The Court observed that the 4th respondent’s complaint was filed two years after the civil suits, which were already pending, and suppressed this fact. The court emphasized that the essential elements of cheating as defined in Section 415 of the Indian Penal Code, 1860 were not satisfied. The Court noted that the appellant had not deceived the 4th respondent, nor had the appellant purported to transfer the 4th respondent’s rights. Furthermore, the Court highlighted that the 4th respondent was not the purchaser in the sale deeds and therefore could not claim to have been defrauded by the appellant. The Court concluded that the criminal proceedings were an abuse of the legal process.
The Court quoted from Mohd. Ibrahim v State of Bihar [(2009) 8 SCC 751]:
“When a sale deed is executed conveying a property claiming ownership thereto, it may be possible for the purchaser under such sale deed to allege that the vendor has cheated him by making a false representation of ownership and fraudulently induced him to part with the sale consideration. But in this case the complaint is not by the purchaser. On the other hand, the purchaser is made a co-accused.”
The Court also stated:
“It is pertinent to note that the purchasers under the sale deeds have not made any grievance about the sale deeds.”
The Court further clarified:
“Taking the complaint as correct, the offence of cheating under Section 415 of IPC was not made out against the appellant. Moreover, the complaint was filed by the 4th respondent for the first time after a time gap of two years from the date of institution of the civil suits.”
Key Takeaways
- ✓ Criminal proceedings for cheating cannot be initiated in a property dispute where the complainant is not the purchaser and the dispute is primarily civil.
- ✓ A delay in filing a criminal complaint after initiating civil suits, while suppressing the existence of those suits, can be seen as an abuse of the process of law.
- ✓ The ingredients of cheating under Section 415 of the Indian Penal Code, 1860 must be strictly met for a criminal complaint to be valid.
- ✓ Courts should be cautious in allowing criminal proceedings to be used as a tool to settle civil disputes.
Directions
The Supreme Court quashed the FIR No.177 of 2020, initially registered with Pernem Police Station, Pernem in the State of Goa, and now transferred to the Special Investigation Team of the Economic Offences Cell, and all proceedings based thereon, only against the appellant. The Court clarified that it has not made any adjudication on the merits of the pending civil dispute between the parties.
Development of Law
The ratio decidendi of this case is that a criminal complaint for cheating under Section 415 of the Indian Penal Code, 1860 is not maintainable in a property dispute where the complainant is not the purchaser and the dispute is primarily civil. This judgment reinforces the principle that criminal law should not be used to settle civil disputes and clarifies the boundaries between civil and criminal jurisdiction in property-related matters. There is no change in the previous position of law, rather the court has reiterated the existing position of law.
Conclusion
In the case of Jit Vinayak Arolkar vs. State of Goa & Ors., the Supreme Court of India quashed the FIR against the appellant, holding that the dispute was primarily civil in nature and that the ingredients of cheating under Section 415 of the Indian Penal Code, 1860 were not met. The Court emphasized that criminal proceedings should not be used to settle civil disputes and that the complainant, who was not the purchaser, could not claim to have been cheated. This judgment reinforces the importance of distinguishing between civil and criminal matters and ensures that criminal law is not misused to settle property disputes.