The Supreme Court of India, in a significant ruling, has quashed a criminal FIR arising from a property dispute, declaring it a “gross abuse of the process of law.” A bench of Justices Vikram Nath and Sandeep Mehta set aside an order of the Telangana High Court and imposed an exemplary cost of ₹10,00,000 on the complainant for entangling the wife and daughter of a retired Army Major General in a “totally false and concocted criminal case.”
The Court was hearing an appeal filed by 70-year-old Mala Choudhary and her daughter, Puttagunta Revathi Choudhary, against a Telangana High Court order dated April 28, 2023. The High Court had dismissed their petition to quash FIR No. 771 of 2020, registered at Gachibowli Police Station for offences under Sections 406 (criminal breach of trust) and 420 (cheating) of the Indian Penal Code, 1860.
Background of the Case
The dispute pertains to a 500-square-yard plot of land in Gachibowli, Telangana, owned by Mrs. Mala Choudhary. According to the appellants, after the demise of Mrs. Choudhary’s husband, Major General PSK Choudhary, they entered into an oral agreement on October 5, 2020, to sell the land to the complainant, respondent No. 2.
The appellants contended that the sale consideration was set at ₹5.75 crore, provided the entire amount was paid by October 7, 2020. The agreement stipulated that the price would escalate to ₹6.50 crore if paid by November 7, 2020, and further to ₹7.50 crore thereafter. The complainant transferred a total of ₹4.05 crore to the appellants’ bank account by November 16, 2020, but failed to pay the remaining amount.
Conversely, the complainant alleged in the FIR lodged on December 14, 2020, that the appellants had agreed to sell the Gachibowli plot and a farmhouse in New Delhi for a total consideration of ₹5 crore. He claimed to have paid ₹75 lakh in cash upfront, in addition to the ₹4.05 crore transferred via banking channels. The FIR further alleged that the appellants, after receiving the money, refused to register the property and issued threats.
Following the FIR, Mrs. Mala Choudhary, despite her age and medical conditions, was arrested on January 13, 2021, and remained in custody for eight days. The appellants subsequently filed a petition under Section 482 of the Code of Criminal Procedure (CrPC) in the Telangana High Court to quash the FIR, which the High Court disposed of without addressing the merits, leading to the present appeal before the Supreme Court.
Arguments of the Parties
Ms. Vanshaja Shukla, counsel for the appellants, argued that the dispute was purely civil in nature and that the complainant, an agent for an influential builder, M/s. Sandhya Constructions & Estates Pvt. Ltd., had misused his influence to initiate a false criminal case. She highlighted that the complainant had already filed a civil suit for specific performance (Original Suit No. 95 of 2021) and that the allegations in the FIR starkly contradicted the pleadings in the suit, particularly regarding the properties involved and the sale consideration. The appellants offered to return the ₹4.05 crore received through banking channels.
Counsel for the complainant and the State of Telangana argued that the appellants had a dishonest intent from the inception and fraudulently induced the complainant to part with the money. They contended that the FIR disclosed the necessary ingredients of the alleged offences and opposed the quashing of the proceedings. They refused the offer to refund the principal amount, demanding interest as well.
Supreme Court’s Analysis and Decision
The Supreme Court heavily criticized the High Court’s handling of the matter, describing its approach as “absolutely laconic and perfunctory” and the order as “cryptic.” The bench observed, “We find the approach of the High Court in casually disposing of the petition filed by the appellants, seeking quashing of the proceedings, without addressing the merits of the matter to be absolutely laconic and perfunctory.”
The Court found that the case was a “classic case” of misusing the criminal justice system for a civil dispute. It noted “drastic variance” between the complainant’s narrative in the FIR and the civil suit, concluding that the complainant had “manipulated and distorted the facts.”
The judgment stated, “On a bare reading of the FIR, it is clear that a plain and simple dispute involving non-execution of a registered sale deed in terms of so-called oral agreement to sell has been given the cloak of a criminal case by misusing the criminal machinery.”
The Court expressed strong disapproval of the arrest of the 70-year-old appellant, stating it “clearly shows the clout of the company of which the complainant is an agent, on the police agency.”
Concluding that the complainant should be penalized for misusing the legal process, the Court held, “We feel that rather than awarding interest to the complainant, it is a fit case wherein the complainant should be penalized with exemplary cost for misusing the process of criminal law in a case which was of purely civil nature.”
In its final order, the Supreme Court quashed the FIR and all related proceedings. It imposed a cost of ₹10,00,000 on the complainant, to be paid to the appellants within 30 days. The Court also directed the police to provide security to the appellants whenever they visit Hyderabad to manage their property.
