REPORTABLE

IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION (CRL) No.1953 of 2008

S.P. Gupta          … Petitioner   

Vs.

Ashutosh Gupta … Respondent

J U D G M E N T

ALTAMAS KABIR, J.

1. In this Special Leave Petition, the Petitioner,  

S.P.  Gupta,  has  challenged  the  order  dated  19th  

February, 2008, passed by the learned Single Judge

of the Delhi High Court in Crl.M.C. No.847 of 2005,  

dismissing  the  Petitioner’s  application  under  

Section 482 Cr.P.C. for quashing of the Criminal  

Complaint No.932 of 1992, instituted against the  

Petitioner  and  the  other  co-accused  by  the  

Complainant  (father  of  the  Respondent)  under  

Section 420 read with Section 120-B of the Indian  

Penal Code.   

2. By an order dated 7th April, 1992, the learned  

Metropolitan Magistrate, New Delhi, issued summons  

to the Petitioner, Accused No.1 Smt. Motian Devi  

Lamba  and  Accused  No.4  Shri  G.R.  Singhal  under  

Section 420 read with Section 34 IPC.  The Revision  

Petition  filed  against  the  said  order  issuing  

summons  having  been  dismissed  by  the  Additional  

Sessions Judge, New Delhi, on 8th February, 2005,  

the Petitioner moved the Application under Section  

482 Cr.P.C. before the High Court.   

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3. Having  regard  to  the  allegations  in  the  

complaint,  the  learned  Single  Judge  of  the  High  

Court dismissed the said application upon holding  

that  upon  reading  the  complaint,  it  was  not  

possible to conclude that not even a prima facie  

case had been made out against the Petitioner for  

the offence under Section 420 read with Section 34  

IPC.   The High Court took note of the fact that  

having regard to the role attributed to each of the  

accused  which  had  been  noticed  by  the  learned  

Magistrate, summons had been issued to only three  

of  them  and  that  as  far  as  the  Petitioner  was  

concerned, the narration in the complaint showed  

that he was integral to all the transactions that  

had  taken  place  between  the  complainant  and  the  

Accused No.1 as he was the constituted attorney of  

the said accused.  The learned Single Judge also  

observed that whether the Petitioner had acted with  

dishonest  intentions  or  as  to  whether  he  was  

unaware of the dishonest intentions of the Accused  

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No.1 or that he himself held out no assurance as to  

the  title  of  the  Accused  No.1  at  the  time  the  

agreement for sale was executed or whether he acted  

beyond the scope of his authority under the power  

of  attorney,  were  matters  that  raised  triable  

issues  and  could  only  be  determined  by  leading  

evidence at the trial.   

4. Mr.  Aman  Lekhi,  learned  Senior  Advocate  

appearing in support of the Special Leave Petition,  

urged  that  all  the  three  Courts  below  had  

completely misconstrued the material available for  

the purpose of taking cognizance on the complaint  

filed  by  Chat  Ram  Gupta,  the  father  of  the  

Respondent Ashutosh Gupta.  Mr. Lekhi urged that as  

the holder of the Power of Attorney for the Accused  

No.1,  the  Petitioner  had  merely  carried  out  the  

instructions given to him from time to time by the  

Accused No.1 which he was required to follow in  

keeping with the powers vested in him under the  

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Power  of  Attorney.  Mr.  Lekhi  urged  that  the  

Petitioner was merely an agent appointed to carry  

out certain directions and that he had no personal  

knowledge of the status of the properties involved  

in the transaction.

5. Mr. Lekhi submitted that if the Petitioner had  

no  dishonest  intention  to  defraud  or  cheat  the  

father of the Respondent, he would not have handed  

over possession of the property in question to the  

father of the Respondent.   In fact, the Petitioner  

received  the  consideration  amount  on  behalf  of  

Accused No.1 and made over the same to her while  

making  over  possession  of  the  land  to  the  

complainant.    

6. Mr.  Lekhi  submitted  that  the  Petitioner  was  

unaware of the manner in which the property had  

been acquired by the Accused No.1 or that the same  

belonged to a Hindu Undivided Family (HUF) and had  

no dishonest intention to either defraud or cheat  

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the father of the Respondent and accordingly, at  

best a suit of a civil nature could have been filed  

on account of the transaction and the issuance of  

summons on the complaint filed by the complainant  

(father of the Respondent) was not justified in the  

facts of the case.  

7. Mr.  Lekhi  submitted  that  the  facts,  as  

disclosed,  do  not  bring  the  actions  of  the  

Petitioner  within  the  ambit  of  the  expression  

“misrepresentation” as defined in Section 18 of the  

Indian Contract Act, 1872, since neither did he has  

any  intention  to  deceive  the  father  of  the  

Respondent, nor did he gain any advantage in acting  

as  the  agent  of  the  Accused  No.1  for  the  sole  

purpose of receiving the consideration money and  

making over possession of the land to the father of  

the Respondent, it could not be said that he had  

committed any offence, as alleged, and the summons  

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issued on the said complaint under Section 482 read  

with Section 34 IPC were liable to be quashed.   

8. In  support  of  his  submissions,  Mr.  Lekhi  

referred to a Three-Judge Bench decision of this  

Court in  Nageshwar Prasad Singh vs.  Narayan Singh  

[(1998) 5 SCC 694], in which a similar question  

fell for consideration and relying on Illustration  

(g) of Section 415 of the Indian Penal Code, it was  

held that an agreement for sale of land and the  

earnest  money  paid  to  the  owner  as  part  

consideration  and  possession  of  the  land  having  

been transferred to the purchasers/complainants and  

the  subsequent  unwillingness  of  the  owner  to  

complete the same, gave rise to a liability of a  

civil  nature  and  the  criminal  complaint  was,  

therefore, not competent.   

9. Mr. Lekhi submitted that in the facts of the  

present  case,  which  are  almost  identical  to  the  

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facts of the aforesaid case, the summons issued to  

the Petitioner was liable to be quashed.  

10. Opposing  Mr.  Lekhi’s  submissions,  Mr.  Ashok  

Gurnani,  Advocate  for  the  Respondent,  contended  

that as had been indicated by the High Court, the  

question  as  to  whether  the  Petitioner  had  any  

dishonest and/or fraudulent intention or whether he  

had deliberately misrepresented the facts relating  

to the status of ownership of the land would become  

clear once evidence had been led in regard to the  

circumstances in which he had represented to the  

father of the Respondent that the land was free  

from all encumbrances and that the Accused No.1 was  

the  sole  owner  of  the  property.  Mr.  Gurnani  

submitted that had the Petitioner not made such a  

representation to the father of the Respondent, he  

may not have proceeded with the transaction. It was  

urged that it was too early for an assumption to be  

drawn  that  the  Petitioner  had  no  dishonest  

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intention  in  representing  to  the  father  of  the  

Respondent  that  the  property  was  free  from  all  

encumbrances and that the Accused No.1 was the sole  

owner of the property.   

11. Referring to the submissions made by Mr. Lekhi  

on Section 18 of the Indian Contract Act, 1872, Mr.  

Gurnani urged that Sub-Section (1) of Section 18  

was  quite  clear  as  to  what  constituted  

misrepresentation.   

12. As  far  as  the  decision  in  Nageshwar  Prasad  

Singh’s  case  (supra)  was  concerned,  Mr.  Gurnani  

submitted that the facts of the said case and the  

present  case,  though  similar,  could  be  

distinguished  having  particular  regard  to  

Illustration  (g)  of  Section  415  IPC.   It  was  

submitted that if no dishonest intention could be  

shown at the very initial stage when the agreement  

was arrived at, the Court would be justified in  

holding that there was no misrepresentation and the  

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dispute  involving  the  refusal  of  one  party  to  

complete the transaction would be a dispute of a  

civil nature, which was not so in the instant case.  

Mr. Gurnani urged that the order of the High Court  

or that of the other fora below did not warrant any  

interference  and  the  Special  Leave  Petition  was  

liable to be dismissed.  

13. Having  carefully  considered  the  submissions  

made on behalf of the respective parties and the  

complaint filed by the father of the Respondent, we  

are inclined to agree with the views expressed by  

the High Court that a prima facie case had been  

made  out  to  go  to  trial.   There  is  a  positive  

assertion in the complaint that an assurance had  

been  given  by  the  Petitioner  to  the  complainant  

that the property in question was free from all  

encumbrances and that the Accused No.1 was the sole  

owner of the property.  It has been mentioned in  

the complaint that had not such a representation  

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been made relating to the status of ownership of  

the property in question, the complainant may not  

have entered into the transaction at all.  Whether  

or  not  the  Petitioner  was  truly  mistaken  with  

regard  to  the  information  given  by  him  is  a  

question of utmost importance in answering a charge  

of the nature indicated in the complaint.  Merely  

because the Petitioner had received part payment of  

the consideration amount and had made over the same  

to the Accused No.1 and merely because possession  

of the land had been handed over by him to the  

complainant, cannot form the basis of a presumption  

that he had no knowledge that there was a dispute  

regarding  the  ownership  of  the  property,  as  to  

whether the same belongs to a HUF or not.  It is  

true, as pointed out by Mr. Lekhi, that Section 415  

IPC,  which  defines  the  offence  of  cheating,  

provides in Illustration (g) as follows :

“(g).   A intentionally deceives Z into a  belief  that  A  means  to  deliver  to  Z  a  

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certain quantity of indigo plant which he  does  not  intend  to  deliver,  and  thereby  dishonestly  induces  Z  to  advance  money  upon the faith of such delivery, A cheats;  but  if  A,  at  the  time  of  obtaining  the  money,  intends  to  deliver  the  indigo  plant, and afterwards breaks his contract  and  does  not  deliver  it,  he  does  not  cheat,  but  is  liable  only  to  a  civil  action for breach of contract.”

However,  the  aforesaid  provision  clearly  

indicates that if at the very initiation of the  

negotiations  it  was  evident  that  there  was  no  

intention to cheat, the dispute would be of a civil  

nature. But such a conclusion would depend on the  

evidence to be led at the time of trial.  In the  

instant case, the complaint does not make out a  

prima facie case to go to trial. The Petitioner may  

have  discharged  his  functions  as  a  constituted  

attorney  for  the  Accused  No.1  by  acting  as  a  

liaison between the Accused No.1 and the father of  

the  Respondent,  but  that  does  not  in  itself  

indicate that he did not have any knowledge of the  

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status of ownership of the land forming the subject  

matter of the transaction.   

14.  We are not, therefore, inclined to interfere  

with the order of the High Court impugned in the  

Special  Leave  Petition  and  the  same  is,  

accordingly, dismissed.  

…………………………………………J. (ALTAMAS KABIR)

…………………………………………J. (ANIL R. DAVE)

New Delhi Dated:13.05.2010.  

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