Supreme Court quashes cheating case, warns on civil disputes as crime

The Supreme Court has quashed criminal proceedings against a power-of-attorney holder in a land sale dispute, observing that the tendency of litigants to turn civil disputes into criminal cases is an open secret. A bench of Justices Satish Chandra Sharma and Nongmeikapam Kotiswar Singh said courts have tried to prevent litigants from obliterating the fine distinction between civil and criminal matters, to prevent abuse of the criminal process.

The case arose from a failed agreement to sell land in Channasandra Village, Karnataka. After prospective buyers did not complete the transaction within the agreed period, the landowners sold the property to a third party in 2016. The buyers then filed a civil suit for specific performance and a criminal complaint under Sections 420, 423, 120-B and 34 IPC. The Karnataka High Court had quashed the FIR against the landowners but not against the petitioner.

Allowing the appeal, the Supreme Court held that the foundational ingredient of cheating was missing since the money was paid in 2012 when the property could legitimately have been transferred, and the subsequent sale took place nearly four years later. The court also found Section 423 IPC inapplicable as there was no false statement regarding consideration. The FIR and all consequential proceedings against the petitioner have been quashed.