Initiate criminal proceedings if seller enters into sale contract twice: Punjab and Haryana High Court

Saurabh Malik

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Chandigarh, November 21

Putting to rest the legal debate on initiation of criminal proceedings in property matters, the Punjab and Haryana High Court has ruled that the same can be launched when a seller enters into a sale contract with a buyer, despite entering into the same with some other person earlier.

The Bench of Justice Sureshwar Thakur and Justice Kuldeep Tiwari reiterated that the launching of criminal proceedings regarding disputes purely civil in nature was nothing but a clever stratagem to overawe the accused. It also amounted to a “complete abuse of the process of law”.

The Bench, at the same time, culled the principles of law governing such matters. Among other things, the Bench asserted instituting a declaratory suit before the civil court concerned was a remedy available to the aggrieved seeking the enforcement of a sale contract.

The Bench asserted criminal proceedings could, however, be launched at the instance of the aggrieved, when the vendor evidently “impersonated the identity of the true owner”. Criminal proceedings might not be launched when the true owner evidently signed the sale contract with the vendee, but the property mentioned was under an encumbrance.

The ruling came in a case involving an agreement to sell purportedly executed between the complainant and the accused. The complainant alleged that the land mentioned in the agreement to sell was mortgaged. There was, rather, an intentional “non-recital” of land being mortgaged to a bank in the revenue record purportedly purveyed to him by the accused.

The Bench, during the course of hearing, was told that the aggrieved filed a complaint in the court of a Sub-Divisional Judicial Magistrate, alleging that the accused had committed cheating, forgery, and other offences under Sections 420, 467, 468, 471 and 506 of the IPC.

The trial judge recorded a verdict of acquittal for offences under Sections 467, 468, 471 and 406 of the IPC, but convicted him for cheating under Section 420 of the IPC. The appellate court subsequently dismissed the appeal.

Affirming the verdicts of acquittal, the Bench asserted two options were given to the vendee in the agreement to sell if the vendor failed to perform his part of the contractual obligations. He could secure a decree of specific performance from a civil court. In the alternative, he could ask for double the earnest money. If the vendee chose not to purchase the encumbered land due to false narration in the ‘jamabandis’, he could then also exercise the option of approaching the civil court, asking for double the earnest money as an alternative to a decree of specific performance in his favour.

Barred in civil disputes

Launching of criminal proceedings regarding disputes purely civil in nature was nothing but a clever stratagem to overawe the accused. It also amounted to a complete abuse of the process of law. — Bench of Justice Sureshwar Thakur & Justice Kuldeep Tiwari