Every Transaction Of Sale If Not Registered In Favour Of Purchaser Would Not Be A Criminal Offence: Telangana High Court

The Telangana High Court observed that every transaction pertaining to the sale if not registered in favour of the purchaser, would not be a criminal offence.

The Court dismissed the appeal against the District Court's decision overturning the Civil Courts' verdict in favour of the Second Respondent. Allegedly, the Petitioners failed to register the land in the Second Respondent's name, transferring it to someone else.

The Bench of Justice K. Surender observed, “to attract an offence of cheating there should be an act of deception played by the person. Deceived by the said act, the person should have delivered the property”.

Advocate V. Umapathi Sarma appeared for the Petitioners and Advocate N. M. M. Murthy appeared for the Respondent.

The Second Respondent filed a private complaint, accusing the Petitioners of offences under Sections 406, 415, 418, 420 and 120-b of the Indian Penal Code, 1860 (IPC), related to a property transaction dating back to 1998. The Second Respondent alleged that the Petitioners failed to register the land in his favour, transferring it to another party. The police closed the case due to lack of evidence, but the Second Respondent filed a protest petition, leading to the issuance of a summons.

The Petitioners contended that the transactions were civil, and the magistrate mechanically took cognizance without considering the facts. The Civil Court had previously decreed in favour of the Second Respondent, but the District Court overturned it. The magistrate's order lacked adequate reasoning for finding a prima facie case of cheating or criminal misappropriation, given the complexities and previous legal proceedings. 

“Issuance of summons in a criminal case is a serious issue. Every transaction pertaining to the sale if not registered in favour of the purchaser, would not be a criminal offence”, the Court observed.

The Court noted that the District Court overturning the Civil Court's direction to register the plot in the name of the second respondent was incorrect. Given this finding, the District Court erred in initiating a criminal trial for cheating in the same sale transaction. The transaction was inherently civil. The Bench also observed that a criminal complaint almost 18 years later, after failing in the civil court, is impermissible.

Additionally, the complaint lacks allegations of deception and property delivery required for cheating. The Petitioners, being the plot owner, had no intention to cheat the second respondent from the beginning, and criminal misappropriation is not applicable in this context.

Accordingly, the Court dismissed the Petition.

Cause Title: D. Balamani and another v The State of Telangana and another

Click here to read/download Order