Allegation Of Criminal Breach Of Trust Cannot Arise From Joint Development Agreement: Karnataka HC

The Karnataka High Court observed that an allegation of a criminal breach of trust can never arise from a joint development agreement.

In that context, the Bench of Justice M Nagaprasanna observed that, "If it is a Joint Development Agreement and the allegations are breach of the said agreement, wherefrom the allegation of criminal breach of trust can emerge, it can never. The other allegation is, cheating as obtaining under Section 420 of the IPC, which has its ingredients in Section 415 of the IPC. Section 415 of the IPC mandates that the victim should be lured by the accused for entering into any transaction with a dishonest intention right from the inception of the transaction. The complainant cannot be said to be lured into the subject transaction, as it is a Joint Development Agreement between the parties. The signatory to the Joint Development Agreement is the mother of the complainant. Therefore, there can be no dishonest intention right from the inception of the transaction."

Counsel Amar Correa appeared for the petitioner, while HCGP Mahesh Shetty, along with others, appeared for the respondents.

The petitioner, involved in three criminal petitions, faced charges related to offenses under various sections of the IPC and the Prevention of Corruption Act. These charges stemmed from a Joint Development Agreement between the petitioner's company and the complainant's family regarding a property in Bengaluru.

The company developed the property into residential villas, and after completion, sold their portion as per a sharing agreement. However, disputes arose, leading to multiple complaints by the complainant, alleging breach of agreement and involvement in bribery.

The petitioner, contending that the complaints were attempts to pressure compliance, sought relief through the court, arguing that the disputes should be resolved through arbitration. The complainant argued that the petitioner's actions caused financial loss and involved forgery and collusion with BBMP officials. Both sides presented their arguments, with the petitioner seeking dismissal of the petitions, while the complainant urged for their continuation, citing evidence to be presented during the trial.

The Court also emphasized that the sharing pattern between the parties in a Joint Development Development at best, can give rise to a civil dispute and not trigger setting the criminal law in motion.

Accordingly, the proceedings against the petitioner were discharged.

Appearances:

Petitioner: Counsel Amar Correa

Respondents: HCGP Mahesh Shetty, Counsels BN Gauri, Vinudeep R

Cause Title: Aditya Kankaria vs The State of Karnataka & Anr.

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