2009 (4) TMI 935 - SC - Indian Laws

Supreme Court reinstates criminal proceedings for alleged land fraud, emphasizing trial for conspiracy and illegal gain.

K. ASHOKA Versus N.L. CHANDRASHEKAR & ORS.

K. ASHOKA Versus N.L. CHANDRASHEKAR & ORS. - 2009 AIR 3288, 2009 (5) SCR 961, 2009 (5) SCC 199, 2009 (5) SCALE 587 Issues Involved:1. Alleged Illegal Allotment of Land2. Alleged Fraud and Misuse of Position by Society Office Bearers3. Validity of the Complaint and Proceedings4. High Court's Quashing of Criminal ProceedingsIssue-wise Detailed Analysis:1. Alleged Illegal Allotment of Land:The appellant, a director of the society, alleged that the respondents, who were office-bearers of the society, earned a substantial illegal gain by allotting a site to Gopal for Rs. 2,40,000, which was later sold for Rs. 28,00,000. The complaint suggested that this allotment was fraudulent as the market value of the property was significantly higher. The land in question was initially acquired in 1985-86, and some sites remained vacant. A request was made by Munivenkatappa (Gopal's father) for the release of land, which led to the allotment of the site to Gopal. Within three months, Gopal sold the property at a significantly higher price, but the sale deed showed a lower consideration amount.2. Alleged Fraud and Misuse of Position by Society Office Bearers:A complaint was filed before the Joint Registrar of Cooperative Societies, who submitted a report stating that the office-bearers conspired with Gopal to allot the site illegally. The report highlighted that there was no site No. 509 in the approved plan, and the site No. 142 had already been allotted to another individual. The society allegedly shifted site No. 509 to the location of site No. 142 and registered it in Gopal's name without proper authorization, indicating an illegal act by the board of directors.3. Validity of the Complaint and Proceedings:The respondents contended that the enquiry was conducted without their participation or notice, and that the proceedings before the Joint Registrar were still pending. The appellant filed a complaint under Section 200 of the Code of Criminal Procedure for an offence under Section 420 read with Section 34 of the IPC. The Magistrate took cognizance and issued summons to the respondents. The respondents filed an application under Section 482 of the Code to quash the criminal proceedings, which the High Court allowed, stating that the complainant did not provide sufficient material to substantiate the allegations and that the complaint seemed to be an abuse of the process of law.4. High Court's Quashing of Criminal Proceedings:The High Court quashed the criminal proceedings, reasoning that the complainant did not make Gopal or the subsequent purchaser parties to the case, and there was no material evidence to show the illegal transaction. The High Court opined that the allegations were imaginary and that the proceedings were initiated to settle personal scores. However, the Supreme Court held that the High Court erred in its judgment, as the complaint disclosed a cognizable offence. The Supreme Court emphasized that the allegations of conspiracy and illegal gain from the allotment were sufficient to proceed with the trial, and the appellant had the locus standi to file the complaint. The Supreme Court set aside the High Court's judgment, allowing the appeals and reinstating the criminal proceedings.Conclusion:The Supreme Court concluded that the High Court's decision to quash the criminal proceedings was incorrect. The allegations made by the appellant disclosed a prima facie case of conspiracy and illegal gain, warranting a trial. The Supreme Court reinstated the criminal proceedings, emphasizing that all contentions of the parties would be considered during the trial.