2025 (2) TMI 1103 - HC - Indian Laws

Real estate developer fails to quash multiple FIRs for fraud under Sections 420, 467, 468, 471 IPC

Alok Kumar Versus The State Of Bihar, The Union Of India, Director General Of Police, Chief Judicial Magistrate, Real Estate Regulatory Authority, Adg, Economic Offence Unit, Manju Dayal, Satish Kumar and Satyendra Kumar, Patna

The Patna HC dismissed a writ petition seeking to quash multiple FIRs filed under Sections 420, 467, 468, and 471 IPC against a real estate developer. The ... Invocation of constitutional writ jurisdiction of this Court under Articles 226 and 227 of the Constitution of India with a prayer to quash multiple FIRs - offence under Sections 420, 467, 468 and 471 of the IPC - HELD THAT:- In the instant case, it is the case of the prosecution that the petitioner collected huge amount of money from the intending purchasers without even purchasing the plots of land for construction of flats. The intending purchasers paid their money entrusting the petitioner that they would get their home but said money was misappropriated. Even from the investigation made by the ED, it is revealed that with the help of the money collected from the market, the petitioner purchased flats on his own money. Collection of money without the permission of RERA and purchasing and identifying the plot prima facie suggests that from the very beginning of transaction, the petitioner had a dishonest intention of deception and false inducement on the basis of which money was collected. Conclusion - The allegations of fraudulent intent and misappropriation of funds in real estate transactions can constitute criminal offences, even if they arise from contractual relationships. Multiple FIRs can be justified when each pertains to a separate transaction. There are no reason to quash the FIRs instituted against the petitioner. As a result, the instant writ petition is dismissed on contest. 1. ISSUES PRESENTED and CONSIDEREDThe core legal questions considered in this judgment include:- Whether the multiple FIRs filed against the petitioner constitute any prima facie offence under Sections 420, 467, 468, and 471 of the IPC, or if they only pertain to a civil dispute.- Whether the allegations in the FIRs justify the invocation of criminal charges, particularly under Section 406 of the IPC.- Whether the multiple FIRs should be quashed or clubbed together as they pertain to the same transaction.- Whether the petitioner is entitled to bail given the circumstances of the case.2. ISSUE-WISE DETAILED ANALYSIS- Relevant legal framework and precedents:The petitioner argued that the FIRs do not constitute offences under Sections 420, 467, 468, and 471 of the IPC, citing precedents like Gian Singh v. State of Punjab and State of Haryana v. Ch. Bhajan Lal, which discuss the quashing of FIRs when no prima facie case is made out. The petitioner also referenced T.T. Antony v. State of Kerala to argue against multiple FIRs for the same transaction.- Court's interpretation and reasoning:The Court examined whether the allegations in the FIRs, taken at face value, constituted criminal offences or merely civil disputes. It noted that the petitioner admitted to potential liability under Section 406 (criminal breach of trust) but contested charges under Sections 420 (cheating), 467, 468, and 471 (forgery-related offences).- Key evidence and findings:The Court noted that the petitioner had collected substantial sums from home buyers without completing the promised construction projects. The Economic Offence Unit and Enforcement Directorate's investigations revealed misappropriation and diversion of funds, which supported the allegations of criminal intent.- Application of law to facts:The Court applied the principles from precedents to the facts, determining that the allegations suggested fraudulent intent from the outset, thus justifying the criminal charges. The Court found that the FIRs disclosed a prima facie case under the relevant sections of the IPC.- Treatment of competing arguments:The petitioner argued for quashing the FIRs, claiming they were civil in nature and that multiple FIRs for the same transaction were unjustified. However, the Court found that each transaction with individual purchasers constituted separate offences, and the allegations indicated criminal intent.- Conclusions:The Court concluded that the FIRs could not be quashed as they disclosed a prima facie case of criminal breach of trust and other offences. The petitioner's request for clubbing the FIRs was also denied, as each transaction was deemed a separate offence.3. SIGNIFICANT HOLDINGS- Preserve verbatim quotes of crucial legal reasoning:'In order to constitute an offence of criminal breach of trust it is to be looked into as to whether there was any entrustment of the property in favour of the accused; whether the property was dishonestly misappropriated or conversed to his own use or dishonestly disposed of by the accused in violation of any direction of law prescribing mode in which such trust may be discharged.'- Core principles established:The Court established that allegations of fraudulent intent and misappropriation of funds in real estate transactions can constitute criminal offences, even if they arise from contractual relationships. It also reinforced the principle that multiple FIRs can be justified when each pertains to a separate transaction.- Final determinations on each issue:The Court dismissed the writ petition, upholding the validity of the FIRs and denying the request to quash or club them. It found sufficient grounds to proceed with the criminal charges, particularly under Section 406 of the IPC, and denied bail to the petitioner.