Isabella Mariam

The High Court of Delhi, Single Bench of Justice Chandra Dhari Singh dismissed a writ petition seeking the quashing of an FIR registered against a real estate developer for alleged offences under Sections 406, 420, and 120B of the Indian Penal Code, 1860. The Court recorded that there existed prima facie material suggesting commission of offences and found no ground to exercise its extraordinary jurisdiction for quashing the FIR.

The case pertained to allegations against a real estate company, accused of collecting funds from an investor for a commercial plot in a project that had not yet received the requisite government approvals at the time of booking.

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The petitioner, a real estate development firm, approached the High Court under Article 226/227 of the Constitution of India, read with Section 482 of the Code of Criminal Procedure, 1973 (now Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023), seeking quashing of FIR No. 57/2020 dated July 28, 2020. The FIR had been registered at Police Station Barakhamba Road, New Delhi, under Sections 406 and 420 of the IPC.

As per the FIR, in 2006, the complainant expressed interest in purchasing a commercial plot in a forthcoming project by the petitioner company. The location of the project was unspecified at that time. The complainant paid Rs. 8,00,000 as a booking amount via cheque on April 13, 2006. Subsequently, he made additional payments amounting to Rs. 22,47,264.

On January 13, 2009, the petitioner informed the complainant that he had been allotted a commercial plot in "TDI City" in Mohali, Punjab. The complainant alleged that he had not been informed that the project was located in Mohali at the time of booking.

Over the years, the complainant made several inquiries regarding the project. In August 2019, he visited the petitioner’s Mohali office and was informed that the project had been closed and his payment forfeited. A legal notice dated September 9, 2019, was sent to the petitioner by the complainant, which received no response. A criminal complaint led to the registration of the aforementioned FIR.

The petitioner argued that no criminal offence was made out and the dispute was purely civil in nature. It was submitted that respondent no. 2 failed to make timely payments in accordance with the payment schedule, justifying cancellation of his registration. The petitioner claimed that the complainant had agreed to the terms outlined in the Advance Registration Form (ARF), which required timely payments.

It was further submitted that assuming the complainant's version was correct, it amounted only to breach of contract, and lacked the men’s rea required to sustain a charge of cheating or criminal breach of trust. The petitioner stated that there was no dishonest or fraudulent inducement, and the FIR failed to establish necessary ingredients under Sections 406 or 420 IPC.

In response, the State and the complainant opposed the petition, arguing that the allegations warranted investigation and trial. It was submitted that the petitioner-company pre-launched the project without obtaining requisite approvals, collected funds from the complainant, and later failed to deliver the promised plot.

The complainant denied signing the ARF and submitted that the form was a fabricated document. It was further contended that the alleged cancellation was never communicated personally to him, and publication of a notice in a Chandigarh newspaper could not be considered valid notice for a Delhi resident.

The court was also informed that the petitioner failed to produce any letters or postal records to show that demands or cancellation notices were sent. The petitioner had not responded to the legal notice issued by the complainant in 2019.

Justice Chandra Dhari Singh, upon hearing both sides and reviewing the FIR, counter affidavits, and status reports dated March 3, 2021, and August 9, 2024, recorded:

"Upon perusal of the law laid down by the Hon’ble Supreme Court regarding the principles of quashing of FIR, as reiterated in Neeharika Infrastructure (P) Ltd. v. State of Maharashtra, (2021) 19 SCC 401, it is clear that an FIR may be quashed by the High Court where the allegations made in the FIR do not prima facie constitute any offence or make out a case against the accused."

The Court noted that the complainant had entered into a transaction for allotment of a commercial plot based on representations by the petitioner and its directors, who allegedly induced him to part with funds before approvals were secured.

The Court quoted from the status reports that the company had received payments from the complainant between 2006 and 2009 but only obtained approval for the project on November 20, 2009. The report stated:

"The company was not having any approval/permission from DTCP for the project for which booking amount and demanded payment from the complainant were received between the years 2006 to 2009. The company had pre launched the project and started collecting money from the buyers."

The investigation also found no records of demand letters or cancellation notices allegedly issued by the petitioner. It was stated:

"Regarding communications issued by the alleged company to the complainant viz dated 19.01.2009, 13.01.2009 & 07.07.2009, in this regard alleged company has no any demand letters/cancellation letter. They stated that copies of the demand letters are missing in the record of the alleged company."

The Court observed that the petitioner failed to notify the complainant directly about the cancellation and relied solely on a public notice in a Chandigarh newspaper dated October 12, 2011. The Court found this insufficient given the complainant's residence in Delhi.

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Regarding the delay in registration of the FIR, the Court recorded:

"The petitioner’s contention that the instant FIR has been registered belatedly does not hold any legal ground in light of the material found by the investigating agency regarding the seriousness of the petitioner-company’s conduct, which prima facie reeks of mala fide."

The Court concluded that the allegations warranted further proceedings:

"The allegations and facts of the case contain essential ingredients for the commission of offences punishable under Sections 406/420/120B of the IPC."

The Court dismissed the writ petition, stating:

"This Court does not find any cogent reasons to exercise its inherent powers. It is held that the petitioner has been unable to put forth any contentions to invite the extraordinary jurisdiction of this Court to quash the aforementioned FIR."

"Accordingly, the instant petition stands dismissed along with the pending applications, if any."

The Court stated that its observations should not influence the outcome of the trial:

"It is made clear that nothing stated hereinabove shall be tantamount to the expression of any opinion on the final merits of the case pending before the Court concerned."

Advocates Representing the Parties:

For the Petitioner: Ms. Kanika Agnihotri, Ms. Sonakshi Chaturvedi, and Mr. Himaghu Jain

For the Respondents: Mr. Sanjay Lao, Standing Counsel, Mr. Abhinav Arya

Case Title: TDI Infratech Limited vs Government of NCT & Anr.

Neutral Citation: 2025: DHC:1885

Case Number: W.P.(CRL) 2081/2020

Bench: Justice Chandra Dhari Singh

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