Sudha Rakesh v. State of Karnataka & Another
Background
Landowners authorised Sudha Rakesh through a general power of attorney to enter into a 2012 agreement to sell land to prospective buyers. The buyers did not complete the purchase within the agreed seven months or before the owners eventually sold the land to someone else in February 2016. The original buyers then brought a civil suit seeking completion of their agreement and filed a criminal complaint alleging cheating and related offences against the owners and Rakesh. The Karnataka High Court quashed the case against the landowners but refused equivalent relief to Rakesh, prompting this petition.
Decision Breakdown
The Supreme Court allowed the petition, set aside the High Court's refusal and quashed the FIR and consequential proceedings against Rakesh. It found no basis to distinguish an authorised representative and confirming party from the landowners whose prosecution had already been quashed. Receiving money on everyone's behalf, signing the agreement as their authorised agent and the later sale at a lower price did not establish a separate criminal role; the High Court had also speculated about misappropriation that nobody had alleged. Cheating required deception that induced the original payment, which the allegations did not show, and the alleged transaction also lacked the false statement about consideration required for the Section 423 IPC charge. The Court left the merits of the buyers' civil suit, including their readiness and willingness to complete the purchase, to the civil court.
Lesson Learnt
A failed property-sale agreement does not automatically amount to cheating: the allegations must establish the ingredients of the criminal offence, including deception inducing payment. Courts should treat similarly placed accused consistently, while leaving genuine contractual claims to the civil court.