Cheating Case Can Only Be Filed By Defrauded Purchaser Of Property, Not Third Parties Who Are Not Purchasers Under Sale Deed: SC
The Supreme Court has reiterated that if someone sells a property they do not own, defrauding the purchaser, only the purchaser can file a complaint of cheating, not a third party who is not the purchaser under the sale deed.
The Court quashed an FIR registered against Jit Vinayak Arolkar (Appellant), an MLA in Goa, stating that the allegations of cheating did not constitute an offence under Section 420 of the IPC. The FIR alleged that the Appellant, as a power of attorney, had sold portions of the property without the consent of all legal heirs.
The Bench of Justice Abhay S. Oka and Justice Ujjal Bhuyan observed, “Thus, in short, the grievance of the 4th respondent is that the vendors under the sale deeds had only an undivided share in the subject property, and they could not have sold the entire subject property under the sale deeds. The contention of the appellant is that what is sold is the right, title and interest of Vidhya Natekar and Sanjay Natekar. Thus, the dispute between the parties is predominantly a civil dispute..”
Senior Advocate Huzefa Ahmadi represented the Appellant, while Senior Advocate Devadatt Kamat appeared for the Respondents.
The Respondent, a resident of the United States, filed twelve separate civil suits in 2018, claiming co-ownership and seeking a declaration of ownership over the disputed property. The FIR, filed in 2020, alleged cheating and land-grabbing.
The Appellant sought quashing of the FIR, arguing that the allegations pertained to rights already being adjudicated in Civil Court. However, the Bombay High Court dismissed the Writ Petition.
The Supreme Court referred to its decision in Mohd. Ibrahim v. State of Bihar (2009), wherein it was it was held, “When a sale deed is executed conveying a property claiming ownership thereto, it may be possible for the purchaser under such sale deed to allege that the vendor has cheated him by making a false representation of ownership and fraudulently induced him to part with the sale consideration. But in this case the complaint is not by the purchaser. On the other hand, the purchaser is made a co-accused.”
In Mohd. Ibrahim (supra), the Apex Court explained, “When we say that execution of a sale deed by a person, purporting to convey a property which is not his, as his property, is not making a false document and therefore not forgery, we should not be understood as holding that such an act can never be a criminal offence. If a person sells a property knowing that it does not belong to him, and thereby defrauds the person who purchased the property, the person defrauded, that is, the purchaser, may complain that the vendor committed the fraudulent act of cheating. But a third party who is not the purchaser under the deed may not be able to make such complaint.”
Consequently, the Court held, “The impugned judgment and order…is set aside, and FIR No.177 of 2020 initially registered with Pernem Police Station, Pernem in the State of Goa, and now transferred to the Special Investigation Team of the Economic Offences Cell, and proceedings based thereon are hereby quashed and set aside only as against the appellant.”
Accordingly, the Supreme Court allowed the Appeal.
Cause Title: Jit Vinayak Arolkar v. State Of Goa & Ors. (Neutral Citation: 2025 INSC 31)
Appearance:
Appellant: Senior Advocate Huzefa Ahmadi; Advocates Ninad Laud, Abhijit Gosavi, Sunil Shetye, Amay Phadte and Karan Mathur; AOR Dcosta Ivo Manuel Simon
Respondent: Senior Advocate Devadatt Kamat; Advocates Abhay Anil Anturkar, Dhruv Tank, Aniruddha Awalgaonkar, Bhagwant Deshpande, Subhi Pastor and Revanata Solanki; AOR Surbhi Kapoor and Rajesh Gulab Inamdar
