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P&H HC: Criminal Proceedings Can be Initiated Against Seller for Entering into Sale Contract Twice

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P&H HC Law Insider

Sakina Tashrifwala

Published on: 22 November 2022 at 22:41 IST

The Punjab and Haryana High Court has decided that criminal proceedings can be started when a seller enters into a sale contract with a buyer, despite entering into the same with another person earlier. This decision ends the legal debate regarding the start of criminal proceedings in property matters.

The Bench of Justices Sureshwar Thakur and Kuldeep Tiwari reiterated that the start of criminal proceedings relating matters that are solely civil in nature is nothing more than a smart ploy to overwhelm the accused. Additionally, it amounted to a “total misuse of the legal system”.

The Bench simultaneously pruned the legal rules controlling these situations.

Further the Bench added that, among other things, that the aggrieved who sought to enforce a sale contract had the option of bringing a declaration action before the relevant civil court.

However, the Bench stated that if it was clear that the vendor “impersonated the identity of the genuine owner,” criminal procedures could be brought at the aggrieved party’s request. When the genuine owner clearly signed the sale contract with the vendee but the property indicated was subject to an encumbrance, criminal proceedings might not be brought.

The decision was made in a case involving a supposedly signed purchase agreement between the complainant and the defendant. The land indicated in the purchase agreement, according to the complainant, was mortgaged. Instead, the revenue record that the accused allegedly provided to him contained an intended “non-recital” of land being mortgaged to a bank.

During the hearing, it was disclosed to the Bench that the aggrieved had filed a complaint with a Sub-Divisional Judicial Magistrate stating that the accused had engaged in fraud, deceit, and other offences in violation of Sections 420, 467, 468, 471, and 506 of the IPC.

He was found not guilty of violating Sections 467, 468, 471, or 406 of the IPC, but was found guilty of violating Section 420 for cheating. Later, the appeal was dismissed by the appellate court.

The Bench upheld the acquittal findings and claimed that if the seller didn’t fulfil his half of the bargain, the vendee had two options under the agreement to buy. He could have a civil court issue a decree of particular performance.

He could even want a double earnest money deposit as an alternative. Due to erroneous narration in the “jamabandis,” if the vendee decided not to buy the encumbered land, he also had the option of going before a civil court and requesting twice as much earnest money in lieu of a particular performance decision in his favour.