Land Procurement Contract Dispute: Supreme Court Overturns High Court Decision

In a significant legal development, the Supreme Court has ruled on the case related to a dispute over a land procurement contract. The parties involved, the appellant and the respondents, were at odds over allegations of fraud and conspiracy. The High Court’s decision to allow petitions under Section 482, Cr.P.C. by the accused has been overturned. The judgment highlights the importance of assessing mens rea in criminal cases, as seen in the case of Anil Mahajan vs Bhor Industries Ltd.


  • The High Court allowed the petitions filed under Section 482, Cr.P.C. by the accused on the ground of novation of the contract through an agreement dated 08.11.2012.
  • The appellant was threatened and pressured by the accused, leading to the filing of the second complaint.
  • Two cheques issued by the accused as security were found to be invalid, indicating potential fraud and conspiracy.
  • The second complaint led to the filing of a chargesheet after investigation.

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  • Both parties agree on the fact that agreements were entered into for procuring land in Ballur Village, Anekal Taluk, Bangalore Urban District in favor of the appellant.
  • The respondents have received Rs. 9 crores through demand drafts and cheques from the appellant.
  • Materials placed on record have been perused by the court.
  • Breach of contract may not always lead to a penal offense
  • Breach of trust with mens rea can result in criminal prosecution
  • Presence of mens rea needs to be assessed based on facts and circumstances of the case
  • Judgment in the case of Anil Mahajan vs Bhor Industries Ltd. emphasized on this aspect

Also Read: Partnership Dissolution Case: Legal Heirs’ Rights Upheld


  • The High Court entered the disputed area when considering petitions filed under Section 482, Cr.P.C.
  • Power under Section 482 Cr.P.C. should be sparingly exercised when the case for the alleged offenses is not made out from the complaint.
  • The fact that there is no pagination in the Schedule does not disprove its existence in the Agreements.
  • Contract being of civil nature does not prevent prosecution for cheating and fraud if such elements are present.
  • Mere filing of a suit or complaint under Section 138 of the N.I. Act is not a ground for quashing proceedings.
  • The High Court erred in concluding there was novation of contract based on a subsequent agreement.
  • In a Section 482, Cr.P.C. petition, the High Court cannot make factual findings where disputes exist.
  • Filing suits for recovery or complaints under Section 138 of the N.I. Act alone is not a basis to quash proceedings; full-fledged trial is required for a decision.
  • The appellant alleges lands were sold prior to the agreement and cheques issued as security were from a closed account.
  • The appellant further claims forceful signing of sale deeds for lands covered by specific survey numbers in Ballur Village.
  • Fraudulent and dishonest intention at the time of the commission of the offence
  • Law permits the victim to proceed against the wrongdoer for criminal breach of trust or cheating
  • The scope of power of the High Court under Section 482 Cr.P.C. was reiterated by the Court.
  • Judgments relied on by the learned counsel were found to not support the case of the respondents.
  • The High Court was held to have committed an error in allowing the petitions filed under Section 482, Cr.P.C. by the accused.

Also Read: State of Madhya Pradesh v. Udham and Others – Legal Judgment Summary


  • The criminal appeals have been allowed.
  • The impugned common order dated 28.4.2017 passed by the High Court of Karnataka at Bengaluru has been set aside.


Case Number: Crl.A. No.-001573-001575 / 2019

Click here to read/download original judgement

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