LexC. SUBBIAH @ KADAMBUR JAYARAJ AND OTHERS versus THE SUPERINTENDENT OF POLICE AND OTHERS
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* Author [2024] 5 S.C.R. 813 : 2024 INSC 416 C. Subbiah @ Kadambur Jayaraj and Others v. The Superintendent of Police and Others (Criminal Appeal No. 2582 of 2024) 15 May 2024 [B.R. Gavai and Sandeep Mehta,* JJ.] Issue for Consideration Matter pertains to the permissibility of suing the accused for a civil wrong, in relation to the benami transactions, as a corollary, allowing criminal prosecution of the accused in relation to the same cause of action. Headnotes† Benami Transactions (Prohibition), Act 1988 – s. 4 – Benami transaction – Initiation of civil suit/criminal proceedings by the real owner of the benami property – Permissibility – Complainant-government teacher, previously doing real estate business, fraudulently allured and induced by the accused persons to invest in various land deals to earn high profits – Purchased properties not registered in complainant’s name despite the investments made by him and thereafter, the accused failed to deliver the plots or profits as agreed and thereby committed fraud and criminal breach of trust – Registration of FIR and filing of chargesheet – On the same set of allegations, the complainant filed civil suit against the accused persons, which is pending – Petition by the accused seeking quashing of the FIR and the chargesheet – Dismissed by the High Court: Held: Dispute is regarding the quantification of profits and full satisfaction of the share claimed by the complainant proportional to the investments made by him after sale of some plots – Complainant after being appointed in Government service would be conscious that indulging in land deals may land him in departmental proceedings, thus, must have agreed that the lands not be registered in his name – By virtue of s. 4(1) and 4(2), the complainant in spite of having made investments in the land deals in the names of other persons which were evidently benami transactions, was prohibited from instituting civil proceedings for recovery against 814 [2024] 5 S.C.R. Digital Supreme Court Reports the accused persons-appellants – As a corollary, allowing criminal prosecution of the accused in relation to the self-same cause of action would be impermissible in law – Thus, in view of the clear bar contained in s. 4, the complainant could not have sued the accused for the same set of facts and allegations which were made the foundation of the criminal proceedings – Since, if such allegations did not constitute an actionable civil wrong, allowing the prosecution of the accused for the very same set of facts, would tantamount to abuse of the process of law – Furthermore, no allegation to persuade the Court to hold that the intention of the accused was to defraud the complainant right from the inception of the transactions – Also necessary ingredients of the offences punishable u/ss. 406, 420, 294(b) and 506(ii) IPC not made out against the accused – Dispute which is purely civil in nature was given a colour of criminal prosecution alleging fraud, breach of trust and criminal intimidation by misusing the tool of criminal law – Criminal prosecution instituted against the accused in pursuance of the totally frivolous FIR tantamounts to sheer abuse of the process of law – Thus, the impugned order quashed and set aside. [Paras 36, 38, 42-48] Benami Transactions (Prohibition), Act 1988 – s. 4 – Benami transaction – Prohibition of the right to recover property held benami: Held: s. 4(1) makes it clear that no suit, claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person, shall lie or on behalf of a person claiming to be real owner of such property – Such person cannot raise a defence based on any right in respect of any property held benami either against the person in whose name the property is held or against any other person – s. 4(2) prohibits the institution of any suit, claim or any other action by and on behalf of a person claiming to be the real owner of such property. [Para 35] Case Law Cited State of Haryana and Others v. Bhajan Lal and Others [1990] Suppl. 3 SCR 259 : 1992 Supp. 1 SCC 335; Indian Oil Corpn. v. NEPC India Ltd. and Others [2006] Supp. 3 SCR 704 : (2006) 6 SCC 736; Anand Kumar Mohatta and Another v. State(NCT of Delhi), Department of Home and Another [2018] 13 SCR [2024] 5 S.C.R. 815 C. Subbiah @ Kadambur Jayaraj and Others v. The Superintendent
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