Supreme Court of India held bona fide purchaser cannot face prosecution for cheating or forgery without intent. Court stressed criminal liability requires clear evidence of inducement and participation in alleged fraud.
The Supreme Court of India has reiterated a significant principle of criminal jurisprudence, holding that a bona fide purchaser of property cannot be prosecuted for offences like cheating or forgery solely because the property is later found to be connected with a disputed or allegedly forged Will. This clarification came where the Court stressed that criminal liability must be founded on clear evidence of intent and participation in wrongdoing.
The Court observed,
“The appellant, being a purchaser of the subject property for valuable consideration, cannot, in the facts of the present case, be considered to be the person who offered fraudulent inducement to respondent No.2- complainant or made him to deliver some property or part with valuable security so as to bring his acts within the purview of fraudulent inducement and cheating to gain property punishable under Section 420 IPC [corresponding Section 318(4) of the Bharatiya Nyaya Sanhita, 2023].”
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A Bench comprising Justice Vikram Nath and Justice Sandeep Mehta quashed the criminal proceedings against a purchaser who had been arraigned as an accused in a long-standing property dispute. The Court found no material suggesting that the buyer had any role in the alleged fabrication of the Will or that he had knowledge of any illegality connected to it.
The case traces back to allegations that a Will dated September 12, 1988, had been forged to transfer ownership of land belonging to a deceased person. Acting on the strength of this disputed Will, the property was subsequently sold to several buyers through registered sale deeds executed in 1998. One such purchaser later came to be implicated and was charged with offences including cheating, forgery, and criminal conspiracy.
Seeking relief, the purchaser approached the Madras High Court, asserting that he had acquired the property for valid consideration after verifying the seller’s title and had no involvement in the alleged fabrication of the Will. However, the High Court declined to interfere, holding that the issues raised involved disputed questions of fact that warranted a full trial.
On appeal, the Supreme Court disagreed with this approach. It pointed out that there was not even an iota of evidence to indicate that the appellant had participated in preparing the alleged forged Will or had any knowledge of its falsity. The Court also noted that if the Will were ultimately held to be forged, the purchasers themselves would face uncertainty regarding their title.
The Court observed,
“Neither the FIR nor the impugned order discloses availability of any tangible material to substantiate the allegation that the appellant had conspired in the preparation of the alleged forged Will, or that the registered sale deed dated 18th December, 1998 was executed by him with knowledge that the signatures on the Will were forged”
Relying on its earlier ruling in Mohammed Ibrahim v. State of Bihar, the Bench reiterated that an offence of cheating requires proof of deception or intentional participation in a fraudulent act. In the absence of such evidence, subjecting a purchaser to criminal prosecution would be legally untenable.
Concluding that continuation of the proceedings would amount to misuse of the criminal justice system, the Court quashed the case against the appellant.
It held,
“we are of the firm opinion that allowing further prosecution of the appellant in connection with Chargesheet No.03 of 2018 dated 26th September, 2018, filed in pursuance of FIR/Case Crime No.994 of 2004 dated 12th July, 2004, would be wholly unjustified and would tantamount to gross abuse of the process of the Court.”
The petitioner was represented by Senior Advocate Arvind Varma along with a team of counsel, while the respondents were represented by Senior Additional Advocate General V. Krishnamurthy and Senior Advocate A. Sirajudeen, among others.
Case Title: S Anand vs. State of Tamil Nadu & Anr.,
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