A Sessions Court in Bengaluru has dismissed a petition seeking the cancellation of bail granted to an individual accused of multi-layered property fraud and cheating. The court, presided over by Sri T. Govindaiah, the LVI Additional City Civil and Sessions Judge, ruled that the dispute appeared to be primarily civil in nature and found no grounds to interfere with the discretion exercised by the lower court in granting relief to the accused.

The petition, filed under Section 437(5) read with Section 439(2) of the Code of Criminal Procedure, sought to overturn the anticipatory bail granted to the second respondent, Lokesh, on November 29, 2022. The bail was originally granted by the IV Additional Chief Metropolitan Magistrate in connection with Crime No. 164/2022 registered by the Govindapura Police Station for offences punishable under Sections 420 (Cheating) and 406 (Criminal Breach of Trust) of the Indian Penal Code.

The Allegations of Fraudulent Real Estate Transactions

The de-facto complainant and petitioner, Raghu R, a resident of Vijayanagar, moved the Sessions Court alleging that the accused had engaged in a sophisticated scheme to cheat him by creating multiple conflicting titles over the same property.

According to the petitioner’s case, the trouble began when he requested his brother-in-law, Srinidhi, to check on the premises of a property he believed he had rightfully purchased. Upon arriving at the site, Srinidhi allegedly found unknown persons occupying the premises. These individuals claimed they held legal records and entries in their names and reportedly threatened the complainant’s representative.

Following this encounter, Raghu R conducted a deeper search of revenue and registration records. The investigation revealed a convoluted history of transactions. It was discovered that a General Power of Attorney (GPA) existed between the accused, Lokesh, and his father dating back to November 2010. Subsequently, Lokesh allegedly executed a sale deed in favor of one Shivareddy (Accused No. 2) in January 2013, who then registered the property in the name of the petitioner.

However, the complainant alleged that in a blatant act of fraud, Lokesh later had a gift deed registered in his own name through his father in July 2018 at the Jalahalli Sub-Registrar office, effectively attempting to reclaim the property he had already sold. Raghu R argued that the trial court failed to consider this “fraudulent conduct” and the creation of “multiple deeds or charges” over the same schedule property when granting bail.

Arguments for the Cancellation of Bail

The petitioner’s counsel argued vehemently that the lower court’s order suffered from a non-application of mind. They contended that the gravity of the offence—systematic real estate fraud—was not properly weighed. The petitioner alleged that the accused had intentionally cheated him by creating a parallel chain of documents to defeat his ownership rights.

The counsel further claimed that the trial court ignored documentary evidence and established precedents from the Hon’ble Apex Court regarding the handling of white-collar crimes and property fraud. They argued that letting such individuals remain on bail would embolden fraudulent activities in the real estate sector.

Court Observations on Civil vs. Criminal Disputes

In its detailed analysis, the Sessions Court noted that while the allegations involved cheating, the core of the matter was a property title dispute. Judge T. Govindaiah observed that in real estate transactions, a significant burden of due diligence lies with the purchaser.

The court remarked that it is the duty of the petitioner to verify the correctness of documents at the time of purchase and registration. The judge noted that if the documents were indeed fraudulent or incorrect, the petitioner should have exercised caution before completing the transaction.

Crucially, the court stated, “The dispute between the complainant and accused is purely civil in nature. Therefore, if really the petitioner put loss or inconvenience while purchasing the property, he has to approach the civil court to seek proper remedy.”

The court also took into consideration that Lokesh is a permanent resident of Bengaluru, suggesting there was no immediate risk of him fleeing the jurisdiction of the court or evading the legal process.

Final Ruling and Rejection of the Petition

The court held that the IV Additional Chief Metropolitan Magistrate had applied proper “judicious mind” while granting the initial bail. It emphasized that the power to cancel bail is a significant one and should not be exercised unless there is clear evidence that the accused has misused the liberty granted to them or if the original order was perverse.

Finding no such grounds, the court concluded that there was no necessity to interfere with the previous order. The petition seeking the cancellation of Lokesh’s bail was officially rejected, affirming his right to remain at liberty pending the conclusion of the criminal proceedings.

This ruling underscores the recurring judicial perspective that property disputes arising from conflicting sale deeds and titles, even when involving allegations of “420” fraud, should primarily be adjudicated in civil courts rather than through the cancellation of criminal bail.