Mere purchase not enough for prosecution in property fraud case: SC

NEW DELHI: The Supreme Court has quashed criminal proceedings against a purchaser arraigned in a decades-old forged Will and property fraud case from Tamil Nadu, holding that mere purchase of disputed property for valuable consideration, without specific material showing involvement in forgery or conspiracy, cannot justify criminal prosecution.

A Bench of Justices Vikram Nath and Sandeep Mehta set aside a Madras High Court order which had refused to quash proceedings against the appellant, S. Anand, in connection with a 2004 FIR alleging fabrication of a Will and fraudulent sale of ancestral property in Karur district.

Allowing the appeal, the apex court said that there was “not even an iota of evidence” indicating that the appellant had played any role in the alleged fabrication of the disputed Will dated September 12, 1988, or had knowledge of the alleged forgery at the time of purchase.

“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,” the Justice Nath-led Bench observed.

The case arose from allegations by the complainant that his deceased brother, in conspiracy with other accused persons, fabricated their father’s Will and used it to execute sale deeds in favour of purchasers, including the appellant, thereby depriving lawful heirs of property rights.

After investigation, police filed a charge sheet alleging offences under Sections 467, 468, 471, 420 and 120-B of the Indian Penal Code (IPC) against multiple accused, including purchasers of the property.

Examining the material on record, the Supreme Court recorded that the appellant was neither connected to the alleged creation of the forged Will nor party to earlier transactions that formed the basis of the prosecution’s conspiracy theory.

Reiterating settled principles governing criminal liability in property disputes, the top court held that criminal prosecution for cheating cannot ordinarily be sustained against a bona fide purchaser unless there is clear evidence of fraudulent intent or active conspiracy.