The Karnataka High Court set aside criminal proceedings initiated against 84-year-old builder Mr. C. Gopalan, founder of Gopalan Enterprises, calling the two-decade-old cheating case “a clear abuse of legal process.” Justice S.R. Krishna Kumar, presiding over the matter, observed that the FIR registered by the HAL Police in Crime No. 366/2024 lacked the essential ingredients of criminal offences and was an attempt to convert a long-standing civil dispute into a criminal prosecution.
Background
The case stemmed from a complaint filed by N.M. Narendra Reddy, who along with his brothers, alleged that Mr. Gopalan had defrauded them in a joint development agreement over eight acres of land in Chinnappanahalli, Bengaluru.
As per the 2003 agreement, the brothers were to receive 47.5% of the constructed apartments, while Gopalan’s firm would retain the remaining 52.5%. The complainant claimed that despite the construction of nearly 396 apartments, the developer failed to hand over their rightful share and even constructed 126 additional units without approval.
Based on this, the HAL Police registered the FIR in April 2024 under Sections 406 (criminal breach of trust), 420 (cheating), and 465, 468, and 471 (forgery) of the Indian Penal Code.
However, Mr. Gopalan’s counsel, senior advocate K.N. Phaneendra, argued that the complaint was a civil dispute revived under criminal pretence after 20 years, and no material evidence indicated fraud or dishonest intention
Court’s Observations
Justice Krishna Kumar meticulously examined the complaint, noting that it failed to specify dates, details, or events showing any act of cheating. “The allegations are vague, bald, and omnibus,” the court said, adding that the FIR merely repeated terms like “fraud” and “cheating” without substantiating them.
The judge also pointed out that the complaint was filed after an unexplained delay of over two decades, despite ongoing civil proceedings between the same parties since 2017. “Absolutely no explanation whatsoever is offered for the long and inordinate delay,” he remarked.
Citing multiple Supreme Court precedents—including Bhajan Lal (1992), Sarabjit Kaur (2023), and Naresh Kumar (2024)—the court reiterated that a breach of contract cannot constitute cheating unless fraudulent intent is shown at the inception of the transaction.
“The dispute between the parties is essentially civil in nature. Criminal law cannot be used as a weapon for private vendetta or to settle civil scores,” the bench observed.
The order further invoked the Supreme Court’s warning in Indian Oil Corporation vs NEPC India Ltd. that there is a “growing tendency in business circles to convert civil disputes into criminal cases,” which the judiciary must discourage.
After analyzing the facts, the High Court concluded that no prima facie criminal case was made out and continuing the proceedings would amount to harassment of the petitioner.
“The continuation of criminal proceedings in this case would clearly amount to abuse of the process of law,” the bench held, directing that the FIR and all subsequent proceedings be quashed.
Case Title: Mr. C. Gopalan vs State of Karnataka & Anr.
Case Number: Writ Petition No. 13519 of 2024 (GM-RES)