The Supreme Court has set aside a Karnataka High Court order that had refused to quash a criminal case against a power of attorney holder in a land sale dispute. The Court said the case cast "the shadow of criminality on a pure civil dispute." A bench of Justice Satish Chandra Sharma and Justice N. Kotiswar Singh allowed the petition filed by Sudha Rakesh on October 5, 2026.
Background
The land in question was a plot of 4 acres 19 guntas in Channasandra Village, Karnataka. After its owner, Ganesh, died without leaving a will, it passed to his wife and other legal heirs. On October 5, 2012, they signed an agreement to sell the land to Sudha Rakesh and also gave her a General Power of Attorney (GPA).
Acting through her as their GPA holder, the landowners then signed another agreement on November 19, 2012, with respondent no. 2 and one Kalpana Sure. The buyers had seven months to pay the balance and get the sale deed done. They never came forward. The landowners waited even beyond the limitation period for seeking specific performance, and on February 11, 2016, sold the land to Gaffar Baig.
The buyers then filed a civil suit for specific performance. On May 13, 2016, they also lodged FIR No. 121/2016 under Sections 420, 423 and 120-B read with Section 34 of the Indian Penal Code, covering cheating, a false statement in a transfer document and criminal conspiracy. The High Court quashed the FIR against the landowners on November 22, 2017, but refused the same relief to Sudha Rakesh on September 19, 2022.
Sudha Rakesh argued that she stood on the same footing as the landowners and that the dispute was purely civil. She said she was only a GPA holder and a confirming party to the sale deed. Respondent no. 2 countered that she was a principal actor who herself received the money, and that the sale deed concealed the earlier agreement.
The Court noted that the High Court had earlier called the matter a civil transaction. It quoted that order:
"Therefore, when the complainant has already approached the civil court and in view of the long delay in moving for getting the sale deed executed, in my opinion, it is purely a civil transaction between the parties which has been given a criminal colour by the complainant (respondent herein) for such type for proceedings, when the factual aspects clearly disclose there is not even a tinge of criminal attitude on the part of the petitioners."
Calling the High Court's reasoning in her case "a grave" error, the bench said the allegations rested on a sale deed signed by the landowners themselves. On the lower sale price, it held:
"The fact that the property was eventually sold at a lesser price should not have weighed with the High Court. It is purely a speculative line of reasoning and cannot be treated as an incriminating circumstance."
The Court also observed that cheating requires a deception that induces someone to hand over money. Here, the money was paid in 2012, nearly four years before the sale. It added that Section 423 was wrongly invoked, as no false statement about consideration appeared in the agreement or sale deed.
Holding that the High Court should have followed judicial consistency, the Supreme Court set aside the September 19, 2022 order. It quashed FIR No. 121/2016 registered at Kadugodi police station, along with all consequential proceedings.
Case Details
Case Title: Sudha Rakesh v. The State of Karnataka & Anr.
Case Number: SLP (Crl.) No. 12638 of 2022
Judge: Justice Satish Chandra Sharma and Justice Nongmeikapam Kotiswar Singh
Decision Date: October 5, 2026
