Supreme Court restores fraud case after daughters of landowner excluded from land acquisition compensation

The Supreme Court recently restored criminal proceedings against two men accused of forging a family tree and partition deed to wrongfully exclude their five women cousins from ₹33 crore land compensation awarded by the Bengaluru Metro Rail Corporation Limited (BMRCL) [Kathyayini v. Sidharth PS Reddy & Ors].

A Bench of Justices Vikram Nath and PB Varale said that the case prima facie involved conspiracy to deprive the five women - daughters of the land owner - of their rightful share by creating false documents.

The appellant in the case, one of the five daughters of late KG Yellappa Reddy, had alleged that her nephews and brothers prepared a fabricated family tree dated January 18, 2011. The tree showed that Reddy had only three sons and no daughters.

Based on this family tree and a disputed partition deed dated March 24, 2005, compensation for the land acquired by BMRCL was claimed and received solely by the sons and grandsons.

The appellant said that she became aware of this only in October 2017, by which time ₹27 crore had already been credited to the accused persons’ accounts. When she questioned them, they allegedly abused and threatened her. She filed complaints before the police, resulting in two FIRs under provisions of cheating, criminal conspiracy and forgery under the Indian Penal Code (IPC).

The City Crime Branch later filed charge sheets in both cases. The trial court took cognisance and registered two complaint cases against the accused, including the appellant’s nephews.

In 2021, two of the accused - Sidharth and Vikram Reddy - who are the sons of the appellant’s elder brother Sudhanva Reddy, approached the Karnataka High Court seeking to quash the criminal proceedings against them.

The High Court allowed their plea, holding that no offence of forgery or cheating was made out since the partition deed bore the thumb impression of Yellappa Reddy.

The Supreme Court held that the High Court had erred in relying on the sub-registrar’s statement, which had not been tested in cross-examination.

“It would be unwise to rely on unverified testimony of a Sub-Registrar to ascertain the genuineness of Partition deed,” the Bench said.

It also noted that while the High Court acknowledged the omission of the daughters from the family tree, it had wrongly concluded that the act did not amount to cheating.

The Court held that the exclusion was not accidental or technical. The allegedly forged documents were used to claim compensation meant for the entire family and criminal trial was required to determine the truth.

“All the above factors suggest that a criminal trial is necessary to ensure justice to the appellant,” the Court said.

The Court also rejected the argument that criminal proceedings should be quashed because related civil suits were pending. It referred to several previous rulings and held that civil remedies do not bar prosecution where a criminal offence is made out.

“Pendency of civil proceedings on the same subject matter, involving the same parties is no justification to quash the criminal proceedings if a prima facie case exists against the accused persons."

The Court ultimately allowed the appeal and set aside the High Court’s order of November 2023. It directed the trial court to proceed with the criminal complaints against the respondents in accordance with law.

The appellant was represented by Senior Advocate Menaka Guruswamy and Advocates Priya Puri, Utkarsh Pratap, Arunima Das, Ritim Mangala, Sachin Dubey and Sharad Kumar Puri.

The respondents were represented by Advocates Nikhil Rohatgi, Ranjeeta Rohatgi, V N Raghupathy, Raghavendra M Kulkarni, M Bangaraswamy, Venkata Raghu Mannepalli, Mythili S, Nikhil Majithia and Rishi Kumar Singh Gautam.

[Read Judgment]