Breach of Joint Development Agreement does not amount to cheating: Karnataka HC

Bengaluru: The Karnataka High Court has said that if allegations are a breach of the Joint Development Agreement, then neither criminal breach of trust nor offence of cheating emerge.

The court said this while partly allowing a petition filed by Aditya Kanakaria, director of a real estate company.

The company had entered into a registered Joint Development Agreement with regard to 4 acres and 20 guntas situated in KR Puram hobli, Bengaluru. The agreement was executed by the children of one Muninarasamma, the owner of the property, and also signed by the stepchildren as confirming parties.

After 31 residential villas were constructed and one particular villa, number 21, was sold in 2016, one of the stepchildren filed two complaints in 2022, alleging criminal breach of trust and cheating.

One more complaint was filed against the petitioner and BBMP officials under the Prevention of Corruption Act, alleging that the petitioner had bribed civic officials for grant of occupancy certificate with regard to villa number 21.

Justice M Nagaprasanna noted that there is a delay of six years in filing the complaint.

The court observed that the complainant cannot be said to be lured into the subject transaction, a requirement for invoking the offence of cheating, as it is a Joint Development Agreement between the parties.

"The signatory to the Joint Development Agreement is the mother of the complainant. Therefore, there can be no dishonest intention right from the inception of the transaction. There is no explanation worth the name as to why the complainant sat quiet for six years, when villa no 21 was allegedly illegally sold in 2016,” the court said.

The court quashed the proceedings in two of the cases. However, with regard to the third complaint, involving the BBMP officials, the court has reserved liberty to the petitioner to seek discharge from the court concerned.