Police Can't Threaten Persons To Settle Disputes: Gujarat HC Says Orally; Flags Unwarranted Indulgence In Property, Money Recovery Matters

While hearing a plea for quashing a cheating FIR where the petitioners alleged that Police was asking them to "settle", the Gujarat High Court on Monday (February 10) orally remarked that these kind of cases were "repeatedly" coming before it where the police seemed to be "more vigilant" in matters concerning property disputes or recovery of money.

In doing so the court, which although was not inclined to entertain the present plea, further orally said that the police cannot insist on parties to settle or threaten the persons concerned which would be abuse of their power, underscoring that police authorities are to simply investigate the case and not conciliate anything. 

Justice Sandeep N Bhatt who was hearing a matter concerning alleged fraudulent transactions over the sale of two plots in Jamnagar orally said, “They have to simply to investigate the case, they are not there to conciliate anything. That itself speaks about the (police officials in) volume. This is repeatedly coming before this Court; this is not in one case. They (police) are more vigilant in such matters where the property dispute or dispute regarding the recovery of money is. They should not indulge in such (matters). They are not meant for this. The offence is different thing and their action is different thing, they can't insist to settle the dispute, that is the bottom line, they are abusing the power to that extent, by threatening the person even by repeatedly visiting the person. Every day we coming across such matter.”

During the hearing counsel for the petitioners contended that an FIR under IPC Section 420 has been registered for a civil dispute which was a “purely” commercial transaction. He said that two plots were agreed to be sold, possession of the subject land was handed over in 2024. He further contended that the transaction regarding the payment of the subject land took place in January 2023 and the FIR is now being registered wherein the applications by the power of attorney (POA)holder, original owner has been tendered to police.

He said that two plots ad-measuring 6000 sq. feet was agreed to be purchased by the accused person. Agreements were entered into, amount of the "white (money) was delivered by two cheques"; in the meanwhile an application to concerned police station was filed by original owner who had already handed over the POA to the original complainant, the counsel said. 

"Notice correspondence between the parties during this in one and half year have taken place, in which our case is that the case is agent process of GIDC (Gujarat Industrial Development Corporation) plots cannot be completed due to insufficient documents. Our loan process has been proceeded. We furnished the documents.The NBFC Finance raised the objection...We are ready to deposit our part before this Court, we have made the payment and we produced the receipt before the police," the counsel said. 

Meanwhile the state's counsel said that a letter was written by petitioner no. 2  Shanti Bhai to the bank that the loan amount is paid, without informing the complainant (Mehul bhai) and the original owner (Rajan). Hence he said that the letter was written without any authority. 

"The signature of the original owner had been put and the agreements were produced before the GIDC and then the transaction was taken place. I'm surprised why 465 and 467 (IPC) is not added, if the signatures are forged, and if that is the allegation, it needs to be looked into," the state's counsel said. 

He said that the loan got cleared at the behest of the accused, they wrote to bank and they got NOC then they told Gujarat Industrial Development Corporation that the loan is cleared and land is to be transferred to them and based on it GIDC passed an office order. He said that now the accused's names are mutated in the records of GIDC as owners of these plots. 

The Court then asked “How GIDC can (mutate names)? On the basis of notarized documents, how it can be?” The AGP then pointed out that the complainant was not present when this notary took place.

The petitioners' counsel said the plots were transferred by the form which was signed by the owner.  He said, "The notary agreement was passed. The notary has said that 'your consideration you sign and your advocate will identify, so far as if Rajan Bhai when he is not available, send it to Bombay and Rajan Bhai will sign before Bombay notary'. That was the agreement".

The Counsel then contended that as per the process of GIDC, a prescribed form as per the rules is to be signed, and the form has the original signature of owner therefore, after the signing of the form and receiving the amount agreed upon till date (80% of the 2 Crores and 36 Lakhs) the possession was handed over.

The Court then asked “Who is the complainant? How is he connected?”. 

The counsel said that the Owner (Rajan Bhai) had given POA to Complainant (Mehul Bhai) to administer the sale proceedings of the two plots and these two men have both have filed applications before the police. He said that in the complainant's application, the belated FIR was registered. 

The Court then remarked “Then how can you contend that it is signed by Rajan Bhai, that is the question of trial.” Meanwhile the petitioners counsel further said police was telling the petitioners to “compromise the matter” and that the son of his client was called upon yesterday. 

At this point the court orally said, “That is… we are deprecating but what else can we (do), if the offence is made out then what else can we (do). They (police) are not supposed to play that role, they are having some more serious...but they are interested in such matters, that is also correct. We don't want to enter into this. Higher Officers are required to look into all this thing, but it seems that ultimately everybody is getting benefit of this...Otherwise, why this practice is not stopped?”

The State's counsel however said that doesn't want to “clarify” the submission of the petitioners' counsel but the officer who was present are looking into the matter. He said that the statement made by the petitioners counsel was “bald statement” and contended that  he will not defend the officer if they are inclined to settle it in such manner. He argued that the matter may be investigated as the FIR is of January and that the matter will be taken to its "logical end" adding that the police only has power to investigate.

The Court then orally said, “You are right. I'm not inclined in this matter. But at the same point of time, he (petitioner) has right to this extend that if they are insisting for the settlement, that practice is required to be deprecated. Your higher officers are not taking proper care about this thing. Someday they have to face the further consequence. Normal citizens must feel safe. If they have committed the offence, they should be afraid of this thing...but it should not happen that instead of approaching the Civil Court, they will approach the police authority, they will play role of this, they are not conciliator. They can't decide title. They can't decide who is right, who is wrong, they have to investigate, they have to place the material on the record.”

The state's counsel then contended that this is just an apprehension and it is a 'bald statement' and he will confirm with the officers.

The Court at this point orally remarked, “You are right, …with a view to prejudice the court, they are making (such statements). Then also, ask the concerned officer not to indulge in such (matter) otherwise, they will face the (consequence). They should only investigate and file the papers they are not there to see whether settlement is arrived or not, that is not their lookout.”

The state's counsel said that the same shall not happen. 

The court showed its inclination to not "entertain" the matter at this stage and said that the petitioners can either withdraw or the court shall dismiss the plea with a reasoned order. Thereafter the petitioners' counsel sought time to seek instructions on this aspect and in the post lunch session he withdrew the plea. 

Case Title: Mukeshbhai angalji Makwana & Anr. vs State of Gujarat & Anr.

Citation: 2025 LiveLaw (Guj) 24