Citation: Sudha Rakesh v. State of Karnataka & Anr., Special Leave Petition (Crl.) No. 12638 of 2022, Supreme Court (Justices Satish Chandra Sharma and Nongmeikapam Kotiswar Singh), decided on 05.10.2026 | 2026 INSC 1086
The Supreme Court has quashed a cheating FIR against a power-of-attorney holder in a land deal gone wrong, holding that it was a civil dispute given a criminal colour and that the High Court should not have given relief to the landowners but refused it to him.
Sudha Rakesh held a 2012 agreement and a General Power of Attorney from the landowners of 4 acres 19 guntas at Channasandra in Karnataka. Acting for them, she signed a second sale agreement on 19 November 2012 with two buyers, who had seven months to pay the balance and complete the sale. They never turned up, and after the limitation period for specific performance passed, the land was sold in February 2016 to another buyer. The original buyers then sued for specific performance and also lodged an FIR in May 2016 under Sections 420, 423 and 120B IPC against the landowners and Sudha Rakesh. In 2017, the Karnataka High Court quashed the FIR against the landowners, saying it was a “purely civil transaction” given a criminal colour. A different bench refused to quash it against her, on the grounds that she received the money, signed the 2012 agreement and was a confirming party to the sale deed, and that the land was sold at a lower price. Justices Satish Chandra Sharma and Nongmeikapam Kotiswar Singh allowed her appeal. They held that the allegations rested on the sale deed executed by the landowners, so if no crime could be attributed to them, none could be attributed to her. The money was received collectively, and she signed the 2012 agreement on the landowners’ behalf, with no claim that she exceeded her authority. The lower price was “speculative” and would equally have implicated the landowners. The question of whether she passed the money to the owners was never alleged. The court also found that the basic ingredient of cheating was missing, since the buyers’ money was given in 2012 without any deception, and the sale four years later could not have induced it. It added that Section 423 IPC was wrongly invoked, since no false statement about consideration was made in either document. The FIR and all consequential proceedings were quashed, and the court did not comment on the civil suit.
Cheating requires a deceptive act that induces delivery of money or property, so a later sale made years after the money was paid cannot make the earlier payment a case of cheating. Where a High Court has already quashed an FIR against co-accused on the ground that the dispute is purely civil, a similarly placed accused with no more serious role should get the same relief, in keeping with judicial consistency. A court cannot distinguish an accused on the basis of hypothetical questions that do not arise from the allegations.