If you are stuck in such a situation, here is what to do.

A few years ago, my sister and I entered into an agreement to sell our ancestral property in the Jayanagar area to a developer, Mr. Verma of Verma Constructions, for a new apartment project. However, Mr. Verma deceitfully obtained a Power of Attorney from us. Instead of developing apartments, he used this Power of Attorney to sell our entire property to a third party for approximately 3.5 Crore and began constructing a private house for this new client.

We immediately filed a civil suit against him. The court was in our favour and granted an injunction, ordering a “status quo” on the property, which means no further construction or changes were allowed. Despite this court order, Mr. Verma has been discreetly continuing the construction work. We recently learned from neighbours that the new buyer has already completed the property registration in their name and has paid the full amount to Mr. Verma. Meanwhile, our civil case is being deliberately delayed by the builder with various excuses.

To make matters worse, we have information that his client plans to move into the property by the end of this year. Our own lawyer seems unsure about whether we can prevent the new buyer from taking possession. Recently, Mr. Verma contacted us, offering an out-of-court settlement. He owes us 1.5 Crore. He claims to have no liquid cash, having reinvested the money elsewhere. His offer is to pay us 10 Lakhs upfront and provide 14 post-dated cheques of 10 Lakhs each for the remaining 1.4 Crore, promising to clear the full amount within a year. He argues that if he defaults, we can file a cheque bounce case against him, which is a serious criminal matter. A year ago, he made a similar offer, but our lawyer advised against it because they wanted us to lift the injunction immediately. Given our lawyer’s current uncertainty and the builder’s past fraudulent actions, we have very little trust in anyone. Should we accept this settlement offer? What if he stops paying once his client gets possession? We are concerned about the risks involved.

Advice in such cases

This is a classic case of fraud and breach of trust compounded by a violation of a court order. The settlement offer, especially with post-dated cheques from a person who has already proven to be untrustworthy, is fraught with risk. Here is some practical advice:

• Never agree to withdraw the civil suit or lift the injunction until you have received the entire settlement amount in your bank account. A promise documented in a settlement paper is not the same as cleared funds.
• The builder’s argument about a cheque bounce case being a deterrent is partially true, but it is also a delaying tactic. A cheque bounce case can take a year or more to resolve, during which time he will have achieved his objective of giving possession to his client.
• Instead of post-dated cheques, you can propose alternative security. Demand a Bank Guarantee for the entire settlement amount. This would mean his bank guarantees the payment, making it much more secure for you.
• You should immediately file a contempt of court petition against the builder for violating the status quo order by continuing construction. This will put significant legal pressure on him.
• The sale to the third party during the pendency of your suit is subject to the doctrine of *lis pendens*. This means the buyer’s rights are subject to the final outcome of your court case. If you win, the sale can be invalidated.

Applicable Sections of Law

This case involves both civil and criminal liabilities. The builder’s actions can be prosecuted under several provisions of Indian law:

• Section 318 of the Bharatiya Nyaya Sanhita, 2023 (BNS): For the act of cheating and fraudulently inducing you to part with your property.
• Section 316 of the Bharatiya Nyaya Sanhita, 2023 (BNS): For criminal breach of trust, as he misused the Power of Attorney entrusted to him.
• Sections 334 & 335 of the Bharatiya Nyaya Sanhita, 2023 (BNS): For forgery, if the Power of Attorney was forged or used for a purpose other than what was agreed upon.
• Section 138 of the Negotiable Instruments Act, 1881: This remains the governing law for cheque bounce cases. If he gives you cheques and they are dishonoured, a criminal case can be filed under this section.
• The Specific Relief Act, 1963: This governs your civil suit for cancellation of the fraudulent sale deed and for the recovery of your property or dues.
• The Contempt of Courts Act, 1971: For willfully disobeying the court’s injunction order.

If you are the complainant

• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.
• Insist that any settlement be executed through a formal agreement and, more importantly, ratified by the court through a consent decree. This makes the settlement terms a binding order of the court.
• File a criminal FIR against the builder for cheating, forgery, and criminal breach of trust. A civil suit and a criminal case can run simultaneously and the criminal proceedings will increase pressure on the builder to settle fairly.
• Do not sign any document relinquishing your rights or withdrawing the case until every single rupee has been credited to your account.
• Gather evidence of the ongoing construction, such as dated photographs, videos, and written statements from neighbours, to support your contempt petition.

If you are the victim

• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think. If you feel your current lawyer is not providing clear guidance or protecting your interests effectively, you are entitled to seek a second opinion or change your counsel.
• Keep all original documents, communications, and evidence securely. Make multiple copies.
• Do not engage in direct negotiation with the builder without your lawyer present. They may try to intimidate or mislead you.
• Understand that the builder is offering a settlement because your legal position is strong, especially with the injunction in your favour. Do not settle out of fear or desperation.

How the police behave in such cases

Often, when a property dispute has elements of a civil case, the police may be hesitant to register an FIR, directing the parties to resolve it in court. They might label it a “civil matter.” However, in this case, there are clear criminal elements like fraud, forgery, and breach of trust. A well-drafted criminal complaint, preferably prepared by a lawyer, highlighting these criminal offences, should be submitted to the Senior Superintendent of Police (SSP) or Commissioner of Police if the local police station refuses to register the FIR. Once an FIR is registered, the police are mandated to investigate under the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), which can lead to the builder’s arrest and puts immense pressure on them to offer a genuine settlement.

FAQs people normally have

What evidence is required?

To build a strong case, you need comprehensive evidence. This includes:

• The original agreement for development with the builder.
• A copy of the fraudulent Power of Attorney.
• A certified copy of your civil suit and the court’s injunction order.
• Any messages, emails, or call recordings of conversations with the builder.
• Dated photographs and videos of the illegal construction happening after the injunction.
• Affidavits or statements from neighbours who can testify about the ongoing construction.
• If possible, obtain a copy of the new sale deed (registry) made by the builder in favour of his client. This can be obtained from the sub-registrar’s office.

How long will the investigation take?

The timeline can vary significantly:

• Civil Suit: These cases are known to be lengthy and can take several years to reach a final verdict, especially if one party is intentionally delaying the proceedings.
• Criminal Investigation: After an FIR is filed, the police investigation can take anywhere from a few months to over a year to conclude with a chargesheet.
• Cheque Bounce Case: These are relatively faster. A case under Section 138 of the NI Act is usually decided within 1 to 2 years.
• Contempt Petition: This is generally decided much faster than the main suit, as it deals with the specific violation of a court order.

Advocate Sudhir Rao, Supreme Court of India