Ruled in favour of State Through SHO P.S. Inderpuri & Ors (Respondents)
In Short
Deepak Malhotra and Ruchi Malhotra accused the sellers of cheating them by selling two flats that were already mortgaged to a bank. However, police investigation and bank records revealed that the buyers actually knew about the loan and mortgage before purchasing the property. The Delhi High Court upheld the decision to close the cheating case against the sellers and to take action against the buyers for filing a false complaint.
The Parties
Party A: Deepak Malhotra and Ruchi Malhotra (Petitioners)
Party B: State Through SHO P.S. Inderpuri, Prem Singh, and Bhupinder Kaur (Respondents)
Advocates & Judges
For Party A: Learned Advocate Mr. Vikram Aggarwal
For Party B: Learned Advocate Mr. Raghuvinder Verma, Learned Advocate Mr. Aditya Vikram Singh, and SI Krishan Verma
Judge(s): Hon'ble Justice Madhu Jain
What the Case Was About
The petitioners bought two flats in Delhi in June 2009. Years later, the bank took over the property because a business loan taken by the seller had not been repaid, and the flats were auctioned off. The buyers claimed they had no idea the property was mortgaged when they bought it and filed a police complaint for cheating. However, the police investigated and found evidence suggesting the buyers actually helped set up the bank loan and knew about the mortgage from the very beginning. Because of this, the police filed a cancellation report stating the cheating complaint was false.
Judgment Date
06.10.2026
The Outcome
The court dismissed the petitioners' challenge, keeping in place the lower court's order that accepted the police cancellation report.
What the Court Looked At
- The court noted that petitioner No. 1 had personally introduced the seller to the bank to help open the bank account and secure the loan.
- Bank records showed that money was transferred from the seller's business account to a concern of petitioner No. 2 on the very day the loan was sanctioned.
- A handwritten letter written by petitioner No. 1 to the bank in November 2010 proved the buyer knew about the outstanding loan years before the claimed discovery date of February 2013.
- The court observed that even though the sale deeds for the flats were genuine, the buyers failed to prove that the pre-existing mortgage was dishonestly hidden from them.
What This Means For You
When you buy property, you must be completely honest about what you knew and when you knew it. In this case, the buyers tried to use the police and the courts to claim they were innocent victims of fraud, but paper trails like bank documents, introduction forms, and letters written to the bank exposed the truth. If your own actions or past paperwork contradict the story you tell in a police complaint, the law can turn around and punish you for making false accusations. Setback Solutions is here to help you understand your options and coordinate your next steps in plain language, ensuring you never face complex disputes without clear guidance.
You Still Have Options
Dealing with a dismissed complaint, a false accusation charge, or a complex property fraud dispute can feel overwhelming and leave you out of pocket. You do not have to navigate these confusing legal crossroads alone; you can always seek a second opinion, explore new ways to present your facts, or get non-judicial guidance. Reach out to Setback Solutions for help understanding your options and coordinating the next steps. Please remember that Setback Solutions is not a law firm and does not give legal advice or guarantee any specific outcome.