Mere Demand Of Exorbitant Amount As Settlement To Withdraw Litigation Not "Extortion": Bombay High Court
The Bombay High Court has held that merely demanding an exorbitant or disproportionate amount during settlement talks does not by itself attract Section 385 of the Indian Penal Code or constitute an offence of extortion. The Court observed that an intentional threat or fear of injury is an essential ingredient of the offence, and quashed the FIR against the flat purchasers.
Justice Ranjitsinha Raja Bhonsale was hearing a criminal application filed seeking quashing of an FIR under Sections 385 and 34 IPC. The applicants had disputes with the builder/developer concerning deficiencies and amenities in the flats and had also filed consumer proceedings.
During a meeting, the applicants had demanded Rs.25 lakh each from the developer for settling the disputes and said that otherwise he would face more trouble and obstacles in completing construction of the last Wing. The applicants contended that the meeting was part of settlement talks and that they had not compelled, coerced or threatened the developer to accept their proposal.
The Court explained that Section 383 IPC requires intentionally putting a person in fear of injury and dishonestly inducing that person to deliver property or valuable security, while Section 385 concerns putting or attempting to put a person in fear of injury in order to commit extortion. The threat must be intentional and of such gravity or intensity that it unsettles the person and takes away the element of free voluntary action constituting consent.
“The act of threat or the threat is required to be intentional and of such gravity or intensity that it mentally throws off balance and unsettles the person so threatened and tends to take away from his act and actions the element of free voluntary action which would constitute consent,” the Court remarked.
The Court noted that the transcripts of the meetings did not indicate any threat or act of extortion. Rather, they showed that the parties had mutually agreed to meet to explore an amicable settlement, discussed the deficiencies in the flats, pending litigation and the difficulties faced by the applicants, and negotiated the compensation amount.
The Court rejected the developer's contention that the demand of Rs.1.75 crore in aggregate was so disproportionate that it itself amounted to extortion.
“Prima facie, the transcript does not reflect or attribute any intention to the Applicants to threaten or put the Respondent No.2 in fear of any injury… Only demanding a exhorbitant and/or disproportionate amount by itself does not attract the provisions of Section 385 of the IPC nor make out any offence of extortion,” the Court observed.
The Court held that a general and bald statement that a pending litigation shall be pursued and proceeded in accordance with law and the consequent adverse orders, if any, may cause hindrance or obstacles cannot be termed as extortion or threat. Pursuing litigation in accordance with law in the alternative to a settlement cannot be perceived as an act of extortion.
The application was accordingly allowed, and the FIR and resultant chargesheet were quashed and set aside.
Case Title: Pawan Subhash Sarkale v. State of Maharashtra [Criminal Application No. 722 of 2017]