Supreme Court: In an appeal challenging the Andhra Pradesh High Court’s order (impugned order) quashing the criminal proceedings relating to alleged fraud and forgery in the sale of CSI Church land, particularly when the allegations disclosed serious discrepancies concerning authorisation, extent of land sold, and compliance with governing rules, the Division Bench of Ahsanuddin Amanullah and R. Mahadevan, JJ., set aside the impugned order and restored the criminal proceedings, holding that the material on record disclosed prima facie allegations of fraud, forgery, and unauthorised alienation of trust property, i.e. CSI Church land, the High Court ought not had quash criminal proceedings at the threshold.
The dispute in instant matter concerns with the transfer of 7.75 acres of land situated in Ananthapuramu, belonging to the Church of South India Trust Association (CSITA). It was asserted that a Resolution dated 10 February 2007 authorised the sale of only 1 acre of land along with a bungalow, whereas the sale deed executed on 22 September 2007 transferred the entire 7.75 acres.
The appellant contended that the sale deed was fraudulent, not only because it exceeded the authority granted but also because the consideration was grossly undervalued. While the circle rate suggested a valuation of nearly ₹10 crores, the land was sold for merely ₹1 crore.
The High Court quashed the criminal proceedings on two principal grounds that, (i) the complainant lacked locus standi as the matter pertained to internal affairs of the trust; and (ii) there was an unexplained delay of several years in lodging the FIR.
The Court examined statements recorded under Section 161 CrPC and other materials which revealed significant inconsistencies. It was noted that key witnesses, including officials of the Church, categorically stated that the Resolution dated 10 February 2007 permitted sale of only 1 acre, and no subsequent resolution authorised sale of the entire extent. It was noted that mandatory approvals under governing rules were not obtained, the sale proceeds were not properly accounted for, and statutory requirements such as remittance of 1 per cent to CSITA were not complied with. The Court asserted that these circumstances “cast serious doubt on the genuineness and scope” of the transaction.
The Court held that the material on record prima facie disclosed serious irregularities. The Court noted that the resolution expressly referred to sale of only 1 acre, whereas the actual transfer was of 7.75 acres, “far beyond the authorised extent”.
The Court reiterated that at the stage of quashing, the Court is not expected to conduct a mini-trial or evaluate the sufficiency of evidence. In the present case the allegations clearly disclosed triable issues, therefore, adjudication on evidence was required.
On the issue of locus standi, the Court clarified that criminal law can be set in motion by any person having knowledge of an offence, unless expressly barred. Therefore, the objection regarding maintainability was rejected. Regarding delay, the Court held that “delay in lodging the complaint is not by itself fatal, particularly in the absence of material indicating prior knowledge or deliberate inaction on the part of the complainant”.
The Court further emphasised that the property in question, though managed by a corporate body, was essentially trust property held for the benefit of the community, making any irregularity in its alienation a matter of public concern.
The Court allowed the appeal and set aside the impugned order. The Court restored the criminal proceedings and directed to proceed from the stage at which they had been quashed. It clarified that its observations were limited to the question of quashing and would not prejudice the trial on merits.
[State of A.P. v. B. Reddeppa Reddy, 2026 SCC OnLine SC 501, decided on 18-3-2026]
Advocates who appeared in this case:
Ms. Prerna Singh, Adv., Mr. Guntur Pramod Kumar, AOR, Mr. Samarth Krishan Luthra, Adv., Mr. Dhruv Yadav, Adv., Counsel for the Appellant
Mr. Basant R., Sr. Adv., Mr. Shailendera Kishore Singh, AOR, Ms. Ananya Singhal, Adv., Mr. Naman Vashishth, Adv., Mr. Akash Rajeev, Adv., Mr. Sumeer Sodhi, AOR, Mr. Varun Tankha, Adv., Ms. Vanshika Jhamb, Adv., Counsel for the Respondents
