Under which rules Minister Anil Vij was ordering SHO for registration of FIR-Turning civil case into criminal is violation of directions of Supreme Court.

Gustakhi Maaf Haryana-Pawan Kumar Bansal.

Under which rules Minister Anil Vij was ordering SHO for registration of FIR-Turning civil case into criminal is violation of directions of Supreme Court.Supreme Court on settling of civil disputes through pressure of criminal prosecution

Atul Kumar Advocate-on-Record, Supreme Court of…
Published Mar 9, 2024

Recently, the Supreme Court of India in its judgment in the case of Lalit Chaturvedi & anr Vs State of U.P. (SLP (Crl) 13485/2023) deprecated the practice of settling purely civil disputes through pressure of criminal prosecution. The Supreme Court observed that it has, in a number of judgments, pointed out the clear distinction between a civil wrong in the form of breach of contract, non-payment of money or disregard to and violation of the contractual terms; and a criminal offence under Sections 420 and 406 of the IPC. The Supreme Court criticised and observed that repeated judgments of the Supreme Court, however, are somehow overlooked, and are not being applied and enforced. While dealing with the instant case, the Supreme Court relied on its judgment in V.Y. Jose and another Vs. State of Gujarat ((2009) 3 SCC 78) wherein it clearly laid down that a contractual dispute or breach of contract per se should not lead to initiation of a criminal proceeding. The Court explained that the ingredient of ‘cheating’, as defined under Section 415 of the IPC, is existence of a fraudulent or dishonest intention of making initial promise or representation thereof, from the very beginning of the formation of contract. Further, the Court held that in the absence of the averments made in the complaint petition wherefrom the ingredients of the offence can be found out, the High Court should not hesitate to exercise its jurisdiction under section 482 of the Cr.P.C. The Supreme Court underlined the importance of section 482 of the Cr.P.C. and explained that it serves a salutary purpose viz. a person should not undergo harassment of litigation for a number of years, when no criminal offence is made out. The Court further explained that it is one thing to say that a case has been made out for trial and criminal proceedings should not be quashed, but another thing to say that a person must undergo a criminal trial despite the fact that no offence has been made out in the complaint.

The Supreme Court held that in the instant case even if the assertions made in the complaint are correct, but even then, a criminal offence under Section 420 read with Section 415 of the IPC is not established in the absence of deception by making false and misleading representation, dishonest concealment or any other act or omission, or inducement of the complainant to deliver any property at the time of the contract(s) being entered. The Court held that the ingredients to allege the offence are neither stated nor can be inferred from the averments. The Court further explained that in the complaint, a prayer is made to the police for recovery of money from the appellants but duty of police is to investigate the allegations which discloses a criminal act and the police does not have the power and authority to recover money or act as a civil court for recovery of money. The Court observed that the chargesheet though refers to Section 406 of the IPC, but without pointing out how the ingredients of said section are satisfied. No details and particulars are mentioned. There are decisions which hold that the same act or transaction cannot result in an offence of cheating and criminal breach of trust simultaneously. The Court further held that for the offence of cheating, dishonest intention must exist at the inception of the transaction, whereas, in case of criminal breach of trust there must exist a relationship between the parties whereby one party entrusts another with the property as per law, albeit dishonest intention comes later. In this case entrustment is missing, in fact it is not even alleged as the case involved sale of goods. The chargesheet does refer to Section 506 of the IPC relying upon the averments in the complaint. However, no details and particulars are given, when and on which date and place the threats were given. Without the said details and particulars, it is apparent that these allegations of threats etc. have been made only with an intent to activate police machinery for recovery of money.The Court held that initiation of the criminal process for oblique purposes, is bad in law and amounts to abuse of process of law. The Supreme Court relying on the above principles, set aside the impugned judgment of High Court and quashed the FIR and resultant proceedings, including the chargesheet.

Other Judicial Precedents on the Issue: In Paramjeet Batra v. State of Uttarakhand & Ors. ((2013) 3 SCC 673), the Supreme Court held that whether a complaint discloses a criminal offence or not depends upon the nature of the facts alleged therein and whether essential ingredients of criminal offence are present or not has to be judged by the High Court. A complaint disclosing civil transactions may also have a criminal texture. But the High Court must see whether a dispute which is essentially of a civil nature is given a cloak of criminal offence. In such a situation, the High Court should not hesitate to quash the criminal proceedings to prevent abuse of process of law.

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Similarly, in Vesa Holdings Private Limited and Anr. v. State of Kerala and Ors. (2013)11 SCC 673), the Supreme Court reiterated the principle and held that it is true that a given set of facts may make out a civil wrong as also a criminal offence. The real test is whether the allegations in the complaint disclose the criminal offence of cheating or not. In the present case there is nothing to show that at the very inception there was any intention on behalf of the accused persons to cheat which is a condition precedent for an offence under Section 420 IPC. Rather the complaint does not disclose any criminal offence at all. The criminal proceedings should not be encouraged when it is found to be mala fide and allowing the police investigation to continue would amount to an abuse of the process of the court. Similar position was reiterated by the Supreme Court in Kapil Aggarwal and Ors. v. Sanjay Sharma and Ors. (2015) 8 SCC 293 and held that section 482 is designed to achieve the purpose of ensuring that criminal proceedings are not permitted to degenerate into weapons of harassment.

It may be noted that the Supreme Court in a catena of judgements in past has criticised the practice to file frivolous criminal complaints and vexatious litigation to settle purely contractual and civil disputes. These cases mainly involve contractual and commercial disputes, property disputes, partnership disputes, recovery matters, inter-company business disputes and rivalries etc. Though the Supreme Court in its various judgments has clearly laid down that in case of purely civil disputes, giving it cloak of criminal offence is abuse of process of law, still criminal cases in such matters are filed with impunity without having regard to the law laid down by the Supreme Court. The modus operandi of settling civil disputes by applying pressure of criminal prosecution are being increasingly resorted to often resulting into arm twisting of a weaker party since long delay in criminal justice system itself becomes punishment for weaker party who is forced to succumb to the pressure of criminal prosecution resulting in abuse of process of law and also choking of criminal justice system.