Full Judgment Text
2025 INSC 575
Non-Reportable
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
Criminal Appeal No. of 2025
(@ Special Leave Petition (Crl.) No.15413 of 2023)
Aaditya Khaitan @ Aditya Khaitan & Ors.
Appellant(s)
Versus
The State of Jharkhand & Ors.
Respondent(s)
J U D G E M E N T
K. VINOD CHANDRAN, J.
1. Leave granted.
2. The appeal is against the judgment of the High Court,
refusing to invoke the power under Section 482 of the Code of
1
Criminal Procedure, 1973 to quash the FIR registered against the
appellants, a company, whose officers are the appellants. The
2
Deputy General Manager of M/s. National Building Construction
3
Corporation Limited also filed a similar application, in which the
Signature Not Verified
1
the Cr.PC
2
the DGM
3
the NBCCL
Digitally signed by
Nirmala Negi
Date: 2025.04.28
15:34:59 IST
Reason:
Page 1 of 8
Crl. A. @ SLP Crl. 15413 of 2023
FIR against him was quashed. The appellants are aggrieved with
the refusal of the High Court to quash the FIR against them too,
which registration of crime according to the appellants is a strong
arm tactic to obtain recovery of money allegedly payable under
a contract, for which arbitration proceedings are initiated, which
has been stayed due to the pendency of the insolvency
proceedings under the Insolvency and Bankruptcy Code, 2016 in
which a moratorium has been ordered by the National Company
Law Tribunal, Kolkata Bench by order dated 29.04.2022 in Bank
4
of India v. McNally Bharat Engineering Company Limited .
3. We heard Mr. Gopal Sankarnarayanan, learned Senior
Counsel appearing for the appellants, Mr. Rajiv Shankar Dwivedi,
learned Standing Counsel for the respondent-State and Mr.
Deepak Dhingra, learned Counsel for the respondents. The crux
of the allegations is that the first accused-company having
obtained a contract from the NBCCL, sublet a portion of the work
to the second respondent herein; which ran into trouble, was
stalled, then revived, and again came to a standstill. Since
payments were due for the work carried out, the second
4
C.P (IB) No. 891/KB/2020
Page 2 of 8
Crl. A. @ SLP Crl. 15413 of 2023
respondent had sought an intervention in a proceeding before the
High Court, pending between the first accused company and
NBCCL, which was declined on the ground there is no back-to-
back contract, the contract between NBCCL and the first accused
clearly having provided a restrictive covenant against subletting
the contract without the consent of NBCCL. The second
respondent herein who was the complainant alleged that this fact
was suppressed and, hence, the accused were liable to be
proceeded against for the offences punishable under Section 406,
420, 467, 468 and 471 read with Section 34 of the Indian Penal
Code, 1860.
4. The High Court having considered the matter also referred
to certain relevant decisions with respect to quashing of an FIR
under Section 482, Cr. PC and while allowing it against the DGM
of NBCCL, refused to grant such relief to the appellants herein,
finding that it cannot be prima facie said that no offence
punishable under law is made out against the appellants herein.
5. The High Court has extracted from the judgment in Prof.
5
R.K.Vijayasarathy and Anr. v. Sudha Seetharam and Anr. ,
5
(2019) 16 SCC 739
Page 3 of 8
Crl. A. @ SLP Crl. 15413 of 2023
wherein the power under Section 482, Cr. PC was dealt with
relying on the judgment in Indian Oil Corporation v. NEPC
6
(India) Ltd. . Going by the binding precedents, it is trite that a
complaint can be quashed when the allegation made in the
complaint, even when taken on its face value and accepted in its
entirety, do not prima facie constitute any offence or make out the
case alleged against the accused. What is required is the
examination of the complaint as a whole, without examining the
merits of the allegations; desisting from a detailed inquiry or
meticulous analysis of the material nor an assessment of the
reliability or genuineness of the allegations in the complaint.
6. The above exercise, obviously, has not been carried out by
the High Court and after merely relying upon the negative
covenant in the contract between NBCCL and the first accused, it
was held that there is suppression of material facts which amounts
to dishonest and fraudulent action.
7. We have examined the complaint made, as available in the
FIR produced as Annexure P II. The complaint alleges that the first
accused-company expressed its intention to enter into a contract
6
(2006) 6 SCC 736
Page 4 of 8
Crl. A. @ SLP Crl. 15413 of 2023
to carry out a portion of the project for which a contract was
entered into with NBCCL. There was a contract entered into
between the first respondent accused and the complainant, based
on which the work was also commenced. The allegations as laid
down in the FIR mostly constitute a narration of the bills submitted
by the complainant and the part payments made by the accused,
as also the balance remaining. It is then submitted that for reason
of non-completion of the work within the stipulated time, as
agreed with NBCCL, the work was directed to be stopped by
NBCCL. A proceeding was initiated by the first accused before
the High Court against the NBCCL in which the complainant
sought intervention, which was denied by the High Court finding
that there is no back to back contract for the reason of the
restrictive covenant in the contract of the first accused with the
NBCCL. The complainant submits that only then, they realised that
there was a stipulation in the contract that subletting will be
permissible only on consent of the principal.
8. However, it is also stated in the complaint that later, on the
directions of the High Court, the contract was resumed, when
even the complainant resumed their work as per the contract
Page 5 of 8
Crl. A. @ SLP Crl. 15413 of 2023
entered into with the first accused. This was after the restrictive
covenant came to the knowledge of the complainant. Again, bills
were submitted, and part payments were made, wherein also,
there are amounts still remaining due to the complainant. An
application filed before the NCLT by the complainant was
rejected, as is seen from Annexure P12. The complainant has now
invoked the arbitration clause, but there is a stay of arbitration, as
admitted by both parties due to the moratorium ordered by the
NCLT.
9. A reading of the complaint, hence, would indicate a contract
having been entered into pursuant to which there were financial
transactions and allegedly amounts are due to the complainant.
We would assume for the moment that the restrictive covenant not
available in the contract with the NBCCL was not disclosed by the
first accused, when they entered into the contract with the
complainant. A reading of the complaint but would clearly
indicate that the complainant was aware of the fact, at the
inception itself, that they were entering into a contract to do a
portion of the work, as per the contract awarded by NBCCL to the
accused company. While the complainant alleges suppression,
Page 6 of 8
Crl. A. @ SLP Crl. 15413 of 2023
obviously, the complainant also did not make any effort to look
into the contract entered with the NBCCL by the first accused.
10. In any event, even if we assume that the sub-contract was
without a consent from the principal and that the restrictive
covenant was suppressed from them, it would only entail an action
by NBCCL as against the first accused-company. The NBCCL
cannot take any action against the complainant since it has no
privity of contract with the complainant.
11. Further, even if, there is a restrictive covenant and the
contract of the NBCCL was terminated for reason of the sub-lease,
that alone cannot absolve the first accused company from
satisfying the bills raised by the complainant, if it is in accordance
with the contract they entered into. The complainant has taken
steps for recovery of the amounts due, which unfortunately has
been stalled by reason of the moratorium ordered by the NCLT.
The complainant would have to take proper recourse and avail its
legal remedies for recovery of money, which is the crux and
essence of the allegations as we discern from the complaint, read
in its entirety. We do not find any criminality arising from the
Page 7 of 8
Crl. A. @ SLP Crl. 15413 of 2023
allegations and prima facie , the allegations do not constitute any
offence or make out any case against the accused persons.
12. We are, hence, of the opinion that the High Court erred in
not invoking the power under Section 482, Cr. PC in the present
case. The High Court having failed to invoke its power under
Section 482, Cr. PC in the appeal, we invoke the same and quash
the FIR on which no further proceedings will be taken. The appeal
stands allowed.
13. Pending application, if any, shall stand disposed of.
………….……………………. J.
(SUDHANSHU DHULIA)
………….……………………. J.
(K. VINOD CHANDRAN)
NEW DELHI;
APRIL 28, 2025.
Page 8 of 8
Crl. A. @ SLP Crl. 15413 of 2023
Non-Reportable
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
Criminal Appeal No. of 2025
(@ Special Leave Petition (Crl.) No.15413 of 2023)
Aaditya Khaitan @ Aditya Khaitan & Ors.
Appellant(s)
Versus
The State of Jharkhand & Ors.
Respondent(s)
J U D G E M E N T
K. VINOD CHANDRAN, J.
1. Leave granted.
2. The appeal is against the judgment of the High Court,
refusing to invoke the power under Section 482 of the Code of
1
Criminal Procedure, 1973 to quash the FIR registered against the
appellants, a company, whose officers are the appellants. The
2
Deputy General Manager of M/s. National Building Construction
3
Corporation Limited also filed a similar application, in which the
Signature Not Verified
1
the Cr.PC
2
the DGM
3
the NBCCL
Digitally signed by
Nirmala Negi
Date: 2025.04.28
15:34:59 IST
Reason:
Page 1 of 8
Crl. A. @ SLP Crl. 15413 of 2023
FIR against him was quashed. The appellants are aggrieved with
the refusal of the High Court to quash the FIR against them too,
which registration of crime according to the appellants is a strong
arm tactic to obtain recovery of money allegedly payable under
a contract, for which arbitration proceedings are initiated, which
has been stayed due to the pendency of the insolvency
proceedings under the Insolvency and Bankruptcy Code, 2016 in
which a moratorium has been ordered by the National Company
Law Tribunal, Kolkata Bench by order dated 29.04.2022 in Bank
4
of India v. McNally Bharat Engineering Company Limited .
3. We heard Mr. Gopal Sankarnarayanan, learned Senior
Counsel appearing for the appellants, Mr. Rajiv Shankar Dwivedi,
learned Standing Counsel for the respondent-State and Mr.
Deepak Dhingra, learned Counsel for the respondents. The crux
of the allegations is that the first accused-company having
obtained a contract from the NBCCL, sublet a portion of the work
to the second respondent herein; which ran into trouble, was
stalled, then revived, and again came to a standstill. Since
payments were due for the work carried out, the second
4
C.P (IB) No. 891/KB/2020
Page 2 of 8
Crl. A. @ SLP Crl. 15413 of 2023
respondent had sought an intervention in a proceeding before the
High Court, pending between the first accused company and
NBCCL, which was declined on the ground there is no back-to-
back contract, the contract between NBCCL and the first accused
clearly having provided a restrictive covenant against subletting
the contract without the consent of NBCCL. The second
respondent herein who was the complainant alleged that this fact
was suppressed and, hence, the accused were liable to be
proceeded against for the offences punishable under Section 406,
420, 467, 468 and 471 read with Section 34 of the Indian Penal
Code, 1860.
4. The High Court having considered the matter also referred
to certain relevant decisions with respect to quashing of an FIR
under Section 482, Cr. PC and while allowing it against the DGM
of NBCCL, refused to grant such relief to the appellants herein,
finding that it cannot be prima facie said that no offence
punishable under law is made out against the appellants herein.
5. The High Court has extracted from the judgment in Prof.
5
R.K.Vijayasarathy and Anr. v. Sudha Seetharam and Anr. ,
5
(2019) 16 SCC 739
Page 3 of 8
Crl. A. @ SLP Crl. 15413 of 2023
wherein the power under Section 482, Cr. PC was dealt with
relying on the judgment in Indian Oil Corporation v. NEPC
6
(India) Ltd. . Going by the binding precedents, it is trite that a
complaint can be quashed when the allegation made in the
complaint, even when taken on its face value and accepted in its
entirety, do not prima facie constitute any offence or make out the
case alleged against the accused. What is required is the
examination of the complaint as a whole, without examining the
merits of the allegations; desisting from a detailed inquiry or
meticulous analysis of the material nor an assessment of the
reliability or genuineness of the allegations in the complaint.
6. The above exercise, obviously, has not been carried out by
the High Court and after merely relying upon the negative
covenant in the contract between NBCCL and the first accused, it
was held that there is suppression of material facts which amounts
to dishonest and fraudulent action.
7. We have examined the complaint made, as available in the
FIR produced as Annexure P II. The complaint alleges that the first
accused-company expressed its intention to enter into a contract
6
(2006) 6 SCC 736
Page 4 of 8
Crl. A. @ SLP Crl. 15413 of 2023
to carry out a portion of the project for which a contract was
entered into with NBCCL. There was a contract entered into
between the first respondent accused and the complainant, based
on which the work was also commenced. The allegations as laid
down in the FIR mostly constitute a narration of the bills submitted
by the complainant and the part payments made by the accused,
as also the balance remaining. It is then submitted that for reason
of non-completion of the work within the stipulated time, as
agreed with NBCCL, the work was directed to be stopped by
NBCCL. A proceeding was initiated by the first accused before
the High Court against the NBCCL in which the complainant
sought intervention, which was denied by the High Court finding
that there is no back to back contract for the reason of the
restrictive covenant in the contract of the first accused with the
NBCCL. The complainant submits that only then, they realised that
there was a stipulation in the contract that subletting will be
permissible only on consent of the principal.
8. However, it is also stated in the complaint that later, on the
directions of the High Court, the contract was resumed, when
even the complainant resumed their work as per the contract
Page 5 of 8
Crl. A. @ SLP Crl. 15413 of 2023
entered into with the first accused. This was after the restrictive
covenant came to the knowledge of the complainant. Again, bills
were submitted, and part payments were made, wherein also,
there are amounts still remaining due to the complainant. An
application filed before the NCLT by the complainant was
rejected, as is seen from Annexure P12. The complainant has now
invoked the arbitration clause, but there is a stay of arbitration, as
admitted by both parties due to the moratorium ordered by the
NCLT.
9. A reading of the complaint, hence, would indicate a contract
having been entered into pursuant to which there were financial
transactions and allegedly amounts are due to the complainant.
We would assume for the moment that the restrictive covenant not
available in the contract with the NBCCL was not disclosed by the
first accused, when they entered into the contract with the
complainant. A reading of the complaint but would clearly
indicate that the complainant was aware of the fact, at the
inception itself, that they were entering into a contract to do a
portion of the work, as per the contract awarded by NBCCL to the
accused company. While the complainant alleges suppression,
Page 6 of 8
Crl. A. @ SLP Crl. 15413 of 2023
obviously, the complainant also did not make any effort to look
into the contract entered with the NBCCL by the first accused.
10. In any event, even if we assume that the sub-contract was
without a consent from the principal and that the restrictive
covenant was suppressed from them, it would only entail an action
by NBCCL as against the first accused-company. The NBCCL
cannot take any action against the complainant since it has no
privity of contract with the complainant.
11. Further, even if, there is a restrictive covenant and the
contract of the NBCCL was terminated for reason of the sub-lease,
that alone cannot absolve the first accused company from
satisfying the bills raised by the complainant, if it is in accordance
with the contract they entered into. The complainant has taken
steps for recovery of the amounts due, which unfortunately has
been stalled by reason of the moratorium ordered by the NCLT.
The complainant would have to take proper recourse and avail its
legal remedies for recovery of money, which is the crux and
essence of the allegations as we discern from the complaint, read
in its entirety. We do not find any criminality arising from the
Page 7 of 8
Crl. A. @ SLP Crl. 15413 of 2023
allegations and prima facie , the allegations do not constitute any
offence or make out any case against the accused persons.
12. We are, hence, of the opinion that the High Court erred in
not invoking the power under Section 482, Cr. PC in the present
case. The High Court having failed to invoke its power under
Section 482, Cr. PC in the appeal, we invoke the same and quash
the FIR on which no further proceedings will be taken. The appeal
stands allowed.
13. Pending application, if any, shall stand disposed of.
………….……………………. J.
(SUDHANSHU DHULIA)
………….……………………. J.
(K. VINOD CHANDRAN)
NEW DELHI;
APRIL 28, 2025.
Page 8 of 8
Crl. A. @ SLP Crl. 15413 of 2023