Full Judgment Text
2025 INSC 794
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO(S). OF 2025
(Arising out of SLP (Crl.) No (s). 9857 of 2018)
SHRICHAND RAJARAM
KUKREJA AND ANR. ….APPELLANT(S)
VERSUS
THE STATE OF MAHARASHTRA
AND ANR. ….RESPONDENT(S)
WITH
CRIMINAL APPEAL NO(S). OF 2025
(Arising out of SLP (Crl.) No (s). 10444 of 2018)
J U D G M E N T
Mehta, J.
1. Heard.
2. Leave granted.
Signature Not Verified
Digitally signed by
SONIA BHASIN
Date: 2025.06.02
12:09:08 IST
Reason:
1
3. The appellants in the above captioned appeals
1
are arraigned as accused in the FIR No. 443 of 2015
registered with MIDC Walunj Police Station,
Aurangabad for offences punishable under Sections
406, 420, 467, 468, 471 and 34 of the Indian Penal
2
Code, 1860.
4. Since both the appeals arise out of a common
th
order dated 8 October, 2018, passed by the Division
Bench of the High Court of Bombay Appellate Side,
3
at Aurangabad dismissing Criminal Application No.
6539 of 2015, filed by the appellants, and Criminal
Writ Petition No. 1438 of 2016, filed by Jaywant
Mallya (accused No. 6 in impugned-FIR), both have
been heard analogously and are being decided
together by this common order.
5. The complainant (respondent No. 2 in Criminal
Appeal @ SLP (Crl.) No. 9857 of 2018) has filed a
counter affidavit. Respondent No. 1-State of
Maharashtra has not filed any counter affidavit
despite repeated opportunities. However, Mr. Aaditya
Aniruddha Pande, learned standing counsel
1
Hereinafter, referred to as “impugned-FIR”.
2
Hereinafter, referred to as “IPC”.
3
Hereinafter, referred to as “High Court”.
2
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
appearing for the State of Maharashtra, has filed a
copy of a report under Section 173 of Code of
4
Criminal Procedure, 1973 in compliance of an order
rd
dated 23 April, 2025 passed by this Court.
6.
Facts in a nutshell, relevant and essential for
disposal of the appeals, are noted hereinbelow: -
5
6.1 . Ashok Karbhari Shingare Patil lodged the
impugned-FIR at the MIDC Walunj Police Station,
Aurangabad alleging, inter alia , that he was a
professional Contractor involved in variety of
construction works.
6.2 MIDC, Walunj, Aurangabad issued a tender in
the year 2009-2010, for construction of a sewerage
water filter plant under built, operate and transfer
basis (B.O.T.) at Plot No. 02, O.S. 7(P), Maharashtra
6
State Industrial Corporation with the pre-condition
that the selected building company would be required
to spend equally for this project. Upon completion of
the work by the company under the contract, a sum
of Rs. 27,00,000/- was to be passed on per month on
B.O.T. basis to the company.
4
Hereinafter, referred to as “CrPC”.
5
Hereinafter, referred to as “complainant”.
6
For short, “MIDC”.
3
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
7
6.3 . The tender submitted by Bharat Udyog Limited
(the successful bidder), a company registered with
the MIDC, was accepted and the project work was
awarded to it for the next 20 years commencing from
th
25 November, 2021. The possession of the property
was transferred to BUL. For undertaking the
construction works, BUL assigned a sub-contract to
S.W.D. Infrastructure Pvt. Ltd., Belapur, C.B.D., Navi
8
Mumbai in January, 2012. BUL gave certain orders
st
to SWD Infra on 1 March, 2012 against which a sum
of Rs.1,35,62,872/- remained outstanding. SWD
Infra further assigned a sub-contract to the
complainant’s company by name of Sai Group and an
agreement was entered into in this regard. The
complainant claimed that the payment for the work
under the sub-contract of SWD Infra was agreed to
be made to the complainant directly, under the
instructions given by the Directors of BUL (appellants
herein) to SWD Infra.
6.4. As per the complainant, for the work done
th th
between 10 October, 2013 to 5 May, 2014, a sum
of Rs.5,13,78,485.50/- remained outstanding to be
7
Hereinafter, referred to as ‘BUL’.
8
Hereinafter, referred to as the ‘SWD Infra’.
4
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
paid to his company (Sai Group) and that he had
received only an amount of Rs.3,68,15,612/-. A sum
of Rs.2,52,12,801/- was due to be paid to the
complainant by BUL. As the payment was not
forthcoming, the complainant expressed his inability
to carry on further work under the sub-contract.
Upon this, the Chairman and Director of the BUL,
namely Shrichand Rajaram Kukreja and Suryakant
(appellant Nos. 1 and 2 respectively) persuaded him
to continue with the project work. The complainant
was given an allurement that he was a prime
Contractor and hence, the bills pending with SWD
Infra should be submitted to them (appellants herein)
and in turn, the appellants would directly transfer
the payment from their bank account to the
complainant’s company. On receiving this assurance,
the complainant resumed the work spending an
amount of Rs.16,74,525/- for the same. He
submitted the bills towards work done via email to
the Project Manager of BUL (accused No. 3 in
th
impugned-FIR) on 12 December, 2014.
6.5. Another bill for a sum of Rs.2,12,59,000/- was
raised by the complainant towards the work carried
out under the sub-contract but the persons in-charge
5
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
of BUL kept on giving false assurances and did not
make the requisite payments. Consequently, the
complainant was compelled to sell his assets in order
to make payment towards the material and labour
costs.
6.6. The complainant further claimed that two
Engineers, namely, Ganesh Rathod and Chetan
Dabhade were working with his concern (Sai Group)
but the Project Manager Rajendra Yadav (accused No.
3 in impugned-FIR) and Jaywant Mallya (accused No.
6 in impugned-FIR), who were associated with BUL,
submitted false documents to MIDC showing those
two engineers to be employed by BUL. These
documents bore false/fabricated signatures of
Ganesh Rathod and Chetan Dabhade and were
th
submitted at the MIDC office on 12 February, 2015.
BUL submitted a false stock statement to the Bank
Auditor, Oriental Bank of Commerce in March 2015,
falsely posing that the stocks, etc. of the complainant
were owned by them.
6.7. The complainant concluded his complaint by
alleging that he had worked on the project of STP
plant and drainage pipe line at Bajaj Nagar, MIDC as
a sub-contractor for BUL but partial payment of
6
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
Rs.3,68,00,000/- only against the total work
successfully carried out by the complainant was
made to him and valid bills to the tune of
Rs.3,95,00,000/- and Rs.1,16,00,000/- remained
outstanding. BUL had entered into a direct sub-
nd
contract with the complainant on 22 November,
2014 and on the assurance of the former, the
complainant undertook the work on their behalf. The
accused persons (including the appellants herein)
collected the amounts against the work executed by
the complainant from MIDC, but they refused to pass
on the payment to him despite his entitlement. They
submitted false documents claiming to have
performed the work whereas it was the complainant
who had carried out the said work under the sub-
contract. In this manner, the complainant claimed to
have been cheated of a total amount of
Rs.5,11,69,398/- at the hands of the accused
persons. Based on this complaint, the impugned-FIR
th
No. 443 of 2015 came to be registered on 14
October, 2015 and the investigation was commenced.
7
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
7. Being aggrieved, the appellants herein filed a
9
quashing petition under Section 482 of CrPC. On the
other hand, Jaywant Mallya (respondent No. 1 in
Criminal Appeal @ SLP (Crl.) No. 10444 of 2018) who
was arraigned as accused No. 6 in impugned-FIR,
10
preferred a criminal writ petition seeking a direction
for fair investigation by an independent agency. As is
noted above, the quashing petition and the criminal
writ petition came to be rejected by learned High
th
Court vide a common order dated 8 October, 2018,
which is assailed in present appeals by special leave.
Submissions on behalf of the appellants:
8. Shri K. Parameshwar, learned senior counsel
representing the appellants, urged that the entire
case as set out in the impugned-FIR does not disclose
the necessary ingredients of any offence whatsoever.
A dispute which is purely civil in nature has been
given the colour of a crime by misusing criminal law
and the appellants herein are being harassed and
persecuted in this matter. He urged that the bills
raised by the appellants under the contract in
question were not honoured by the MIDC upon which
9
Criminal Application No. 6539 of 2015.
10
Criminal Writ Petition No. 1438 of 2016.
8
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
the appellants resorted to arbitration proceedings
and the awards have been passed in their favour.
8.1 . He further urged that the accounts of the
appellant’s Company (BUL) with the Oriental Bank of
Commerce have been settled and there is no
outstanding due to the bank. Even if the allegations
of the complainant are to be accepted as true on their
face value, it is manifest that part payment has been
made to him for execution of the project work as a
sub-contractor of the appellants. Apparently, by filing
the impugned-FIR, the complainant has tried to
invoke criminal law to seek recovery of dues towards
a commercial contract.
8.2. Shri Parmeshwar submitted that during
pendency of the instant appeals, the police concluded
investigation and chargesheet has been filed against
the appellants herein for the offences punishable
under Sections 420, 406, 467, 468, 471 and 34 of
IPC. Shri Parmeshwar urged that the conclusions
drawn in the chargesheet are absolutely vague and
unsubstantiated and the Investigating Officer has
just toed the line of the complainant without making
9
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
any effort to seek proper legal opinion on the aspect
of whether the dispute is of civil nature or not.
On these grounds, he urged that ex-facie , the
invocation of criminal machinery for a dispute purely
of civil nature is nothing short of a gross abuse of the
process of law and hence, the impugned-FIR and all
the proceedings sought to be taken there under
including the chargesheet deserve to be quashed.
Submissions on behalf of the respondent:
9. Per-contra , learned counsel for the complainant
(respondent No. 2 in Criminal Appeal @ SLP (Crl.) No.
9857 of 2018), urged that after the initial period
wherein the complainant’s work under the sub-
contract with SWD Infra came to an end, the
appellants induced the complainant to continue with
the project work by assigning a direct sub-contract to
the complainant’s company. As per the terms of the
sub-contract, the appellants were to receive
payments from the MIDC and thereafter they were
obligated to honour the bills submitted by the
complainant towards execution of the project work.
However, the appellants acted fraudulently and
10
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
dishonestly thereby inducing the complainant to
spend huge sums of money towards the completion
of the project in question. The appellants, thereafter,
got encashed the bills of payment directly from the
MIDC. Not only this, but the appellants also
intentionally misrepresented to the authorities that
two Engineers employed by the company of the
complainant were their employees and thus,
fabricated the record.
On these grounds, he thus, implored the Court
to affirm the orders passed by the High Court and
dismiss the appeals.
Analysis and Conclusion:
10. We have given our thoughtful consideration to
the submissions advanced at bar and have gone
through the impugned order and the material placed
on record.
11. The appellants were awarded the work in
question in pursuance of their successful bid
following the tender floated by the MIDC for
construction of a sewerage water filter plant. Going
by the material available on record, it seems that the
11
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
appellants may have taken some loans, etc. from the
banks, for executing the works under the contract
awarded by the MIDC. However, neither the MIDC
nor any of the bank/s have raised any grievance
against the appellants’ company in connection with
the contract work. The appellants have affirmatively
stated in this Court that there is no pending
proceeding of criminal nature by any of the banks or
MIDC against them in relation to the subject tender.
12. The High Court, while rejecting the appeal, held
that the appellants had failed to carry out various
works under other contracts awarded by the MIDC
and that they were in default in these works as well.
13. The High Court, in its order, also referred to an
action taken against BUL by the Kotak Mahindra
Bank under the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security
11
Interest Act, 2002. The High Court also took note of
the status report filed by the Investigating Officer
with the conclusion that the transaction was in the
nature of a civil dispute. However, the High Court
11
Hereinafter, being referred to as ‘SARFAESI Act’.
12
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
went on to conclude that the company of the
appellants had employed peculiar modus operandi
whereby they obtained work orders from various
Government institutions and authorities and took
advance amounts in the name of investment for the
institution and by using the record of the project,
they raised huge loans from the banks and financial
institutions. They appointed sub-contractors, but did
not pass on the money received by them towards the
project to the sub-contractors and most of the work
was not completed and the contracts were
terminated.
14. Placing reliance on these hypothetical
presumptions and assumptions, the High Court
concluded that as the loan was raised only on specific
projects, the sufferers may be both i.e., the
Government institutions and the sub-contractors. It
was held that there was a clear possibility that
without informing or without taking permission from
the local authority or Government Institutions, the
properties of the local body may have been mortgaged
for raising loan. The High Court further noted that
only a few of the questioned transactions were
13
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
highlighted by Jaswant Mallya (respondent No. 1 in
Criminal Appeal @ SLP (Crl.) No. 10444 of 2018) and
that there was a possibility of many more such
fraudulent transactions.
15. It was further observed that the quotient of
MIDC to the tune of Rs.3,00,00,000/- was collected
by the appellants and a loan of more than
Rs.11,00,00,000/- was raised on the project but the
amount was not passed on to the Sub-Contractor.
The High Court further noted that the appellants did
not make any investment in the project and money
was usurped by the afore-stated modus operandi as
the subject tender did not provide permission to
assign sub-contracts. The appellants deceived not
only the sub-contractor, but also the MIDC, being the
Government corporation. The High Court, in its
conclusion, observed that the State Government
needs to mull over the matter and hand over the
investigation to some specialized agency like the
Economic Wing or CBI to conduct investigation into
the contracts in which the company of the appellants
was involved.
14
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
16. The conclusions of the High Court are prima
facie based on sheer conjectures regarding the
appellants having misused the acquired work orders
for taking loan from various financial institutions as
well as taking advances from the MIDC. The High
Court suspected that the accused appellants may
have cheated the financial institutions as well as the
MIDC. However, a perusal of the report under Section
173(2) of CrPC placed on record, by learned standing
counsel for the respondent-State, presents an
entirely different picture. In this report, there is no
reference to the accused appellants having misused
the contracts/tenders awarded to them for procuring
undue gain from any other financial institutions, viz .,
banks, etc. or from the MIDC itself. The report, under
Section 173(2) of CrPC, takes note of the directions
given by the High Court. The investigation of the FIR
continued for almost ten years but not a shred of
evidence has been collected by the Investigating
Officer to support or fortify the conclusion of the High
Court regarding financial bungling by the appellants
other than the disputed transaction with the
complainant.
15
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
17. Hence, the order passed by the High Court
directing extensive investigation regarding the
perceived financial misadventures of the appellants
is ex facie erroneous and illegal and hence, the same
cannot be sustained.
18. Coming to the prosecution of the appellants
based on the impugned-FIR No. 443 of 2015 lodged
by complainant (respondent No. 2 in Criminal Appeal
@ SLP (Crl.) No. 9857 of 2018), we find that the
allegations levelled therein, even if taken to be true
on their face value, do not disclose the necessary
ingredients of any offence, what to say of a cognizable
offence/s. The allegations, on the face of it, disclose
a dispute which is purely civil in nature. The
complainant came out with an admitted case in his
complaint that he had received a part payment to the
tune of Rs. 3,68,15,612/- from the appellants,
towards the work which was carried out in
furtherance of the sub-contracts awarded initially
through the sub-contractor, namely SWD Infra, and
thereafter directly to the complainant’s company.
Apparently thus, the admitted facts as available on
record reveal that the complainant’s claim is for
reimbursement of the remaining amount claimed by
16
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
him towards the works executed in furtherance of a
contract. The allegations, made in the complaint,
present a dispute which is purely commercial and
civil in nature. It seems that the complainant has
contrived to somehow or the other, involve the police
machinery to act as recovery agents on his behalf.
The complaint, on the face of record, did not disclose
any offence whatsoever and no FIR should have been
registered based thereupon.
19. This Court has time and again come down
heavily on the attempts of the over-zealous litigants
in trying to settle their civil disputes by misusing the
police machinery and resorting to criminal
proceedings. A gainful reference in this regard may
be made to a decision of three-judge bench of this
Court in Inder Mohan Goswami v. State of
12
Uttaranchal , which involved a contractual dispute
among the parties wherein a part payment had been
made to the complainant by the accused. This Court,
while exercising jurisdiction under Article 136 of the
Constitution of India, quashed the FIR/criminal
proceedings.
12
(2007) 12 SCC 1.
17
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
20. It may be noted that so far as the allegation
regarding forging the signatures of two Engineers
namely, Ganesh Rathod and Chetan Dabhade are
concerned, the Investigating Officer has already got
comparison of the questioned signatures done
through the handwriting expert and the report, thus,
received is inconclusive. Hence, ex facie , the
allegations of forging the signatures of the Engineers,
employed by the complainant, are not substantiated
from the investigation conducted in the case.
21. In wake of the above discussion, we are of the
firm view that allowing the proceedings of the
impugned-FIR and the chargesheet filed as a
culmination of the investigation, would be nothing
short of a gross abuse of process of the Court. The
th
impugned order dated 8 October, 2018, passed by
the High Court does not stand to scrutiny and is
hereby quashed and set aside.
22. Resultantly, the impugned-FIR No. 443 of 2015
and all proceedings sought to be taken in furtherance
thereof including the chargesheet are also quashed.
23. This order will not preclude the Investigating
Agency to investigate financial irregularities, if any,
18
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
disclosed during the course of investigation of the
present FIR.
24. The appeals are allowed accordingly.
25. Pending application(s), if any, shall stand
disposed of.
….……………………J.
(VIKRAM NATH)
...…………………….J.
(SANDEEP MEHTA)
NEW DELHI;
May 14, 2025.
19
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO(S). OF 2025
(Arising out of SLP (Crl.) No (s). 9857 of 2018)
SHRICHAND RAJARAM
KUKREJA AND ANR. ….APPELLANT(S)
VERSUS
THE STATE OF MAHARASHTRA
AND ANR. ….RESPONDENT(S)
WITH
CRIMINAL APPEAL NO(S). OF 2025
(Arising out of SLP (Crl.) No (s). 10444 of 2018)
J U D G M E N T
Mehta, J.
1. Heard.
2. Leave granted.
Signature Not Verified
Digitally signed by
SONIA BHASIN
Date: 2025.06.02
12:09:08 IST
Reason:
1
3. The appellants in the above captioned appeals
1
are arraigned as accused in the FIR No. 443 of 2015
registered with MIDC Walunj Police Station,
Aurangabad for offences punishable under Sections
406, 420, 467, 468, 471 and 34 of the Indian Penal
2
Code, 1860.
4. Since both the appeals arise out of a common
th
order dated 8 October, 2018, passed by the Division
Bench of the High Court of Bombay Appellate Side,
3
at Aurangabad dismissing Criminal Application No.
6539 of 2015, filed by the appellants, and Criminal
Writ Petition No. 1438 of 2016, filed by Jaywant
Mallya (accused No. 6 in impugned-FIR), both have
been heard analogously and are being decided
together by this common order.
5. The complainant (respondent No. 2 in Criminal
Appeal @ SLP (Crl.) No. 9857 of 2018) has filed a
counter affidavit. Respondent No. 1-State of
Maharashtra has not filed any counter affidavit
despite repeated opportunities. However, Mr. Aaditya
Aniruddha Pande, learned standing counsel
1
Hereinafter, referred to as “impugned-FIR”.
2
Hereinafter, referred to as “IPC”.
3
Hereinafter, referred to as “High Court”.
2
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
appearing for the State of Maharashtra, has filed a
copy of a report under Section 173 of Code of
4
Criminal Procedure, 1973 in compliance of an order
rd
dated 23 April, 2025 passed by this Court.
6.
Facts in a nutshell, relevant and essential for
disposal of the appeals, are noted hereinbelow: -
5
6.1 . Ashok Karbhari Shingare Patil lodged the
impugned-FIR at the MIDC Walunj Police Station,
Aurangabad alleging, inter alia , that he was a
professional Contractor involved in variety of
construction works.
6.2 MIDC, Walunj, Aurangabad issued a tender in
the year 2009-2010, for construction of a sewerage
water filter plant under built, operate and transfer
basis (B.O.T.) at Plot No. 02, O.S. 7(P), Maharashtra
6
State Industrial Corporation with the pre-condition
that the selected building company would be required
to spend equally for this project. Upon completion of
the work by the company under the contract, a sum
of Rs. 27,00,000/- was to be passed on per month on
B.O.T. basis to the company.
4
Hereinafter, referred to as “CrPC”.
5
Hereinafter, referred to as “complainant”.
6
For short, “MIDC”.
3
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
7
6.3 . The tender submitted by Bharat Udyog Limited
(the successful bidder), a company registered with
the MIDC, was accepted and the project work was
awarded to it for the next 20 years commencing from
th
25 November, 2021. The possession of the property
was transferred to BUL. For undertaking the
construction works, BUL assigned a sub-contract to
S.W.D. Infrastructure Pvt. Ltd., Belapur, C.B.D., Navi
8
Mumbai in January, 2012. BUL gave certain orders
st
to SWD Infra on 1 March, 2012 against which a sum
of Rs.1,35,62,872/- remained outstanding. SWD
Infra further assigned a sub-contract to the
complainant’s company by name of Sai Group and an
agreement was entered into in this regard. The
complainant claimed that the payment for the work
under the sub-contract of SWD Infra was agreed to
be made to the complainant directly, under the
instructions given by the Directors of BUL (appellants
herein) to SWD Infra.
6.4. As per the complainant, for the work done
th th
between 10 October, 2013 to 5 May, 2014, a sum
of Rs.5,13,78,485.50/- remained outstanding to be
7
Hereinafter, referred to as ‘BUL’.
8
Hereinafter, referred to as the ‘SWD Infra’.
4
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
paid to his company (Sai Group) and that he had
received only an amount of Rs.3,68,15,612/-. A sum
of Rs.2,52,12,801/- was due to be paid to the
complainant by BUL. As the payment was not
forthcoming, the complainant expressed his inability
to carry on further work under the sub-contract.
Upon this, the Chairman and Director of the BUL,
namely Shrichand Rajaram Kukreja and Suryakant
(appellant Nos. 1 and 2 respectively) persuaded him
to continue with the project work. The complainant
was given an allurement that he was a prime
Contractor and hence, the bills pending with SWD
Infra should be submitted to them (appellants herein)
and in turn, the appellants would directly transfer
the payment from their bank account to the
complainant’s company. On receiving this assurance,
the complainant resumed the work spending an
amount of Rs.16,74,525/- for the same. He
submitted the bills towards work done via email to
the Project Manager of BUL (accused No. 3 in
th
impugned-FIR) on 12 December, 2014.
6.5. Another bill for a sum of Rs.2,12,59,000/- was
raised by the complainant towards the work carried
out under the sub-contract but the persons in-charge
5
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
of BUL kept on giving false assurances and did not
make the requisite payments. Consequently, the
complainant was compelled to sell his assets in order
to make payment towards the material and labour
costs.
6.6. The complainant further claimed that two
Engineers, namely, Ganesh Rathod and Chetan
Dabhade were working with his concern (Sai Group)
but the Project Manager Rajendra Yadav (accused No.
3 in impugned-FIR) and Jaywant Mallya (accused No.
6 in impugned-FIR), who were associated with BUL,
submitted false documents to MIDC showing those
two engineers to be employed by BUL. These
documents bore false/fabricated signatures of
Ganesh Rathod and Chetan Dabhade and were
th
submitted at the MIDC office on 12 February, 2015.
BUL submitted a false stock statement to the Bank
Auditor, Oriental Bank of Commerce in March 2015,
falsely posing that the stocks, etc. of the complainant
were owned by them.
6.7. The complainant concluded his complaint by
alleging that he had worked on the project of STP
plant and drainage pipe line at Bajaj Nagar, MIDC as
a sub-contractor for BUL but partial payment of
6
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
Rs.3,68,00,000/- only against the total work
successfully carried out by the complainant was
made to him and valid bills to the tune of
Rs.3,95,00,000/- and Rs.1,16,00,000/- remained
outstanding. BUL had entered into a direct sub-
nd
contract with the complainant on 22 November,
2014 and on the assurance of the former, the
complainant undertook the work on their behalf. The
accused persons (including the appellants herein)
collected the amounts against the work executed by
the complainant from MIDC, but they refused to pass
on the payment to him despite his entitlement. They
submitted false documents claiming to have
performed the work whereas it was the complainant
who had carried out the said work under the sub-
contract. In this manner, the complainant claimed to
have been cheated of a total amount of
Rs.5,11,69,398/- at the hands of the accused
persons. Based on this complaint, the impugned-FIR
th
No. 443 of 2015 came to be registered on 14
October, 2015 and the investigation was commenced.
7
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
7. Being aggrieved, the appellants herein filed a
9
quashing petition under Section 482 of CrPC. On the
other hand, Jaywant Mallya (respondent No. 1 in
Criminal Appeal @ SLP (Crl.) No. 10444 of 2018) who
was arraigned as accused No. 6 in impugned-FIR,
10
preferred a criminal writ petition seeking a direction
for fair investigation by an independent agency. As is
noted above, the quashing petition and the criminal
writ petition came to be rejected by learned High
th
Court vide a common order dated 8 October, 2018,
which is assailed in present appeals by special leave.
Submissions on behalf of the appellants:
8. Shri K. Parameshwar, learned senior counsel
representing the appellants, urged that the entire
case as set out in the impugned-FIR does not disclose
the necessary ingredients of any offence whatsoever.
A dispute which is purely civil in nature has been
given the colour of a crime by misusing criminal law
and the appellants herein are being harassed and
persecuted in this matter. He urged that the bills
raised by the appellants under the contract in
question were not honoured by the MIDC upon which
9
Criminal Application No. 6539 of 2015.
10
Criminal Writ Petition No. 1438 of 2016.
8
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
the appellants resorted to arbitration proceedings
and the awards have been passed in their favour.
8.1 . He further urged that the accounts of the
appellant’s Company (BUL) with the Oriental Bank of
Commerce have been settled and there is no
outstanding due to the bank. Even if the allegations
of the complainant are to be accepted as true on their
face value, it is manifest that part payment has been
made to him for execution of the project work as a
sub-contractor of the appellants. Apparently, by filing
the impugned-FIR, the complainant has tried to
invoke criminal law to seek recovery of dues towards
a commercial contract.
8.2. Shri Parmeshwar submitted that during
pendency of the instant appeals, the police concluded
investigation and chargesheet has been filed against
the appellants herein for the offences punishable
under Sections 420, 406, 467, 468, 471 and 34 of
IPC. Shri Parmeshwar urged that the conclusions
drawn in the chargesheet are absolutely vague and
unsubstantiated and the Investigating Officer has
just toed the line of the complainant without making
9
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
any effort to seek proper legal opinion on the aspect
of whether the dispute is of civil nature or not.
On these grounds, he urged that ex-facie , the
invocation of criminal machinery for a dispute purely
of civil nature is nothing short of a gross abuse of the
process of law and hence, the impugned-FIR and all
the proceedings sought to be taken there under
including the chargesheet deserve to be quashed.
Submissions on behalf of the respondent:
9. Per-contra , learned counsel for the complainant
(respondent No. 2 in Criminal Appeal @ SLP (Crl.) No.
9857 of 2018), urged that after the initial period
wherein the complainant’s work under the sub-
contract with SWD Infra came to an end, the
appellants induced the complainant to continue with
the project work by assigning a direct sub-contract to
the complainant’s company. As per the terms of the
sub-contract, the appellants were to receive
payments from the MIDC and thereafter they were
obligated to honour the bills submitted by the
complainant towards execution of the project work.
However, the appellants acted fraudulently and
10
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
dishonestly thereby inducing the complainant to
spend huge sums of money towards the completion
of the project in question. The appellants, thereafter,
got encashed the bills of payment directly from the
MIDC. Not only this, but the appellants also
intentionally misrepresented to the authorities that
two Engineers employed by the company of the
complainant were their employees and thus,
fabricated the record.
On these grounds, he thus, implored the Court
to affirm the orders passed by the High Court and
dismiss the appeals.
Analysis and Conclusion:
10. We have given our thoughtful consideration to
the submissions advanced at bar and have gone
through the impugned order and the material placed
on record.
11. The appellants were awarded the work in
question in pursuance of their successful bid
following the tender floated by the MIDC for
construction of a sewerage water filter plant. Going
by the material available on record, it seems that the
11
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
appellants may have taken some loans, etc. from the
banks, for executing the works under the contract
awarded by the MIDC. However, neither the MIDC
nor any of the bank/s have raised any grievance
against the appellants’ company in connection with
the contract work. The appellants have affirmatively
stated in this Court that there is no pending
proceeding of criminal nature by any of the banks or
MIDC against them in relation to the subject tender.
12. The High Court, while rejecting the appeal, held
that the appellants had failed to carry out various
works under other contracts awarded by the MIDC
and that they were in default in these works as well.
13. The High Court, in its order, also referred to an
action taken against BUL by the Kotak Mahindra
Bank under the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security
11
Interest Act, 2002. The High Court also took note of
the status report filed by the Investigating Officer
with the conclusion that the transaction was in the
nature of a civil dispute. However, the High Court
11
Hereinafter, being referred to as ‘SARFAESI Act’.
12
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
went on to conclude that the company of the
appellants had employed peculiar modus operandi
whereby they obtained work orders from various
Government institutions and authorities and took
advance amounts in the name of investment for the
institution and by using the record of the project,
they raised huge loans from the banks and financial
institutions. They appointed sub-contractors, but did
not pass on the money received by them towards the
project to the sub-contractors and most of the work
was not completed and the contracts were
terminated.
14. Placing reliance on these hypothetical
presumptions and assumptions, the High Court
concluded that as the loan was raised only on specific
projects, the sufferers may be both i.e., the
Government institutions and the sub-contractors. It
was held that there was a clear possibility that
without informing or without taking permission from
the local authority or Government Institutions, the
properties of the local body may have been mortgaged
for raising loan. The High Court further noted that
only a few of the questioned transactions were
13
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
highlighted by Jaswant Mallya (respondent No. 1 in
Criminal Appeal @ SLP (Crl.) No. 10444 of 2018) and
that there was a possibility of many more such
fraudulent transactions.
15. It was further observed that the quotient of
MIDC to the tune of Rs.3,00,00,000/- was collected
by the appellants and a loan of more than
Rs.11,00,00,000/- was raised on the project but the
amount was not passed on to the Sub-Contractor.
The High Court further noted that the appellants did
not make any investment in the project and money
was usurped by the afore-stated modus operandi as
the subject tender did not provide permission to
assign sub-contracts. The appellants deceived not
only the sub-contractor, but also the MIDC, being the
Government corporation. The High Court, in its
conclusion, observed that the State Government
needs to mull over the matter and hand over the
investigation to some specialized agency like the
Economic Wing or CBI to conduct investigation into
the contracts in which the company of the appellants
was involved.
14
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
16. The conclusions of the High Court are prima
facie based on sheer conjectures regarding the
appellants having misused the acquired work orders
for taking loan from various financial institutions as
well as taking advances from the MIDC. The High
Court suspected that the accused appellants may
have cheated the financial institutions as well as the
MIDC. However, a perusal of the report under Section
173(2) of CrPC placed on record, by learned standing
counsel for the respondent-State, presents an
entirely different picture. In this report, there is no
reference to the accused appellants having misused
the contracts/tenders awarded to them for procuring
undue gain from any other financial institutions, viz .,
banks, etc. or from the MIDC itself. The report, under
Section 173(2) of CrPC, takes note of the directions
given by the High Court. The investigation of the FIR
continued for almost ten years but not a shred of
evidence has been collected by the Investigating
Officer to support or fortify the conclusion of the High
Court regarding financial bungling by the appellants
other than the disputed transaction with the
complainant.
15
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
17. Hence, the order passed by the High Court
directing extensive investigation regarding the
perceived financial misadventures of the appellants
is ex facie erroneous and illegal and hence, the same
cannot be sustained.
18. Coming to the prosecution of the appellants
based on the impugned-FIR No. 443 of 2015 lodged
by complainant (respondent No. 2 in Criminal Appeal
@ SLP (Crl.) No. 9857 of 2018), we find that the
allegations levelled therein, even if taken to be true
on their face value, do not disclose the necessary
ingredients of any offence, what to say of a cognizable
offence/s. The allegations, on the face of it, disclose
a dispute which is purely civil in nature. The
complainant came out with an admitted case in his
complaint that he had received a part payment to the
tune of Rs. 3,68,15,612/- from the appellants,
towards the work which was carried out in
furtherance of the sub-contracts awarded initially
through the sub-contractor, namely SWD Infra, and
thereafter directly to the complainant’s company.
Apparently thus, the admitted facts as available on
record reveal that the complainant’s claim is for
reimbursement of the remaining amount claimed by
16
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
him towards the works executed in furtherance of a
contract. The allegations, made in the complaint,
present a dispute which is purely commercial and
civil in nature. It seems that the complainant has
contrived to somehow or the other, involve the police
machinery to act as recovery agents on his behalf.
The complaint, on the face of record, did not disclose
any offence whatsoever and no FIR should have been
registered based thereupon.
19. This Court has time and again come down
heavily on the attempts of the over-zealous litigants
in trying to settle their civil disputes by misusing the
police machinery and resorting to criminal
proceedings. A gainful reference in this regard may
be made to a decision of three-judge bench of this
Court in Inder Mohan Goswami v. State of
12
Uttaranchal , which involved a contractual dispute
among the parties wherein a part payment had been
made to the complainant by the accused. This Court,
while exercising jurisdiction under Article 136 of the
Constitution of India, quashed the FIR/criminal
proceedings.
12
(2007) 12 SCC 1.
17
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
20. It may be noted that so far as the allegation
regarding forging the signatures of two Engineers
namely, Ganesh Rathod and Chetan Dabhade are
concerned, the Investigating Officer has already got
comparison of the questioned signatures done
through the handwriting expert and the report, thus,
received is inconclusive. Hence, ex facie , the
allegations of forging the signatures of the Engineers,
employed by the complainant, are not substantiated
from the investigation conducted in the case.
21. In wake of the above discussion, we are of the
firm view that allowing the proceedings of the
impugned-FIR and the chargesheet filed as a
culmination of the investigation, would be nothing
short of a gross abuse of process of the Court. The
th
impugned order dated 8 October, 2018, passed by
the High Court does not stand to scrutiny and is
hereby quashed and set aside.
22. Resultantly, the impugned-FIR No. 443 of 2015
and all proceedings sought to be taken in furtherance
thereof including the chargesheet are also quashed.
23. This order will not preclude the Investigating
Agency to investigate financial irregularities, if any,
18
Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter
disclosed during the course of investigation of the
present FIR.
24. The appeals are allowed accordingly.
25. Pending application(s), if any, shall stand
disposed of.
….……………………J.
(VIKRAM NATH)
...…………………….J.
(SANDEEP MEHTA)
NEW DELHI;
May 14, 2025.
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Crl. Appeal @ SLP (Crl.) No (s). 9857 of 2018 with connected matter