Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO(S). OF 2024
(Arising out of SLP (Criminal) No(s). 8990 of 2019)
C. SUBBIAH @ KADAMBUR JAYARAJ
AND OTHERS .…APPELLANT(S)
VERSUS
THE SUPERINTENDENT OF POLICE
AND OTHERS ….RESPONDENT(S)
J U D G M E N T
Mehta, J.
1. Leave granted.
2. The instant appeal by special leave is filed against the
rd
judgment dated 23 April, 2018 passed by learned Single Judge of
the Madras High Court, Madurai Bench dismissing the
CRL.O.P.(MD) No. 3846 of 2013 preferred by the appellants herein
seeking quashing of proceedings of Criminal Case No. 250 of 2012
pending in the Court of learned Judicial Magistrate No. II,
Kovilpatti for offences punishable under Sections 420 read with
Section 120B, Section 294(b), Section 506(ii) read with Section 114
1
of the Indian Penal Code, 1860(hereinafter being referred to as the
‘IPC’).
Brief facts:-
3. Respondent No. 3(hereinafter being referred to as the
‘complainant’) lodged a complaint in the Court of learned Judicial
Magistrate No. II, Kovilpatti alleging inter alia that he was having
a qualification of M.Sc., MD Graduate. He was appointed as a
th
Government teacher on 8 October, 2007. Before being appointed
as a Government teacher, the complainant was doing real estate
business for earning his livelihood for past 16 years.
4. The complainant was knowing Kannabiran(hereinafter being
referred to as ‘A-3’) who was working as a Manager in the State
Bank of India(SBI), Kovilpatti Branch. While being engaged in the
real estate business, the complainant came into contact with
Subbiah @ Kadambur Jeyaraj(hereinafter being referred to as ‘A-
1’) and his wife A. Vijaya(hereinafter being referred to as ‘A-2’).
Through A-1 and A-2, the complainant came into contact with
Chandrasekar(hereinafter being referred to as ‘A-4’), his son
Pandiyaraj(hereinafter being referred to as ‘A-6’), his wife(S.
Pandiyammal, hereinafter being referred as ‘A-5’), and his brother
2
(K.Shanmugiah, hereinafter being referred as ‘A-8’) who were also
engaged in real estate business.
5. The complainant claimed that he always trusted his partners
in business. Taking undue advantage of the trusting nature of the
complainant, the accused persons induced him to join their real
estate business claiming that they had strong political
connections. The accused allured and induced the complainant to
enter into land deals with the intention to defraud the complainant
right at the inception of the transactions. The complainant was
told that the documents need not be registered in his own name
and instead the registration may be carried out in the name of his
sister-in-law. An alternative option was given that if the documents
were registered in the names of the accused, the plots could be
sold immediately to earn higher profits. By flaunting their political
connections, the accused influenced the complainant to make
investments into lands assuring that he would reap huge benefits
out of these deals.
6. The complainant was also fraudulently induced to believe
that out of the chunks of lands so purchased, smaller plots would
be carved out and sold to different persons which would frequently
require physical presence of the seller and since the complainant
3
was a teacher, he would face inconvenience if the land parcels were
to be registered in his name. In this manner, the complainant was
not allowed to get the purchased properties registered in his name
despite he making the investments. The complainant was given
assurances that the plots would be sold for huge profit in a very
short duration and he would be given his share. By using this
mode of inducement, A-1, A-3, A-4, and A-6 infused a sense of
trust in the complainant with the ulterior motive to defraud him
and to commit breach of trust.
7. It was further alleged that before the complainant had come
in touch with the accused, he and his brother-in-law
Chandrasekar, S/o Krishnasamy Naicker had entered into an
agreement for sale with A. Sairam in respect of a chunk of land at
Allampatti village, admeasuring 8 acres, but the sale could not be
finalized because a suit was pending in the District Court,
Tuticorin in respect of the said land. In the meantime, the
complainant was appointed as a teacher. The suit pending before
the District Court, Tuticorin was disposed in favour of A. Sairam.
8. Having given the fraudulent allurements to the complainant,
the accused got registered a sale deed in their name as Document
th
No. 1839 of 2008 dated 27 February, 2008 on the file of Sub
4
Registrar Office, Kovilpatti in respect of some plots of land situated
in the Allampatti village of total area 7.618 acres. The complainant
invested a sum of Rs. 1,01,47,800/- towards this transaction
whereas, the accused invested proportionately much lesser
amounts in the said land deal. A-1, A-3, A-4, and A-6 along with
the complainant, purchased the said parcel of land from A. Sairam
for a total consideration of Rs. 3,08,33,600/-. However, as per the
complainant, the accused never gave him the plots equivalent to
the investment made by him and thereby, committed fraud and
breach of trust.
9. The complainant further alleged that A-2 and A-5 had
conspired with A-1, A-3, A-4, and A-6 to cheat him. The accused
made the complainant believe that the business of real estate is
generally carried on by word of mouth and trust. However, at a
later point of time, the accused started indulging in criminal
breach of trust with the ulterior motive of cheating the
complainant.
10. A-1, A-3, A-4 and A-6 invested the amount provided by the
complainant towards his share in the land deal and completed the
th
sale of the suit property on 27 February, 2008 with A. Sairam.
However, despite the assurances, the accused conspired and
5
refused to give the due share of plots to the complainant thereby
committing breach of trust. Therefore, a Panchayat meeting was
th
convened on 19 July, 2010 and a settlement deed was also
executed wherein, it was agreed that 52 plots admeasuring 256.51
cents would be handed over by A-1 and A-2 to the complainant
towards the investment made by him.
11. Under the same settlement, A-4 and A-6 were given 45 plots
to the extent of 233.50 cents for the investment made by them after
deducting land to the extent of 16.50 cents towards the passages.
On the very date of execution of the settlement deed, all the
accused entered into an agreement with Dharamraj(hereinafter
being referred to as ‘A-7’), brother-in-law of A-4 and executed a
General Power of Attorney(GPA) in his favour after receiving a sum
of Rs. 30,00,000/- towards plots Nos. 68, 69, 70 and 71 which
were a part and parcel of the settlement deed.
12. The complainant alleged that the accused failed to pay a sum
of Rs. 19,00,000/- which would be the share amount due to the
complainant out of the sale price of Rs. 30,00,000/-. Thus, the
accused persons despite being signatories to the settlement deed
did not act as promised under the settlement and thereby,
committed breach of trust.
6
13. The accused had also promised to execute the sale deeds of
some plots in favour of the persons to be nominated by the
complainant. The complainant provided names of three persons
for these plots. Three sale deeds were got prepared on stamp
papers worth Rs. 90,000/-. The accused gave their photographs
and ID-proofs and signed the sale deeds, but they failed to appear
at the Sub-Registrar Office, Kovilpatti at the scheduled time for
registration of the sale deeds. When the complainant enquired
from A-1 and A-3 as to why they were indulging in such fraudulent
acts, they abused the complainant and threatened to get rid of
him. A-1 threatened the complainant that if the matter is reported
to the police, he would shoot and kill the complainant and his
family members by using a revolver. While saying so, A-1
brandished a revolver and handed it over to A-3.
14. It was further alleged that A-1 further induced the
th
complainant to pay a sum of Rs. 41,00,000/- on 14 November,
2011, whereafter, the sale deed for one of the properties forming a
part of the settlement memorandum was executed. However, for
some of the properties, the accused were not abiding by the terms
of the memorandum and had fraudulently transferred the same to
7
other investors. Some land brokers were also present at the time
when this incident occurred.
15. Being aggrieved of these continued criminal activities of the
th
accused, the complainant submitted a complaint dated 29 June,
2010 at the Kovilpatti West Police Station but no action was taken
thereupon. Having failed to get any action on his complaint, the
complainant approached the Madras High Court, Madurai Bench
by filing CRL.O.P.(MD) No. 1396 of 2011 and as per the directions
of the High Court, he submitted a fresh complaint to the District
Superintendent of Police, Tuticorin, but still the FIR was not
registered. Ultimately, the complainant was compelled to file a
complaint in the Court of the Jurisdictional Magistrate with a
prayer to forward the same to the police under Section 156(3) of
Code of Criminal Procedure, 1973.
16. Under the direction of the learned Magistrate, the complaint
was forwarded to Police Station Kovilpatti West, where FIR No. 305
th
of 2011 dated 6 March, 2011 came to be registered. After
investigation, the Investigating Agency, proceeded to file a charge
sheet against eight accused with the following conclusions: -
“ By these Criminal Acts accused 1 to 6 have made to believe
the complainant by their honey coated words have purchased
lands, along with the complainant, in Alampatti Village in
8
Survey No.218/B - 1.5 Acres, Survey No. 219 - 2.74 Acres,
Survey No.218/1 - 1 Acre, Survey No.221/1 - 2.37 Acres
totaling in all 7 Acres 61 cents which are valued Rs.6,18,500/-
as per guideline value but paid Rs.3,08,33,600/- and registered
the sale deed as Doc.No.1839/08 on the file of SRO Kovilpatti,
out of the said sale consideration have paid the complainant
Rs.10,00,100/- as per his proportionate share of his
investment and without paying the balance sale consideration
of Rs.91,47,700/- towards his share received from the sale
consideration or by not giving the proportionate land in
alternate, they indulged in cheating activities. Therefore the
acts committed by the accused or criminal nature and they
appear to have committed the criminal acts which are
punishable under the following Sections:
The 1st accused punishable under Section 420 IPC r/w. 120(B)
IPC and Section 294(b), 506(ii) of IPC.
The 2nd accused punishable under Section 420 IPC r/w
Section 120(B) IPC.
The 3rd accused punishable under Section 420 IPC r/w. 120(B)
IPC and Section 294(b), 506(ii) of IPC r/w 114 of IPC.
The 4th accused punishable under Section 420 IPC r/w Section
120(B) IPC.
The 5th accused punishable under Section 420 IPC r/w Section
120(B) of IPC.
The 6th accused punishable under Section 420 IPC r/w Section
120(B) of IPC.
The 7th accused punishable under Section 420 IPC r/w
Section120(B) of IPC.
The 8th accused punishable under Section 420 IPC r/w Section
120(B) of IPC.”
17. It may be mentioned that for the very same set of allegations,
the complainant had also filed a civil suit by impleading A-1 to A-
6 as defendants which is pending on the file of District Judge,
Tuticorin in O.S. No. 06 of 2012.
9
18. A-1, A-2, A-3, A-4, A-5, A-6, A-7, and A-8 being the appellants
herein, approached the Madras High Court, Madurai Bench for
assailing the FIR and the charge sheet by filing a CRL.O.P.(MD) No.
3846 of 2013. The learned Single Judge of Madras High Court
proceeded to dismiss the said petition preferred by the appellants
rd
vide order dated 23 April, 2018 which is subject matter of
challenge in this appeal by special leave.
Submissions on behalf of appellants: -
19. Learned senior counsel, Mr. Dama Seshadri Naidu
representing the appellants vehemently and fervently contended
that even if the allegations set out in the FIR and the charge sheet
are treated to be true on the face of record, the same do not
constitute the necessary ingredients of the offences alleged. He
contended that looking at the admitted facts as set out in the
complaint, the dispute, if any, between the parties is purely of civil
nature and thus, continuance of the proceedings pursuant to the
charge sheet filed against the accused appellants would
tantamount to gross abuse of process of law. The charge sheet
clearly spells out that a part of the sale proceeds from the land
deals were paid to the complainant, but the entire amount as per
his entitlement was not paid. Thus, as per Shri Naidu, for alleged
10
part performance of contractual obligations, the tool of criminal
law has been misused by the complainant.
20. He further submitted that the complainant being a teacher
serving in the Government establishment was not entitled to
indulge in property transactions and thus, at his own risk, he
made the investments through the accused appellants herein and
when the profit sharing quotient towards the land deals did not
work out to the complainant’s satisfaction, the process of criminal
law was misused so as to launch a purely frivolous prosecution
against the accused appellants.
21. The contention of the learned senior counsel was that there
is no material whatsoever on the record of the case to show that
the intention of the accused appellants was to defraud the
complainant right at the time of the inception of the transactions.
Furthermore, since the allegation of the complainant is regarding
disproportionate sharing of profits enuring from the land deals
which he entered with the accused appellants with open eyes, the
offence of criminal breach of trust would also not be made out
against the accused appellants.
22. He urged that the essential ingredients of the offences alleged
are not made out from the highest allegations levelled by the
11
complainant as set out in the charge sheet warranting
continuation of the criminal proceedings against the accused
appellants. He placed reliance on the judgments of this Court in
1
State of Haryana and Others v. Bhajan Lal and Others ;
2
Indian Oil Corpn. v. NEPC India Ltd. and Others and Anand
Kumar Mohatta and Another v. State(NCT of Delhi),
3
Department of Home and Another in support of his contentions
and buttressed that the criminal proceedings sought to be taken
against the appellants as a consequence to the charge sheet are fit
to be quashed as the same amount to a sheer abuse of process of
Court apart from the fact that the charge sheet does not disclose
the necessary ingredients of any cognizable offence.
Submissions on behalf of respondents-complainant and State:-
23. Per contra , learned counsel for the respondent complainant
as well as the learned Standing Counsel representing the State
vehemently and fervently opposed the submissions advanced by
the learned counsel for the appellants. It was contended that, the
accused appellants won over the trust of the complainant by using
honey quoted language, and thereby, fraudulently induced him to
1
1992 Supp(1) SCC 335
2
(2006) 6 SCC 736
3
(2019) 11 SCC 706
12
make huge investments in land deals. The complainant was
assured time and again by the accused that he would be given his
due share of profits or the plots from the lands, as the case may
be, which would be purchased in the name of the accused because
the complainant being a Government teacher could not indulge
into such transactions. The complainant fell for the allurements
given by the accused appellants and invested huge sums of money
for land deals placing blind faith on the assurances given by
accused. However, the accused appellants resiled from their
promises and defrauded the complainant by failing to give him the
requisite number of plots which would fall in his share
commensurate with the investment made by him. The
complainant was also deprived of his rightful share in the profits
reaped after some of the plots had been sold.
24. They submitted that merely because the complainant has
also availed civil remedy for the same grievances, that by itself
cannot disentitle him from invoking jurisdiction of the criminal
Court to prosecute the accused appellants for their fraudulent acts
because the allegations set out in the complaint constitute both
the civil wrong as well as criminal offences and thus parallel
proceedings can continue. On these grounds, learned counsel for
13
the complainant and the learned Standing Counsel for the State
implored the Court to dismiss the appeal.
Consideration of submissions and material on record: -
25. Heard the learned counsel for the parties at length and
perused the impugned order as well as the complaint and the
charge sheet filed against the accused appellants.
26. The arguments were heard, and the judgment was reserved
th
on 16 February, 2024. Thereafter, we thought it fit to seek a
clarification from the learned counsel for the parties because on
going through the material available on record, we were prima facie
of the opinion that the case presents sufficient material to direct
inquiry under the provisions of Section 13(1)(b) and Section 13(2)
of the Prevention of Corruption Act, 1988(hereinafter being
referred to as ‘PC Act’) because, manifestly, the complainant being
a public servant had indulged in large scale benami land
transactions without disclosing the same to his employer.
Accordingly, learned counsel for the complainant was put to notice
and he has submitted a short clarificatory note mentioning therein
that the complainant is an Income Tax assessee from the year
2000. It is also submitted in the note that the complainant started
the business of real estate from the year 2004 onwards and had
14
acquired significant wealth during the course of this business. The
complainant was appointed as a teacher in the Government School
only in the year 2007 when he was nearly 45 years of age. He has
superannuated in the year 2022 without any pensionary benefits.
Thus, it was submitted that whatever money the complainant
invested in the disputed land deals entered into with the accused,
were genuine investments made by using his valid and declared
sources of income and savings. A chart was also set out along with
this explanation regarding the sources from where the
complainant received various amounts which he claims to have
invested in the disputed land deals.
27. Being satisfied with the explanation so offered, we do not find
any justifiable cause so as to direct an enquiry against the
complainant for the offences under the PC Act.
28. Now, we proceed to appreciate the merits of the present
appeal.
29. At the outset, we may note that the complainant has come
out with a clear case that he was already involved in real estate
business before being selected as a Government teacher in the year
2007. Hence, it can safely be assumed that he was well versed with
the nitty gritties of such business and the innocence and ignorance
15
feigned by him in the complaint qua pros and cons of fallouts of
property dealings cannot ex facie be countenanced.
30. The complainant has alleged in the FIR, that the accused
fraudulently allured him into buying the lands by using honey
quoted words and that they also took advantage of the fact that
the complainant was a teacher serving in a Government institution
and hence he was persuaded to get the lands registered in the
name of the accused. However, these allegations are one sided and
do not present the true picture. The complainant after having been
appointed in Government service would be conscious that
indulging in land deals may land him in departmental proceedings.
It was precisely for that reason, the complainant must have agreed
that the lands to be purchased may not be registered in his name.
On the face of the record, the property deals allegedly made in the
names of other persons by using the funds partially provided by
the complainant were benami transactions.
31. We may, at this stage, refer to the relevant provisions of the
Benami Transactions (Prohibition), Act 1988(hereinafter being
referred to as the ‘Benami Act’)(applicable at the time of the alleged
transactions), and particularly Section 2(a), Section 2(c) and
Section 4 thereof: -
16
“2. Definitions- In this Act, unless the context otherwise
requires,--
(a) benami transaction means any transaction in which
property is transferred to one person for a consideration paid
or provided by another person;
(b) …….
(c) property means property of any kind, whether movable or
immovable, tangible or intangible, and includes any right or
interest in such property
“4. Prohibition of the right to recover property held
benami-
(1) No suit, claim or action to enforce any right in respect of
any property held benami against the person in whose name
the property is held or against any other person shall lie by or
on behalf of a person claiming to be the real owner of such
property.
(2) No defence based on any right in respect of any property
held benami, whether against the person in whose name the
property is held or against any other person, shall be allowed
in any suit, claim or action by or on behalf of a person claiming
to be the real owner of such property.
(3) Nothing in this section shall apply,--
(a) where the person in whose name the property is
held is a coparcener in a Hindu undivided family
and the property is held for the benefit of the
coparceners in the family; or
(b)
where the person in whose name the property is
held is a trustee or other person standing in a
fiduciary capacity, and the property is held for the
benefit of another person for whom he is a trustee
or towards whom he stands in such capacity .”
32. As per Section 2(a), any transaction in which property is
transferred to one person for a consideration paid or provided by
another person would be a “benami transaction”.
17
33. As per Section 2(c), “property” means property of any kind,
whether movable or immovable, tangible or intangible, and
includes any right or interest in such property.
34. Sections 3 of the Benami Act have been declared
unconstitutional by this Court in the case of Union of India v.
4
Ganpati Dealcom (P) Ltd . A review petition is, however, pending
against the said judgment.
35. Section 4(1) of the Benami Act makes it clear that no suit,
claim or action to enforce any right in respect of any property held
benami against the person in whose name the property is held or
against any other person, shall lie or on behalf of a person claiming
to be real owner of such property. Such person cannot raise a
defence based on any right in respect of any property held benami
either against the person in whose name the property is held or
against any other person. Section 4(2) prohibits the institution of
any suit, claim or any other action by and on behalf of a person
claiming to be the real owner of such property.
(emphasis supplied)
36. It is, thus, clear that the complainant in spite of having made
investments in the land deals which were evidently benami
4
(2023) 3 SCC 315
18
transactions, could not have instituted any civil proceedings for
recovery against the person(s) in whose name, the properties were
held which would be the accused appellants herein. Since by
virtue of the provisions contained in Sections 4(1) and 4(2) of the
Benami Act, the complainant is prohibited from suing the accused
for a civil wrong, in relation to these benami transactions, as a
corollary, allowing criminal prosecution of the accused in relation
to the self-same cause of action would be impermissible in law.
37. Going by the allegations as set out in the FIR and the charge
sheet, it is apparent that it is the admitted case of the complainant
that the accused appellants made over a part of the purchased
lands/plots to the complainant and also paid a part of the profits
to him. However, when the exact share of the investment on pro-
rata basis was not being given to the complainant, he was
compelled to convene a Panchayat meeting wherein a
Memorandum of Settlement was arrived at. Even despite the
settlement, the actual share of the lands and profits enuring to the
complainant was not paid to him. The relevant extract from the
complaint is reproduced hereinbelow: -
“10. As a per the Memorandum of Settlement it has been
ensured that a Plot measuring 169 cents in the Property Item
No.5 should be given to the complainant for his investment. It
is also been assured that 32 cents to the 3rd accused
Kannabiran and 55.50 cents to the 1st accused Subbiah @
19
Kadambur Jeyaraj. Upon the continuous insistence of the
complainant to register the sale on 169 cents in his favour, the
1st and 3rd accused and all other accused informed the
complainant that they will come on 9.9.2010 to register the
rd
complainant's share. But on 9.9.2010 the 3 accused
Kannabiran only came to the Sub - Registrar Office, Kovilpatti.
The complainant asked the 3rd accused about the other
accused, he replied that he did not know about them and he
said the complainant pays the entire amount for 32 cents he is
ready to execute the sale deed and therefore the complainant
paid the entire amount for 32 cents and after receiving the same
rd
on 09.09.2010 the 3 accused executed a sale deed in respect
th
of his 1/4 undivided share and the same was registered as
Doc. No.8124 of 2010 then he left. For the investment amount
made by the complainant, he has to get 169 cents, adding the
rd
plots to the extent of 32 cents settled by the 3 accused
Kannabiran the complainant has to get in total 201 cents. Out
th
of this Kannabiran has got right to sell his 1/4 undivided
st
share which is equivalent to 103 cents only. The 1 accused
C.Subbiah @ Kadambur Jeyaraj can execute the Plots only to
an extent of 100 cents to the complainant. But having
committed the breach of trust and cheating the complainant
without coming to the Sub Registrar Office on 9.9.2010 and
keeping the 1 acre without executing in favour of the
complainant, he is not only committing a breach of trust but
also intimidating the complainant by threatening the
complainant continuously with dire consequences that he is
having political influence and no one can do anything.
11. Since the 1st Accused expressed his willingness to execute
a sale deed in respect of the Property Item No.2 in the
Memorandum of Settlement dated 19.10.2010 which is plots
situate in Nehru Maha College Road, Malumichampatti Village,
Kovai Corporation, if the complainant pays a sum of
st
Rs.41,00,000/- to the 1 Accused. Believing his words the
complainant on 14.1.2011 paid a sum of Rs.41,00,000/- to the
st
1 Accused and completed the sale. And also gave an assurance
that they will act in accordance with the Settlement and on the
very same date executed an Agreement of Execution. But they
have been cheating the complainant without transferring the
complainant's share in the Property Item No.5 as per the
settlement dated 19.07.2010. Also it is found in the
Memorandum of Settlement dated 19.7.2010 that as for as the
st
Item No.1 concern only the 1 accused has to get the release
st
after paying Rs.31,52,000/- to the Complainant. The 1
accused is cheating even without executing the same. And as
per the Memorandum of Settlement dated 19.7.2010 as for as
rd
the 3 Item is concern they have to divide the property in
20
proportionate to their respective investments. Item No.4 has
already been sold by the investors.”
38. It is thus clear that from the complaint, there is no such
allegation therein which can persuade the Court to hold that the
intention of the accused appellants was to defraud the
complainant right from the inception of the transactions. The
accused appellants have unquestionably, passed on some plots as
well as part profits from the land deals to the complainant but the
dispute is regarding the quantification of profits and full
satisfaction of the share claimed by the complainant proportional
to the investments made by him.
39. These allegations can at best give a cause to the complainant
to sue the accused appellants in a civil Court. However, as
discussed above, such remedy is barred by Section 4 of the Benami
Act.
40. The complainant has clearly alleged that the accused caused
him monetary loss because the appropriate share of profits was
not passed on to him after some plots from the entire chunk had
been sold. This Court in the case of Sarabjit Kaur v. State of
5
Punjab and Anr observed that: -
5
2023 SCC OnLine SC 201
21
“A breach of contract does not give rise to criminal prosecution
for cheating unless fraudulent or dishonest intention is shown
right at the beginning of the transaction. Merely on the
allegation of failure to keep up the promise will not be enough
to initiate criminal proceedings”.
6
41. Similarly, in the case of Vijay Kumar Ghai v. State of W.B . ,
this Court while tracing the earlier decisions on the subject
observed as under:
24. This Court in G. Sagar Suri v. State of U.P. [G. Sagar Suri v.
State of U.P., (2000) 2 SCC 636] observed that it is the duty and
obligation of the criminal court to exercise a great deal of
caution in issuing the process, particularly when matters are
essentially of civil nature.
25. This Court has time and again cautioned about converting
purely civil disputes into criminal cases. This Court in Indian
Oil Corpn. [Indian Oil Corpn. v. NEPC India Ltd., (2006) 6 SCC
736] noticed the prevalent impression that civil law remedies
are time consuming and do not adequately protect the interests
of lenders/creditors. The Court further observed that : (Indian
Oil Corpn. case [Indian Oil Corpn. v. NEPC India Ltd., (2006) 6
SCC 736)
“13. … Any effort to settle civil disputes and claims,
which do not involve any criminal offence, by applying
pressure through criminal prosecution should be
deprecated and discouraged.”
42. Thus, we are of the firm view that the necessary ingredients
of the offences punishable under Section 406 and Section 420 IPC
are not made out against the accused appellants from the admitted
allegations set out in the complaint and the charge sheet. It cannot
be doubted that a dispute which is purely civil in nature has been
6
(2022) 7 SCC 124
22
given a colour of criminal prosecution alleging fraud and criminal
breach of trust by misusing the tool of criminal law.
43. The Investigating Officer has also applied offences under
Section 294(b) and Section 506(ii) read with Section 114 IPC in the
charge sheet. On going through the entire charge sheet, we do not
find any such material therein which can justify invocation of the
offence under Section 294(b) IPC which reads as below: -
“294. Obscene acts and songs. —Whoever, to the annoyance
of others,
(a) ….
(b) sings, recites or utters any obscene song, ballad or
words, in or near any public place,
Shall be punished with imprisonment of either
description for a term which may extend to three
months, or with fine, or with both.”
44. The complainant alleged that the accused abused him by
using profane language. Section 294(b) IPC would clearly not apply
to such an act. Apart from a bald allegation made by the
th
complainant that A-1 abused him and intimidated him on 28
July, 2010, there is no material which can show that the accused
indulged in criminal intimidation of the complainant so as to
justify invocation of the offence punishable under Section 506(ii)
IPC.
45. We have to be conscious of the fact that the complainant has
tried to misuse the tool of criminal law by filing the patently
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th
frivolous FIR dated 6 March, 2011, wherein the allegation is
levelled regarding the so-called incident of criminal intimidation
th
dated 28 July, 2010. The said allegation otherwise is also belied
for the reason that in the FIR, the complainant states that he filed
th
a complaint dated 29 July, 2010 in Kovilpatti West Police Station,
but the RTI reply from the said police station clearly states that no
such complaint was ever received.
46. Thus, we are persuaded to accept the contention of learned
counsel for the accused appellants to hold that the criminal
prosecution instituted against the accused appellants in
pursuance of the totally frivolous FIR tantamounts to sheer abuse
of the process of law.
47. At the cost of repetition, it may be reiterated that in view of
the clear bar contained in Section 4 of the Benami Act, the
complainant could not have sued the accused appellants for the
same set of facts and allegations which are made the foundation
of the criminal proceedings. Since, if such allegations do not
constitute an actionable civil wrong, in such circumstances,
allowing the prosecution of the accused appellants for the very
same set of facts, would tantamount to abuse of the process of law.
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48. Consequently, the impugned order whereby the petition filed
by the appellants seeking quashing of the Criminal Case No. 250
of 2012 and FIR No. 305 of 2011 was dismissed, does not stand to
scrutiny, thus, the same is hereby quashed and set aside.
49. As a result, all proceedings sought to be taken against the
th
appellants in pursuance of the charge sheet dated 10 August,
2011 are also quashed.
50. The appeal is allowed accordingly.
51. Pending application(s), if any, shall stand disposed of.
………………….……….J.
(B.R. GAVAI)
………………………….J.
(SANDEEP MEHTA)
New Delhi;
May 15, 2024
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