Full Judgment Text
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ Crl.M.C. 3914/2008 and Crl.M.A. No.14592/2008
Reserved on: October 21, 2009
Pronounced on: October 26, 2009
# ADRASH GUPTA ..... Petitioner
! Through: Mr.B.S. Rana with Mr. Raj
Singh, Advocates.
Versus
$ STATE
(NCT OF DELHI & ANR.) …..Respondents
^ Through: Mr.R.N. Vats, Addl.PP.
Mr. R.D. Sharma for R-2.
CORAM:
HON'BLE MR. JUSTICE V.K. JAIN
1. Whether Reporters of Local newspapers may be
allowed to see the Judgment?
2. To be referred to the Reporter or not?
3. Whether the Judgment should be reported in the
Digest?
V.K.Jain, J.
This is a petition under Section 482 of the Code of
Criminal Procedure for quashing complaint case
No.619/2003 titled Shyam Sunder Bansal Vs. Adrash Gupta &
Ors., pending before learned Metropolitan Magistrate, Delhi.
It has been stated in the petition that even if the allegations
Crl. M.C. No. 3914/2008 Page 1 of 12
made and evidence available on record is considered, no
offence as alleged is made out against the petitioner.
2. Admittedly, an agreement was executed between
th
Sadashiv Enterprises and Liberty Group, Karnal, on 27
February, 2002 and was signed by Sh. Shyam Sunder Bansal
on behalf of Sadashiv Enterprises and by Mr. P.D. Gupta on
behalf of Liberty Group. Under the Agreement, Liberty
Group was to supply Hawai Chappals of second grade for
sale in Delhi. A complaint for cheating, criminal intimidation,
extortion and criminal conspiracy was filed by respondent
No.2, Shyam Sunder Bansal, proprietor of Sadashiv
Enterprises, against three persons including petitioner
Adrash Gupta. It was alleged in the petition that at the
behest of accused No.1 (Adrash Gupta), accused No.2, Sh.
Vivek Gupta had contacted the complainant to become
distributor of products of accused No.1 and several false
promises were made and lucrative incentives were offered by
them to the complainant, vide agreement which was annexed
as Annexure-A to the complaint. It was further alleged that
accused No.1 added the words “second grade” so as to save
his skin from impending orders of a court of Law and the
accused were successful in selling their unsalable held up
stock of second grade spurious products worth over Rs. 1
Crore, whereas the price charged by them was regular full
Crl. M.C. No. 3914/2008 Page 2 of 12
price and not the usual 50% price of second grade items and,
thus, they cheated the complainant to the extent of Rs.1
Crore by compelling him to re-sell the stock at a huge loss. It
was also alleged that accused No.1 and 2 did not increase the
M.R.P. printed on their box and started billing the
complainant on a hiked purchase price. They also charged
2% Branch Charges from the complainant. Allegations of
criminal intimidation and threat were also made in the
complaint.
3. The learned Metropolitan Magistrate vide order dated
th
9 January, 2008 took the view that ingredients of Section
503 and 385 of IPC were not made out. He, however,
summoned accused No.1 and 2, i.e. the petitioner and one
Mr. Vivek Gupta for the offence u/s 420/34 IPC.
4. During the course of arguments, the learned counsel
for respondent No.2 was specifically asked as to how offence
of cheating is made out against the petitioner, from the
averments made in the complaint. It was contended by the
learned counsel that the petitioner supplied second quality
goods to the complainant/respondent No.2, while charging
the price of first quality goods and, therefore, cheating is
made out against him.
5. A perusal of the agreement executed between Sadashiv
Enterprises and Liberty Group, a copy of which has been
Crl. M.C. No. 3914/2008 Page 3 of 12
filed with the petition and contents whereof have not been
disputed by respondent No.2, would show that the agreement
between Sadashiv Enterprises and Liberty Group was for
supply of second grade goods and not for first grade goods.
If the agreement between the parties itself envisaged supply
of second grade goods, there can be no cheating in supplying
goods of that very grade and not supplying the goods of first
grade. Had the petitioner sold second grade goods, mis-
representing them to be first grade goods then of course
offence of cheating would have been made out against them.
But, when the agreement itself envisaged supply of second
grade goods, there is no cheating in supplying goods of that
very quality. If the petitioner claimed price of first grade
goods from the complainant/ respondent No.2 while
supplying second grade goods to him and if that was against
the terms and conditions of the agreement between the
parties, the complainant could have rejected those goods.
6. Admittedly, the complainant has not made entire
payment as demanded by the seller of the goods and a civil
suit filed by Liberty Shoes Limited for recovery of
Rs.1589384 against him is pending in civil court. The
complainant/respondent No.2 has also filed a suit against
Liberty Shoes Limited for recovery of Rs.2823561 and that
suit is also pending in this court. A perusal of the plaint of
Crl. M.C. No. 3914/2008 Page 4 of 12
the civil suit filed by the complainant against Liberty Shoes
Limited which show that the plea taken by him in the civil
suit is that the defendant had all of a sudden changed the
st
discount structure retrospectively with effect from 1 April,
2003, contrary to the terms and conditions of the agreement
th
dated 27 July, 2002, as a result of which he started suffering
heavy losses. It was further alleged that the plaintiff was
assured that due to introduction of VAT, the price of Chappal
were high but the M.R.P. would remain unchanged. He,
however, later came to know that VAT was not implemented
but the defendant, Liberty Shoes Limited had reduced his
margin of profit from 48% to 32.5% and had also decreased
the M.R.P. of Chappals as a result of which he suffered net
loss of 7.5%. The complainant claimed that he was entitled
to average profit of 14.96% and the amount of profit
calculated at that percentage came to Rs.2358829.67. He
further claimed Rs.144729/- on account of reduction in
M.R.P. He disputed a debit note of Rs.81414/- towards
service charges and claimed two other amounts, one of
Rs.31758/- and the other of Rs.1422/- besides security
deposit of Rs.1 lakh.
7. Thus, the dispute between the parties is purely civil in
th
nature. Since the agreement dated 27 February, 2009
which is an admitted document envisage supply of second
Crl. M.C. No. 3914/2008 Page 5 of 12
quality goods to the complainant, there was no cheating if
goods of second quality were supplied. It would be pertinent
to notice here that in the civil suit filed by the complainant,
he did not claim that his agreement with Liberty Shoes
Limited envisaged supply of first quality goods. I fail to
appreciate how cheating is made out against the petitioners
when the agreement envisaged supply of second quality
goods and the goods of that very quality were admittedly
supplied to the complainant.
In State of Haryana vs. Bhajan Lal, AIR 1992 SC 604,
the Hon’ble Supreme Court held that where the allegations
made in the FIR or the complaint even if they are taken at
their face value and accepted in their entirety do not, prima
facie, constitute any offence or make out any case against the
accused, the court would be justified in quashing the
criminal proceedings in exercise of powers u/s 482 of Code of
Criminal Procedure.
If the allegations disclose a civil dispute but also
constitute an offence, that by itself cannot be a ground to
hold that the criminal proceedings should not be allowed to
continue, but, where the allegations made in the complaint,
even if taken on their face value do not disclose commission
of any offence, the court would be justified in taking recourse
Crl. M.C. No. 3914/2008 Page 6 of 12
of taking provisions of Section 482 of the Code of Criminal
Procedure.
9. The learned counsel for the complainant has referred
to the decision of the Hon’ble High Court in R. Kalyani v.
Janak C. Mehta & Ors. JT 2008 (12) SC 279. There can be no
quarrel with the proposition of law enunciated in the case of
R. Kalyani v. Janak to the effect that if the allegations made
in an FIR or in a complaint discloses a civil dispute that by
itself cannot be a ground to hold that criminal proceedings
should not continue. But, this would be a case only if the
allegations also disclose commission of an offence. This case
would have no application where the allegations even if taken
as correct do not constitute commission of an offence. The
learned counsel has drawn my attention to para 14 of the
judgment where the Hon’ble Supreme Court observed that
while exercising jurisdiction u/s 482 of Cr.P.C., it is not
permissible for court to act as if it was a trial court and even
when charge is framed, the court has to only prima-facie be
satisfied about existence of sufficient grounds for
proceedings against the accused. The proposition of law
enunciated in above referred para is undisputable, but would
not be attracted to a case where the allegations do not
disclose commission of any offence at all and a crude attempt
is made to project a dispute which is essentially civil in
Crl. M.C. No. 3914/2008 Page 7 of 12
nature as a criminal offence. Even if it is presumed that the
petitioner did not honour all its obligations under the
agreement and thereby committed its breach that by itself
would give no justification to initiate criminal proceedings
against him unless the acts attributed to him also amount to
an offence. In fact, in para 18 of the judgment, the Hon’ble
Supreme Court observed that a matter which essentially
involves dispute of a civil nature should not be allowed to be
the subject matter of a criminal offence.
10. In All Carogo Movers (I) Pvt. Ltd. Vs. Dhanesh
Badarmal Jain & Anr. (2007) 12 SCALE 39, the Hon’ble
Supreme Court observed as under:-
“For the said purpose, allegations in the
complaint petition must disclose the
necessary ingredients therefor. Where a
civil suit is pending and the complaint
petition has been filed one year after filing
of the civil suit, we may for the purpose of
finding out as to whether the said
allegations are prima facie cannot notice
the correspondences exchanged by the
parties and other admitted documents. It is
one thing to say that the Court at this
juncture would not consider the defence of
the accused but it is another thing to say
that for exercising the inherent jurisdiction
of this Court, it is impermissible also to
Crl. M.C. No. 3914/2008 Page 8 of 12
look to the admitted documents. Criminal
proceedings should not be encouraged,
when it is found to be mala fide or
otherwise an abuse of the process of the
Court, Superior Courts, while exercising
this power should also strive to serve the
ends of justice.”
11. In V.Y. Jose & Anr. Vs. State of Gujarat & Anr. 2009 I
AD (Cr.) (S.C.) 567, the Hon’ble Supreme Court has observed
as under:-
“There exists a distinction between pure
contractual dispute of civil nature and an
offence of cheating. Although breach of
contract per se would not come in the way of
initiation of a criminal proceeding, there
cannot be any doubt whatsoever that in
absence of the averments made in the
complaint petition wherefrom the ingredients
of an offence can be found out, the court
should not hesitate to exercise its jurisdiction
under Section 482 of the Code of Criminal
Procedure.
We may reiterate that one of the ingredients
of cheating as defined in Section 415 of the
Indian Penal Code is existence of an intention
of making initial promise of existence thereof
from the very beginning of formation of
contract.
Crl. M.C. No. 3914/2008 Page 9 of 12
Section 482 of the Code of Criminal
Procedure, saves the inherent power of the
court. It serves a salutary purpose viz. a
person should not undergo harassment of
litigation for a number of years although no
case has been made out against him.
It is one thing to say that a case has been
made out for trial and as such the criminal
proceedings should not be quashed but it is
another thing to say that a person should
undergo a criminal trial despite the fact that
no case has been made out at all.”
12. In Inder Mohan Goswami and Another versus
State of Uttranchal and Others (2007) 12 SCC 1, a
chargesheet was filed against the appellant pursuant to an
FIR registered under Section 420, 467 and 120B of IPC. The
appellant before the Hon’ble Supreme Court were office
bearers of a charitable society. A General Power of Attorney
was executed by the society in favour of respondent No.4 in
respect of some land belonging to the society and an
Agreement to Sell was also executed for sale of the
remaining land. Certain payments were also received by the
society from him. The case of the appellants was that since
balance payment was not made to the society, it cancelled
Crl. M.C. No. 3914/2008 Page 10 of 12
the General Power of Attorney executed by the society in
favour of the respondent No.4, by executing a registered
cancellation deed. The appellants then sold that part of the
land for which the agreement with the
complainants/respondents was terminated and earnest
money paid by them was forfeited. The Hon’ble Supreme
Court quashed all the proceedings emanating from the FIR.
During the course of the judgment, the Hon’ble Court, inter
alia, observed as under:
“The Court must ensure that criminal
prosecution is not used as an instrument of
harassment or for seeking private vendetta
or with an ulterior motive to pressurise the
accused.”
It was noted that the veracity of the facts alleged by the
appellant and the respondents could only be ascertained on
the basis of the evidence and documents by a civil court of
competent jurisdiction and the dispute in question was purely
of civil nature and respondent No.3 had already instituted a
civil suit in the Court and in the facts and circumstances of
the case, initiating criminal proceedings was clearly an abuse
of process of the Court.
In Indian Oil Corporation versus N.E.P.C. India Ltd.
(2006) 6 SCC 736, the Hon’ble Supreme Court cautioned
Crl. M.C. No. 3914/2008 Page 11 of 12
against a growing tendency in business circles to convert
purely civil disputes into criminal cases. The Hon’ble Court
observed that:-
“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.”
The present case appears to be an attempt to
solve a purely civil dispute, by putting pressure on the
petitoiner, by initiating criminal proceedings against
him, as I find that the petitoner was not even a signatory
th
to the agreement dated 27 February, 2002 which was
signed by one P.D. Gupta on behalf of Liberty Group.
For the reasons given above, the criminal complaint
No.619/2003 titled Shyam Sunder Bansal Vs. Adrash Gupta &
Ors. pending in the court of Metropolitan Magistrate, Delhi
and the proceedings arising therefrom are hereby quashed.
(V.K. JAIN)
JUDGE
October 26, 2009/sk
Crl. M.C. No. 3914/2008 Page 12 of 12
+ Crl.M.C. 3914/2008 and Crl.M.A. No.14592/2008
Reserved on: October 21, 2009
Pronounced on: October 26, 2009
# ADRASH GUPTA ..... Petitioner
! Through: Mr.B.S. Rana with Mr. Raj
Singh, Advocates.
Versus
$ STATE
(NCT OF DELHI & ANR.) …..Respondents
^ Through: Mr.R.N. Vats, Addl.PP.
Mr. R.D. Sharma for R-2.
CORAM:
HON'BLE MR. JUSTICE V.K. JAIN
1. Whether Reporters of Local newspapers may be
allowed to see the Judgment?
2. To be referred to the Reporter or not?
3. Whether the Judgment should be reported in the
Digest?
V.K.Jain, J.
This is a petition under Section 482 of the Code of
Criminal Procedure for quashing complaint case
No.619/2003 titled Shyam Sunder Bansal Vs. Adrash Gupta &
Ors., pending before learned Metropolitan Magistrate, Delhi.
It has been stated in the petition that even if the allegations
Crl. M.C. No. 3914/2008 Page 1 of 12
made and evidence available on record is considered, no
offence as alleged is made out against the petitioner.
2. Admittedly, an agreement was executed between
th
Sadashiv Enterprises and Liberty Group, Karnal, on 27
February, 2002 and was signed by Sh. Shyam Sunder Bansal
on behalf of Sadashiv Enterprises and by Mr. P.D. Gupta on
behalf of Liberty Group. Under the Agreement, Liberty
Group was to supply Hawai Chappals of second grade for
sale in Delhi. A complaint for cheating, criminal intimidation,
extortion and criminal conspiracy was filed by respondent
No.2, Shyam Sunder Bansal, proprietor of Sadashiv
Enterprises, against three persons including petitioner
Adrash Gupta. It was alleged in the petition that at the
behest of accused No.1 (Adrash Gupta), accused No.2, Sh.
Vivek Gupta had contacted the complainant to become
distributor of products of accused No.1 and several false
promises were made and lucrative incentives were offered by
them to the complainant, vide agreement which was annexed
as Annexure-A to the complaint. It was further alleged that
accused No.1 added the words “second grade” so as to save
his skin from impending orders of a court of Law and the
accused were successful in selling their unsalable held up
stock of second grade spurious products worth over Rs. 1
Crore, whereas the price charged by them was regular full
Crl. M.C. No. 3914/2008 Page 2 of 12
price and not the usual 50% price of second grade items and,
thus, they cheated the complainant to the extent of Rs.1
Crore by compelling him to re-sell the stock at a huge loss. It
was also alleged that accused No.1 and 2 did not increase the
M.R.P. printed on their box and started billing the
complainant on a hiked purchase price. They also charged
2% Branch Charges from the complainant. Allegations of
criminal intimidation and threat were also made in the
complaint.
3. The learned Metropolitan Magistrate vide order dated
th
9 January, 2008 took the view that ingredients of Section
503 and 385 of IPC were not made out. He, however,
summoned accused No.1 and 2, i.e. the petitioner and one
Mr. Vivek Gupta for the offence u/s 420/34 IPC.
4. During the course of arguments, the learned counsel
for respondent No.2 was specifically asked as to how offence
of cheating is made out against the petitioner, from the
averments made in the complaint. It was contended by the
learned counsel that the petitioner supplied second quality
goods to the complainant/respondent No.2, while charging
the price of first quality goods and, therefore, cheating is
made out against him.
5. A perusal of the agreement executed between Sadashiv
Enterprises and Liberty Group, a copy of which has been
Crl. M.C. No. 3914/2008 Page 3 of 12
filed with the petition and contents whereof have not been
disputed by respondent No.2, would show that the agreement
between Sadashiv Enterprises and Liberty Group was for
supply of second grade goods and not for first grade goods.
If the agreement between the parties itself envisaged supply
of second grade goods, there can be no cheating in supplying
goods of that very grade and not supplying the goods of first
grade. Had the petitioner sold second grade goods, mis-
representing them to be first grade goods then of course
offence of cheating would have been made out against them.
But, when the agreement itself envisaged supply of second
grade goods, there is no cheating in supplying goods of that
very quality. If the petitioner claimed price of first grade
goods from the complainant/ respondent No.2 while
supplying second grade goods to him and if that was against
the terms and conditions of the agreement between the
parties, the complainant could have rejected those goods.
6. Admittedly, the complainant has not made entire
payment as demanded by the seller of the goods and a civil
suit filed by Liberty Shoes Limited for recovery of
Rs.1589384 against him is pending in civil court. The
complainant/respondent No.2 has also filed a suit against
Liberty Shoes Limited for recovery of Rs.2823561 and that
suit is also pending in this court. A perusal of the plaint of
Crl. M.C. No. 3914/2008 Page 4 of 12
the civil suit filed by the complainant against Liberty Shoes
Limited which show that the plea taken by him in the civil
suit is that the defendant had all of a sudden changed the
st
discount structure retrospectively with effect from 1 April,
2003, contrary to the terms and conditions of the agreement
th
dated 27 July, 2002, as a result of which he started suffering
heavy losses. It was further alleged that the plaintiff was
assured that due to introduction of VAT, the price of Chappal
were high but the M.R.P. would remain unchanged. He,
however, later came to know that VAT was not implemented
but the defendant, Liberty Shoes Limited had reduced his
margin of profit from 48% to 32.5% and had also decreased
the M.R.P. of Chappals as a result of which he suffered net
loss of 7.5%. The complainant claimed that he was entitled
to average profit of 14.96% and the amount of profit
calculated at that percentage came to Rs.2358829.67. He
further claimed Rs.144729/- on account of reduction in
M.R.P. He disputed a debit note of Rs.81414/- towards
service charges and claimed two other amounts, one of
Rs.31758/- and the other of Rs.1422/- besides security
deposit of Rs.1 lakh.
7. Thus, the dispute between the parties is purely civil in
th
nature. Since the agreement dated 27 February, 2009
which is an admitted document envisage supply of second
Crl. M.C. No. 3914/2008 Page 5 of 12
quality goods to the complainant, there was no cheating if
goods of second quality were supplied. It would be pertinent
to notice here that in the civil suit filed by the complainant,
he did not claim that his agreement with Liberty Shoes
Limited envisaged supply of first quality goods. I fail to
appreciate how cheating is made out against the petitioners
when the agreement envisaged supply of second quality
goods and the goods of that very quality were admittedly
supplied to the complainant.
In State of Haryana vs. Bhajan Lal, AIR 1992 SC 604,
the Hon’ble Supreme Court held that where the allegations
made in the FIR or the complaint even if they are taken at
their face value and accepted in their entirety do not, prima
facie, constitute any offence or make out any case against the
accused, the court would be justified in quashing the
criminal proceedings in exercise of powers u/s 482 of Code of
Criminal Procedure.
If the allegations disclose a civil dispute but also
constitute an offence, that by itself cannot be a ground to
hold that the criminal proceedings should not be allowed to
continue, but, where the allegations made in the complaint,
even if taken on their face value do not disclose commission
of any offence, the court would be justified in taking recourse
Crl. M.C. No. 3914/2008 Page 6 of 12
of taking provisions of Section 482 of the Code of Criminal
Procedure.
9. The learned counsel for the complainant has referred
to the decision of the Hon’ble High Court in R. Kalyani v.
Janak C. Mehta & Ors. JT 2008 (12) SC 279. There can be no
quarrel with the proposition of law enunciated in the case of
R. Kalyani v. Janak to the effect that if the allegations made
in an FIR or in a complaint discloses a civil dispute that by
itself cannot be a ground to hold that criminal proceedings
should not continue. But, this would be a case only if the
allegations also disclose commission of an offence. This case
would have no application where the allegations even if taken
as correct do not constitute commission of an offence. The
learned counsel has drawn my attention to para 14 of the
judgment where the Hon’ble Supreme Court observed that
while exercising jurisdiction u/s 482 of Cr.P.C., it is not
permissible for court to act as if it was a trial court and even
when charge is framed, the court has to only prima-facie be
satisfied about existence of sufficient grounds for
proceedings against the accused. The proposition of law
enunciated in above referred para is undisputable, but would
not be attracted to a case where the allegations do not
disclose commission of any offence at all and a crude attempt
is made to project a dispute which is essentially civil in
Crl. M.C. No. 3914/2008 Page 7 of 12
nature as a criminal offence. Even if it is presumed that the
petitioner did not honour all its obligations under the
agreement and thereby committed its breach that by itself
would give no justification to initiate criminal proceedings
against him unless the acts attributed to him also amount to
an offence. In fact, in para 18 of the judgment, the Hon’ble
Supreme Court observed that a matter which essentially
involves dispute of a civil nature should not be allowed to be
the subject matter of a criminal offence.
10. In All Carogo Movers (I) Pvt. Ltd. Vs. Dhanesh
Badarmal Jain & Anr. (2007) 12 SCALE 39, the Hon’ble
Supreme Court observed as under:-
“For the said purpose, allegations in the
complaint petition must disclose the
necessary ingredients therefor. Where a
civil suit is pending and the complaint
petition has been filed one year after filing
of the civil suit, we may for the purpose of
finding out as to whether the said
allegations are prima facie cannot notice
the correspondences exchanged by the
parties and other admitted documents. It is
one thing to say that the Court at this
juncture would not consider the defence of
the accused but it is another thing to say
that for exercising the inherent jurisdiction
of this Court, it is impermissible also to
Crl. M.C. No. 3914/2008 Page 8 of 12
look to the admitted documents. Criminal
proceedings should not be encouraged,
when it is found to be mala fide or
otherwise an abuse of the process of the
Court, Superior Courts, while exercising
this power should also strive to serve the
ends of justice.”
11. In V.Y. Jose & Anr. Vs. State of Gujarat & Anr. 2009 I
AD (Cr.) (S.C.) 567, the Hon’ble Supreme Court has observed
as under:-
“There exists a distinction between pure
contractual dispute of civil nature and an
offence of cheating. Although breach of
contract per se would not come in the way of
initiation of a criminal proceeding, there
cannot be any doubt whatsoever that in
absence of the averments made in the
complaint petition wherefrom the ingredients
of an offence can be found out, the court
should not hesitate to exercise its jurisdiction
under Section 482 of the Code of Criminal
Procedure.
We may reiterate that one of the ingredients
of cheating as defined in Section 415 of the
Indian Penal Code is existence of an intention
of making initial promise of existence thereof
from the very beginning of formation of
contract.
Crl. M.C. No. 3914/2008 Page 9 of 12
Section 482 of the Code of Criminal
Procedure, saves the inherent power of the
court. It serves a salutary purpose viz. a
person should not undergo harassment of
litigation for a number of years although no
case has been made out against him.
It is one thing to say that a case has been
made out for trial and as such the criminal
proceedings should not be quashed but it is
another thing to say that a person should
undergo a criminal trial despite the fact that
no case has been made out at all.”
12. In Inder Mohan Goswami and Another versus
State of Uttranchal and Others (2007) 12 SCC 1, a
chargesheet was filed against the appellant pursuant to an
FIR registered under Section 420, 467 and 120B of IPC. The
appellant before the Hon’ble Supreme Court were office
bearers of a charitable society. A General Power of Attorney
was executed by the society in favour of respondent No.4 in
respect of some land belonging to the society and an
Agreement to Sell was also executed for sale of the
remaining land. Certain payments were also received by the
society from him. The case of the appellants was that since
balance payment was not made to the society, it cancelled
Crl. M.C. No. 3914/2008 Page 10 of 12
the General Power of Attorney executed by the society in
favour of the respondent No.4, by executing a registered
cancellation deed. The appellants then sold that part of the
land for which the agreement with the
complainants/respondents was terminated and earnest
money paid by them was forfeited. The Hon’ble Supreme
Court quashed all the proceedings emanating from the FIR.
During the course of the judgment, the Hon’ble Court, inter
alia, observed as under:
“The Court must ensure that criminal
prosecution is not used as an instrument of
harassment or for seeking private vendetta
or with an ulterior motive to pressurise the
accused.”
It was noted that the veracity of the facts alleged by the
appellant and the respondents could only be ascertained on
the basis of the evidence and documents by a civil court of
competent jurisdiction and the dispute in question was purely
of civil nature and respondent No.3 had already instituted a
civil suit in the Court and in the facts and circumstances of
the case, initiating criminal proceedings was clearly an abuse
of process of the Court.
In Indian Oil Corporation versus N.E.P.C. India Ltd.
(2006) 6 SCC 736, the Hon’ble Supreme Court cautioned
Crl. M.C. No. 3914/2008 Page 11 of 12
against a growing tendency in business circles to convert
purely civil disputes into criminal cases. The Hon’ble Court
observed that:-
“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.”
The present case appears to be an attempt to
solve a purely civil dispute, by putting pressure on the
petitoiner, by initiating criminal proceedings against
him, as I find that the petitoner was not even a signatory
th
to the agreement dated 27 February, 2002 which was
signed by one P.D. Gupta on behalf of Liberty Group.
For the reasons given above, the criminal complaint
No.619/2003 titled Shyam Sunder Bansal Vs. Adrash Gupta &
Ors. pending in the court of Metropolitan Magistrate, Delhi
and the proceedings arising therefrom are hereby quashed.
(V.K. JAIN)
JUDGE
October 26, 2009/sk
Crl. M.C. No. 3914/2008 Page 12 of 12