Civil remedy pursuit does not preclude criminal proceedings where ingredients of fraudulent inducement and cheating are prima facie substantiated.

The Appellant (complainant) filed an FIR alleging that Respondent No. 2 (Monika Dwivedi) and her family members fraudulently induced him into an agreement to sell a residential property in Lucknow for ₹4.30 Crores.

Despite receiving ₹3.55 Crores, the accused allegedly executed a sale deed in favor of a third party and threatened the Appellant when a refund was demanded.

Respondent No. 2’s previous writ petition to quash the FIR was dismissed by the High Court, noting her criminal antecedents and a prima facie case of fraud.

Subsequently, after the Sessions Court rejected her anticipatory bail, she approached the Allahabad High Court via Section 482 BNSS.

The High Court granted anticipatory bail on October 06, 2025, primarily observing that the dispute appeared civil because the agreement was only notarized, only partial payment was made, and the refund was sought in the FIR.

The Appellant approached the Supreme Court seeking cancellation of this protection.

1. Whether the High Court was justified in granting anticipatory bail by characterizing a prima facie case of financial fraud as a dispute of a civil nature.

2. Whether the non-consideration of criminal antecedents and the nature of an economic offence vitiates the discretionary exercise of granting anticipatory bail.

The Court applied the principles governing Section 438 of the CrPC (now Section 482 of the BNSS) regarding anticipatory bail, emphasizing that the existence of a civil remedy does not preclude criminal proceedings if the ingredients of an offence are prima facie met.

The Court underscored that in economic offences involving substantial sums, the court must consider the nature of the accusation, the conduct of the accused (such as absconding), and criminal antecedents as germane factors for exercising discretion.

It reiterated established jurisprudence that the form of a contract (notarized vs. registered) does not neutralize alleged criminality if fraudulent inducement is present.

The Supreme Court held that the High Court’s reasoning was flawed as it relied on peripheral factors rather than the core allegations of deception.

The Court clarified that the fact that one co-owner was abroad or that the agreement was notarized does not dilute the allegation of "inducement" at the inception of the transaction.

The High Court erred in viewing the Appellant's request for a refund as indicative of a purely civil dispute, noting that restitution claims do not efface charges of cheating.

The Supreme Court found the High Court order "unsustainable" because it was completely silent on the Respondent’s criminal antecedents and the fact that she had previously absconded to evade investigation—factors that both the Sessions Court and a different bench of the High Court had previously recorded.

The Supreme Court concluded that the High Court failed to apply its mind to the requirements of an effective investigation in a large-scale economic fraud.

The Court set aside the High Court’s order dated October 06, 2025, and officially cancelled the anticipatory bail granted to Respondent No. 2, Monika Dwivedi.

The appeal was allowed, with a clarification that these observations would not influence the trial on merits.