9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (4) TMI 1113 - SC - Indian LawsConcealment of documents - false statements - in what circumstances and categories of cases, a criminal proceeding may be quashed either in exercise of the extraordinary powers of the High Court Under Article 226 of the Constitution, or in the exercise of the inherent powers of the High Court Under Section 482 Code of Criminal Procedure? - HELD THAT - It is settled that the exercise of inherent power of the High Court is an extraordinary power which has to be exercised with great care and circumspection before embarking to scrutinise the complaint/FIR/charge-sheet in deciding whether the case is the rarest of rare case, to scuttle the prosecution at its inception. The issue involved in the matter under consideration is not a case in which the criminal trial should have been short-circuited. The High Court was not justified in quashing the criminal proceedings in exercise of its inherent jurisdiction. The High Court has primarily adverted on two circumstances, (i) that it was a case of termination of agreement to sell on account of an alleged breach of the contract and (ii) the fact that the arbitral proceedings have been initiated at the instance of the Appellants. Both the alleged circumstances noticed by the High Court, in our view, are unsustainable in law. The facts narrated in the present complaint/FIR/charge-sheet indeed reveal the commercial transaction but that is hardly a reason for holding that the offence of cheating would elude from such transaction - So far as initiation of arbitral proceedings is concerned, there is no correlation with the criminal proceedings. That apart, the High Court has not even looked into the charge-sheet filed against 2nd Respondent which was on record to reach at the conclusion that any criminal offence as stated is prima facie being made out and veracity of it indeed be examined in the course of criminal trial. Appeal allowed.
Issues Involved:
1. Quashing of criminal proceedings by the High Court under Section 482 of the Code of Criminal Procedure. 2. Allegations of cheating and breach of trust under Sections 420, 406, and 34 of the Indian Penal Code. 3. The distinction between civil disputes and criminal offences. 4. The exercise of inherent powers by the High Court under Section 482 CrPC. 5. The impact of pending arbitral proceedings on criminal prosecution. Detailed Analysis: 1. Quashing of Criminal Proceedings: The appellants, who are the de-facto complainants, challenged the High Court's order quashing the criminal proceedings against the 2nd respondent. The High Court had quashed the proceedings on the grounds that the allegations in the FIR did not constitute offences under Sections 420, 406, and 34 IPC, and deemed the matter to be a civil dispute arising from a breach of contract. 2. Allegations of Cheating and Breach of Trust: The factual matrix involved the 2nd respondent allegedly conspiring with a broker to cheat and defraud the appellants. The 2nd respondent was accused of breaching trust by failing to fulfill the requirements of an agreement to sell property, despite receiving substantial payments from the appellants. The 2nd respondent allegedly terminated the agreement illegally and misappropriated the amounts paid. 3. Distinction Between Civil Disputes and Criminal Offences: The High Court concluded that the case was a simple breach of contract, giving rise to a civil dispute, and that criminal proceedings would be an abuse of the court's process. However, the Supreme Court noted that the allegations in the complaint/FIR/charge-sheet did disclose the commission of an offence and that the truth of the allegations was to be determined during the trial. The Court emphasized that the existence of a civil remedy does not preclude criminal prosecution if the ingredients of a criminal offence are present. 4. Exercise of Inherent Powers by the High Court: The Supreme Court reiterated that the inherent power under Section 482 CrPC is to be exercised sparingly and with great care. The High Court should not quash criminal proceedings unless it is a rarest of rare case where the FIR/charge-sheet does not disclose any cognizable offence. The Court referred to established principles, including those from the Bhajan Lal case, which outline situations where quashing may be justified. 5. Impact of Pending Arbitral Proceedings: The High Court had also considered the fact that arbitral proceedings were initiated by the appellants, concluding that criminal proceedings would be inappropriate. The Supreme Court clarified that the initiation of arbitral proceedings does not bar criminal prosecution if the allegations prima facie constitute a criminal offence. The Court cited precedents indicating that arbitration is not a substitute for criminal prosecution. Conclusion: The Supreme Court set aside the High Court's judgment, stating that the High Court erred in quashing the criminal proceedings without considering the charge-sheet and the material on record. The Court emphasized that the allegations disclosed the commission of offences under Sections 406 and 420 IPC, and the matter should proceed to trial. The Court dismissed the application for initiating proceedings under Section 340 CrPC against the appellants and directed the trial court to expedite the trial without being influenced by its observations. Disposition: The appeal was allowed, the High Court's judgment was set aside, and the trial court was directed to proceed with the trial expeditiously. All pending IAs were disposed of.
|
