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Quashing of FIR Where Converted Purely Civil Disputes into Criminal cases.

Now in respect of the offence of cheating, the law is fairly well settled in various judgments of the Apex Court, some of which are relied upon  like Hridaya Ranjan Prasad Verma & ors -vs Stat of Bihar and anr (2000) 4 SCC 168; wherein it was observed that, “It is held time and again that the distinction between mere breach of contract and the offence of cheating is a fine one.

It would depend upon the intention of the accused at the time of inducement, which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of transaction that is the time when the offence is said to have been committed.

Therefore, it is the intention which is gist of the offence. To hold a person guilty of cheating, it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise. From his mere failure to keep up promise subsequently such an culpable intention right at the beginning that is when he made the promise cannot be presumed”

Where  predominantly case  of civil nature and which has been given the robe of criminal offence that too, after availing civil remedies. Therefore, as held by the Apex Court in the case of State of Haryana and others -vs- Bhajan Lal and otherss 1992 Supp (1) SCC 335, where a criminal proceeding is manifestly attended with malafide intention and/or the proceeding is maliciously instituted with object to serve the oblique purpose of recovering the amount, such proceeding needs to be quashed and set aside. The allegations made in the present complaint, even after taken, as they are, also do not make out ingredients of the criminal offence, though at the most they may attract civil dispute, for which respondent No.3 has already taken recourse to the civil law and therefore, on this count also, complaint needs to be quashed and set aside.

In the case of Chandran Ratnaswami -vs- K.C. Palanisamy and ors (2013) 6 SCC 740, relied upon by learned counsel for applicant, wherein it was held that, when the disputes are of civil nature and finally adjudicated by the competent authority, as in the present case, by the Company Law Board and the disputes are arising out of alleged breach of joint venture agreement and when such disputes have been finally resolved by the Court of competent jurisdiction, then it is apparent that complainant wants to manipulate and misuse the process of Court. In this judgment, it was held that, it would be unfair if the applicants are to be tried in such criminal proceeding arising out of the alleged breach of a Joint Venture Agreement. It was further held that the wholesome power under Section 482 of Code of Criminal Procedure entitles the High Court to quash a proceeding when it comes to the conclusion that allowing the proceeding to continue would be abuse of the process of the Court or that the ends of justice require that the proceedings ought to be quashed.

in the case in Indian Oil Corpn-vs- NEPC India Ltd and ors, 2006 (3) SCC Cri 736, the Apex Court was pleased to caution about the growing tendency in business circles to convert purely civil disputes into criminal cases. It was 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  Hon’ble Supreme Court in the case of V.Y. Jose and anr -vs- State of Gujarat (2009) 3 SCC 78, wherein the Apex Court was once again pleased to observe that:-

“Section 482 serves a salutary purpose that a person should not undergo harassment litigation, even though no case has been made out against him. A matter which essentially involves disputes of civil nature, should not be allowed to be subject matter of a criminal offence, the latter being a shortcut of executing a decree which is non-existent”.

 

Where there is no purely matter of Civil in nature FIR can not be quashed.

In the latest judgment of Apex Court in the case of Parbatbhai Aahir @ Parbatbhai Bhimsinhbhai Karmur and ors -vs- State of Gujarat and anr, in Criminal Appeal No.1723 of 2017  it was found that the case involves allegations of extortion, forgery, fabrication of documents, utilization of those documents to effectuate transfers of title before registering authorities and the deprivation of the complainant of his interest in land on the basis of fabricated power of attorney. Hence, it was held that such allegations in the F.I.R., cannot be construed to be of a merely private or civil dispute. They implicate serious offence having a bearing on a vital societal interest and therefore, it was held that the High Court was justified in declining to quash the F.I.R., though the matter was amicably settled between the private parties.

In the case of State of Maharashtra and ors -vs- Arun Gulab Gawali, (2009) 9 SCC 701, Court has explained the parameters and ambit of section 482 of the Code of Criminal Procedure, in the light of decision of Apex Court.

 The based judgments for quashing u/s 482 of Cr.P.C is  State of Haryana -vs- Bhajanlal.

 

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