3/14/24, 12:55 AM High Court Must Not Hesitate In Quashing Criminal Proceedings Which Are Essentially Of Civil Nature:

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High Court Must Not Hesitate In Quashing Criminal
Proceedings Which Are Essentially Of Civil Nature:
Supreme Court
Yash Mittal
(/yash-mittal)
13 Mar 2024 10:05 AM

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The Supreme Court reiterated that the High Court by exercising their inherent
power must quash the prosecution based on the criminal complaint arising out of
a civil transaction.

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3/14/24, 12:55 AM High Court Must Not Hesitate In Quashing Criminal Proceedings Which Are Essentially Of Civil Nature: Supreme Court

"...although the inherent powers of a High Court under Section 482 of the Code of
Criminal Procedure should be exercised sparingly, yet the High Court must not
hesitate in quashing such criminal proceedings which are essentially of a civil
nature," the Court stated referring to the precedent Paramjeet Batra v. State of
Uttarakhand (2013) 11 SCC 673.

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artice&utm_medium=also-read)

Reversing the decision of the High Court which had refused to quash the pending
criminal case against the appellant/accused, the Bench Comprising Justices
Sudhanshu Dhulia and PB Varale quashed the criminal case against the accused
arising out of a civil transaction by noting that the High Court must quash
proceedings arising out of civil transaction as continuation of the proceedings
would be an abuse of the process due to absence of the criminal intent.

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officers-must-have-all-necessary-details-as-per-section-1732-crpc-supreme-court-252049?
utm_source=internal-artice&utm_medium=also-read)

“In Usha Chakraborty & Anr. v. State of West Bengal & Anr.
(https://www.livelaw.in/top-stories/sec-482-crpc-pendency-of-suit-concealed-
cloak-of-criminal-offence-given-to-civil-dispute-supreme-court-quashes-criminal-
proceedings-220279) relying upon Paramjeet Batra (supra) it was again held that
where a dispute which is essentially of a civil nature, is given a cloak of a criminal
offence, then such disputes can be quashed, by exercising the inherent powers
under Section 482 of the Code of Criminal Procedure.”, the Judgment authored by
Justice Sudhanshu Dhulia observed.

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hearing-parties-251982?utm_source=internal-artice&utm_medium=also-read)

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3/14/24, 12:55 AM High Court Must Not Hesitate In Quashing Criminal Proceedings Which Are Essentially Of Civil Nature: Supreme Court

The gist of the dispute was that the complaint under Sections 406, 420, and 506 of
the Indian Penal Code was registered against the accused/appellant for only
paying Rs.62 lakhs as against the full amount of Rs. 1,01,58,574/- to the
complainant for assembling the bicycle. The allegation levied against the
appellant/accused was that he committed cheating by intentionally deceiving the
complainant to assemble more bicycles without paying the assembling fees for
more bicycles assembled by the complainant.

After finding that the dispute between the parties is purely civil dispute emanating
from a civil transaction where settlement was also being arrived between the
parties to which the complainant admitted that he had received the additional
amount from the accused/appellant, the Supreme Court found that “this is a case
where the inherent powers should have been exercised by the High Court under
Section 482 of the Criminal Procedure Code as the powers are there to stop the
abuse of the process and to secure the ends of justice.”

"We do not agree with the findings arrived at by the High Court for two reasons.
Firstly, the dispute between the parties is primarily, civil in nature. It is after all a
question of how many bicycles the complainant had assembled and the dispute
between the parties is only regarding the figure of bicycles and consequently of
the amount liable to be paid. This is a civil dispute. The complainant has not been
able to establish that the intention to cheat the complainant was there with the
appellants right from the beginning. Merely because the appellants admit that only
28,995 bicycles were assembled, but they have admittedly paid an amount of Rs.
62,01,746/- to the complainant, which is of a much higher number of bicycles,
would not prove that the intention of the appellants right from the beginning was
to cheat.”, the Supreme Court noted.

The Supreme Court placed reliance on its earlier Judgment of Paramjeet Batra v.
State of Uttarakhand (https://main.sci.gov.in/jonew/judis/39838.pdf), to hold that
the High Court must not hesitate in quashing such criminal proceedings which
arise out of a civil nature.

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3/14/24, 12:55 AM High Court Must Not Hesitate In Quashing Criminal Proceedings Which Are Essentially Of Civil Nature: Supreme Court

“A complaint disclosing civil transactions may also have a criminal texture. But the
High Court must see whether a dispute which is essentially of a civil nature is
given a cloak of criminal offence. In such a situation, if a civil remedy is available
and is, in fact, adopted as has happened in this case, the High Court should not
hesitate to quash the criminal proceedings to prevent abuse of process of the
court.”, the Supreme Court held in Paramjeet Batra.

Further, the Court clarified that every breach of contract wouldn't essentially give
rise to an offence of cheating unless the fraudulent or dishonest intention on the
part of the accused is shown by the complainant since the making of the contract.

“In the case at hand, the dispute between the parties was not only essentially of a
civil nature but in this case, the dispute itself stood settled later as we have already
discussed above. We see no criminal element here and consequently, the case
here is nothing but an abuse of the process.”, the Supreme Court observed.

Accordingly, the appeal was allowed and the criminal proceedings pending against
the accused stand quashed.

Counsels For Appellant(s) Mr. Aman Lekhi, Sr. Adv. Mr. Abhishek Gupta, AOR Mr.
Chaitanya Mahajan, Adv. Ms. Payal Kakra, Adv. Mr. Ehraaz Zafar, Adv. Mr.
Kunalkakumanu, Adv.

Counsels For Respondent(s) Mr. D. L. Chidananda, AOR Mr. Ravindera Kumar

Verma, Adv. Mr. Anand Sanjay M Nuli, Sr. Adv. Mr. Suraj Kaushik, Adv. Mr. Agam
Sharma, Adv. Mr. Dharm Singh, Adv. Mr. Nanda Kumar, Adv. Ms. Akhila Wali, Adv.
Mr. Shiva Swaroop, Adv. Mr. Akash Kukreja, Adv. M/S. Nuli & Nuli, AOR

Also Read: Efforts To Settle Pure Civil Disputes By Applying Pressure Through
Criminal Prosecution Must Be Deprecated: Supreme Court
(https://www.livelaw.in/top-stories/efforts-to-settle-pure-civil-disputes-by-applying-
pressure-through-criminal-prosecution-must-be-deprecated-supreme-court-
247396)

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3/14/24, 12:55 AM High Court Must Not Hesitate In Quashing Criminal Proceedings Which Are Essentially Of Civil Nature: Supreme Court

Case Title: NARESH KUMAR & ANR. VERSUS THE STATE OF KARNATAKA & ANR.

Citation : 2024 LiveLaw (SC) 228

Click Here To Read/Download The Judgment (https://www.sci.gov.in/wp-

admin/admin-ajax.php?
action=get_judgements_pdf&diary_no=44722021&type=j&order_date=2024-03-12)

Tags Justice Sudhanshu Dhulia (https://www.livelaw.in/tags/justice-sudhanshu-dhulia)

Justice PB Varale (https://www.livelaw.in/tags/justice-pb-varale)

Section 406 IPC (https://www.livelaw.in/tags/section-406-ipc)

Section 420 IPC (https://www.livelaw.in/tags/section-420-ipc)

Civil Dispute (https://www.livelaw.in/tags/civil-dispute)

Cheating Case (https://www.livelaw.in/tags/cheating-case)

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Yash Mittal
(/yash-mittal)
13 Mar 2024 2:37 PM

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