Mere Existence Of Civil Remedies Not A Ground To Quash Criminal Proceedings: Reiterates Supreme court

The Supreme Court observed that existence of civil remedies by itself is not a ground to quash criminal proceedings.

Simply because there is a remedy provided for breach of contract or arbitral proceedings initiated at the instance of the complainant, that does not by itself clothe the court to come to a conclusion that civil remedy is the only remedy, and the initiation of criminal proceedings, in any manner, will be an abuse of the process of the court for exercising inherent powers of the High Court under Section 482 CrPC for quashing such proceedings, the bench comprising Justices Indu Malhotra and Ajay Rastogi observed.

In this case, the High Court had quashed the criminal proceedings against the accused who were charged with offences under Sections 420, 406 and 34 of the Indian Penal Code. In appeal, the complainant contended that High Court proceeded on a premise that in case where there is an agreement to sell and its subsequent termination for its alleged breach, such disputes are civil disputes and more so where the arbitral proceedings are pending, criminal proceedings will be an abuse of the process of the Court. 

"After hearing learned counsel for the parties, we are satisfied that 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 23 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. In fact, many a times, offence of cheating is committed in the course of commercial transactions and the illustrations have been set out under Sections 415, 418 and 420 IPC", the bench said.

The bench said that to exercise powers under Section 482 CrPC, the complaint in its entirety shall have to be examined on the basis of the allegation made in the complaint/FIR/charge-sheet and the High Court at that stage was not under an obligation to go into the matter or examine its correctness.

"Whatever appears on the face of the complaint/FIR/charge-sheet shall be taken into consideration without any critical examination of the same. The offence ought to appear ex facie on the complaint/FIR/charge-sheet and other documentary evidence, if any, on record...

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 court added.

Allowing the appeal, the bench observed that there was sufficient material available as manifests from the record of criminal proceedings to connect the accused in the commission of crime

Case: Priti Saraf Vs. State Of NCT Of Delhi [CrA 296 OF 2021]
Coram: Justices Indu Malhotra and Ajay Rastogi
Counsel:  Sr.Adv Mukul Rohatgi, Sr. Adv P. Chidambaram, ASG Aishwarya Bhati
Citation: LL 2021 SC 154

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