'Unscrupulous Litigants Shouldn't Be Allowed To Go Scot Free' : Supreme Court Imposes Rs 25 Lakhs Cost On Complainant

Condemning such intended acts of abuse of power, a Division Bench of Justices Vikram Nath and Rajesh Bindal imposed the cost of ₹25 lakhs on the respondent.

“Considering the above facts and circumstances of the case, we impose costs of ₹25 lakhs on the respondent Karan Gambhir to be deposited within four weeks from today with the Registry of this Court. Upon receipt of the said amount, the same will be transmitted in equal amount to the SCBA & SCAORA to be utilised for the development and benefit of their members.”

The Court did not mince its words while observing that "unscrupulous litigants should not be allowed to go scot-free". They should be put to strict terms and conditions including costs., the Court asserted before adding:

“It is time to check with firmness such litigation initiated and laced with concealment, falsehood, and forum hunting. Even State actions or conduct of government servants being party to such malicious litigation should be seriously reprimanded.”

In the instant case, the respondent had filed the FIR against inter-alia, the promoters of three companies. The allegations were of forgery and cheating. As per the complainant, his company was induced to extend short-term loans to the accused companies. Chief Judicial Magistrate Gautam Budh Nagar issued the summoning order. Challenging the same, the accused persons/appellants approached the High Court. The same being dismissed, the present appeal was preferred.

While addressing the issue of false jurisdiction, the Supreme Court noted that the registration of FIR was at Noida. However, the registered offices of the companies in question at Delhi. The Court observed that it “shows a wishful forum shopping by the Complainant, casting serious doubts on their bona fides.”

The Court opined that the Trial Court's order, wherein it took cognizance of the matter and issued summons to the accused, shows no application of mind.

“The Magistrate also did not take into consideration the address of the complainant and the accused companies as also the addresses of their Directors. There was complete lack of application of mind while taking cognizance and issuing summons.,” the Court said.

The Court noted that the complainant concealed the material facts, and a new story of forging documents was built up in the complaint only to give a criminal color. Expressing its anguish, the Court recorded that the respondent chose to pursue criminal charges to abuse the criminal justice system with a motive to seek personal vengeance rather than true justice.

“This unnecessary turning of a civil matter into a criminal case not only overburdens the criminal justice system but also violates the principles of fairness and right conduct in legal matters. The apparent misuse of criminal proceedings in this case not only damages trust in our legal system but also sets a harmful precedent if not addressed.,” the Court said.

Apart from this, the Court noted that the short-term loan was advanced in 2010 for one year. However, when the same was not returned, no steps were taken by the complainant to recover the same until the present FIR was registered only after 8 years & 7 months later.

The Court opined that these facts reflect upon the ill designs of the complainant.

“The entire factual matrix and the time lines clearly reflects that the complainant deliberately and unnecessarily has caused substantial delay and had been waiting for opportune moment for initiating false and frivolous litigation.,” the Court added.

Therefore, observing that this is a clear malicious prosecution case, the Court quashed the FIR against the appellants.

Case Details: DINESH GUPTA v. THE STATE OF UTTAR PRADESH & ANR.

Citation : 2024 LiveLaw (SC) 33

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