"Civil Dispute Given Colour Of Criminal Wrong Doing" Supreme Court Quashes Chargesheet Registered U/S 420 IPC

The bench of Justices DY Chandrachud and Surya Kant in the present case was considering a criminal appeal assailing Allahabad High Court's order dated August 10, 2021 ("impugned judgement")

In the impugned judgement, Single Judge had dismissed a petition under Section 482 of the Code of Criminal Procedure 19731 filed by the appellant for quashing the charge-sheet submitted on 12 February 2021, an order taking cognizance dated 8 March 2021 and the proceedings which arise out of case registered under Section 420 of the Indian Penal Code 1860.

While allowing the appeal, the bench in Syed Yaseer Ibrahim v State of Uttar Pradesh & Anr said,

"Insofar as the appellant is concerned, none of the ingredients of the offence punishable under Section 420 of the IPC have been found to exist after the investigation was complete. Neither the FIR nor the charge-sheet contain any reference to the essential requirements underlying Section 420. In this backdrop, the continuation of the prosecution against the appellant would amount to an abuse of the process where a civil dispute is sought to be given the colour of a criminal wrongdoing."

Factual Background

The appellant claimed title to certain immovable property on the basis of a gift deed dated 2 January 2002.

On 12 September 2008, Azim Wasif instituted a suit, in the Court of the Civil Judge (Senior Division), Kanpur Nagar against the appellant seeking a declaration of title and possession of the suit property. He founded his claim on the basis of a Will alleged to have been executed by the brother of the appellant's maternal grandfather.

On 19 September 2009, the First Additional Civil Judge allowed the application under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure 1908 and directed the parties to the suit to maintain status quo over the disputed property.

On 10 September 2010, the appellant entered into an agreement to sell the property with Mohd Naeem and Nitin Gupta, which was to take effect after the disposal of the suit in favour of the appellant.

On 13 October 2014, the suit was dismissed in default.

On an application for restoration filed by the plaintiff on 17 October 2014, the suit was restored to file on 21 April 2016.

On 24 November 2014, the appellant allegedly executed a sale deed in respect of the suit property which was registered on 2 January 2015.

On 5 February 2020, the FIR, was registered by the second respondent claiming as holder of a Special Power of Attorney executed by Wasif, who had instituted the declaratory suit.

The allegation in the FIR was that in pursuance of a Power of Attorney executed by Wasif on 29 October 2018, the second respondent visited the disputed property on 24 November 2019 and found that certain work of demolition was being carried out.

It was alleged that the appellant committed an offence punishable under Section 420 of the IPC. Against the three other co-accused who have been named in the FIR, there are allegations were in regard to offences allegedly punishable under Sections 323, 504 and 506 of the IPC.

After investigation was complete, a charge-sheet was submitted before the competent court on 12 February 2021.

The appellant preferred a petition u/s 482 which was dismissed by the Single Judge on the ground that disputed questions of facts arose which could not be adjudicated in the proceedings u/s 482 of CrPC.

Submission of Counsels

Appearing for the appellant, Advocate Gaurav Khanna submitted that the entire dispute was of a civil nature and that the charge-sheet submitted before the competent court specifically contained a recital that a suit was pending before the court of the Civil Judge (Senior Division). It was also counsel's contentio that the issue as to whether the appellant was entitled to claim under the deed of gift would be resolved in the trial, while, on the other hand, the claim of the second respondent which is based on the Will would also have to be tested on the basis of evidence in the suit.

Appearing for the 2nd respondent, Advocate Sanjay Singh relying upon relevant extracts from the charge-sheet urged that the sale of the property was hit by the doctrine of lis pendens.

Advocate Ankit Goel appeared for the State of UP.

Supreme Court's Analysis

The bench to adjudicate on the issue while considering the submissions made by Advocate Sanjay Singh with regards to the application of doctrine of lis pendens said that the same was itself an indicator that the dispute was of a civil nature.

The Court in this regard further said, "The execution of a sale deed, during the pendency of the suit, may attract the doctrine of lis pendens , but, from reading the charge-sheet as it stands, it is evident that there is no element of criminality which can stand attracted in a matter which essentially involves a civil dispute between the appellant and the second respondent."

While allowing the appeal and quashing the charge sheet the bench said,

"Insofar as the appellant is concerned, none of the ingredients of the offence punishable under Section 420 of the IPC have been found to exist after the investigation was complete. Neither the FIR nor the charge-sheet contain any reference to the essential requirements underlying Section 420. In this backdrop, the continuation of the prosecution against the appellant would amount to an abuse of the process where a civil dispute is sought to be given the colour of a criminal wrong doing."

Case Title: Syed Yaseer Ibrahim v State of Uttar Pradesh & Anr| Criminal Appeal No 295 of 2022