Courts Must Remain Vigilant Against Misuse Of Criminal Justice Machinery For Vested Interests: Supreme Court
The Apex Court held that criminal prosecution cannot be permitted to continue when allegations lack a material foundation, emphasising the need for vigilance against attempts to misuse criminal law for ulterior motives.
Justice B.V. Nagarathna, Justice R. Mahadevan, Supreme Court
The Supreme Court has held that courts must exercise caution when criminal law is invoked to pursue vested interests and oblique motives, noting that unsupported allegations can destabilise social harmony and burden the criminal justice system.
The Court was hearing a criminal appeal arising from the refusal of the Gauhati High Court to quash proceedings initiated under Sections 406, 420 and 120B of the Indian Penal Code, following a complaint filed in relation to partnership property
The Bench of Justice B.V. Nagarathna and Justice R. Mahadevan, while stating that the complainant made grave allegations which he failed to justify before the Court, reiterated that the machinery of criminal justice is being misused by certain persons for their vested interests and for achieving their oblique motives and agenda”, further adding that “Courts have therefore to be vigilant against such tendencies.”
Advocate Pooja Dhar, AOR, represented the appellant, while Advocate Somiran Sharma, AOR, represented the respondents.
Background
The dispute arose from a long-standing partnership established in 1976, relating to the construction and leasing of godowns. The appellant and other partners executed a supplementary agreement in 1981, followed by the dissolution of the firm in 1997. A civil suit for dissolution and accounts filed by the complainant resulted in a preliminary decree.
Subsequently, the appellant executed a sale deed in 2011 in favour of a third party. The complainant filed a civil suit in 2012 challenging the sale, and later, in 2013, lodged a criminal complaint alleging criminal breach of trust, cheating, and conspiracy in relation to the disputed property.
The Magistrate took cognisance under Sections 406, 420 and 34 IPC. The High Court quashed proceedings only against one accused but refused to do so for the appellant, holding that a prima facie case existed.
Court’s Observation
The Supreme Court, upon hearing the matter, examined the complaint in light of the statutory ingredients of Sections 406 and 420 IPC. It noted that a charge of cheating requires demonstration of dishonest or fraudulent intention at the very inception, and the complaint failed to show any such intention on the part of the appellant at the time of entering the partnership.
The Court held that the complaint did not disclose intentional deception, misrepresentation, or inducement needed to constitute an offence under Section 420 IPC. Mere allegations of subsequent sale of property were insufficient to establish dishonest intention from the outset.
With respect to Section 406 IPC, the Court found that the complainant had not demonstrated entrustment of property to the appellant or dishonest misappropriation. The partnership deed and supplementary agreement indicated that the disputed property originally belonged to the appellant and was agreed to revert to him after expiry of the lease.
While stating that the complainant could not simultaneously rely on the agreement acknowledging reversion of the property and claim criminal breach of trust on the same facts, the Court further observed that the simultaneous invocation of cheating and criminal breach of trust was impermissible when the factual basis was mutually exclusive.
The Court also referred to the availability of civil remedies and noted that the complainant had already pursued a civil suit relating to the sale deed. When allegations did not disclose criminal intent, recourse to criminal law could not be justified, and such proceedings would amount to harassment.
Relying on the principles in State of Haryana v. Bhajan Lal, the Court held that the allegations, even if taken at face value, were manifestly attended with mala fide intent, while observing that “to continue the criminal proceedings against the appellant-accused herein would cause undue harassment to him because as observed hereinabove, no prima facie case for the offence under Sections 406 or 420 of the IPC is made out”.
At this stage, the Court revisited the observation from Vishal Noble Singh v. State of Uttar Pradesh that the machinery of criminal justice is being misused by certain persons for their vested interests and for achieving their oblique motives and agenda, and underscored that “acts of omission and commission having an adverse impact on the fabric of our society must be nipped in the bud”.
Conclusion
The Supreme Court held that the allegations failed to satisfy the essential ingredients of offences under Sections 406 or 420 IPC and that the continuation of criminal proceedings would amount to an abuse of process.
The impugned order of the Gauhati High Court was set aside, and the complaint and all consequent proceedings were quashed.
The appeal was allowed in the aforesaid terms.
Cause Title: Inder Chand Bagri v. Jagadish Prasad Bagri & Another (Neutral Citation: 2025 INSC 1350)
Appearances
Petitioner: Pooja Dhar, AOR
Respondents: Somiran Sharma, AOR with Advocate Snigdha Shresth