Supreme Court: Mere Institution Of Civil Proceedings For Breach Of Contract Not A Ground For Quashing FIR Or Holding That Dispute Is Merely Civil
The Supreme Court revived the FIR while clarifying that mere delay on the part of a complainant in lodging an FIR, cannot by itself be a ground to quash it.
The Supreme Court held that the mere institution of civil proceedings for a breach of contract is not a ground for quashing an FIR or holding that a dispute is merely a civil dispute.
The Court set aside a decision of the Single Bench of the Delhi High Court, which quashed an FIR registered under Sections 467, 468, 471, 420 and 120B of the IPC against a mother and her son (Respondents). The Court revived the FIR while clarifying that mere delay on the part of a complainant in lodging an FIR, cannot by itself be a ground to quash it.
A Bench of Justice Dipankar Datta and Justice Manmohan held, “This Court is of the view that the conclusion of the learned Single Judge that the complaint/FIR on its face did not disclose offences under Sections 467, 468, 471, 420, 120-B IPC against Respondent Nos. 2 and 3 is factually incorrect. If the averments in the complaint are to be believed, which is the norm that is to be followed at this stage, then the subject FIR/complaint reveals commission of cognizable offences by Respondent Nos. 2 and 3 also as they despite being aware that father of Vikramjit Singh and husband of Maheep Singh had no authority to enter into an Agreement to Sell on behalf of the HUF (as he was not the Karta of HUF on the said date), allowed Bhai Manjit Singh to misrepresent with dishonest and fraudulent intent that he was the Karta of Bhai Manjit Singh HUF. This misrepresentation assumes serious connotation.”
Senior Advocate Mukta Gupta appeared for the Appellant, while ASG Archana Pathak Dave and Senior Advocate Saurabh Mishra represented the Respondents.
Brief Facts
The Prosecution alleged that a Receipt-cum-Agreement to Sell was executed in favour of the Appellant by the Respondents for the sale of a property. It was alleged that the Appellant had paid the sale consideration and part physical possession of the property was even handed over to the Appellant vide a letter of possession.
However, another person claimed that a similar Agreement to Sell was executed in his favour for the same property. The Respondents initially denied the existence of any Agreement to Sell, but later claimed that the amount paid by the Appellant had been returned. Ultimately, the Appellant filed a suit for specific performance before the High Court. It was later revealed that the property had been sold to another company.
Court’s Reasoning
The Supreme Court reiterated that “simply because there is a remedy provided for breach of contract, that does not by itself clothe the Court to conclude 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. This Court is of the view that because the offence was committed during a commercial transaction, it would not be sufficient to hold that the complaint did not warrant a further investigation and if necessary, a trial.”
The Bench stated, “This Court is of the view that the learned Single Judge misdirected himself by concluding that the only allegation against Respondent Nos. 2 and 3 is that they were witnesses to the Receipt-cum-Agreement to Sell dated 12th April 2004, whereas, the gravamen of the allegation was that Respondent Nos. 2 and 3 were equally guilty of misrepresentation as, despite their knowledge to the contrary (as they were all closely related as well as members of the said HUF and Vikramjit Singh was actual Karta), they allowed Bhai Manjit Singh who was not competent to execute the Receipt-cum-Agreement to Sell on behalf of Bhai Manjit Singh HUF to represent himself as the Karta and execute the same. Consequently, the underlying act of misrepresentation…by which the Appellant is aggrieved, and not the mere act of signing the receipt as witnesses.”
The Court further clarified that “delay in registration of the FIR for offences punishable with imprisonment of more than three years cannot be the basis of interdicting a criminal investigation.”
The Bench remarked that “in cases involving cross-FIRs, it would be prudent and fair if the investigation was carried out in a comprehensive manner. After all, the object of the investigation is the discovery of truth. In the present case, in view of cross-FIRs, the investigating authority will conclude that either the receipts in favour of the Appellant are forged and fabricated or that the receipts are genuine.”
The Court, consequently, revived the FIR quashed by the High Court.
Accordingly, the Supreme Court disposed of the Appeal.
Cause Title: Punit Beriwala v. The State Of NCT Of Delhi & Ors. (Neutral Citation: 2025 INSC 582)
Appearance:
Appellant: Senior Advocate Mukta Gupta; AOR Misha Rohatgi; Advocates Lokesh Bhola, Nakul Mohta, Abhishek Singh Chauhan, Nitya Gupta, Aditi Gupta and Riya Dhingra
Respondents: ASG Archana Pathak Dave; Senior Advocate Saurabh Mishra; AOR Jasmeet Singh, Mukesh Kumar Maroria and Vanshaja Shukla; Advocates Sanjay Kumar Tyagi, Rajan Kumar Chourasia, Digvijay Dam, Gaurang Bhushan and Siddhant Yadav
