Money Can't Be Recovered In Civil Disputes By Filing FIR, Seeking Help Of Police: Supreme Court
The Supreme Court also expressed displeasure at the High Court's inability to understand that the entire dispute between the parties was of civil nature and reiterated that to constitute an offence of cheating, there has to be something more than prima facie on record to indicate intention to cheat right from the inception.
Justice J.B. Pardiwala, Justice R. Mahadevan, Supreme Court
The Supreme Court has held that money cannot be recovered by way of filing a First Information Report seeking the help of the Police as the dispute is civil in nature.
The Court was considering an Appeal against an order of the Allahabad High Court by which the High Court, in a Writ Petition seeking quashing of the FIR lodged by the Respondent No.4 for cheating, directed the parties to go for mediation and simultaneously directed the Appellant to hand over a demand draft of ₹25,00,0000/-.
The Bench of Justice JB Pardiwala and Justice R Mahadevan observed, "We also enquired with the learned counsel appearing for the Respondent No.4 whether his client has filed any civil suit or has initiated any other proceedings for recovery of the money. It appears that no civil suit has been filed for recovery of money till this date. Money cannot be recovered, more particularly, in a civil dispute between the parties by filing a First Information Report and seeking the help of the Police. This amounts to abuse of process of law."
The Appellant was represented by Advocate Sana Raees Khan, while the Respondent was represented by Advocate-On-Record Sarvesh Singh Baghel.
Facts of the Case
Answering the question as to whether prima facie any offence of cheating could be said to have been committed by the Appellant, the Court stated that the entire case is squarely covered by a recent pronouncement in the case of Delhi Race Club (1940) Ltd. & Ors. v. State of Uttar Pradesh & Anr. (2024 INSC 626) in which the entire law as to what constitutes cheating and criminal breach of trust respectively has been exhaustively explained.
It expressed displeasure at the High Court's inability to understand that the entire dispute between the parties was of a civil nature and reiterated that to constitute an offence of cheating, there has to be something more than prima facie on record to indicate intention to cheat right from the inception.
"How many times the High Courts are to be reminded that to constitute an offence of cheating, there has to be something more than prima facie on record to indicate that the intention of the accused was to cheat the complainant right from the inception. The plain reading of the FIR does not disclose any element of criminality," it observed.
The Court also questioned the High Court's action to refer the matter to mediation rather than handling the case on its merits.
"It appears that this very decision was relied upon by the learned counsel appearing for the petitioner before the High Court. However, instead of looking into the matter on its own merits, the High Court thought fit to direct the Petitioner to go for mediation and that too by making payment of ₹25,00,000/- to the 4th respondent as a condition precedent. We fail to understand, why the High Court should undertake such exercise. The High Court may either allow the petition saying that no offence is disclosed or may reject the petition saying that no case for quashing is made out. Why should the High Court make an attempt to help the complainant to recover the amount due and payable by the accused. It is for the Civil Court or Commercial Court as the case may be to look into in a suit that may be filed for recovery of money or in any other proceedings, be it under the Arbitration Act, 1996 or under the provisions of the IB Code, 2016," the Court observed.
It stated that it is 'disturbed' by the manner in which the High Court has passed the impugned order.
"The High Court first directed the appellant to pay Rs.25,00,000/- to the Respondent No.4 and thereafter directed him to appear before the Mediation and Conciliation Centre for the purpose of settlement. That’s not what is expected of a High Court to do in a Writ Petition filed under Article 226 of the Constitution or a miscellaneous application filed under Section 482 of the Code of Criminal Procedure, 1973 for quashing of FIR or any other criminal proceedings. What is expected of the High Court is to look into the averments and the allegations levelled in the FIR along with the other material on record, if any. The High Court seems to have forgotten the well-settled principles as enunciated in the decision of this Court in the “State of Haryana & Others vs. Bhajan Lal & Others” Reported in 1992 Supp.(1) SCC 335," the Court observed.
The Appeal was accordingly allowed.
Cause Title: Shailesh Kumar vs. State of Uttar Pradesh & Ors.
Appearances:
Appellants- Advocate Sana Raees Khan, Advocate Smiti Verma, Advocate-On-Record Pranay Shridhar Chitale, Advocate Beleena Biju
Respondents- Advocate-On-Record Sarvesh Singh Baghel, Advocate Nupur Dubey, Advocate Shaurya Krishna, Advocate-On-Record Anand Mishra, Advocate Sachin Midha
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