Supreme Court of India· 15 May 2024
What is the settled caution against converting a purely civil dispute into a criminal case, and how was it applied to a real estate profit-sharing dispute?
C. Subbiah @ Kadambur Jayaraj and Others v. The Superintendent of Police and Others
2024 INSC 416
Coram: B.R. Gavai; Sandeep Mehta
Answer
A criminal court must exercise a great deal of caution in issuing the process, particularly when matters are essentially of civil nature, and any effort to settle civil disputes and claims which do not involve any criminal offence by applying pressure through criminal prosecution should be deprecated and discouraged. Applying this, the Court held that a dispute which is purely civil in nature had been given a colour of criminal prosecution alleging fraud and criminal breach of trust by misusing the tool of criminal law.
Headnote
Benami Transactions (Prohibition) Act, 1988 — s.2(a) — s.4 — Indian Penal Code, 1860 — s.420 — s.406 — s.294(b) — s.506(ii) — Benami transaction — Quashing of criminal proceedings — Abuse of process of law —
Benami Transactions (Prohibition) Act, 1988 — s.4 — Property held benami — civil remedy barred, criminal prosecution impermissible —
Held: Section 4 of the Benami Act bars the real owner from suing to enforce any right in property held benami. As a corollary, criminal prosecution on the self-same cause of action is impermissible in law. (¶35, 36)
Indian Penal Code, 1860 — s.420 — s.406 — Cheating — fraudulent intention at inception of the transaction —
Held further: Cheating is not made out unless fraudulent or dishonest intention is shown right at the beginning of the transaction. Where plots and part profits were passed on and only quantification of the share is disputed, the dispute is purely civil. (¶38, 42)
Indian Penal Code, 1860 — s.294(b) — s.506(ii) — Obscene acts — profane language and bald allegation insufficient —
Held further: Section 294(b) applies only to an obscene song, ballad or words uttered in or near a public place, not to an allegation of abuse by profane language. A bald allegation of intimidation, unsupported by material, will not sustain Section 506(ii). (¶43, 44)
Indian Penal Code, 1860 — s.420 — Civil dispute given colour of criminal prosecution — abuse of process —
Held further: A purely civil dispute given the colour of criminal prosecution by misusing the tool of criminal law tantamounts to sheer abuse of the process of law. Impugned order and the proceedings pursuant to the charge sheet quashed; appeal allowed. (¶42, 46)
In the Court's own words
Paragraph 41Similarly, in the case of Vijay Kumar Ghai v. State of W.B.[^6], this Court while tracing the earlier decisions on the subject observed as under: 24. This Court in G. Sagar Suri v. State of U.P. [G. Sagar Suri v. State of U.P., (2000) 2 SCC 636] observed that it is the duty and obligation of the criminal court to exercise a great deal of caution in issuing the process, particularly when matters are essentially of civil nature. 25. This Court has time and again cautioned about converting purely civil disputes into criminal cases. This Court in Indian Oil Corpn. [Indian Oil Corpn. v. NEPC India Ltd., (2006) 6 SCC 736] noticed the prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. The Court further observed that : (Indian Oil Corpn. case [Indian Oil Corpn. v. NEPC India Ltd., (2006) 6 SCC 736) “13. … Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure through criminal prosecution should be deprecated and discouraged.”
Paragraph 42Thus, we are of the firm view that the necessary ingredients of the offences punishable under Section 406 and Section 420 IPC are not made out against the accused appellants from the admitted allegations set out in the complaint and the charge sheet. It cannot be doubted that a dispute which is purely civil in nature has been given a colour of criminal prosecution alleging fraud and criminal breach of trust by misusing the tool of criminal law.
Acts & Sections
s.4 Benami Transactions (Prohibition) Act, 1988s.2(a) Benami Transactions (Prohibition) Act, 1988s.420 Indian Penal Code, 1860s.406 Indian Penal Code, 1860s.294(b) Indian Penal Code, 1860s.506(ii) Indian Penal Code, 1860s.120B Indian Penal Code, 1860s.156(3) Code of Criminal Procedure, 1973One judgment a day. That's the whole habit.
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Also decided in this judgment
Under the Benami Transactions (Prohibition) Act, 1988, where the real owner's civil suit to recover property held benami is barred by Section 4, can he still prosecute the person in whose name the property is held on the self-same cause of action?Under the Benami Transactions (Prohibition) Act, 1988, what makes a land deal registered in another person's name, using consideration provided by the complainant, a benami transaction?Under the Indian Penal Code, 1860, can a prosecution for cheating under Section 420 be sustained where some plots and part profits were passed on and the dispute is only over quantification of the share due?Under the Indian Penal Code, 1860, does an allegation that the accused abused the complainant by using profane language attract the offence under Section 294(b)?Under the Indian Penal Code, 1860, is a bald allegation of criminal intimidation, unsupported by any material in the charge sheet, enough to sustain a charge under Section 506(ii)?