SUPREME COURT HOLDS THAT A PERSON CANNOT BE PROSECUTED IF THE CHARGES FRAMED ARE CIVIL IN NATURE

A two Judge Bench of Supreme Court comprising of Justice Vikram Nath and Justice K.V. Viswanathan passed a judgement in The State of Arunachal Pradesh v. Kamal Agarwal & Ors. SLP(Crl.) Nos.8663-8665 of 2023 and Chandra Mohan Badaya v. The State of Arunachal Pradesh & Ors.  SLP(Crl.) No. 7301 OF 2022 wherein the Apex Court held that High Courts must contemplate the true nature of the case and then exercise their jurisdiction.

Facts

A FIR bearing no.227 of 2017 was lodged by Mr. Anil Agarwal on behalf of Mr. Okep Tayeng who was the proprietor of M/s Shiv Bhandar and subsequently a FIR Case was registered at Police Station Pasi Ghat, District Siang East, Arunachal Pradesh for offences under Section 420,120-B and 34 Indian Penal Code, 1860 (Cheating and dishonestly inducing delivery of property), (Punishment of criminal conspiracy) and (Acts done by several persons in furtherance of common intention).

According to the Complainant, M/s Shiv Bhandar, the proprietorship concerned transferred an amount of Rs.1 Crore in the year 2016 in the account of Chandra Mohan Badaya, and Rajesh Natani in four equal transactions of 25 lakhs each.

As per the statement of Chandra Mohan Badaya (Appellant No. 2), the amount was transferred as a loan. However, to the contrary, the Complainant submitted that the amount was in respect to purchase of land/building in Jaipur, Rajasthan. No written agreement was entered into between the parties while giving the loan. The Appellant No. 2 also contended that he transferred back a sum of Rs. 37 lakhs to the Complainant and also, he executed 2 sale deeds with respect to two properties situate in Chaksu, Jaipur in favour of wife (Smt. Shalini Agarwal) and sister-in-law (Smt. Jaya Agarwal), Shri Anil Agarwal, Power of Attorney holder of the Complainant/ Proprietor.

The case was registered in the court of Chief Judicial Magistrate in Arunachal Pradesh bearing no. GR No.225 of 2017 but the said FIR bearing no.227 of 2017 was challenged by 8 of the accused on the grounds that the Court did not have jurisdiction to try the case there because all the accused and properties belonged to Rajasthan. Second ground taken by the Petitioners was that even if the State of Arunachal Pradesh had the jurisdiction, then there was no point in registering an FIR as the transaction of funds and transfer of properties was purely of civil/commercial nature and no offence of cheating or criminal conspiracy was done.

Two sets of petitions were filed before two different High Courts namely Gauhati High Court and Rajasthan High Court.

The Gauhati High Court dismissed the FIR quashing petition registered as Criminal Petition No.91 of 2021 filed by Chandra Mohan Badaya, Shashi Natani and Rajesh Natani vide Order dated 24.06.2022. On the other hand, remaining five other accused filed Writ Petitions in Rajasthan High Court bearing no. W.P No.987 of 2022, W.P No.988 of 2022, W.P No.989 of 2022 and the same were allowed and the FIR was quashed against them vide Order dated 23.05.2023.

The quashing of Writ Petitions by the Rajasthan High Court has led to the filing of the present Appeal no. 1 before the Supreme Court by the State of Arunachal Pradesh.

The Appeal No.2 was filed by Mr. Chandra Mohan Badaya against the Gauhati High Court Order dated 26.11.2021 whereby the Court rejected the Criminal Petition bearing no.110/2021 filed by the Appellant No. 2 herein.

Issues

I) Whether the case pending before the Judicial Magistrate was of Civil/Commercial nature and no cognizable offence was made out against the accused?

II) Whether Gauhati High Court erred in dismissing the Writ Petition filed by the Petitioners?

Decision by Supreme Court

The Supreme Court took consideration of all the facts and circumstances and held that the Accused transferred 37 lakhs back to the Complainant and also transferred 2 properties amounting to Rs. One crore in favour of the Complainant.

Moreover, a simple reading of the FIR itself did not disclose any cognizable offence against the Accused for which a FIR should be registered.

The Supreme Court was of the view that the High Court of Rajasthan had rightly concluded that the State of Arunachal Pradesh had no jurisdiction to try the offence as the parties and the properties belonged to Rajasthan.

The Apex Court also took notice of the fact that the Complainant himself did not appeal against the quashing order of Rajasthan High Court but instead the State of Arunachal Pradesh appealed against the said Order. The Apex Court also stated that the State of Arunachal Pradesh should be happy that they are getting rid of an unnecessary criminal case filed in their jurisdiction.

Hence, the Supreme Court set aside the Order of Gauhati High Court and allowed the appeal filed by Chandra Mohan Badaya and also quashed the entire proceedings arising out of FIR No.227 of 2017. The Apex Court further dismissed the three appeals filed by the State of Arunachal Pradesh.

Conclusion

In the present matter, the Hon’ble Supreme Court took consideration of the facts of the case and concluded that the case was not related to fraud and cheating but instead, it was of civil/commercial nature related to delivery of property which could be tried by the civil courts of Rajasthan as per the provisions of Code of Civil Procedure 1908. Hence, the Apex Court set aside the criminal proceedings pending against the accused and prevented parties from being dragged into irrelevant criminal prosecution.

Editor’s Comments

Though there is no restriction in filing both a civil and criminal case for the same cause of action, the litigant must be able to prove that there is a civil dispute as well as a crime committed in the same factual scenario. In the present case, the litigant was unable to show that the case that was filed for cheating was supported by mens rea and as such he failed to prove the criminal intent that is extremely important in any criminal matter.

 

ARJAV JAIN

ASSOCIATE

THE INDIAN LAWYER & ALLIED SERVICES\

 

Edited By-

SUSHILA RAM VARMA

CHIEF CONSULTANT

THE INDIAN LAWYER & ALLIED SERVICES