Supreme Court Restores FIR in Property Dispute: Emphasizes Comprehensive Investigation in Cross FIR Cases

A Two Judge Bench comprising of Judges Justice Dipankar Datta and Justice Manmohan passed a Judgment dated April 29,2025 in the case of Punit Beriwala vs the State of NCT of Delhi & Ors. Criminal Appeal No. 1834 of 2015 arising out of Special Leave Petition (Crl.) No. 11042 of 2022 wherein the Supreme Court overturned the Judgment of a Single Judge Bench and held that Cross FIR’s must be holistically interpreted so that investigation is held in a comprehensive manner.

The Present Appeal arose from the Judgment passed by Learned Single Judge, Delhi High Court whereby petition under Section 482 of Criminal Procedure Code was allowed and First Information Report for offences punishable under Section 467,468,471,420 and 120B of Indian Penal Code was quashed against Respondent No. 2 and 3.

Facts of the Case:

The Agreement to Sell for sale of property represented that the Karta of the HUF would get property to freehold before transfer of the property in favour of Appellant. The Appellant on the basis of this trust made the payments to the Karta Bhai Manjit Singh. Thereafter, part physical possession was handed over to the Appellant on paper but no actual physical possession has been given to him. On 24^th June 2016, Ashok Gupta lodged an FIR alleging that the Agreement to Sell for the subject property has been executed in his favour and he was also put in servant quarter of said property. This FIR got quashed in view of settlement between the parties. Later a Public Notice was issued and it came to the knowledge of the Appellant that said property has been mortgaged by Bhai Manjit Singh for securing the loan granted to Montari Industries Limited.

Bhai Manjit Singh denied the existence of Agreement to Sell and stated to have returned the amount paid by the Appellant. The Sale Deed dated 2^nd December 2021 held that the Bhai Manjit Singh resigned as Karta in favour of remaining members of HUF.

Issue that arises for consideration:

Whether the Ld. Single Judge, Delhi High Court was justified in quashing the FIR against Respondent No. 2 and 3 ?

Analysis of the Hon’ble Supreme Court:

The Hon’ble Supreme Court observed that mere institution of civil proceedings is not a ground for quashing the FIR and holding that the dispute is merely a civil dispute. The Court settled that quashing of a complaint/FIR should be exercised sparingly with circumspection. It was held that except where non-interference would result in miscarriage of justice, the Court and judicial process should not interfere at the stage of investigation of offence.

The Learned Single Judge further observed that the intention to cheat was not present since inception because as per FIR, part possession was handed over to the Appellant. However, he failed to observe that it was a mere paper possession.

The Hon’ble Supreme Court observed, “It is settled law 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 delay will assume importance only when the Complainant fails to give a plausible explanation and whether the explanation is plausible or not, has to be decided by the Trial Court only after recording the evidence.” The Court analysed contradictory defenses of the Accused as well as registration and pendency of cross FIRs and held that the Learned Single Judge should not have limited the scope of investigation.

The Court finally observed that, in cases involving cross FIRs, it must be ensured that the investigation was carried out in a comprehensive manner, and as a result the court overturned the Judgment of the Single Bench and revived the second FIR.

Conclusion

The Supreme Court’s judgment in Punit Beriwala vs. State of NCT of Delhi & Ors. reaffirms the principle that the quashing of criminal proceedings, especially at the stage of investigation, must be exercised with extreme caution and only in rare cases. The Court rightly emphasized that the existence of cross FIRs necessitates a holistic and thorough investigation rather than premature judicial interference. By overturning the Delhi High Court’s decision, the Supreme Court has clarified that civil proceedings or delayed registration of FIRs cannot be the sole grounds for quashing criminal complaints when serious allegations are involved. This decision strengthens the investigative process and ensures that justice is not derailed by technicalities or isolated judicial interpretations.

TRISHA SAXENA

SENIOR LEGAL ASSOCIATE
THE INDIAN LAWYER & ALLIED SERVICES