IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL No. of 2024
[Arising out of SLP (CRL.) No.9762 of 2024]
DHRUV ASHOKBHAI JAGANI APPELLANT
VERSUS
THE STATE OF GUJARAT & ANR. RESPONDENTS
ORDER
1. Leave granted.
2. Invoking the jurisdiction under Section 482, Code of Criminal
Procedure, 19731 to quash the First Information Report 2 bearing C.R.
No. 11210069230852 of 2023 registered with Althan Police Station,
District Surat, under Sections 420 and 506(2) of the Indian Penal
Code3 as well as proceedings arising therefrom, the appellant had
approached the High Court of Gujarat at Ahmedabad. Vide
impugned judgment and order dated 9 th July, 2024, a learned Single
Judge of the High Court declined interference. Assail in this appeal is
to such judgment and order.
3. We have heard learned counsel for the appellant, the
respondent no.1-State and the respondent no.2-complainant4.
4. Perusal of the FIR reveals that the complainant had entered
Signature Not Verified into an agreement for sale with the appellant in respect of an
Digitally signed by
rashmi dhyani pant
Date: 2024.12.06
16:56:15 IST
Reason:
1 Cr. PC
2 FIR
3 IPC
4 complainant
1
immovable property. An advance of Rs.65,00,000/- (Rupees sixty-
9ve lakh), in cash, had been paid by the complainant to the
appellant; however, later, it was disclosed to the complainant that
the said immovable property was a mortgaged property and that
the secured creditor had initiated proceedings under the SARFAESI
Act in respect thereof. On the asking of the appellant, the
complainant lent him a further sum of Rs. 40,00,000/- (Rupees forty
lakh), by cheque, to clear the outstanding dues of the secured
creditor. However, despite receiving Rs. 1,05,00,000/- (Rupees One
crore 9ve lakh) from the complainant, the appellant did not execute
the sale deed and breached the agreement. Upon the complainant
pressing the appellant to execute the sale deed, or to return the
money that had been paid/lent, the appellant threatened to kill the
complainant. It was also alleged in the FIR that the appellant
cheated the complainant by hiding the fact that the property was
encumbered. Resting on such allegations, the complainant claimed
that the appellant had committed o>ences punishable under
Sections 420 and 506 of the IPC.
5. In course of hearing, a disclosure has been made on behalf of
the complainant that he has instituted a civil suit for recovery of Rs.
1,05,00,000/- (Rupees One crore 9ve lakh) and that such suit is
pending. It has also been disclosed that the appellant has since
been dispossessed from the said immovable property by the
secured creditor and the same has been sold in public auction to a
third party.
6. To ascertain existence of the ingredient of cheating, we need
to read the agreement for sale. Having read the same, translated
2
version whereof is part of the paper book, we 9nd the following
clause which is relevant. It reads:
“As the said property taken into an attachment under
SARFAESI Act hence the second party after releasing the
said property from attachment shall have to execute the
sale deed in favour of the 9rst party.”
(We believe, this is an accurate translation of the relevant clause of
the agreement for sale.)
7. The aforesaid clause in the agreement for sale, wherein the
complainant himself is described as the 9rst party/purchaser,
demolishes the pointed allegation in the FIR that the appellant hid
from the complainant the fact of the said immovable property being
a mortgaged property. The complainant was fully aware of the
status of the said immovable property, yet, he took the risk of
entering into a sale agreement with the appellant. Having known
about the status, it was too late in the day for the complainant to
allege that the appellant had withheld from the complainant the
factum of mortgage. The circumstance of deception from inception
is, thus, absent. At the same time, it is the case of the complainant
that he had given to the appellant Rs. 40,00,000/- (Rupees forty
lakh) on loan, by cheque, to clear the outstanding dues of the
secured creditor. We have also noticed from the counter aCdavit
9led by the complainant a statement to the following e>ect:
“3. That the petitioner in this case and respondent no.
2 were in an agreement to sell of a property but petitioner
in this case breached the agreement and denied to
transfer the property to the respondent even after taking
money from him. This act of petitioner in this case
amounts to the provisions of section 420 Indian Penal
Code.”
It is, therefore, abundantly clear that the complainant took recourse
3
to the criminal laws for the purpose of settling a civil dispute.
8. Time and again, this Court has ruled that civil wrongs cannot
be the subject matter of criminal wrongs. In Indian Oil
Corporation v. NEPC India Ltd. & Others 5, this Court expressed
lament in the following words:
"13. While on this issue, it is necessary to take notice of a
growing tendency in business circles to convert purely
civil disputes into criminal cases. This is obviously on
account of a prevalent impression that civil law remedies
are time consuming and do not adequately protect the
interests of lenders/creditors. Such a tendency is seen in
several family disputes also, leading to irretrievable
breakdown of marriages/families. There is also an
impression that if a person could somehow be entangled
in a criminal prosecution, there is a likelihood of imminent
settlement. Any e>ort to settle civil disputes and claims,
which do not involve any criminal o>ence, by applying
pressure through criminal prosecution should be
deprecated and discouraged. In G. Sagar Suri v. State of
U.P. [(2000) 2 SCC 636 : 2000 SCC (Cri) 513] this Court
observed: (SCC p. 643, para 8)
‘It is to be seen if a matter, which is essentially of
a civil nature, has been given a cloak of criminal
o>ence. Criminal proceedings are not a short cut
of other remedies available in law. Before issuing
process a criminal court has to exercise a great
deal of caution. For the accused it is a serious
matter. This Court has laid certain principles on
the basis of which the High Court is to exercise its
jurisdiction under Section 482 of the Code.
Jurisdiction under this section has to be exercised
to prevent abuse of the process of any court or
otherwise to secure the ends of justice.’
14. While no one with a legitimate cause or grievance
should be prevented from seeking remedies available in
criminal law, a complainant who initiates or persists with a
prosecution, being fully aware that the criminal
proceedings are unwarranted and his remedy lies only in
civil law, should himself be made accountable, at the end
of such misconceived criminal proceedings, in accordance
with law. … "
9. The complainant’s remedy in law is to institute a suit for
speci9c performance or in the alternative for return of the money
5 2006) 6 SCC 736
4
paid as advance, as well as for recovery of the money lent. Wise
counsel has since prevailed on him. A civil suit has been instituted
by him, which is pending before the civil court. Carriage of civil
proceedings to its logical conclusion is a duty that the law burdens
the suitor with. He would, therefore, be at liberty to pursue the civil
litigation he has initiated.
10. In our view, it would be an abuse of process on facts and in the
circumstances to allow the proceedings arising from the FIR to
continue.
11. Insofar as the subsidiary allegation of threat to kill is
concerned, the o>ence under Section 506, IPC is non-cognizable.
Since the primary allegation relating to o>ence under Section 420,
IPC is not made out, for reasons discussed above, we see no reason
to keep the pot boiling; more so, in the absence of any whisper as
to when, how and where such threat was given. Having regard to
the manner of description of the incident giving rise to the o>ence,
as alleged by the complainant, the proceedings ought to be put to
rest.
12. For the reasons aforesaid, we are of the considered opinion
that the High Court acted illegally in not exercising its inherent
powers saved by Section 482, Cr. PC and in not acceding to the
prayer for quashing the FIR and the subsequent proceedings.
13. The judgment and order of the High Court is, consequently, set
aside. FIR bearing C.R. No. 11210069230852 of 2023 together with
proceedings arising therefrom stands quashed.
14. The appeal is, accordingly, allowed.
15. We clarify that the civil suit instituted by the complainant
5
against the appellant shall be decided by the competent court on its
own merits and without being inMuenced by any observation made
in this judgment.
16. Pending interlocutory application(s), if any, stands disposed of.
..................................J.
(DIPANKAR DATTA)
.................................J.
(SANDEEP MEHTA)
New Delhi;
December 03, 2024.
6
ITEM NO.13 COURT NO.16 SECTION II-B
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (Crl.) No(s). 9762/2024
[Arising out of impugned final judgment and order dated 09-07-2024
in CRLMA No.12701/2024 passed by the High Court of Gujarat at
Ahmedabad]
DHRUV ASHOKBHAI JAGANI Petitioner
VERSUS
THE STATE OF GUJARAT & ANR. Respondents
(with I.A. No.158083/2024-EXEMPTION FROM FILING C/C OF THE IMPUGNED
JUDGMENT, I.A. No.158085/2024-EXEMPTION FROM FILING O.T., I.A. No.
160028/2024-EXEMPTION FROM FILING O.T. and I.A. No.160026/2024-
PERMISSION TO FILE ADDITIONAL DOCUMENTS/FACTS/ANNEXURES)
Date : 03-12-2024 This petition was called on for hearing today.
CORAM : HON'BLE MR. JUSTICE DIPANKAR DATTA
HON'BLE MR. JUSTICE SANDEEP MEHTA
For Petitioner(s) Mr. Rohan Thawani, Adv.
Ms. Pooja Dhar, AOR
Mr. Pratul Pratap Singh, Adv.
Mr. Ronith Joy, Adv.
Mr. Jay A. Tamakuwala, Adv.
For Respondent(s) Ms. Swati Ghildiyal, AOR
Ms. Devyani Bhatt, Adv.
Ms. Neha Singh, Adv.
Mr. Vishal Mani, Adv.
Mr. Ajay Amritraj, AOR
Mr. Tara Chauhan, Adv.
UPON hearing the counsel the Court made the following
O R D E R
1. Leave granted.
2. The appeal is allowed in terms of the signed order.
3. Pending application(s), if any, shall stand disposed of.
(RASHMI DHYANI PANT) (SUDHIR KUMAR SHARMA)
COURT MASTER (SH) COURT MASTER (NSH)
(signed order is placed on the file)
