Criminal Procedure — Quashing of FIR — Civil dispute given criminal colour — Scope of judicial scrutiny under Article 226/Section 482 CrPC — Duty to examine admitted documents along with FIR. (Paras 15, 29–30)
While ordinarily the allegations in the FIR are to be taken at face value, where the dispute is essentially civil in nature, the Court must examine attending circumstances and admitted documents to ascertain whether a criminal offence is prima facie made out or whether the proceedings amount to abuse of process.
Ratio Decidendi: Where the foundational dispute arises from a contractual arrangement and admitted documents negate the essential ingredients of alleged offences, continuation of criminal proceedings constitutes abuse of process and warrants quashing.
Indian Penal Code, 1860 — Sections 420, 406 — Cheating and Criminal Breach of Trust — Absence of dishonest intention at inception — Non-fulfilment of contractual obligations. (Paras 25–28)
The Joint Venture Agreement (JVA) dated 16.08.2010 governed the rights and obligations of the parties. Allegations of non-performance, non-refund of security deposit and breach of contractual terms, absent evidence of dishonest intention at inception, do not constitute offences of cheating or criminal breach of trust.
Security money under Clause 5 was non-refundable and adjustable against the share of the first party; hence, non-refund could at best give rise to civil consequences.
Ratio Decidendi: Mere breach of contract or failure to perform contractual obligations, without fraudulent or dishonest intention at the inception of the transaction, does not attract Sections 420 or 406 IPC.
Indian Penal Code, 1860 — Sections 467, 468, 471 — Forgery — Meaning of “false document” under Section 464 IPC — Non-traceability of certificate insufficient. (Paras 23–24)
A letter issued by the Tehsildar was alleged to be forged merely because it was not traceable in official records after several years. The Court held that absence of record does not ipso facto establish fabrication. A document constitutes a “false document” only if it satisfies the ingredients of Section 464 IPC, including dishonest or fraudulent making, alteration or execution.
Ratio Decidendi: Non-traceability of an official certificate in departmental records does not establish forgery; criminal liability for forgery arises only when the document satisfies the statutory ingredients of a “false document” under Section 464 IPC.
Cheating — False representation regarding title — Construction of contractual assurances — No explicit statement of “no litigation pending.” (Paras 19–21, 26)
The JVA contained assurances regarding absence of attachment, restraint orders, and indemnification for marketable title, but did not contain any specific representation that no litigation was pending. Allegations in the FIR that the accused falsely represented absence of litigation were unsupported by the terms of the agreement.
Ratio Decidendi: Where contractual covenants do not contain the alleged misrepresentation and no falsity in declared assurances is demonstrated, the offence of cheating is not made out.
Delay in lodging FIR — Indicative of civil dispute — Absence of prompt allegation of fraud. (Para 25)
The JVA was executed in 2010; FIR was lodged in 2021. The prolonged delay without intervening allegation of fraudulent conduct indicates a contractual dispute rather than criminality at inception.
Ratio Decidendi: Long delay in initiating criminal proceedings in a purely contractual dispute, without contemporaneous allegation of fraud, reinforces the inference that the matter is civil in nature.
Final Holding
The dispute arose from a Joint Venture Agreement and disclosed, at best, a civil cause of action. Essential ingredients of offences under Sections 406, 420, 467, 468 and 471 IPC were not made out even on a complete reading of the FIR along with admitted documents.
The judgment of the High Court was set aside. FIR No. 0112 of 2021 dated 14.03.2021 and all consequential proceedings were quashed.
Pending applications disposed of.
