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2025 Supreme(SC) 722
SUPREME COURT OF INDIA
SUDHANSHU DHULIA, K. VINOD CHANDRAN, JJ.
Aaditya Khaitan @ Aditya Khaitan & Ors. – Appellants
Versus
The State of Jharkhand & Ors. – Respondents
Criminal Appeal No. 2252 of 2025 (@ Special Leave Petition (Crl.) No.15413 of 2023)
Decided On : 28-04-2025
For the Petitioner(s): Mr. Gopal Sankaranarayanan, Sr. Adv. Ms. Anusuya Sadhu Sinha, Adv. Mr. Ritoban Sarkar, Adv. Ms. Priyanka Goswami, Adv. Mr. Siddharth Naidu, Adv. Mr. Vishal Sinha, Adv. Ms. Kinjal Agarwal, Adv. Ms. Ishita Choudhary, Adv. M/S. Ksn & Co., AOR
For the Respondent(s): Mr. Abhijit Banerjee, AOR Mr. Deepak Dhingra, Adv. Mr. Aastik Dhingra, Adv. Ms. Sneh Somani, Adv. Mr. Rajiv Shankar Dwivedi,Standing Counsel, Adv. Ms. Madhusmita Bora, AOR Mr. Pawan Kishore Singh, Adv. Mr. Dipankar Singh, Adv.
IMPORTANT POINT
Criminal breach of trust, cheating and forgery – Complaint can be quashed when allegation made in complaint, even when taken on its face value and accepted in its entirety, do not prima facie constitute any offence or make out case alleged against accused.
Headnote:
Indian Penal Code, 1860 – Section 406, 420, 467, 468 and 471 read with Section 34 – Criminal Procedure Code, 1973 – Section 482 – Criminal breach of trust, cheating and forgery – Common intention – Refusal to quash FIR – Complaint can be quashed when allegation made in complaint, even when taken on its face value and accepted in its entirety, do not prima facie constitute any offence or make out case alleged against accused – What is required is examination of complaint as a whole, without examining merits of allegations; desisting from a detailed inquiry or meticulous analysis of material nor an assessment of reliability or genuineness of allegations in complaint – Such exercise has not been carried out by High Court and after merely relying upon negative covenant in contract between NBCCL and first accused, it was held that there is suppression of material facts which amounts to dishonest and fraudulent action – Allegations as laid down in FIR mostly constitute a narration of bills submitted by complainant and part payments made by accused, as also balance remaining – Even if, there is a restrictive covenant and contract of NBCCL was terminated for reason of sub-lease, that alone cannot absolve first accused company from satisfying bills raised by complainant, if it is in accordance with contract they entered into – Complainant has taken steps for recovery of amounts due, which has been stalled by reason of moratorium ordered by NCLT – Complainant would have to take proper recourse and avail its legal remedies for recovery of money, which is crux and essence of allegations – No criminality arising from allegations and prima facie, allegations do not constitute any offence or make out any case against accused persons – FIR quashed. (Paras 5, 6, 7, 11 and 12)
Facts of the case:
Appellants are aggrieved with refusal of High Court to quash FIR against them, which registration of crime according to the appellants is a strong arm tactic to obtain recovery of money allegedly payable under a contract, for which arbitration proceedings are initiated, which has been stayed due to the pendency of the insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 in which a moratorium has been ordered by the National Company Law Tribunal, Kolkata Bench by order dated 29.04.2022.
Findings of Court:
High Court erred in not invoking the power under Section 482, Cr. PC in the present case. High Court having failed to invoke its power under Section 482, Cr. PC in appeal, we invoke same and quash the FIR on which no further proceedings will be taken.
Result : Appeal allowed. FIR quashed.
JUDGMENT :
K. VINOD CHANDRAN, J.
1. Leave granted.
2. The appeal is against the judgment of the High Court, refusing to invoke the power under Section 482 of the Code of Criminal Procedure, 1973,1[the Cr.PC] to quash the FIR registered against the appellants, a company, whose officers are the appellants. The Deputy General Manager,2[the DGM] of M/s. National Building Construction Corporation Limited,3[the NBCCL] also filed a similar application, in which the FIR against him was quashed. The appellants are aggrieved with the refusal of the High Court to quash the FIR against them too, which registration of crime according to the appellants is a strong arm tactic to obtain recovery of money allegedly payable under a contract, for which arbitration proceedings are initiated, which has been stayed due to the pendency of the insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 in which a moratorium has been ordered by the National Company Law Tribunal, Kolkata Bench by order dated 29.04.2022 in Bank of India v. McNally Bharat Engineering Company Limited, [C.P (IB) No. 891/KB/2020].
3. We heard Mr. Gopal Sankarnarayanan, learned Senior Counsel appearing for the appellants, Mr. Rajiv Shankar Dwivedi, learned Standing Counsel for the respondent-State and Mr. Deepak Dhingra, learned Counsel for the respondents. The crux of the allegations is that the first accused-company having obtained a contract from the NBCCL, sublet a portion of the work to the second respondent herein; which ran into trouble, was stalled, then revived, and again came to a standstill. Since payments were due for the work carried out, the second respondent had sought an intervention in a proceeding before the High Court, pending between the first accused company and NBCCL, which was declined on the ground there is no back-to-back contract, the contract between NBCCL and the first accused clearly having provided a restrictive covenant against subletting the contract without the consent of NBCCL. The second respondent herein who was the complainant alleged that this fact was suppressed and, hence, the accused were liable to be proceeded against for the offences punishable under Section 406, 420, 467, 468 and 471 read with Section 34 of the Indian Penal Code, 1860.
4. The High Court having considered the matter also referred to certain relevant decisions with respect to quashing of an FIR under Section 482, Cr. PC and while allowing it against the DGM of NBCCL, refused to grant such relief to the appellants herein, finding that it cannot be prima facie said that no offence punishable under law is made out against the appellants herein.
5. The High Court has extracted from the judgment in Prof. R.K. Vijayasarathy and Anr. v. Sudha Seetharam and Anr., (2019) 16 SCC 739, wherein the power under Section 482, Cr. PC was dealt with relying on the judgment in Indian Oil Corporation v. NEPC (India) Ltd., (2006) 6 SCC 736. Going by the binding precedents, it is trite that a complaint can be quashed when the allegation made in the complaint, even when taken on its face value and accepted in its entirety, do not prima facie constitute any offence or make out the case alleged against the accused. What is required is the examination of the complaint as a whole, without examining the merits of the allegations; desisting from a detailed inquiry or meticulous analysis of the material nor an assessment of the reliability or genuineness of the allegations in the complaint.
6. The above exercise, obviously, has not been carried out by the High Court and after merely relying upon the negative covenant in the contract between NBCCL and the first accused, it was held that there is suppression of material facts which amounts to dishonest and fraudulent action.
7. We have examined the complaint made, as available in the FIR produced as Annexure P II. The complaint alleges that the first accused-company expressed its intention to enter into a contract to carry out a portion of the pr
