1. Sub-contractor alleges cheating and forgery regarding unpaid dues for a construction project — FIR registered under Sections 406, 420, 467, 468, 471, and 34, IPC. (Para 3 )
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2025 Supreme(SC) 959
SUPREME COURT OF INDIA
VIKRAM NATH, SANDEEP MEHTA, JJ.
Shrichand Rajaram Kukreja and Another - Appellants
Versus
The State of Maharashtra and Another - Respondents
Criminal Appeal No. 2591 of 2025 [Arising Out of SLP (Crl.) No. 9857 of 2018] WITH Criminal Appeal No. 2592 of 2025 [Arising Out of SLP (Crl.) No. 10444 of 2018]
Decided On : 14-05-2025
Advocates appeared:
For the Petitioner(s): Mr. K Parameshwar, Sr. Adv. Mr. Abhishek Bharti, Adv. Ms. Aarti Mahto, Adv. Mr. Balaji Srinivasan, AOR Mr. Shreenivas Patil, Adv.
For the Respondent(s): Mr. Aaditya Aniruddha Pande, AOR Mr. Siddharth Dharmadhikari, Adv. Mr. Bharat Bagla, Adv. Mr. Sourav Singh, Adv. Mr. Aditya Krishna, Adv. Mr. Adarsh Dubey, Adv. Mr. Shakul R. Ghatole, Adv. Mr. Sambhaji Gawande, Adv. Mr. Vatsalya Vigya, AOR Mr. Shradha, Adv. Mr. Seshatalpa Sai Bandaru, AOR
For the Petitioner(s): Mr. K Parameshwar, Sr. Adv. Mr. Abhishek Bharti, Adv. Ms. Aarti Mahto, Adv. Mr. Balaji Srinivasan, AOR Mr. Shreenivas Patil, Adv.
For the Respondent(s): Mr. Aaditya Aniruddha Pande, AOR Mr. Siddharth Dharmadhikari, Adv. Mr. Bharat Bagla, Adv. Mr. Sourav Singh, Adv. Mr. Aditya Krishna, Adv. Mr. Adarsh Dubey, Adv. Mr. Shakul R. Ghatole, Adv. Mr. Sambhaji Gawande, Adv. Mr. Vatsalya Vigya, AOR Mr. Shradha, Adv. Mr. Seshatalpa Sai Bandaru, AOR
Civil disputes cannot be transformed into criminal proceedings, and attempts to misappropriate criminal law for debt recovery are deemed an abuse of process.
Headnote:(A) Indian Penal Code, 1860 - Sections 406, 420, 467, 468, 471 and 34 - Criminal proceedings in case of civil disputes - Complaint involving allegations of cheating and forgery relating to construction contracts held to disclose purely civil disputes, warranting quashing of FIR. (Para 18)
(B) Abuse of process of law - Resorting to criminal proceedings in aid of recovering dues under a commercial contract viewed as gross misuse of police machinery. (Para 19)
(C) Quashing proceedings - Order of High Court set aside due to lack of necessary ingredients of a cognizable offense. (Paras 21 and 22)
Facts of the case:
The appellants, contractors, faced allegations of non-payment to the complainant for work done under sub-contracts related to a construction project. After part payments, the complainant filed an FIR alleging cheating and forgery.
Findings of Court:
The Court concluded that the allegations did not constitute cognizable offenses but rather were civil in nature, leading to a quashing of the FIR.
Issues: The main issues were whether the allegations disclosed necessary ingredients of an offense and whether the FIR represented a civil dispute cloaked as a crime.
Ratio Decidendi: The court emphasized that civil disputes should not give rise to criminal proceedings, reinforcing principles against misuse of the criminal justice system for recovery of debts.
Result: Appeals allowed and the FIR quashed.
Legal Category Hierarchy
Table of Contents
2. Appellants contend the dispute is purely civil and commercial — Respondent alleges fraudulent inducement, misappropriation of funds, and fabrication of records. (Para 8 , 9 )
3. High Court's conclusions were based on conjectures unsupported by the investigation report — Dispute is purely commercial as part payment was admitted. (Para 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 20 )
4. Criminal machinery cannot be invoked to settle purely civil or commercial disputes or used by litigants as recovery agents. (Para 18 , 19 )
5. High Court order, FIR, and chargesheet quashed. (Para 21 , 22 , 24 )
6. When can a criminal proceeding be quashed if it arises from a contractual dispute?
A proceeding can be quashed when the allegations, even if taken as true, disclose a dispute that is purely civil or commercial in nature, and the criminal process is being misused as a recovery mechanism for dues. (Para 18 , 19 )
7. Can an FIR be quashed if the investigation report fails to support the conjectures of a lower court?
Yes, if the conclusions of a court are based on sheer conjectures and the official investigation report under Section 173(2) Cr.P.C. provides no evidence to support those presumptions, the order directing extensive investigation is erroneous. (Para 16 , 17 )
8. What is the effect of an inconclusive handwriting expert report on allegations of forgery?
If the handwriting expert's report is inconclusive, the allegations of forging signatures are not substantiated, which may lead the court to view the continuation of such proceedings as an abuse of process. (Para 20 )
JUDGMENT :
SANDEEP MEHTA, J.
1. Heard.
2. Leave granted.
3. The appellants in the above captioned appeals are arraigned as accused in the FIR No. 443 of 20151 [Hereinafter referred to as “impugned-FIR”] registered with MIDC Walunj Police Station, Aurangabad for offences punishable under Sections 406 , 420, 467, 468, 471 and 34 of the INDIAN PENAL CODE , 1860.2 [Hereinafter referred to as “IPC”]
4. Since both the appeals arise out of a common order dated 8th October, 2018, passed by the Division Bench of the High Court of Bombay Appellate Side, at Aurangabad3 [Hereinafter referred to as “High Court”] dismissing Criminal Application No. 6539 of 2015, filed by the appellants, and Criminal Writ Petition No. 1438 of 2016, filed by Jaywant Mallya (accused No. 6 in impugned-FIR), both have been heard analogously and are being decided together by this common order.
5. The complainant (respondent No. 2 in Criminal Appeal @ SLP (Crl.) No. 9857 of 2018) has filed a counter affidavit. Respondent No. 1-State of Maharashtra has not filed any counter affidavit despite repeated opportunities. However, Mr. Aaditya Aniruddha Pande, learned standing counsel appearing for the State of Maharashtra, has filed a copy of a report under Section 173 of Code of Criminal Procedure, 19734 [Hereinafter referred to as “Cr.P.C.”] in compliance of an order dated 23rd April, 2025 passed by this Court.
6. Facts in a nutshell, relevant and essential for disposal of the appeals, are noted herein-below:
6.1. Ashok Karbhari Shingare Patil5 [Hereinafter referred to as “complainant”] lodged the impugned-FIR at the MIDC Walunj Police Station, Aurangabad alleging, inter alia, that he was a professional Contractor involved in variety of construction works.
6.2 MIDC, Walunj, Aurangabad issued a tender in the year 2009-2010, for construction of a sewerage water filter plant under built, operate and transfer basis (B.O.T.) at Plot No. 02, O.S. 7(P), Maharashtra State Industrial Corporation6 [For short “MIDC”] with the pre-condition that the selected building company would be required to spend equally for this project. Upon completion of the work by the company under the contract, a sum of Rs. 27,00,000/- was to be passed on per month on B.O.T. basis to the company.
6.3. The tender submitted by Bharat Udyog Limited7 [Hereinafter referred to as ‘BUL’] (the successful bidder), a company registered with the MIDC, was accepted and the project work was awarded to it for the next 20 years commencing from 25th November, 2021. The possession of the property was transferred to BUL. For undertaking the construction works, BUL assigned a sub-contract to S.W.D. Infrastructure Pvt. Ltd. Belapur, C.B.D. Navi Mumbai8 [Hereinafter referred to as the ‘SWD Infra’] in January, 2012. BUL gave certain orders to SWD Infra on 1st March, 2012 against which a sum of Rs. 1,35,62,872/- remained outstanding. SWD Infra further assigned a sub-contract to the complainant’s company by name of Sai Group and an agreement was entered into in this regard. The complainant claimed that the payment for the work under the sub-contract of SWD Infra was agreed to be made to the complainant directly, under the instructions given by the Directors of BUL (appellants herein) to SWD Infra.
6.4. As per the complainant, for the work done between 10th October, 2013 to 5th May, 2014, a sum of Rs. 5,13,78,485.50/- remained outstanding to be paid to his company (Sai Group) and that he had received only an amount of Rs. 3,68,15,612/-. A sum of Rs. 2,52,12,801/- was due to be paid to the complainant by BUL. As the payment was not forthcoming, the complainant expressed his inability to carry on further work under the sub-contract. Upon this, the Chairman and Director of the BUL, namely Shrichand Rajaram Kukreja and Suryakant (appellant Nos. 1 and 2 respectively) persuaded him to continue with the project work. The complainant was given an allurement that he was a prime Contractor and hence, the bills pending with SWD Infra should be submit
