IMPORTANT POINT
Malicious Litigation – Unscrupulous litigants should not be allowed to go scot-free – They should be put to strict terms and conditions including costs.

JUDGMENT :

(Vikram Nath, Rajesh Bindal, JJ.)

Leave granted.

2. Unscrupulous litigants should not be allowed to go scot-free. They should be put to strict terms and conditions including costs. It is time to check with firmness such litigation initiated and laced with concealment, falsehood, and forum hunting. Even State actions or conduct of government servants being party to such malicious litigation should be seriously reprimanded. In the instant case, we find initiation of criminal proceedings before a forum which had no territorial jurisdiction by submitting incorrect facts and giving frivolous reasons to entertain such complaints. A closer look at the respondents actions reveals more than just an inappropriate use of jurisdiction. The core issue of the dispute, which involves financial transactions and agreements, clearly places it in the realm of civil and commercial law. Yet, the respondent chose to pursue criminal charges in a quest to abuse the criminal justice system with a motive to seek personal vengeance rather than seeking true justice. This unnecessary turning of a civil matter into a criminal case not only overburdens the criminal justice system but also violates the principles of fairness and right conduct in legal matters. The apparent misuse of criminal proceedings in this case not only damages trust in our legal system but also sets a harmful precedent if not addressed.

3. A common order¹[Dated 17.02.2022 in Applications under Section 482 Cr.P.C. No(s).29852 of 2021 & 25990 of 2021], passed by the High Court²[High Court of Judicature at Allahabad], dismissing the petitions filed by the appellants seeking quashing of the summoning order³[Dated 15.02.2021 in Case No.2828 of 2021 (re-numbered as 4084 of 2021)], has been impugned in the present appeals.

FACTUAL MATRIX -

4. Karan Gambhir, who owns M/s D.D. Global Capital Pvt. Ltd. (hereinafter referred to as the Company) is the complainant in the FIR⁴[FIR No.1271 of 2018 dated 29.07.2018 registered at Gautam Budh Nagar Police Station, NOIDA], which was registered against Sushil Gupta, Rajesh Gupta, Dinesh Gupta, Baljeet Singh & others. Three private limited companies had also been arrayed as accused i.e. BDR⁵[M/s BDR Builders and Developers Pvt. Ltd. (hereinafter referred to as ‘BDR’)], Gulab Buildtech⁶[M/s Gulab Buildtech Pvt. Ltd. (hereinafter referred to as ‘Gulab Buildtech’)] and Verma Buildtech⁷[M/s Verma Buildtech and Promoters Pvt. Ltd. (hereinafter referred to as ‘Verma Buildtech’)]. The individuals, namely, Sushil Gupta, Rajesh Gupta and Dinesh Gupta are stated to be the promoters of the aforesaid three companies.

5. Only two of the accused persons, i.e. Dinesh Gupta and Rajesh Gupta approached the High Court seeking quashing of the summoning order and the FIR. Nothing was pointed out at the time of hearing that any matter filed by any other accused is pending either in this Court or High Court.

6. It is alleged by the complainant that his company was induced to extend short-term loans of Rs. 5,16,00,000/- to Gulab Buildtech and Rs. 11,29,50,000/- to Verma Buildtech respectively. Later, the said loan was converted into debt equity allegedly promising high returns from real estate business to the complainant. The shares were allotted at an exorbitant price. The complainant acquired 21% shareholding in Verma Buildtech, whereas, in Gulab Buildtech, the shareholding was to the tune of 4.53%. A share pledge agreement was forged, allegedly to have been executed in favour of Sushil Gupta, one of the accused (not before this Court). Some scheme of amalgamation was made by Gulab Buildtech and Verma Buildtech to amalgamate the aforesaid companies with BDR, as a result of which, the percentage of shareholding of the company reduced considerably. No notice was served on the company of the proposed amalgamation. The amalgamation was got approved from the Delhi High Court. The