Mere institution of civil proceedings no ground to quash FIR: Supreme Court

New Delhi: The Supreme Court on Tuesday said, mere institution of civil proceedings is not a ground for quashing the FIR or to hold that the dispute is merely civil in nature.

A bench of Justices Dipankar Datta and Manmohan set aside the Delhi High Court's October 17, 2022 order which quashed an FIR registered with the Delhi Police's Economic Offences Wing for cheating and forgery, arising out of an agreement to sell of a property in posh Prithvi Raj Road here.

The court also said since cross FIR was lodged, there should be comprehensive investigation into the matter.

Dealing with the matter, the bench pointed out said this court in various judgments, has held that simply because there is a remedy provided for breach of contract, that does not by itself clothe the court to conclude that civil remedy is the only remedy, and the initiation of criminal proceedings, in any manner, will be an abuse of the process of the court. 

"This court is of the view that because the offence was committed during a commercial transaction, it would not be sufficient to hold that the complaint did not warrant a further investigation and if necessary, a trial," the bench said.

Allowing the appeal filed by Punit Beriwala, the court stressed it has been settled that the power of quashing of a complaint or FIR should be exercised sparingly with circumspection, only in exceptional cases where non-interference would result in miscarriage of justice.

According to the FIR lodged against Vikramjit Singh and Maheep Singh on June 16, 2022, the accused in April, 2004 misrepresented the appellant to part with a sum of Rs 1,64,50,000 between April 12, 2004 to January 3, 2005 with regard to the property.

It was only during the suit proceedings that it came to light that after the agreement to sell with the appellant, that the property was mortgaged to SREI Infrastructure Finance Limited and SREI Equipment Finance Limited and it was subsequently sold to J K Paper Limited by sale deed of December 2, 2021.

The court held all accused persons acted in conspiracy to deceive and cheat the appellant with no intention of selling the subject property to the appellant.

In its order, the High Court had said that ‘there had been a delay in registration of the FIR and because of such delay, the allegations made by the appellant are unbelievable’.  

The counsel for the accused also said that no complaint/FIR should be entertained ‘at this distance of time’.

The court, however, pointed out, it is settled law that delay in registration of the FIR for offences punishable with imprisonment of more than three years cannot be the basis of interdicting a criminal investigation. 

"The delay will assume importance only when the complainant fails to give a plausible explanation and whether the explanation is plausible or not, has to be decided by the trial court only after recording the evidence," the bench said.

According to the complaint, during 2004-2020 the accused persons kept representing that they were in the process of getting the property unencumbered and converted to freehold. Upon the failure of the accused persons to show documents for clear title of the property, the appellant had initially instituted a suit for specific performance.

The court also found after the registration of the subject FIR, a cross FIR was lodged on August 22, 2022, alleging that the receipts of payment in favour of the appellant and relied upon by him in his civil suit as well as the FIR of June 16, 2022, were forged and fabricated. 

In such circumstance, the bench said, "This court is of the view that the Single Judge should not have limited the scope of investigation". 

The court also felt in cases involving cross-FIRs, it would be prudent and fair if the investigation was carried out in a comprehensive manner. 

"After all, the object of the investigation is the discovery of truth. In the present case, in view of cross-FIRs, the investigating authority will conclude that either the receipts in favour of the appellant are forged and fabricated or that the receipts are genuine. The complicity of the accused can only be ascertained once the investigation is permitted to reach its logical conclusion," the bench said.