Supreme Court Quashes Criminal Proceedings in Civil Dispute: Usha Chakraborty vs. State of West Bengal (2023)

Introduction

Date of the Judgment: 30 January 2023

Citation: 2023 INSC 86

Judges: Hon’ble Justices Ajay Rastogi and C.T. Ravikumar

Can a dispute that is essentially civil in nature be given a criminal color? The Supreme Court of India recently addressed this question in a case where a criminal complaint was filed despite a pending civil suit between the parties. The Court examined whether the High Court was justified in declining to quash the criminal proceedings, especially when the allegations appeared to be an attempt to use criminal law as a tool for harassment. The judgment was delivered by a division bench comprising Justices Ajay Rastogi and C.T. Ravikumar, with Justice C.T. Ravikumar authoring the opinion.

Case Background

The case revolves around a dispute concerning the management of the Bagla Sundari Memorial Trust, which runs the Rose Bank Educare High School. The respondent, Jayanta Banerjee, claimed to be the Secretary of the school and a trustee. He alleged that the appellants, Usha Chakraborty and Ashoka Chakraborty, along with two others, had illegally removed him from his position. According to Banerjee, the appellants strengthened the trust deed without informing him and got it registered on 12 July 2016, leading to his removal.

Banerjee further alleged that the appellants had assaulted him, threatened his life, and forcibly withheld his personal documents, including LIC policies, bank passbooks, and a Tata Sumo car. He also accused them of misappropriating his Provident Fund and forging ESI documents. These allegations led him to file a criminal complaint against the appellants.

Prior to the criminal complaint, Banerjee had filed a civil suit (Title Suit No. 363/2015) seeking a declaration that he was the Secretary of the school and an injunction against the appellants from obstructing his duties. This suit was pending before the First Court Civil Judge (Junior Division) at Barasat. The appellants contended that Banerjee had suppressed the fact of his removal from the post of Secretary and the trusteeship, as well as the pendency of the civil suit, in his criminal complaint.

Timeline

Course of Proceedings

The respondent, Jayanta Banerjee, filed an application under Section 156(3) of the Code of Criminal Procedure, 1973 (Cr.P.C.) before the Additional Chief Judicial Magistrate at Barasat, seeking a direction for investigation against the appellants and two others. The Magistrate forwarded the application, leading to the registration of FIR No. 189/2017 at Madhyamgram Police Station. The appellants then approached the Calcutta High Court under Section 482 Cr.P.C. seeking to quash the FIR, arguing that the allegations were primarily civil in nature and an abuse of the legal process. The High Court declined to exercise its jurisdiction under Section 482 Cr.P.C., holding that the case diary and materials prima facie made out a case for investigation. The High Court vacated the interim stay on further proceedings and dismissed the petition. Aggrieved, the appellants appealed to the Supreme Court.

Legal Framework

The case involves several sections of the Indian Penal Code (IPC) and the Code of Criminal Procedure (Cr.P.C.). The respondent alleged offenses under the following sections of the IPC:

• Section 323, IPC: Punishment for voluntarily causing hurt. The section states, “Whoever, except in the case provided by section 334, voluntarily causes hurt, shall be punished with imprisonment of either description for a term which may extend to one year, or with fine which may extend to one thousand rupees, or with both.”
• Section 384, IPC: Punishment for extortion. The section states, “Whoever commits extortion shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.”
• Section 406, IPC: Punishment for criminal breach of trust. The section states, “Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.”
• Section 423, IPC: Dishonest or fraudulent execution of deed of transfer containing false statement of consideration. The section states, “Whoever dishonestly or fraudulently signs, executes or becomes a party to any deed or instrument which purports to transfer or subject to any charge any property, or any interest therein, and which contains any false statement relating to the consideration for such transfer or charge, or relating to the person or persons for whose use or benefit it is really intended to operate, shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both.”
• Section 467, IPC: Forgery of valuable security, will, etc. The section states, “Whoever forges a document which purports to be a valuable security or a will, or an authority to adopt a son, or which purports to give authority to any person to make or transfer any valuable security, or to receive the principal, interest or dividends thereon, or to receive or deliver any money, movable property, or valuable security, or any document purporting to be an acquittance or receipt acknowledging the payment of money, or an acquittance or receipt for the delivery of any movable property or valuable security, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.”
• Section 468, IPC: Forgery for purpose of cheating. The section states, “Whoever commits forgery, intending that the document or electronic record forged shall be used for the purpose of cheating, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.”
• Section 420, IPC: Cheating and dishonestly inducing delivery of property. The section states, “Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.”
• Section 120B, IPC: Punishment of criminal conspiracy. The section states, “Whoever is a party to a criminal conspiracy to commit an offence punishable with death, imprisonment for life or rigorous imprisonment for a term of two years or upwards, shall, where no express provision is made in this Code for the punishment of such a conspiracy, be punished in the same manner as if he had abetted such offence.”

Additionally, the appellants invoked Section 482 of the Cr.P.C., which deals with the inherent powers of the High Court to prevent abuse of the process of any court or otherwise to secure the ends of justice.

Arguments

Respondent’s Arguments (Jayanta Banerjee):

• ✓ The respondent claimed that he was a trustee and Secretary of the school.
• ✓ He alleged that the appellants illegally removed him from his position by strengthening the trust deed without his knowledge.
• ✓ The appellants assaulted him, threatened him, and forcibly withheld his personal documents and car.
• ✓ They misappropriated his Provident Fund and forged his ESI documents.
• ✓ The respondent argued that these actions constituted criminal offenses under Sections 323, 384, 406, 423, 467, 468, 420, and 120B of the IPC.
• ✓ He sought an investigation under Section 156(3) of the Cr.P.C. to punish the accused.

Appellants’ Arguments (Usha Chakraborty & Anr.):

• ✓ The appellants contended that the respondent’s application did not disclose any cognizable offense.
• ✓ They argued that the allegations were motivated by mala fides and were purely civil in nature.
• ✓ The respondent had already filed a civil suit regarding his removal from the post of Secretary, which was pending.
• ✓ The respondent had concealed the fact that he had been removed from the post of Secretary and the membership of the Board of Trustees prior to the criminal complaint.
• ✓ They argued that the criminal proceedings were an abuse of the legal process, initiated to harass them after the respondent failed to obtain favorable orders in the civil suit.
• ✓ They relied on the fact that the respondent was removed from the post of Secretary and membership of the trust much before the filing of the criminal complaint.

Table of Sub-Submissions:

Issues Framed by the Supreme Court

The Supreme Court framed the central issue as:

1. Whether the High Court was justified in declining to invoke the power under Section 482 Cr.P.C. to quash the order for forwarding the application filed by the respondent for investigation under Section 156(3), Cr.P.C., the consequential registration of the FIR, and the investigation pursuant thereto.

Additionally, the court also considered the sub-issue of whether the allegations made by the respondent in his application disclosed the commission of the alleged offenses.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

The Supreme Court considered several authorities while deciding the case:

Cases:

• Paramjeet Batra v. State of Uttarakhand & Ors. [(2013) 11 SCC 673] – The Supreme Court held that the High Court should not hesitate to quash criminal proceedings if a dispute is essentially civil in nature and a civil remedy is available and adopted.
• Vesa Holdings Private Limited and Anr. v. State of Kerala and Ors. [(2015) 8 SCC 293] – The Court stated that criminal proceedings should not be encouraged when they are found to be mala fide or an abuse of the process of the court.
• Kapil Aggarwal and Ors. v. Sanjay Sharma and Ors. [(2021) 5 SCC 524] – This case emphasized that Section 482 Cr.P.C. is designed to prevent criminal proceedings from becoming weapons of harassment.
• State of Haryana v. Bhajan Lal [AIR 1992 SC 604] – A landmark judgment that laid down the principles for quashing FIRs, including cases where allegations do not constitute an offense or are an abuse of the legal process.
• Neeharika Infrastructure Pvt. Ltd. v. State of Maharashtra and Others [2021 SCC OnLine SC 315] – This case summarized the principles for exercising power under Section 482 Cr.P.C., emphasizing that quashing should be an exception and a rarity.

Legal Provisions:

• Section 156(3), Cr.P.C.: Empowers a Magistrate to order an investigation into a cognizable offense.
• Section 482, Cr.P.C.: Grants inherent powers to the High Court to prevent abuse of the process of any court or to secure the ends of justice.
• Sections 323, 384, 406, 423, 467, 468, 420, and 120B of the IPC: These sections define the offenses of voluntarily causing hurt, extortion, criminal breach of trust, dishonest or fraudulent execution of deed of transfer, forgery of valuable security, forgery for the purpose of cheating, cheating and dishonestly inducing delivery of property, and criminal conspiracy, respectively.

Table of Authorities and Their Treatment:

Judgment

The Supreme Court allowed the appeal and quashed the FIR against the appellants. The Court held that the High Court had erred in not exercising its inherent powers under Section 482 Cr.P.C. The Court found that the allegations made by the respondent were vague, lacked the essential ingredients to constitute the alleged offenses, and were primarily civil in nature.

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Court relied on Paramjeet Batra v. State of Uttarakhand & Ors. [(2013) 11 SCC 673]* to emphasize that criminal proceedings should not be used to resolve civil disputes.
• The Court cited Vesa Holdings Private Limited and Anr. v. State of Kerala and Ors. [(2015) 8 SCC 293]* to support the view that criminal proceedings should not be encouraged when they are mala fide or an abuse of process.
• The Court referred to Kapil Aggarwal and Ors. v. Sanjay Sharma and Ors. [(2021) 5 SCC 524]* to reinforce that Section 482 Cr.P.C. is meant to prevent harassment through criminal proceedings.
• The Court applied the principles laid down in State of Haryana v. Bhajan Lal [AIR 1992 SC 604]* to determine that the allegations did not constitute a cognizable offense.
• The Court used Neeharika Infrastructure Pvt. Ltd. v. State of Maharashtra and Others [2021 SCC OnLine SC 315]* to reiterate the exceptional nature of quashing FIRs and the need for the court to be cautious while exercising such powers.

What weighed in the mind of the Court?

The Supreme Court’s decision was heavily influenced by several factors. The Court emphasized the lack of specific allegations in the respondent’s complaint, the concealment of the pending civil suit, and the fact that the dispute was essentially civil in nature. The Court was also concerned that the criminal proceedings were being used as a tool for harassment. The Court’s reasoning was a combination of factual analysis and legal principles.

Sentiment Analysis of Reasons Given by the Supreme Court:

Fact:Law Ratio:

Logical Reasoning:

The Court considered alternative interpretations but rejected them because the facts clearly indicated an abuse of the criminal justice system. The Court emphasized that the respondent should pursue his remedies in the civil court, where his suit was already pending.

The Court’s decision was based on the following reasons:

• The allegations in the application did not disclose the commission of any cognizable offense.
• The allegations were vague and lacked specificity.
• The core dispute was civil in nature.
• The respondent had concealed the pendency of a civil suit.
• The criminal proceedings were an attempt to harass the appellants.

The Court quoted from the judgment: “There can be no doubt with respect to the position that in order to cause registration of an F.I.R. and consequential investigation based on the same the petition filed under Section 156(3), Cr.P.C., must satisfy the essential ingredients to attract the alleged offences.”

The Court further stated, “The factual position thus would reveal that the genesis as also the purpose of criminal proceedings are nothing but the aforesaid incident and further that the dispute involved is essentially of civil nature.”

Finally, the Court concluded, “For all these reasons, we are of the considered view that this case invites invocation of the power under Section 482 Cr.P.C. to quash the FIR registered based on the direction of the Magistrate Court in the afore-stated application and all further proceeding in pursuance thereof.”

Key Takeaways

• ✓ Criminal proceedings should not be initiated if the core dispute is civil in nature.
• ✓ Allegations in a criminal complaint must be specific and clearly disclose the commission of an offense.
• ✓ Parties must disclose the existence of pending civil suits related to the same dispute.
• ✓ Criminal law should not be used as a tool for harassment or to settle civil disputes.
• ✓ The High Court has inherent powers under Section 482 Cr.P.C. to quash criminal proceedings that are an abuse of the legal process.

The judgment has significant implications for future cases. It reinforces the principle that criminal law should not be used to circumvent civil remedies. It also highlights the importance of transparency and full disclosure in legal proceedings. The decision is likely to deter parties from filing frivolous criminal complaints when civil remedies are available.

Directions

The Supreme Court directed that FIR No. 189 of 2017 dated 11.04.2017 at Madhyagram Police Station against the appellants and all further proceedings based on the same were quashed and set aside.

Development of Law

The ratio decidendi of this case is that criminal proceedings should not be initiated or continued when the core dispute is civil in nature, especially when a civil suit is already pending. The Supreme Court reiterated the importance of specific allegations in criminal complaints and emphasized that the inherent powers of the High Court under Section 482 Cr.P.C. should be used to prevent abuse of the process of law. This judgment reinforces the existing legal position and serves as a reminder of the limitations on using criminal law for civil disputes.

Conclusion

In conclusion, the Supreme Court allowed the appeal filed by Usha Chakraborty and Ashoka Chakraborty, quashing the FIR and all further criminal proceedings against them. The Court found that the allegations made by Jayanta Banerjee were vague, lacked the essential ingredients to constitute criminal offenses, and were primarily civil in nature. The Court emphasized that the respondent had concealed the pendency of a civil suit related to the same dispute and that the criminal proceedings were an abuse of the process of law. This judgment reinforces the principle that criminal law should not be used to settle civil disputes and highlights the importance of transparency in legal proceedings.