Supreme Court Quashes Criminal Proceedings in Family Dispute Over Money Transfer: Prof R K Vijayasarathy vs. Sudha Seetharam (2019) INSC 108 (15 February 2019)

Case Background

The case revolves around a marital dispute between Rajiv Vijayasarathy Ratnam and Savitha Seetharam. They married on 24 May 2002, moved to the United States, and had a child in 2009. In February 2010, Savitha was involved in a car accident, leading to legal proceedings. The appellants, parents of Rajiv, alleged that an amount of Rs 20 lakhs was transferred by Rajiv to the bank account of the first respondent, Sudha Seetharam (Savitha’s mother), on 17 February 2010, fearing attachment of their son’s property. Following marital discord, Rajiv and Savitha have been living separately since October 2010, and multiple litigations ensued.

Savitha filed a private complaint against her husband and the appellants, alleging criminal intimidation and dowry demands. The High Court of Karnataka quashed the proceedings against the second appellant. On 14 February 2013, Rajiv filed a civil suit against Sudha Seetharam for the recovery of the money transferred. This suit is still pending. Subsequently, on 25 February 2016, Sudha Seetharam filed a private complaint against the appellants, alleging that the Rs 20 lakhs was returned in cash to the appellants with an interest of Rs 24,000 on 1 July 2010, without any receipt. She alleged that the appellants and their son colluded to siphon the money and that the civil suit was without merit.

Timeline:

Course of Proceedings

The Additional Metropolitan Magistrate referred the complaint for investigation under Section 156(3) of the Code of Criminal Procedure 1973 on 11 May 2016. Consequently, a First Information Report (FIR) was registered on 19 May 2016, under Sections 405, 406, 415, and 420 read with Section 34 of the Indian Penal Code. The appellants then filed a petition before the High Court of Karnataka to quash the FIR, which was rejected. The High Court, however, stayed the criminal proceedings until the disposal of the pending civil suit. Aggrieved by the High Court’s decision, the appellants appealed to the Supreme Court.

Legal Framework

The Supreme Court examined the following sections of the Indian Penal Code, 1860:

• Section 405 of the Indian Penal Code, 1860 defines “Criminal breach of trust” as: “Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits “criminal breach of trust”.”
• Section 406 of the Indian Penal Code, 1860 prescribes the punishment for criminal breach of trust: “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 415 of the Indian Penal Code, 1860 defines “Cheating” as: “Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to “cheat”.”
• Section 420 of the Indian Penal Code, 1860 defines “Cheating and dishonestly inducing delivery of property” as: “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 34 of the Indian Penal Code, 1860 defines “Acts done by several persons in furtherance of common intention”

The Court also referred to Section 482 of the Code of Criminal Procedure, 1973, which saves the inherent power of the High Court to make orders necessary to secure the ends of justice.

Arguments

Appellants’ Arguments (Prof R K Vijayasarathy & Anr):

• The complaint does not disclose any offense.
• The first respondent admitted receiving the money from the appellants’ son, Rajiv.
• The dispute is civil in nature, and the criminal complaint is an abuse of the court process.
• The allegations are similar to those in a previous complaint filed by the first respondent’s daughter.

Respondents’ Arguments (Sudha Seetharam & Anr):

• The complaint discloses offenses under Sections 405, 406, 415, and 420 of the Indian Penal Code.
• The appellants colluded with their son to siphon the money, as no receipt was given for the returned amount.
• The complaint need not reproduce every ingredient of the criminal offense verbatim.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

1. Whether the High Court erred in rejecting the plea of the appellants for quashing the criminal proceedings against them?
2. Whether the averments in the complaint disclose the ingredients necessary to constitute an offence under the Penal Code?

Treatment of the Issue by the Court

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

Authorities

The Supreme Court considered the following authorities:

Judgment

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

How each authority was viewed by the Court?

• The Court relied on Indian Oil Corpn. v NEPC India Ltd. [ (2006) 6 SCC 736 ]* to establish the principles for exercising jurisdiction under Section 482 of the Code of Criminal Procedure, emphasizing that a complaint can be quashed if it does not disclose an offense.
• The Court followed Binod Kumar v State of Bihar [ (2014) 10 SCC 663 ]* to emphasize that the essential ingredients of dishonest misappropriation and cheating must be present for criminal proceedings to be valid.
• The Court distinguished Rajesh Bajaj v State of NCT of Delhi [ (1999) 3 SCC 259 ]* by stating that the complaint in the present case lacked the basic facts necessary to constitute the alleged offenses.
• The Court cited State of Karnataka v L Muniswamy [ (1977) 2 SCC 699 ]* to highlight that the High Court can quash proceedings if they are an abuse of the process of the Court.

What weighed in the mind of the Court?

The Supreme Court emphasized several points in its reasoning:

• Lack of Entrustment: The Court noted that the first respondent’s complaint clearly stated that the money was transferred by the son of the appellants to her account, and not that the appellants were entrusted with any property. The Court emphasized that entrustment is an essential ingredient for an offense under Section 405 of the Indian Penal Code.
• Absence of Dishonest Inducement: The Court highlighted that the complaint did not allege any dishonest inducement by the appellants to deliver any property to them, which is a necessary ingredient for an offense under Section 415 and 420 of the Indian Penal Code.
• Civil Dispute Cloaked as Criminal Offense: The Court observed that the dispute was essentially civil in nature, and the criminal complaint was an attempt to harass the appellants.
• Delay in Filing Complaint: The Court noted that the criminal complaint was filed six years after the alleged transaction and three years after the filing of the civil suit, which indicated a mala fide intention.

Logical Reasoning:

The Supreme Court concluded that the complaint did not disclose the necessary ingredients for offenses under Sections 405, 415, and 420 of the Indian Penal Code. The Court emphasized that the dispute was essentially civil in nature and that the criminal complaint was an abuse of the process of the court. The Court also considered the delay in filing the complaint, which further supported the conclusion that the proceedings were intended to harass the appellants.

“The condition necessary for an act to constitute an offence under Section 405 of the Penal Code is that the accused was entrusted with some property or has dominion over property.”

“The first respondent admitted that the disputed sum was transferred by the son of the appellants to her bank account on 17 February 2010. She alleges that she transferred the money belonging to the son of the appellants at his behest.”

“A plain reading of the complaint thus shows that the ingredients necessary for constituting offences under Sections 405, 415 and 420 of the Penal Code are not made out.”

The Court did not express any opinion on the merits of the pending civil suit filed by the son of the appellants for the recovery of money.

Key Takeaways

• Criminal proceedings can be quashed if the complaint does not disclose the necessary ingredients for the alleged offenses.
• A civil dispute should not be given a criminal flavor to harass the parties involved.
• Entrustment of property and dishonest inducement are essential ingredients for offenses under Sections 405, 415, and 420 of the Indian Penal Code.
• Delay in filing a criminal complaint can be an indicator of mala fide intention.

Potential Future Impact: This judgment reinforces the principle that criminal proceedings should not be used as a tool to harass parties in civil disputes. It also clarifies the essential ingredients of offenses like criminal breach of trust and cheating, providing guidance for future cases.

Directions

The Supreme Court clarified that no opinion was expressed on the merits of the pending civil suit filed by the son of the appellants for the recovery of money. The pending suit shall be disposed of in accordance with the law.

Development of Law

Ratio Decidendi: The ratio decidendi of this case is that criminal proceedings should not be initiated or continued if the complaint does not disclose the essential ingredients of the alleged offenses. Specifically, for offenses under Sections 405, 415, and 420 of the Indian Penal Code, the complaint must demonstrate entrustment of property and dishonest inducement. The Court also emphasized that civil disputes should not be cloaked with a criminal nature to harass the parties involved.

Change in Previous Positions of Law: This judgment does not introduce a new position of law but reinforces existing principles regarding the quashing of criminal proceedings under Section 482 of the Code of Criminal Procedure. It emphasizes that the High Court should examine whether the complaint discloses the necessary ingredients of the alleged offenses and that criminal proceedings should not be used as a tool for harassment in civil disputes.

Conclusion

The Supreme Court allowed the appeal, set aside the judgment of the High Court, and quashed the criminal proceedings initiated by Sudha Seetharam against Prof R K Vijayasarathy and his wife. The Court held that the complaint did not disclose the necessary ingredients for offenses under Sections 405, 415, and 420 of the Indian Penal Code. The Court emphasized that the dispute was essentially civil in nature and that the criminal complaint was an abuse of the process of the court. The Court also clarified that no opinion was expressed on the merits of the pending civil suit filed by the son of the appellants for the recovery of money.