Supreme Court quashes FIR against Project Manager in Cheating Case: Kim Wansoo vs. State of Uttar Pradesh (2025) INSC 8

Date of the Judgment: January 2, 2025
Citation: 2025 INSC 8
Judges: C.T. Ravikumar, J. and Sanjay Kumar, J.

Can a person be held liable for a crime if there are no specific allegations against them? The Supreme Court recently addressed this question in a case involving a project manager accused of cheating. The court examined whether the High Court was correct in refusing to quash a First Information Report (FIR) against the project manager. The Supreme Court, in this judgment, ultimately quashed the FIR, finding no specific allegations against the project manager. This case highlights the importance of specific accusations in criminal proceedings. The judgment was delivered by a two-judge bench comprising Justice C.T. Ravikumar and Justice Sanjay Kumar.

Case Background

Hyundai Motor India Limited (HMIL) contracted Hyundai Engineering & Construction India LLP (HEC India LLP) for a project. The appellant, Kim Wansoo, was the Project Manager for HEC India LLP. HEC India LLP then sub-contracted work to KOTEC Automotive Services India Private Limited (KOTEC), who further sub-contracted to M/s. YSSS India Construction (YSSS). YSSS, in turn, sub-contracted with M/s R.T. Construction, the complainant, for manpower. The complainant alleged that YSSS, in collusion with others, defaulted on payments of approximately Rs. 9 crores. The FIR was registered against several individuals, including the appellant, under Sections 406, 420, 323, 504, 506, and 120-B of the Indian Penal Code, 1860. The appellant received notices to produce documents, which he claimed were not in his possession.

Timeline

Course of Proceedings

The appellant approached the High Court of Judicature at Allahabad seeking to quash the FIR. The High Court refused to quash the FIR, but directed that the appellant should not be arrested until credible evidence is found against him or until the police report is submitted under Section 173(2) of the Code of Criminal Procedure, 1973. The Supreme Court issued a notice and stayed the proceedings of the FIR.

Legal Framework

The case involves several sections of the Indian Penal Code, 1860 and the Code of Criminal Procedure, 1973. The FIR was registered under Sections 406 (criminal breach of trust), 420 (cheating), 323 (voluntarily causing hurt), 504 (intentional insult), 506 (criminal intimidation), and 120-B (criminal conspiracy) of the Indian Penal Code, 1860. Section 91 of the Code of Criminal Procedure, 1973 allows a police officer to issue a notice to a person to produce documents necessary for investigation. Section 173(2) of the Code of Criminal Procedure, 1973 deals with the police report after investigation.

Arguments

The appellant contended that the FIR did not disclose any specific allegations against him or his company, HEC India LLP. He argued that the allegations were primarily against YSSS and other companies. The appellant also stated that he had produced all the documents in his possession.

The complainant alleged that YSSS, in connivance with others, defaulted on payments. They claimed that despite reconciliation meetings, the payments were not made, and the cheques issued were dishonored. The complainant also alleged that they were misbehaved with and threatened when they demanded payment. The complainant sought registration of a case to recover the amount due.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in the judgment. However, the core issue was whether the High Court was correct in refusing to quash the FIR against the appellant, given the lack of specific allegations against him.

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on several cases to support its decision. These cases established the principles for quashing criminal proceedings to prevent abuse of process and secure the ends of justice.

Judgment

The Supreme Court analyzed the authorities and the submissions of both parties. The court found that the FIR did not disclose any specific allegations against the appellant. The court noted that the allegations were primarily against YSSS and other companies. Therefore, the court held that continuing the proceedings against the appellant would be an abuse of the process of law.

The court emphasized that the High Court should have exercised its power under Article 226 of the Constitution of India to quash the FIR. The court stated that non-interference would result in a miscarriage of justice. The court also considered the principle that the court can look into the overall circumstances of the case, as laid down in Mohammad Wajid and Another. v. State of U.P. and Anr. [2023 SCC Online SC 951].

The Supreme Court, relying on State of Haryana and Ors. v. Bhajan Lal and Ors. [AIR 1992 SC 604], observed that the High Court can exercise its power under Article 226 of the Constitution of India or under Section 482 of the Code of Criminal Procedure, 1973 to quash criminal proceedings to prevent abuse of process. The court also relied on Pepsi Foods Ltd . and Anr. v. Special Judicial Magistrate and Ors. [AIR 1998 SC 128], which reiterated the same principle.

The court also referred to Eastern Spg. Mills v. Rajiv Poddar [AIR 1985 SC 1668], stating that the High Court could interfere with the investigation if non-interference would result in miscarriage of justice. The court further relied on State of A.P. v. Golconda Linga Swamy [(2004) 6 SCC 522], which stated that an FIR could be quashed if it did not disclose the commission of an offense.

The Supreme Court quoted from the FIR:

“About all aforementioned people conniving with intention to cause loss to the Applicant and to make gain for themselves, hatching criminal conspiracy, committing cheating, fraud and. forgery against the Applicant and misappropriating Applicant’s money…”

The Supreme Court stated:

“Despite our microscopic examination of the allegations raised thereunder, except some vague allegations, no specific allegation could be seen made against the appellant herein or against the company by name ‘HEC India LLP’ wherein he was the Project Manager.”

The Supreme Court further stated:

“A perusal of the subject FIR would reveal that the same did not disclose commission of offence(s) as alleged without anything being added to the recitals thereof. That apart, besides the vague allegations, the rest of them, even if taken as true, would not disclose the commission of any offence and make out a case against, the appellant.”

What weighed in the mind of the Court?

The court’s decision was primarily influenced by the lack of specific allegations against the appellant in the FIR. The court emphasized that criminal proceedings should not be initiated based on vague and unsubstantiated claims. The court also considered the principle that the High Court should exercise its power to prevent abuse of the legal process.

Key Takeaways

• ✓ Criminal proceedings should be based on specific allegations, not vague claims.
• ✓ Courts have the power to quash FIRs to prevent abuse of the legal process.
• ✓ High Courts must exercise their power under Article 226 of the Constitution to prevent miscarriage of justice.
• ✓ The Court can look into the overall circumstances of the case during investigation.

Directions

The Supreme Court quashed the FIR No. 64/2020 registered at Police Station, Sadar Bazar, District Meerut and all further proceedings against the appellant.

Development of Law

The judgment reinforces the principle that criminal proceedings must be based on specific allegations. It reiterates the power of High Courts to quash FIRs to prevent abuse of process. The ratio decidendi is that an FIR can be quashed if it does not disclose the commission of an offense and lacks specific allegations against the accused. There is no change in the previous position of law.

Conclusion

The Supreme Court allowed the appeal and quashed the FIR against the appellant, Kim Wansoo. The court found that the FIR lacked specific allegations against him and that continuing the proceedings would be an abuse of the legal process. This judgment underscores the importance of specific accusations in criminal proceedings and the court’s role in preventing the misuse of legal processes.