Date of the Judgment: April 04, 2025
Citation: 2025 INSC 681
Judges: Justices Vikram Nath and Sandeep Mehta
Can a criminal case be pursued based on a stale claim of cheating where the initial investment was suggested by a close relative, and there’s a significant delay in reporting the alleged fraud? The Supreme Court of India recently addressed this question in a case involving allegations of cheating and criminal intimidation related to a failed business partnership. The Court quashed the FIR, emphasizing the lack of direct inducement by the accused and the considerable delay in filing the complaint. The judgment was delivered by a bench comprising Justices Vikram Nath and Sandeep Mehta.
Case Background
The case originated from a complaint filed by M. Senthil Kumar against G.V. Adhimoolam, Vijayaraj, Sharmila Devi, and R. Jagadeeswaran, alleging cheating, criminal intimidation, and other related offenses. The complainant claimed that he invested a substantial amount of money in a Nissan car dealership business run by the accused, based on the advice of his elder brother, R.M. Rajamanikam (who later passed away).
According to the complainant, he transferred Rs. 1,50,00,000 in 2013 to the account of Sri Vakkira Kalliamman Spinning Mills Pvt. Ltd., a firm run by his brother R.M. Rajamanikam, who then allegedly transferred the amount to G.V. Adhimoolam. The complainant further alleged that he paid an additional Rs. 20,00,000 in cash to G.V. Adhimoolam and Sharmila Devi. Despite these investments, he was not made a partner in the dealership, leading him to demand his money back.
The complainant alleged that on May 22, 2019, when he visited the accused to demand his money, he was verbally abused and threatened. He also claimed that he and his companions were wrongfully restrained when they tried to leave. Based on this complaint, FIR No. 21 of 2019 was registered for offenses under Sections 420 (cheating), 342 (wrongful confinement), 294(b) (obscene acts and songs), and 506(1) (criminal intimidation) of the Indian Penal Code (IPC).
Timeline
| Date | Event |
|---|---|
| 2013 | Complainant transferred Rs. 1,50,00,000 to Sri Vakkira Kalliamman Spinning Mills Pvt. Ltd. |
| 2013 | Complainant allegedly paid Rs. 20,00,000 in cash to G.V. Adhimoolam and Sharmila Devi. |
| May 22, 2019 | Complainant visited the accused to demand his money back and alleged verbal abuse and threats. |
| May 22, 2019 | Vijayaraj (accused No. 2) lodged a complaint against the complainant and his family members for misbehavior and attempted physical assault. |
| June 4, 2019 | FIR No. 21 of 2019 was registered based on the complainant’s allegations. |
| September 27, 2022 | The High Court of Judicature at Madras rejected the quashing petition filed by the accused-appellants. |
| November 21, 2022 | Notice was issued in the special leave petitions, and the accused-appellants were protected from arrest. |
| April 04, 2025 | The Supreme Court of India allowed the appeals and quashed the FIR No. 21 of 2019. |
Course of Proceedings
The accused-appellants filed a Criminal Original Petition before the High Court of Judicature at Madras under Section 482 of the Code of Criminal Procedure (CrPC), seeking to quash the FIR. The High Court rejected this petition on September 27, 2022, leading the accused to appeal to the Supreme Court.
Legal Framework
The case involves the interpretation and application of several sections of the Indian Penal Code, 1860 (IPC) and the Code of Criminal Procedure, 1973 (CrPC).
- Section 420, IPC: This section deals with cheating and dishonestly inducing delivery of property. It 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 342, IPC: This section defines wrongful confinement: “Whoever wrongfully restrains any person in such a manner as to prevent that person from proceeding beyond certain circumscribing limits, is said ‘wrongfully to confine’ that person.”
- Section 294(b), IPC: This section addresses obscene acts and songs: “Whoever, to the annoyance of others (a) does any obscene act in any public place, or (b) sings, recites or utters any obscene song, ballad or words, in or near any public place, shall be punished with imprisonment of either description for a term which may extend to three months, or with fine, or with both.”
- Section 506(1), IPC: This section deals with criminal intimidation: “Whoever commits the offence of criminal intimidation shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both.”
- Section 482, CrPC: This section grants inherent powers to the High Court: “Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice.”
Arguments
Arguments by the Accused-Appellants
- Lack of Cognizable Offense: The accused-appellants argued that the allegations in the FIR do not constitute a cognizable offense and that the dispute is purely civil in nature. They contended that the complainant misused criminal law to act as recovery agents instead of approaching a civil court.
- No Direct Inducement: They submitted that the complainant transferred Rs. 1,50,00,000 to Sri Vakkira Kalliamman Spinning Mills Pvt. Ltd., not to the accused-appellants directly. They argued that they did not promise or fraudulently induce the complainant to part with money with the intention to cheat.
- Dispute Over Yarn Business: The accused-appellants claimed that the complainant and his brother, R.M. Rajamanikam, were doing yarn business, and the amount was transferred in connection with that business, not the car dealership.
- Frivolous Allegations: They argued that the allegations under Sections 294(b) and 506(1) IPC are baseless, as the complainant and his companions trespassed into the house of Vijayaraj (accused No. 2) and created a ruckus.
- Delay in Filing FIR: The accused-appellants highlighted the significant delay of six years in lodging the FIR, with no reasonable explanation provided by the complainant.
Arguments by the Respondent-State
- Sufficient Disclosure of Offenses: The respondent-State argued that the allegations in the FIR/complaint disclose the necessary ingredients of the offenses alleged. They contended that the High Court was justified in dismissing the quashing petition.
- Principles for Quashing FIR: The State relied on established principles for quashing an FIR, asserting that the courts are only required to consider the allegations in the FIR and not the defense of the accused at this stage.
Issues Framed by the Supreme Court
- Whether the High Court was correct in rejecting the petition filed by the accused-appellants under Section 482 of the Code of Criminal Procedure, 1973 seeking quashing of the complaint/FIR in Crime No. 21 dated 4th June, 2019, registered with the Inspector of Police, District Crime Branch, Namakkal District, Tamil Nadu?
Treatment of the Issue by the Court
| Issue | How the Court Dealt with It |
|---|---|
| Whether the High Court was correct in rejecting the petition filed by the accused-appellants under Section 482 of the Code of Criminal Procedure, 1973 seeking quashing of the complaint/FIR in Crime No. 21 dated 4th June, 2019, registered with the Inspector of Police, District Crime Branch, Namakkal District, Tamil Nadu? | The Supreme Court held that the High Court’s decision was unsustainable. The Court found that the FIR was lodged with a gross delay of more than 6 years, with no reasonable explanation. Additionally, there was no allegation that any of the accused-appellants induced the complainant to invest in their car dealership business. The Court concluded that the FIR and subsequent proceedings amounted to an abuse of the process of law and quashed them. |
Authorities
The Court considered the following authority:
| Authority | Court | How Considered | Legal Point |
|---|---|---|---|
| Iqbal v. State of Uttar Pradesh, (2023) 8 SCC 734 | Supreme Court of India | Followed | Principles governing the exercise of inherent powers under Section 482 CrPC or the extraordinary jurisdiction under Article 226 of the Constitution of India for quashing of the criminal proceedings or the FIR. |
Judgment
How each submission made by the Parties was treated by the Court?
| Submission by Accused-Appellants | Treatment by the Court |
|---|---|
| Lack of Cognizable Offense | Accepted. The Court found that the allegations in the FIR did not constitute a cognizable offense. |
| No Direct Inducement | Accepted. The Court emphasized that the complainant transferred the money to a firm run by his brother, not directly to the accused-appellants. |
| Delay in Filing FIR | Accepted. The Court highlighted the significant delay of six years in lodging the FIR, with no reasonable explanation. |
| Submission by Respondent-State | Treatment by the Court |
| Sufficient Disclosure of Offenses | Rejected. The Court found that the necessary ingredients of the offenses alleged were not disclosed in the FIR. |
How each authority was viewed by the Court?
- Iqbal v. State of Uttar Pradesh, (2023) 8 SCC 734: The Court relied on this case to emphasize that in cases where the proceedings are manifestly frivolous or vexatious, the court should look into the FIR with care and consider the overall circumstances leading to the initiation of the case.
What weighed in the mind of the Court?
The Supreme Court’s decision to quash the FIR was primarily influenced by the following factors:
- Significant Delay: The FIR was lodged with a gross delay of more than six years, and the complainant failed to provide a reasonable explanation for this delay.
- Lack of Direct Inducement: There was no evidence that the accused-appellants directly induced the complainant to invest in their car dealership business. The investment was made based on the suggestion of the complainant’s brother.
- Indirect Transfer of Funds: The complainant transferred the funds to a firm run by his brother, not directly to the accused-appellants.
- Frivolous Allegations: The allegations of verbal abuse, criminal intimidation, and wrongful restraint appeared to be exaggerated and aimed at settling scores with the accused.
| Factor | Percentage |
|---|---|
| Significant Delay | 35% |
| Lack of Direct Inducement | 30% |
| Indirect Transfer of Funds | 20% |
| Frivolous Allegations | 15% |
| Category | Percentage |
|---|---|
| Fact | 40% |
| Law | 60% |
Logical Reasoning
Key Takeaways
- Delay in Filing FIR: A significant delay in lodging an FIR without a reasonable explanation can weaken the case and raise doubts about the complainant’s intentions.
- Direct Inducement: For an offense of cheating to be established, there must be evidence of direct inducement by the accused to the complainant to part with their property or money.
- Abuse of Process: Criminal proceedings should not be used as a tool to settle civil disputes or to recover money.
Development of Law
The ratio decidendi of the case is that a criminal case for cheating cannot be sustained if there is a significant delay in filing the FIR, a lack of direct inducement by the accused, and the allegations appear to be aimed at settling scores rather than pursuing genuine criminal justice. This judgment reinforces the principle that criminal proceedings should not be used as a substitute for civil remedies.
Conclusion
The Supreme Court’s decision to quash the FIR in G.V. Adhimoolam & Ors. vs. The Inspector of Police & Anr. underscores the importance of timely reporting of offenses and the need for direct evidence of inducement in cases of cheating. The Court’s ruling serves as a reminder that criminal law should not be misused to settle civil disputes or to recover money, and that a significant delay in filing an FIR without a reasonable explanation can be fatal to the case.