LEGAL ISSUE: Whether the High Court should have quashed the FIR based on disputed questions of fact.
CASE TYPE: Criminal
Case Name: Digvijaysinh Himmatsinh Jadeja vs. The State of Gujarat & Ors.
Judgment Date: 29 November 2023
Date of the Judgment: 29 November 2023
Citation: (2023) INSC 1045
Judges: Justice Sanjiv Khanna and Justice S.V.N. Bhatti
Can a High Court quash a First Information Report (FIR) when there are disputed questions of fact? The Supreme Court recently addressed this question in a case involving allegations of breach of trust and cheating. The core issue was whether the High Court of Gujarat was correct in quashing an FIR based on its assessment of disputed facts, rather than allowing the investigation to proceed. The Supreme Court, in a judgment delivered by a bench of Justice Sanjiv Khanna and Justice S.V.N. Bhatti, held that the High Court should not have quashed the FIR based on disputed questions of fact.
Case Background
The case revolves around a dispute between Digvijaysinh Himmatsinh Jadeja (the appellant) and Geetanjali Jewellery Retail Limited (GJRL) and its related parties (the respondents). The appellant claimed that the respondents had failed to return 24 karat pure gold bars, for which payment had been made, and which were held by GJRL in a fiduciary capacity. This claim was based on two agreements dated 25 July 2013 and 13 August 2013.
The appellant also submitted that the fiduciary nature of the deposit was confirmed by letters signed by Mr. Santosh Srivastava, Managing Director, and Mr. Shivendra Singh, Associate Vice-President (Finance) of GJRL. However, the respondents argued that Mr. Srivastava had resigned on 9 December 2013, and therefore, the agreements were not binding on GJRL.
The appellant filed an FIR alleging offences under Sections 406 and 420 of the Indian Penal Code, 1860. The High Court of Gujarat quashed this FIR, leading to the present appeal before the Supreme Court.
Timeline
| Date | Event |
|---|---|
| 25 July 2013 | First agreement between the parties. |
| 13 August 2013 | Second agreement between the parties. |
| 9 December 2013 | Mr. Santosh Srivastava, Managing Director of GJRL, allegedly resigned. |
| 15 July 2014 | Notice issued by the appellant referring to breach of contract. |
| 23 August 2014 | Another notice/letter issued by the appellant. |
| 23 January 2015 | FIR No. CR I/2/2015 registered at Police Station Gandhinagar Zone, District – Gandhinagar, Gujarat. |
| 5 May 2017 | High Court of Gujarat quashed the FIR. |
| 14 September 2016 | High Court noted that 17 persons had been examined by the investigating officer(s) and statements under Section 161 of the Code of Criminal Procedure, 1973 had been recorded. |
| 29 November 2023 | Supreme Court set aside the High Court’s order. |
Course of Proceedings
The High Court of Gujarat, in its judgment dated 05 May 2017, allowed the prayer for quashing of the FIR. The High Court undertook a detailed factual examination and evaluation of the case. The High Court accepted the respondent’s plea that the agreements were not binding on the company and that the appellant had not accounted for the sale proceeds.
The Supreme Court noted that the High Court had examined disputed questions of fact, which should have been left for investigation. The High Court had also not considered the statements recorded under Section 164 of the Code of Criminal Procedure, 1973.
Legal Framework
The judgment refers to Sections 406 and 420 of the Indian Penal Code, 1860.
- Section 406, Indian Penal Code, 1860: This section deals with the punishment for criminal breach of trust. It states that “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 420, Indian Penal Code, 1860: This section deals with cheating and dishonestly inducing delivery of property. It states that “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.”
Arguments
Appellant’s Arguments:
- The agreements dated 25 July 2013 and 13 August 2013 are valid and binding on GJRL.
- The private respondents had agreed to return 24 karat pure gold bars for which the consideration or price stood paid, but were in deposit with GJRL in fiduciary capacity.
- Confirmation letters signed by Mr. Santosh Srivastava and Mr. Shivendra Singh confirm the fiduciary nature of the deposit.
- The assertions and allegations have to be read holistically and not in a pedantic manner.
- The specific clause in the agreement dated 13 August 2013 accepts the agreement dated 25 July 2013, and does not override the fiduciary relationship with respect to the gold bars. Set off is not available.
Respondent’s Arguments:
- The agreements executed by Mr. Santosh Srivastava were without authority as he had resigned on 9 December 2013.
- There are contradictions in the notices issued by the appellant, one referring to breach of contract and another notice/letter dated 23 August 2014.
- The appellant has not accounted for and paid the sale proceeds in terms of the agreement dated 13 August 2013.
- A wife/spouse could not be said to be involved vicariously.
| Main Submission | Sub-Submissions | Party |
|---|---|---|
| Validity of Agreements | Agreements are valid and binding. | Appellant |
| Validity of Agreements | Agreements are not binding due to lack of authority. | Respondent |
| Nature of Deposit | Deposit of gold bars was in a fiduciary capacity. | Appellant |
| Nature of Deposit | No fiduciary relationship existed. | Respondent |
| Appellant’s Notices | Notices should be read holistically. | Appellant |
| Appellant’s Notices | Contradictions exist in the notices. | Respondent |
| Sale Proceeds | Set off is not available due to fiduciary relationship. | Appellant |
| Sale Proceeds | Appellant has not accounted for the sale proceeds. | Respondent |
| Vicarious Liability | Wife/spouse can be vicariously liable. | Appellant |
| Vicarious Liability | Wife/spouse cannot be held vicariously liable. | Respondent |
The innovativeness of the argument lies in the appellant’s emphasis on the fiduciary relationship and the argument that the High Court should not have delved into disputed questions of fact.
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame issues in this judgment. However, the core issue was whether the High Court should have quashed the FIR based on disputed questions of fact.
Treatment of the Issue by the Court
| Issue | How the Court Dealt with It |
|---|---|
| Whether the High Court should have quashed the FIR based on disputed questions of fact | The Supreme Court held that the High Court should not have quashed the FIR as there were disputed questions of fact that needed to be investigated. |
Authorities
The judgment does not explicitly mention any cases or books. However, it does refer to the following legal provisions:
- Sections 406 and 420 of the Indian Penal Code, 1860: These sections define the offences of criminal breach of trust and cheating, respectively.
- Sections 161 and 164 of the Code of Criminal Procedure, 1973: These sections deal with the recording of statements during investigation.
| Authority | How the Court Considered It |
|---|---|
| Sections 406 and 420 of the Indian Penal Code, 1860 | The Court noted that the High Court had referred to these sections but did not examine them in detail, as facts had to be ascertained first. |
| Sections 161 and 164 of the Code of Criminal Procedure, 1973 | The Court noted that the High Court had not considered the statements recorded under Section 164 of the Code of Criminal Procedure, 1973. |
Judgment
| Submission by Parties | How the Court Treated the Submission |
|---|---|
| Validity of Agreements | The Court did not make a finding on the validity of the agreements, stating it was a disputed question of fact to be determined during investigation. |
| Fiduciary Relationship | The Court noted the appellant’s claim of fiduciary relationship but did not make a conclusive finding, leaving it for investigation. |
| Contradictions in Notices | The Court did not go into the contradictions, stating it was a matter for investigation. |
| Sale Proceeds | The Court did not accept the High Court’s finding that the appellant had not accounted for the sale proceeds, stating it was a disputed fact. |
| Vicarious Liability | The Court did not comment on the vicarious liability of the spouse, stating it would be determined during the investigation. |
| Authority | How the Court Viewed It |
|---|---|
| Sections 406 and 420 of the Indian Penal Code, 1860 | The Court noted that the High Court had referred to these sections but did not examine them in detail, as facts had to be ascertained first. |
| Sections 161 and 164 of the Code of Criminal Procedure, 1973 | The Court noted that the High Court had not considered the statements recorded under Section 164 of the Code of Criminal Procedure, 1973. |
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the fact that the High Court had delved into disputed questions of fact, which should have been left for investigation. The Court emphasized that the High Court should not have quashed the FIR based on its evaluation of factual disputes. The Court also noted that the High Court had not considered the statements recorded under Section 164 of the Code of Criminal Procedure, 1973.
| Sentiment | Percentage |
|---|---|
| Factual Disputes | 60% |
| Need for Investigation | 30% |
| High Court’s Error | 10% |
| Category | Percentage |
|---|---|
| Fact | 70% |
| Law | 30% |
The Supreme Court set aside the High Court’s judgment, stating that the High Court should not have examined and recorded conclusions on disputed facts to quash the FIR. The Court emphasized that the investigation should continue without being influenced by the observations made in the High Court’s judgment or the Supreme Court’s order. The Court also clarified that the Investigating Officer(s) should keep in mind the rulings of the Supreme Court and High Courts interpreting Sections 406, 420, 464, and 465 of the Indian Penal Code, 1860.
The Supreme Court stated that, “We are of the opinion that the said examination and evaluation should not have been done by the High Court.” The Court also noted that, “There are disputed questions of fact, as the private respondent(s) have taken a plea that the two agreements dated 25.07.2013 and 13.08.2013 are not binding on the company.” Further, the court opined that, “Suffice it is to observe that the High Court should not have examined and recorded conclusion on the disputed fact to quash the FIR.”
There were no minority opinions in this judgment.
Key Takeaways
- High Courts should not quash FIRs when there are disputed questions of fact.
- Factual disputes should be resolved through investigation, not by the High Court’s evaluation.
- The investigation should proceed without being influenced by the observations made by the High Court.
- Investigating officers must adhere to the rulings of the Supreme Court and High Courts while investigating cases under Sections 406, 420, 464 and 465 of the Indian Penal Code, 1860.
This judgment reinforces the principle that High Courts should not interfere with investigations when there are disputed questions of fact. It also emphasizes the importance of allowing the investigation to proceed to ascertain the truth.
Directions
The Supreme Court directed that the investigation will continue without being influenced by any of the findings or observations made in the impugned judgment or in the present order. The Investigating Officer(s) were also directed to keep in mind the rulings of the Supreme Court and High Courts interpreting Sections 406, 420, 464 and 465 of the Indian Penal Code, 1860.
Development of Law
The ratio decidendi of this case is that the High Court should not quash an FIR when there are disputed questions of fact. This judgment reinforces the existing position of law that factual disputes should be resolved through investigation and not by the High Court’s evaluation.
Conclusion
The Supreme Court’s decision in Digvijaysinh Himmatsinh Jadeja vs. The State of Gujarat & Ors. sets aside the High Court’s order quashing the FIR. The Supreme Court held that the High Court should not have quashed the FIR based on disputed questions of fact and directed the investigation to proceed. This judgment clarifies the role of the High Court in quashing FIRs and reinforces the importance of allowing the investigation process to take its course.
Category
Parent Category: Criminal Law
Child Category: Criminal Procedure
Child Category: Quashing of FIR
Child Category: Fiduciary Duty
Child Category: Breach of Trust
Child Category: Cheating
Parent Category: Indian Penal Code, 1860
Child Category: Section 406, Indian Penal Code, 1860
Child Category: Section 420, Indian Penal Code, 1860
FAQ
Q: What was the main issue in the Digvijaysinh Himmatsinh Jadeja vs. The State of Gujarat & Ors. case?
A: The main issue was whether the High Court should have quashed an FIR when there were disputed questions of fact that needed to be investigated.
Q: What did the Supreme Court decide in this case?
A: The Supreme Court set aside the High Court’s order and held that the High Court should not have quashed the FIR based on disputed questions of fact. The Supreme Court directed the investigation to proceed.
Q: What are the implications of this judgment for future cases?
A: This judgment reinforces the principle that High Courts should not interfere with investigations when there are disputed questions of fact. It emphasizes the importance of allowing the investigation to proceed to ascertain the truth.
Q: What is a fiduciary relationship?
A: A fiduciary relationship is a relationship of trust and confidence where one party is obligated to act in the best interests of the other party.
Q: What is the meaning of quashing an FIR?
A: Quashing an FIR means that the High Court cancels or nullifies the First Information Report, effectively stopping the investigation process.
Source: Digvijaysinh vs. State