High Court Cannot Conduct Mini-Trial at Quashing Stage, SC Reiterates

The Supreme Court recently set aside a Patna High Court judgment that quashed criminal proceedings in a dispute involving alleged misappropriation of pledged gold, reiterating that courts cannot evaluate evidence or conduct a mini-trial when considering petitions under Section 482 of the Code of Criminal Procedure (CrPC).

A bench of Justices Sanjay Karol and Manoj Misra, allowing an appeal filed by Abhishek Kumar, emphasised that the High Court’s role at the stage of adjudicating a quashing petition is limited to assessing whether a prima facie case is made out, not whether the charges will ultimately stand.

Citing Rajeev Kourav v. Baisahab (2020), the Court underscored that “the evidence produced by the accused in his defence cannot be looked into by the court, except in very exceptional circumstances, at the initial stage of the criminal proceedings.” It further held that appreciation of evidence is impermissible at the stage of a Section 482 petition, and if the allegations disclose ingredients of the offence, proceedings cannot be quashed.

The bench also relied on its recent ruling in Naresh Aneja v. State of UP (2025), observing that courts cannot "conduct a mini-trial" but only need to be satisfied that the allegations meet the threshold for constituting an offence. "To put it differently," the Court said, "it is to be seen, without undertaking a minute examination of the record, that there is some substance in the allegations made which could meet the threshold of statutory language."

Background

Abhishek Kumar had pledged 254 grams of 22-carat gold ornaments to secure a loan of ₹7.7 lakh. Although he repaid the amount by March 31, 2023, the bank refused to return the pledged gold, claiming the loan was unpaid. The ornaments were later revalued and found to be counterfeit, leading to the registration of an FIR against Kumar under Sections 420 and 379 of the Indian Penal Code.

Kumar also filed a counter-complaint against the bank's officials and valuers, alleging misconduct. While the investigation was ongoing, the respondents moved the High Court, which quashed the FIR on October 5, 2023.

Observations by the Court

“We are at a loss to understand as to how such a conclusion was arrived at, for the settled position is that for determining intention, evidence has to be taken into account. In a similar vein, how the court concluded that the appellant had an ulterior motive, is unclear", Court said.

The bench noted that the High Court had relied on the bank’s internal fraud risk policy and the removal of the initial valuer to conclude lack of malafides. However, it observed that this did not rule out potential misconduct by bank officials or valuers.

“There was no third-party verification undertaken by the bank to corroborate the findings returned by the second valuer,” the Court said. “So it cannot be positively ruled out, without appreciating the evidence, that all the persons involved from the bank or outside (valuers) did not commit any act affecting appellant’s pledged gold", it was further noted.

While acknowledging the delay in loan repayment, the Court questioned why the gold was revalued and auctioned after the dues were cleared. “Fraud, if any, whether perpetrated at the first instance of valuation, or later, is a matter which could be unearthed only after a trial based on the evidence led by the parties,” it held.

Accordingly, the Court restored the FIR proceedings, holding that a prima facie case had been made out and should proceed to trial.

Case Title: Abhishek Singh v. Ajay Kumar & Ors.