Supreme Court Slams Misuse Of Police Machinery For Civil Recovery, Quashes FIR In Contractual Dispute
Court termed the FIR an abuse of process and held that the complaint failed to disclose any cognizable offence warranting criminal proceedings;
The Supreme Court has strongly criticized the growing trend of over-zealous litigants attempting to settle civil and commercial disputes by misusing criminal law and police machinery, observing that law enforcement cannot be turned into recovery agents for private claims.
“Apparently thus, the admitted facts as available on record reveal that the complainant’s claim is for reimbursement of the remaining amount claimed by him towards the works executed in furtherance of a contract,” the Bench observed.
“The allegations, made in the complaint, present a dispute which is purely commercial and civil in nature. It seems that the complainant has contrived to somehow or the other, involve the police machinery to act as recovery agents on his behalf," the Bench said.
Facts of the Case
The case originated from a sub-contract given to the complainant’s company, Sai Group, by SWD Infra, for the construction of a sewerage water filtration plant under the Build-Operate-Transfer (BOT) model in Walunj, Aurangabad. The primary contract was floated by MIDC in 2009-2010. The complainant alleged that as per the understanding, he was to be paid directly by the principal company, BUL, based on instructions given to SWD Infra by BUL’s directors (the appellants before the Apex Court).
The complainant raised bills for the work executed, which were allegedly not paid despite repeated assurances. Claiming he was cheated of over Rs. 5 crore, the complainant filed a criminal case invoking Sections 406 (criminal breach of trust), 420 (cheating), 467, 468, 471 (forgery), and 34 (common intention) of the IPC.
The FIR and subsequent charge sheet were challenged, but the High Court refused to quash the proceedings.
Supreme Court’s Intervention
Aggrieved, the Appellants approached the Supreme Court, which thoroughly examined the materials on record, including the final report submitted under Section 173(2) CrPC.
The Apex Court found that the investigating authorities had not unearthed any credible evidence to support the complainant’s claims of criminal intent or forgery. The only issue that emerged was the non-payment of dues for work executed, a matter squarely within the civil domain.
The Bench also noted that the High Court had indulged in speculative reasoning by suggesting that the accused company had misused government work orders to secure loans from financial institutions. However, the investigating agency's report did not substantiate these claims.
“The conclusions of the High Court are prima facie based on sheer conjectures regarding the appellants having misused the acquired work orders for taking loans... not a shred of evidence was collected by the Investigating Officer to support or fortify the conclusion of the High Court regarding financial bungling,” the Court observed.
The Bench referred to its earlier decision in Inder Mohan Goswami v. State of Uttaranchal, where it had warned against allowing criminal law to be used as a tool for settling civil scores. It reiterated that criminal proceedings should not be permitted to continue when they serve no purpose other than harassment.
Senior Advocate K Parameshwar appeared for the appellants, while AOR Aaditya Aniruddha Pande represented the respondents.
Allowing the Appeal, the Court held that the continuation of the proceedings would amount to gross abuse of the judicial process. The FIR and charge sheet were accordingly quashed.
Case Title: Shrichand Rajaram Kukreja and Anr. v. The State of Maharashtra & Anr.