High Courts ought to quash criminal proceedings initiated to shroud civil dispute with cloak of criminality: SC

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Court noted that in the case at hand, the dispute, which formed the genesis of the criminal proceedings initiated by the respondent was entirely civil in nature

The Supreme Court has said that the high courts ought to quash the criminal proceedings initiated particularly to cast doubt on validity of commercial transactions in which appropriate civil remedy is already being pursued.

A bench of Justices Vikram Nath and Satish Chandra Sharma allowed an appeal filed by Dr Sonia Verma and another against the Punjab and Haryana High Court's order which had declined to quash the FIR under Sections 506, 420, 34, 120-B and 467 of the Indian Penal Code.

"A closer examination of the surrounding facts and circumstances fortifies the conclusion that an attempt has been made by the Respondent No 2 to shroud a civil dispute with a cloak of criminality," the bench said. 

The matter arose out of a registered sale deeds concerning the plot on which the appellants ran a maternity and trauma centre at Rewari in Haryana.

The FIR was lodged on October 29, 2022.

Appellants contended that the dispute between the parties was essentially civil in nature and as the appropriate civil remedy was already being pursued by them, the criminal proceedings arising out of the subject FIR amounted to an abuse of the process of law. They claimed that the high court erred in failing to consider the litigation history between the parties i.e., the pending civil suit and the FIR filed by the appellants against the family of Respondent No 2. 

The Haryana government counsel submitted that there existed sufficient prima facie evidence for the trial court to proceed against the appellants and that the mere existence of a civil profile did not justify quashing of criminal proceedings.

Having heard the counsel, the bench said, "In the considered opinion of this court, the dispute herein, which forms the genesis of the criminal proceedings initiated by Respondent No 2 is entirely civil in nature i.e., whether the appellants are in lawful possession of the suit property or, in essence, whether the registered sale deed is valid".

"To that extent, the appellants have already taken recourse to the appropriate civil remedy to establish their claim before the civil court. The grievance of respondent No 2 i.e., whether the registered sale deed is forged and fabricated is an issue that will be considered by the civil court while making its determination," the bench added.

The court noted that Respondent No 2 registered the subject FIR subsequent to the filing of the civil suit and the chain of sale deeds produced by the appellants contained identical descriptions of the Suit Property and yet Respondent No 2 had pursued criminal action only against the appellants and Sher Singh and not against Babu Lal and her husband.

"When the High Court was apprised of such a matter wherein the substance of the criminal complaint served only to cast doubt on the validity of a commercial transaction (in this case, a sale deed for the transfer of property), and the appropriate civil remedy was already being pursued, the High Court ought to have quashed the criminal proceedings," the bench said.

Case Title: Dr Sonia Verma & Anr Vs The State of Haryana & Anr