Mere Institution Of Civil Proceedings Not A Ground To Quash FIR : Supreme Court

 The Supreme Court has reiterated that the mere institution of civil proceedings does not automatically justify the quashing of a First Information Report (FIR).

The Court observed that the existence of a civil remedy for breach of contract does not preclude the initiation or continuation of criminal proceedings. "Simply because there is a remedy provided for breach of contract, that does not by itself clothe the court to conclude that civil remedy is the only remedy," the bench noted, emphasizing that criminal prosecution cannot be stifled merely on the basis of parallel civil litigation.

The judgment clarified that where allegations disclose commission of a criminal offence, particularly in the context of a commercial transaction, the matter deserves to be investigated and, if necessary, tried. The fact that the offence was committed during a commercial transaction is not, by itself, sufficient to hold that the complaint does not warrant further investigation or a trial, the Court held.

The bench comprising Justice Dipankar Datta and Justice Manmohan observed :

"It is trite law that mere institution of civil proceedings is not a ground for quashing the FIR or to hold that the dispute is merely a civil dispute. This Court, in various judgments, has held that simply because there is a remedy provided for breach of contract, that does not by itself clothe the Court to conclude that civil remedy is the only remedy, and the initiation of criminal proceedings, in any manner, will be an abuse of the process of the Court. This Court is of the view that because the offence was committed during a commercial transaction, it would not be sufficient to hold that the complaint did not warrant a further investigation and, if necessary, a trial."

Reference was made to the judgments in Syed Aksari Hadi Ali Augustine Imam v. State (Delhi Admin.) (2009) 5 SCC 528, Lee Kun Hee v. State of UP (2012) 3 SCC 132 and Trisuns Chemicals v. Rajesh Aggarwal (1999) 8 SCC 686.

The bench was deciding an appeal against a judgment of the Delhi High Court which quashed an FIR in a case arising out a dispute related to an agreement to sell. There were cross-FIRs in the case. Civil suits were also filed over the dispute.

The FIR, which was quashed by the High Court, was registered for the offences under Section 467/468/471/420/120B of the Indian Penal Code, for alleged cheating, forgery etc.

The Supreme Court reversed the High Court's decision after noting that the allegations in the FIR, prima facie, disclosed cognizable offences.

Other reports about the judgment can be read here.