Supreme Court Imposes ₹10 Lakh Costs On Builder's Agent Who Lodged Frivolous FIR To Force Property Sale

Taking a strong stand against the misuse of criminal law, the Supreme Court on July 18 came down heavily on a complainant for filing a false and baseless FIR in what was essentially a civil dispute. The Court imposed exemplary costs of ₹10,00,000 (Ten Lakh Rupees) on the complainant, directing that the amount be deposited into the appellants' bank account.

The Court was shocked to know that the Appellant, a lady, was arrested and humiliated in police custody for eight days "for allegations which had no elements of any offence whatsoever what to talk of a cognizable offence."

“We feel that rather than awarding interest to the complainant, it is a fit case wherein the complainant should be penalized with exemplary cost for misusing the process of criminal law in a case which was of purely civil nature.”, the bench comprising Justices Vikram Nath and Sandeep Mehta said.

The Court also criticized the Telangana High Court's order, dismissing the appellants' petition under Section 482 Cr.P.C. seeking quashing of the FIR in a one-line, unreasoned order.

“We find the approach of the High Court in casually disposing of the petition filed by the appellants, seeking quashing of the proceedings, without addressing the merits of the matter to be absolutely laconic and perfunctory.”, the court remarked.

The appellants(wife and daughter of a retired army general) were accused by the complainant (an agent of an influential builder named M/s Sandhya Constructions and Estates Pvt Ltd) of taking ₹4.8 crore for selling a plot and farmhouse but refusing to execute the sale deed, leading to an FIR under Sections 420 and 406 IPC(offences of cheating and criminal breach of trust). The appellants argued that the deal was oral and conditional, and since full payment wasn't made, a suit for specific performance of contract was already filed by the complainant.

Appellants claimed that the FIR was filed to pressure them despite the ongoing civil dispute.

Against the High Court's refusal to quash the FIR, the Appellants approached the Supreme Court.

Setting aside the High Court's decision, the judgment authored by Justice Mehta observed:

“Thus, clearly the complainant has manipulated and distorted the facts and has used its influence for getting the FIR registered against the appellants. On a bare reading of the FIR, it is clear that a plain and simple dispute involving non-execution of a registered sale deed in terms of so-called oral agreement to sell has been given the cloak of a criminal case by misusing the criminal machinery. Not only this, appellant No. 1 being a 70 years' old lady and wife of a retired Army officer was arrested in connection with this false and frivolous FIR and had to remain in the custody for almost eight days.”, the court observed.

“We are of the firm opinion that even from the admitted allegations set out in the complaint, there was no justification for registering the FIR and rather the complainant should have been instructed to avail the appropriate remedy by approaching the civil Court.”, the court added.

Also, in anticipation of harm being caused to them in Hyderabad by the complainant, the court directed the Superintendent of Police/Commissioner of Police of Hyderabad to ensure that appropriate security shall be provided to them.

Accordingly, the appeal was allowed.

“The approach of the High Court in throwing out the quashing petition in such a cursory manner cannot be appreciated. Hence, we are of the opinion that the appeal merits acceptance and deserves to be allowed.”

Cause Title: MALA CHOUDHARY & ANR. VERSUS THE STATE OF TELANGANA & ANR.

Citation : 2025 LiveLaw (SC) 725

Click here to read/download the judgment

Appearance:

For Petitioner(s) : Ms. Vanshaja Shukla, Adv. Ms. Divya Jyoti Singh, AOR Mr. Vineet Nagar, Adv.

For Respondent(s) : Ms. Devina Sehgal, AOR Mr. Yatharth Kansal, Adv. Mr. Tadimalla Bhaskar Gowtham, Adv. Ms. Ekta Swarup, Adv. Mr. Abishek.s, Adv. Mr. Sandeep Singh, AOR