Summary
In a writ petition seeking quashing of an FIR under Sections 60(b), 316(2) and 318(2) BNS arising from an oral financing arrangement between two media businesses, the High Court, instead of deciding the petition, referred the parties to mediation on condition that the accused first pay Rs. 25 lakh to the informant. The Supreme Court held that the FIR disclosed a purely civil money dispute with no element of criminality, that a High Court hearing a quashing petition must examine the FIR on the Bhajan Lal principles and either allow or reject it rather than help the complainant recover money, and quashed the FIR.
Issues
- Whether the FIR disclosed the ingredients of cheating or criminal breach of trust, or merely a civil dispute arising from an oral agreement.
- Whether the High Court, in a petition under Article 226 of the Constitution or Section 482 CrPC for quashing an FIR, could refer the parties to mediation conditional on the accused paying Rs. 25 lakh to the informant instead of deciding the petition on merits.
Provisions considered
- Section 318(2), Bharatiya Nyaya Sanhita, 2023To constitute cheating there must be prima facie material showing that the accused intended to cheat the complainant from the very inception; the FIR, which showed at most an oral agreement and money possibly due, disclosed no such intention and no element of criminality. (¶¶ 7, 9, 10, 11)
- Section 316(2), Bharatiya Nyaya Sanhita, 2023The Court noted that the law on what constitutes criminal breach of trust was exhaustively explained in Delhi Race Club (1940) Ltd. v. State of U.P., which squarely covered the case, and found the dispute to be civil in nature. (¶¶ 6, 11, 12)
- Section 60(b), Bharatiya Nyaya Sanhita, 2023Set out as one of the offences alleged in the FIR; the Court found that a plain reading of the FIR disclosed no element of criminality. (¶¶ 5, 10)
- Article 226, Constitution of IndiaIn a writ petition for quashing an FIR the High Court is expected to examine the averments in the FIR and other material on record in light of the principles in State of Haryana v. Bhajan Lal, and either allow or reject the petition; directing the accused to pay money and attend mediation is not what is expected of the High Court. (¶¶ 11, 15)
- Section 482, Code of Criminal Procedure, 1973The same approach governs a miscellaneous application under Section 482 CrPC for quashing: the High Court must test the FIR against the Bhajan Lal principles rather than attempt to help the complainant recover money. (¶¶ 11, 15)
Held
- To constitute the offence of cheating there must be something more than a bare allegation; the record must prima facie indicate that the accused intended to cheat the complainant right from the inception. An FIR founded on an oral agreement under which money may be due does not disclose cheating or any element of criminality. (¶¶ 9, 10, 11)
- A High Court hearing a petition under Article 226 of the Constitution or Section 482 CrPC for quashing an FIR must examine the averments in the FIR and the material on record and either allow the petition because no offence is disclosed or reject it because no case for quashing is made out. It should not direct the accused to pay the complainant and attend mediation as a condition precedent; recovery of money is for the civil or commercial court, or proceedings under the Arbitration Act or the IB Code. (¶¶ 11, 15)
- Money due under a civil arrangement cannot be recovered by lodging an FIR and seeking the help of the police; doing so amounts to an abuse of the process of law, and the complainant must pursue a civil suit or other remedy available in law. (¶¶ 12, 13, 14, 18)
Result
Appeal allowed; High Court order dated 07.03.2025 set aside; FIR (Case Crime No. 12 of 2025, P.S. Hariparwat, Agra) quashed; liberty to respondent no. 4 to pursue appropriate legal remedy for recovery of the amount allegedly due.