Summary
The Court quashed the FIR and subsequent proceedings against two company promoters as a malicious abuse of process. The complaint misstated addresses to create territorial jurisdiction, concealed the complainant’s prior challenge to the companies’ merger, and recast board-approved equity investments in a commercial dispute as loans and criminal offences.
Issues
- Whether the FIR and subsequent proceedings against the two appellants were an abuse of process warranting quashing under Section 482 CrPC, given the commercial nature of the dispute, alleged concealment and false territorial addresses.
Provisions considered
- Section 482, Code of Criminal Procedure, 1973The Court exercised the High Court’s inherent power to prevent abuse of process and secure the ends of justice, quashing the FIR and ensuing proceedings against the appellants where the record established malicious prosecution and deliberate forum shopping. (¶¶ 3, 9, 22, 23, 26, 36, 37)
Held
- On the record of this case, the criminal complaint was a malicious use of process to pursue a commercial grievance. The undisputed company resolutions showed that the amounts were approved as equity investments, while the later complaint recast them as loans and alleged forged share-pledge documents that had not been raised in the complainant’s earlier proceedings concerning the merger. (¶¶ 10, 12, 15, 27, 28, 29, 30, 31, 32, 33, 34, 36)
- The complainant gave a false company address and incomplete addresses for the accused companies and their directors in Gautam Budh Nagar, although the relevant businesses, parties and transactions were based in Delhi. The Court found this was done to create territorial jurisdiction where none lay. The Magistrate’s summoning order also showed no application of mind to the parties’ addresses and gave no reasons. (¶¶ 22, 23, 24, 26)
- The FIR and subsequent proceedings were quashed only insofar as they concerned the two appellants before the Court; the ruling did not adjudicate the allegations against the other accused or determine the underlying commercial claims. (¶¶ 5, 36, 37)
Result
Both appeals were allowed; the High Court’s order was set aside and FIR No. 1271 of 2018 and subsequent proceedings were quashed qua the two appellants. The complainant was ordered to pay costs of ₹25 lakh to the Supreme Court Registry within four weeks for equal distribution to the SCBA and SCAORA.