Invoking criminal law for recovery of money is abuse of law: Supreme Court

NEW DELHI: Invoking criminal law by filing an FIR for recovery of money by a person is an abuse of the process of law as it is a civil dispute, the Supreme Court said and expressed frustration over HCs allowing it in violation of its rulings.The apex court stated this while quashing criminal proceedings initiated by a production house against Bollywood filmmaker Shailesh Kumar Singh, who had produced ‘Tanu Weds Manu’, over a monetary dispute.“How many times HCs are to be reminded that to constitute an offence of cheating, there has to be something more than prima facie on record to indicate that the intention of the accused was to cheat the complainant right from the inception.

The plain reading of FIR does not disclose any element of criminality,” a bench of Justices J B Pardiwala and R Mahadevan said in an order on July 14.Indicating that HCs have virtually turned a deaf ear to its recent orders holding that such cases come within the ambit of civil suits, the bench referred to its verdicts which had settled the issue. It said SC in Aug had stated that a mere breach of contract cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right from the beginning of the transaction.

“Every act of breach of trust may not result in a penal offence of criminal breach of trust unless there is evidence of a manipulating act of fraudulent misappropriation.

An act of breach of trust involves a civil wrong in respect of which the person may seek his remedy for damages in civil courts but, any breach of trust with a mens rea, gives rise to a criminal prosecution as well,” it had said.Advocate Sana Raees Khan, appearing for producer Shailesh Kumar Singh, told the court that no criminal offence was made out against him and criminal prosecution should not be allowed to be used as an instrument of harassment.

Agreeing with her, the bench quashed the FIR and also expressed shock on how the Allahabad HC dealt with the case by directing him to pay Rs 25 lakh to the complainant. SC also directed them to go for mediation.“We fail to understand why the HC should undertake such an exercise. The HC may either allow the petition saying that no offence is disclosed or may reject the petition saying that no case for quashing is made out. Why should the HC make an attempt to help the complainant to recover the amount due and payable by the accused.

It is for the civil court or commercial court, as the case may be, to look into in a suit that may be filed for recovery of money or in any other proceedings,” SC said.“We are quite disturbed by the manner in which the HC has passed the impugned order. The HC first directed the appellant to pay Rs 25 lakh to the respondent, and thereafter, directed him to appear before the Mediation and Conciliation Centre for the purpose of settlement.

That’s not what is expected of an HC to do in a writ petition filed under Article 226 of the Constitution or a miscellaneous application filed under Section 482 of the Code of Criminal Procedure for quashing of FIR or any other criminal proceedings,” SC said.It said that “what is expected of the HC is to look into the averments and the allegations levelled in the FIR along with the other material on record, if any. The HC seems to have forgotten the well-settled principles as enunciated in the decision of this court”.