Forum Shopping and Power of High Court u/s 482 CrPC; Supreme Court tells when to convert a civil complaint into criminal case

Supreme Court: The Division Bench S. Abdul Nazeer and Krishna Murari*, JJ., reversed the impugned order of the Calcutta High Court for being affected with the vice of forum shopping. The Bench expressed,

“The timeline of filing complaints clearly indicates the malafide intention of Respondent 2 which was to simply harass the petitioners so as to pressurise them into shelling out the investment made by Respondent 2.”

The entire origin of the dispute emanated from an investment made by Respondent 2, amounting to Rs. 2.5 crores in lieu of which 2,50,000 equity shares were issued in the year 25-03-2008, finally culminating into the MOU dated 20-08-2009. Based on the MOU, respondent 2 filed three complaints, two at Delhi and one at Kolkata. Thus, two simultaneous proceedings, arising from the same cause of action i.e. MOU dated 20-08-2009 were initiated, amounting to an abuse of the process of the law which is barred.

Power of High Court under S. 482 of CrPC

By the said judgment, the High Court exercised the powers under Section 482 as well as Section 401 of CrPC to dismiss the prayer for quashing of the proceedings and held that continuance of criminal proceedings against the present appellant/accused would not be an abuse of the process of the court. In G. Sagar Suri v. State of UP, (2000) 2 SCC 636, it had been observed that it is the duty and obligation of the criminal court to exercise a great deal of caution in issuing the process, particularly when matters are essentially of civil nature. This Court has time and again cautioned about converting purely civil disputes into criminal cases.

In the instant case, respondent 2 alleged that the appellants were responsible for the offence punishable under Section 420, 405, 406, 120B IPC. The Bench opined that the High Court failed to examine the ingredients of the said offences and whether the allegations made in the complaint, read on their face, attract those offences under the Penal Code. The Bench remarked,

“…in order to attract the ingredients of Section of 406 and 420 IPC it is imperative on the part of the complainant to prima facie establish that there was an intention on part of the petitioner and/or others to cheat and/or to defraud the complainant right from the inception. Furthermore it has to be prima facie established that due to such alleged act of cheating the complainant had suffered a wrongful loss and the same had resulted in wrongful gain for the accused.”

Observing that the averments in the FIR and the allegations in the complaint against the appellant did not constitute an offence under Section 405 & 420 IPC, 1860, the Bench clarified that even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in the absence of a culpable intention at the time of making promise being absent, no offence under Section 420 IPC can be said to have been made out. Therefore, the Bench rejected the findings of the High Court holding that there was no material to indicate that Appellants had any malafide intention against the Respondent.

Forum Shopping

Noticeably, the application under Section 156(3) CrPC filed before the Metropolitan Magistrate, Tis Hazari Court, Delhi was dismissed and there was no further challenge against the same. Instead, Respondent 2 chose to file a complaint with the same cause of action in Calcutta which was the exact reproduction of the complaint filed before Tis Hazari Court, New Delhi with the only difference or what may be termed as ‘Jurisdictional improvement’. The Bench noted that the jurisdiction had been created in Delhi as the Appellants used to visit Respondent 2 in order to persuade them to invest in their company and special emphasis can be laid on the fact that Respondent 2 himself accepted/agreed to the fact that all the transactions took place in Delhi. Therefore, the Bench observed,

“…registering a complaint in Kolkata is way of harassing the appellant as a complaint has already been filed in Delhi with all the necessary facts, apart from the jurisdictional issue at Kolkata.”

In Krishna Lal Chawla v. State of U.P., (2021) 5 SCC 435, it was observed that, “…permitting multiple complaints by the same party in respect of the same incident, whether it involves a cognizable or private complaint offence, will lead to the accused being entangled in numerous criminal proceedings. As such he would be forced to keep surrendering his liberty and precious time before the police and the courts, as and when required in each case.” Hence, the Bench observed,

“This Court has condemned the practice of forum shopping by litigants and termed it as an abuse of law and also deciphered different categories of forum shopping.”

The Bench observed that in spite of this Court condemning the practice of forum shopping, Respondent 2 filed two complaints i.e., a complaint u/s 156(3) CrPC before the Tis Hazari Court, New Delhi and a complaint which was eventually registered as FIR u/s 406, 420, 120B IPC in Kolkata i.e., one in Delhi and one complaint in Kolkata, which was abuse of process.

Findings

The Bench held that the order of the High Court was seriously flawed due to the fact that in its interim order it was observed that two complaints were filed on the same cause of action at different places but the impugned order overlooked the said aspect and there was no finding on that issue. Additionally, the Bench noted,

“…it is apparent that the complaint was lodged at a very belated stage (as the entire transaction took place from January 2008 to August 2009, yet the complaint has been filed in March 2013 i.e., after a delay of almost 4 years) with the objective of causing harassment to the petitioner and is bereft of any truth whatsoever.”

Accordingly, the impugned order was set aside and the FIR registered in Kolkata was also quashed.

[Vijay Kumar Ghai v. State of W.B., 2022 SCC OnLine SC 344, decided on 22-03-2022]


*Judgment by: Justice Krishna Murari


Appearance by:

For the Appellants: Menaka Guruswamy, Senior Advocate

For the Respondents: Anjana Prakash, Senior Advocate


Kamini Sharma, Editorial Assistant has put this report together

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