The Supreme Court has reiterated that criminal law must not be used to settle civil disputes or pursue vested interests. In Inder Chand Bagri v. Jagadish Prasad Bagri (2025), the Court quashed IPC charges for lack of criminal intent and warned against abuse of the criminal justice system.
Introduction
In a significant ruling aimed at safeguarding the integrity of the criminal justice system, the Supreme Court has cautioned that criminal proceedings cannot be invoked to pursue vested interests, personal motives, or to exert pressure in civil disputes. The decision, delivered in Inder Chand Bagri v. Jagadish Prasad Bagri & Another (Neutral Citation: 2025 INSC 1350), reinforces the judiciary’s responsibility to remain vigilant against frivolous and mala fide prosecutions.
A Bench of Justice B.V. Nagarathna and Justice R. Mahadevan quashed criminal charges under Sections 406, 420 and 120B IPC, holding that the allegations lacked the essential ingredients required to sustain prosecution.
Background of the Case
The dispute stemmed from a partnership formed in 1976 for constructing and leasing godowns. The parties executed a supplementary agreement in 1981, and the firm was dissolved in 1997 after a civil suit led to a preliminary decree.
In 2011, the appellant executed a sale deed in favour of a third party. The complainant challenged this through a civil suit filed in 2012, and subsequently lodged a criminal complaint in 2013, alleging criminal breach of trust, cheating, and conspiracy relating to the partnership property.
The trial court took cognisance under Sections 406, 420 and 34 IPC. While the Gauhati High Court quashed the proceedings for one accused, it refused to grant relief to the appellant. This led to the criminal appeal before the Supreme Court.
Supreme Court’s Key Observations
- No Evidence of Cheating Under Section 420 IPC
The Court reiterated that a charge of cheating requires proof of dishonest or fraudulent intention at the inception of the transaction.
The complaint lacked any allegation that the appellant had such intention when the partnership was formed. The mere subsequent sale of property could not retroactively imply dishonest intent. - No Entrustment or Misappropriation Under Section 406 IPC
For criminal breach of trust, the complainant must show that:
• property was entrusted, and
• it was dishonestly misappropriated.
The partnership agreements revealed that the property originally belonged to the appellant and was contractually agreed to revert to him after the lease period. Therefore, the allegation of criminal breach of trust was inherently unsustainable. - Mutually Exclusive Allegations Cannot Be Simultaneously Invoked
The Court emphasized that accusations of cheating and breach of trust, when based on mutually inconsistent facts, cannot stand together. The complainant attempted to rely on the agreement while simultaneously alleging breach of trust on the same basis, which the Court found impermissible. - Civil Dispute Cannot Be Given a Criminal Colour
The complainant had already availed civil remedies. Invoking criminal law without evidence of criminal intent amounted to harassment.
Citing the principles laid down in State of Haryana v. Bhajan Lal, the Supreme Court held that the allegations were prima facie mala fide and meant to exert undue pressure. - Warning Against Abuse of Criminal Law
Reiterating concerns expressed in Vishal Noble Singh v. State of Uttar Pradesh, the Court observed that misuse of criminal justice mechanisms for oblique motives threatens societal harmony and burdens the justice system. Courts must remain alert to such tendencies to prevent abuse of process.
Judgment and Final Outcome
The Supreme Court held that:
- No prima facie case under Sections 406 or 420 IPC was made out.
- The allegations failed to establish essential elements of the offences.
- Continuing the criminal proceedings would result in undue harassment.
Accordingly, the Court allowed the appeal, set aside the Gauhati High Court’s order, and quashed the criminal complaint and all consequential proceedings.
Appearances
• Petitioner: Pooja Dhar, AOR
• Respondents: Somiran Sharma, AOR with Advocate Snigdha Shresth
Conclusion
This judgment is another strong reminder that criminal law cannot be used as a tool to settle scores in civil or commercial disputes. Courts are required to scrutinise allegations carefully and prevent misuse of criminal proceedings, especially when civil remedies are adequate and available.
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