LexNARESH KUMAR & ANR. versus THE STATE OF KARNATAKA & ANR.
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* Author [2024] 3 S.C.R. 740 : 2024 INSC 196 Naresh Kumar & Anr. v. The State of Karnataka & Anr. (Criminal Appeal No. 1510 of 2024) 12 March 2024 [Sudhanshu Dhulia* and Prasanna B. Varale, JJ.] Issue for Consideration Refusal by High Court to quash criminal proceedings against Appellants/Accused arising out of a civil transaction between Appellants and Respondent No.2, if justified. Headnotes Code of Criminal Procedure, 1973 – s.482 – Powers of the High Court under – Quashing of FIR filed by Respondent No.2 against Appellants – Appellants, employees of a bicycle manufacturing company engaged Respondent No.2 for assembling, transporting and delivering bicycles – Respondent No.2 aggrieved by the fact of payment not being commensurate with the service rendered - FIR filed under Sections 406, 420, 506, Indian Penal Code – Subsequently, settlement arrived at between the parties – Appellants paid an additional amount of INR 26,00,000/- to Respondent No.2 as full and final settlement, duly accepted by Respondent No.2 – Payment and receipt of settlement amount not disputed by parties – Chargesheet filed against Appellants – Appellants sought quashing of the FIR and proceedings arising therefrom under Section 482, CrPC on the ground of the dispute being civil in nature – Respondent No.2 objected to settlement on the ground of it being vitiated by coercion – High Court’s refusal to exercise powers under Section 482, CrPC on the ground of a prima facie case being made out – Challenged: Held: Section 482 empowers High Court to prevent abuse of process and secure ends of justice – Though the power under Section 482 should be exercised sparingly, the High Court must not hesitate in quashing criminal proceedings which are essentially of a civil nature – Judgement in Paramjeet Batra [2024] 3 S.C.R. 741 Naresh Kumar & Anr. v. State of Karnataka v. State of Uttarakhand (2013) 11 SCC 673 relied upon – Reference to observations in Randheer Singh v. State of U.P. (2021) 14 SCC 626 regarding misuse of criminal proceedings as a weapon of harassment and also Usha Chakraborty & Anr. v. State of West Bengal & Anr. 2023 SCC OnLine SC 90 for exercise of the inherent powers of the High Court under Section 482 to quash civil disputes cloaked in criminal offence – High Court erred in holding that a prima facie case was made out based on the ground that Appellants’ intention to cheat Respondent No.2 from the beginning was evident from the fact that the Appellants had cumulatively paid Respondent No.2 an amount much higher than what the latter was entitled to receive for the services rendered by him – Additional amount paid in light of the settlement, cannot be presumed as an act of cheating – Nature of dispute in present case is civil and allegation of a coerced settlement is unlikely – No FIR or Complaint by Respondent No.2 alleging coercion, amount also duly accepted by him – Mere breach of contract would not attract criminal prosecution in every case, Sarabjit Kaur v. State of Punjab and Anr. (2023) 5 SCC 360 relied upon – Every breach of contract would not amount to cheating and it must be proved that fraudulent or dishonest intention to cheat existed while making the promise, as held in Vesa Holdings (P) Ltd. v. State of Kerala, (2015) 8 SCC 293 – Present dispute was not only civil in nature but also stood settled subsequently – In the instant case, no criminal element present, only an abuse of process – Impugned Order of the High Court set aside – FIR and criminal proceedings quashed – Appeal allowed. [Para 4-8] Case Law Cited Paramjeet Batra v. State of Uttarakhand (2013) 11 SCC 673; Sarabjit Kaur v. State of Punjab and Anr. (2023) 5 SCC 360; Vesa Holdings (P) Ltd. v. State of Kerala [2015] 4 SCR 27 : (2015) 8 SCC 293 - relied on. Randheer Singh v. State of U.P. (2021) 14 SCC 626, Usha Chakraborty & Anr. v. State of West Bengal & Anr. 2023 SCC OnLine SC 90 – referred to. List of Acts Code of Criminal Procedure, 1973; Penal Code, 1860. 742 [2024] 3 S.C.R. Digital Supreme Court Reports List of Keywords Quashing of FIR; Inherent powers of the High Court; Criminal case arising from civil dispute; Inherent powers; Criminal breach of trust; Cheating; Settlement; Compromise. Case Arising From CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No.1510 of 2024 From the Judgment and Order dated 02.12.2020 of the High Court of Karnataka at Bengaluru in CRLP No.8003 of 2019 Appearance
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