High Courts can't quash FIR when larger economic offences are manifest: Supreme Court
"Financial frauds need deeper scrutiny and cannot be brushed off as civil disputes. Dummy firms, suspected conspiracy etc. warranted probe," said, a two-judge Bench of the apex court, led by Justice Bela M Trivedi and Justice Prasanna B Varale, in an order recently.
The bench of the top court passed the judgement on hearing a case involving Dinesh Sharma against a company.
Lawyer and Advocate on Record (AOR), Krishnamohan Menon, appearing for the appellant, Sharma, said this ruling, lays down the principle that-financial disputes involving manifest fraudulent intent or larger Economic Offense should not be dismissed as mere civil matters without proper investigation, even if there is civil/commercial transaction history between the parties.
Setting aside the Rajasthan HC order, which quashed the FIR, against the company -- Emgee Cables and Communication Ltd -- the top court said, the peculiar facts and circumstances of the present case warrants thorough investigation as there was a huge amount involved.
"It is true that there is a growing tendency of parties to rope in their counterparts to harass and extract monetary transaction. It is the duty of the Court to consider the facts of each case, in its proper perspective and then to arrive at the conclusion as to whether the case warrants investigation or the proceedings are required to be quashed. The peculiar facts and circumstances of the present case warrant a thorough investigation as there was a huge amount involved," said the SC in its order.
The judgment underscores the importance of judicial scrutiny in cases where financial misconduct is alleged, ensuring that criminal liability is not evaded under the guise of contractual disputes.
The Apex Court, while doing so, has drawn an exception to the general principle that FIRs (First Information Reports) can be quashed when the Civil/Commercial transaction history between the parties indicates that the dispute is of a civil nature.
The SC has held that if Economic Offences in the form of creation of shell companies to siphon money and materials is clear from connected FIR (S), the Enforcement Directorate Orders or otherwise from the records, the intention to cheat is manifest and the High Court cannot quash an FIR filed alleging under Section 420 (Cheating) of the Indian Penal and (IPC) and other sections of the law.
Reversing the Order of the Rajasthan HC which had quashed the Subject FIR filed by the Appellant-supplier (Dinesh Sharma) against the accused Respondent-buyers, the top court said, "Financial frauds demand a higher degree of judicial scrutiny, given their far-reaching consequences on the economy, investors, and financial institutions. Thus, when an accused is engaged in conduct akin to financial fraud, courts must be cautious and weigh all material circumstances before exercising their power under Section 482 CrPC to quash proceedings."
Restoring the criminal proceedings, against the company -- Emgee Cables and Communication Ltd -- the top court said, the HC cannot ignore material produced before it and proceed only on the premise of civil/commercial transaction history between the parties.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Hindustan Times
an hour ago
- Hindustan Times
Sharda University didn't file FIR on student's suicide, SC informed
New Delhi, The Supreme Court has been informed that the Sharda University in Greater Noida, where a girl student allegedly committed suicide, did not register the FIR in the incident but her parents did and that security guards brought down her body hanging from the ceiling fan of her hostel. Sharda University didn't file FIR on student's suicide, SC informed The information was given in a status report filed by senior advocate Aparna Bhatt, who has been appointed amicus curiae in the matter by the apex court to assist it. A bench headed by Justice J B Pardiwala is likely to hear the case on Monday. In her 30-page report, Bhatt said that in the incident related to Sharda University, the FIR was registered by the parents and not by the university, and two persons named in the suicide note have been arrested. The report also said that postmortem revealed death by asphyxiation, and the investigation is ongoing and would be completed soon. In the detailed report, the amicus curiae gave a sequence of events and different versions of information available of the incident and pointed out that the immediate cause of concern was a complaint by faculty member Dr Mahinder Singh Chauhan that the deceased had forged the signatures of her teachers in the manual that documents the practical work and is monitored by the teachers with regard to progress made. "Upon further questioning, the university officials admitted that the warden did not call anyone – neither university authorities, nor the police or the hospital for an ambulance. The body was brought down by the security guards and carried out on a bedsheet by four hostel staff members. The warden eventually called the parents to tell them their daughter was in a serious condition in the emergency room ; it is assumed that other students had already informed the parents. "No call to the PCR was body was taken to a government hospital in Noida for PMR and later taken by the family for last rites. The family has not been in touch with the university or the police since then," the report said. The status report also gave the police version in which they claimed that a series of protocols to be followed in such cases were violated by the university staff. "The body has to be moved by the police, but the university staff took it upon themselves to do that. The scene was thus compromised because the warden entered and multiple people left fingerprints in the room. Secondly, the university hospital issued the medico-legal certificate to the police, which is also against protocol. However, the officers clarified, the MLC only mentioned that she had no pulse and so on, but no internal examination of the body was conducted by the university hospital," the report said. Similarly, Bhatt also gave the status of investigation in IIT-Kharagpur case where a fourth year mechanical engineering student allegedly committed suicide. The report said the FIR was registered by the university in which no one named as accused, postmortem contents are not known and investigation status is also not known as the police did not respond. The report said according to the information shared by the registrar, the deceased student had a good CGP and there was a slight dip in his grade in the last semester of third year but the same was not significant. Bhatt said despite repeated attempts, the police officer could not be contacted and hence the status of the investigation cannot be reported. "The Amicus is informed by the Registrar of IIT Kharagpur that a post mortem was conducted but they are not aware of the findings," the report said. On July 21, the top court took suo motu cognisance of the students' deaths in both these institutes and asked the amicus curiae to submit a status report with regard to the incidents. It had noted that a fourth year mechanical engineering student of the IIT, Kharagpur allegedly committed suicide three days after he returned to the institute after two-month summer break and was pursuing a five-year dual degree programme. The bench had also noted that it is the fourth unnatural death at the institute in the past seven months. Similarly, the top court had noted that in Sharda University a 21-year-old bachelor of dental surgery second-year student allegedly committed suicide leaving behind a suicide note. The bench said, "We would like to know how promptly the FIRs were registered in both the cases. We would also like to know who registered the FIRs. We would also like to know how promptly the management of the IIT, Kharagpur and Sharda University acted no sooner they learnt about the suicides. We would also like to know what has the preliminary investigation undertaken so far revealed in both the cases." The top court has taken serious note of students' suicide in institutions of higher learning, and in March set up a national task force to address the mental health concerns of students and prevent such incidents. On July 14, it had asked for a status report from the police in three states on the investigation over the suicides by students of IIT-Delhi, IIT-Kharagpur and a NEET aspirant in Kota, Rajasthan. The top court in its March 24 verdict appointed former apex court judge Justice S Ravindra Bhat as the chairperson of the NTF and said secretaries of a state's higher education department, social justice and empowerment and legal affairs apart from the ministry of women and child development would be its ex-officio members. This article was generated from an automated news agency feed without modifications to text.
Time of India
2 hours ago
- Time of India
Trial court not the first stop for investigation, says Supreme Court
NEW DELHI: SC has barred trial courts from directly entertaining complaints and ordering police to investigate them by ruling that prior to moving court for probing a cognisable offence, a person must approach jurisdictional police for registration of FIR. A bench of Justices Pankaj Mithal and S V N Bhatti said, "A magistrate ought not ordinarily entertain an application under Section 156(3) of the Code of Criminal Procedure (CrPC) directly unless the informant has availed and exhausted his remedies provided under Section 154 (3) of the code." Writing the judgment in a cross-case, Justice Mithal said magistrates must ask the informant to first approach the officer-in-charge of the police station and then the superintendent of police. "It is well recognized in law that the person aggrieved must first exhaust the alternative remedies available to him in law before approaching the court of law. In other words, he cannot ordinarily approach the court directly," he said. The bench did a conjoint reading of sections 154, 156 and 190 of the CrPC and said, "It is crystal clear that an informant who wants to report about a commission of a cognisable offence has to, in the first instance, approach the officer-in-charge of the police station for setting the criminal law into motion by lodging an FIR." "However, if such information is not accepted by the officer-in-charge of the police station and he refuses to record it, the remedy of the informant is to approach the SP concerned. It is only subsequent to availing the above opportunities that if he is not successful, he may approach the magistrate under section 156(3) of the CrPC for necessary action or of taking cognisance in accordance with section 190 of the CrPC," the bench said. SC said if the information about a cognisable offence is not being recorded by the officer-in-charge of the police station or even by the SP, then the person aggrieved or the informant "may move the court the magistrate concerned to get the FIR registered and lodged with the concerned police station."
Time of India
3 hours ago
- Time of India
Burglaries in MIDC and Mankapur: Valuables Worth Over Rs4.7 Lakh Stolen
Nagpur: In two separate incidents of burglary reported in the city, valuables worth more than Rs4.7 lakh were stolen from industrial and residential premises, prompting police to launch investigations. Tired of too many ads? go ad free now In the first incident, which occurred between 8pm on July 18 and 6.30am on July 19, unidentified burglars targeted Suprabha Hydraulic and Pneumatic Company, located at Plot No. W-129, Amar Nagar, within MIDC police station limits. The complainant, 45-year-old Prashant Shivhare of Pension Nagar, had locked the premises and left for the night on July 18. When he returned the next morning, he discovered the locks had been broken. A total of five hydraulic jacks, several iron pipes, structural components, and tin sheets were reported missing, with the total loss estimated at Rs1.65 lakh. A case has been registered against unidentified persons under relevant sections of the IPC at the MIDC police station. In a separate case under the Mankapur police station, 50-year-old Ashish Sawashere of Zingabai Takli reported a burglary that took place while he was away in Raipur with his family between July 22 and July 25. Upon his return, he found the locks of his house's compound gate and main door broken. Intruders had ransacked the bedroom closet and stolen gold and silver ornaments, along with a sports bike from a well-known Japanese brand. The total value of the stolen items was pegged at Rs3.11 lakh. A case has been registered, and further investigation is underway.
