Supreme Court allows appeal, sets aside order by Jutice Dr. Anshuman in a kidnapping of minor case

In Nikhil Kumar @ Paras vs. The State of Bihar & Anr. (2026), Supreme Court's Division Bench of Justices B.V. Nagarathna and Ujjal Bhuyan passed a 5-page long order dated March 25, 2026, wherein, it allowed appeal, setting aside 2-page long order by Justice Dr. Anshuman of the Patna High Court dated August 13, 2025. The order concluded:"Considering the circumstances on record, in our view, the appellant is entitled to the relief claimed under Section 482 of BNSS. We, therefore, allow this appeal and set aside the order passed by the High Court dated 13.08.2025. We direct that in the event of arrest of the appellant, the Arresting Officer shall release the appellant on bail, subject to furnishing cash security in the sum of Rs.25,000/-(Rupees Twenty-Five Thousand only) with two like sureties."

An FIR was lodged against two named accused persons, including the appellant, with the allegation that they kidnapped the daughter of the informant. The counsel for the petitioner submitted that the alleged victim was recovered and has given her statement under Section 161 of the Cr.P.C. before the police and under Section 164 of the Cr.P.C. before the Magistrate. In her statement under Section 161 of the Cr.P.C., she did not make any allegation against anyone, rather, she disclosed that she had left the house of her own will. He also submitted that the criminal antecedent of the petitioner was clean.

Justice Dr. Anshuman had observed: "6. In the present facts and circumstances of the case, and considering that the victim is a minor, this Court is not inclined to grant anticipatory bail to the petitioner. Accordingly, the prayer for anticipatory bail is hereby rejected." 

Apprehending arrest in connection with crime registered pursuant to FIR of 2024 dated June 3, 2024 lodged with P.S. Wajirganj, District Gaya in respect of the offence punishable under Section 366A of the Indian Penal Code, 1860, the appellant preferred an application before the High Court seeking anticipatory bail in terms of Section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023. The application for anticipatory bail was rejected by the High Court vide the impugned order, the instant appeal was preferred. 

Section 366 A of IPC deals with procuration of minor girl. It reads: "Whoever, by any means whatsoever, induces any minor girl under the age of eighteen years to go from any place or to do any act with intent that such girl may be, or knowing that it is likely that she will be, forced or seduced to illicit intercourse with another person shall be punishable with imprisonment which may extend to ten years, and shall also be liable to fine." Punishment procuration of minor girl 10 years and fine. It cognizable and non-Bailable which is tried by Court of Session.

The counsel for the appellant submitted that the offences alleged against him are wholly false inasmuch as there was a consensual relationship between the appellant and the so-called victim who was about 17/18 years of age at the relevant point of time; that in fact there was a marriage between the parties and subsequently owing to a marital dispute a criminal colour has been given to the entire dispute. He submitted that this Court by interim order dated December 3, 2025 had granted protection to the appellant herein subject to his cooperation in the investigation.; that the appellant was cooperating with the investigation. In the circumstances, the interim order may be made absolute. 

Supreme Court's prder is apparently based on the fact that the alleged victim  had gone with the petitioner of her own will. She had also stated that she married the petitioner and that they developed a physical relationship on 1–2 occasions.

High Court quashes cognizanece order by Trial Court in exercise of its power under Section 482 Cr.P.C

"If the offences which are absolutely private in nature, having no impact upon society, are brought to the notice of the Court and it is found that no useful purpose would be served in keeping the litigation of that kind pending, the invocation and exercise of the power under Section 482 Cr.P.C. would be justified."

-Justice Ashutosh Kumar, Patna High Court in Abhishek Kumar vs. The State of Bihar & Ors. (2021)

Relying on Supreme Court's decisions in State of Haryana & Ors. vs. Ch. Bhajan Lal & Ors.:AIR 1992 SC 604; Gian Singh vs. State of Punjab & Anr.:(2012) 10 SCC 303; Narinder Singh & Ors. vs. State of Punjab & Anr.:(2014) 6 SCC 46; State of Maharashtra vs. Vikram Anantrai Doshi:(2014) 15 SCC 29; Central Bureau of Investigation vs. Maninder Singh:(2016) 1 SCC 389; and State of Tamil Nadu vs. R. Vasanthi Stanley & Ors.:(2016) 1 SCC 376, upon hearing in Abhishek Kumar vs. The State of Bihar & Ors. (2021), Justice Ahustosh Kumar quashed the order of dated August 12, 2015 by Judicial Magistrate-Ist Class, Danapur in a Complaint Case of 2014, whereby cognizance has been taken against him under Sections 341, 323, 379 and 452 of the Indian Penal Code (IPC). All further proceedings pursuant to the order of cognizance were stand quashed. It all began with a dispute between them regarding measurement of land to demarcate their respective boundaries and which was pending adjudication before the L.R.D.C., Danapur in a Land Settlement Case No. 111 of 2012-13.

Abhishek Kumar, the petitioner is the son of Sri Braj Kishore Prasad and the second respondent is Monu, son of Dharnidhar Mishra are neighbors in Patna. The petitioner was the son of an Advocate of the Patna High Court. The father of the complainant/opposite party No. 2, the second respondent also was a practicing Advocate of the High Court. 

The Court recorded that "there are too many differences and contradictory complaint petitions, one filed by the opposite party No. 2 and the other by his father, both of which relate to the same occurrence which took place on October 10, 2014. The father of the petitioner and the father of the opposite party No. 2 are the practicing Advocates of the High Court and are also neighbours in real life. For some reason or the other, some dispute had arisen between them with respect to demarcation of their boundaries, which led to a series of litigation between them. It is the presumption of the opposite party No. 2 as also his father that the police case against the opposite party No. 2 and his brother has been filed at the instance of the petitioner and his father and that the police party had assaulted opposite party No. 2 and his brother as also his father only because the petitioner and his father had brought them into their collusion. The purpose for filing such cases was only to settle scores between the two families, which were on very good terms in the past. An effort was made by the High Court to have the dispute between the parties settled. 

Justice Kumar observed:"it appears that the accusation has been levelled only to wreak vengeance because of the dispute which had arisen between the two neighbours. Under Section 482 of the Code of Criminal Procedure (in short the Cr.P.C.) a provision has been made in the nature of savings of the inherent powers of the Court as a superior Court to make such orders which are necessary for preventing the abuse of the process of Court or to otherwise secure the ends of justice....Broadly speaking, if the High Court is the of the view that continuance of any litigation would only be an abuse of the process of the Court, it would be justified in preventing such abuse and exercising the powers under Section 482 of the Cr.P.C. to quash such proceedings."

He added: The invocation of this jurisdiction of the Courts to quash the proceedings at the initial stages on the ground that a settlement has been arrived at between the parties may be permissible under certain circumstances but it cannot be treated to be the same as the invocation of the jurisdiction for the purposes of compounding an offence which is governed by the provisions contained in Section 320 of the Cr.P.C. This has been clarified by the Supreme Court in order to lay at rest the controversy whether provision under Section 482 Cr.P.C. could be invoked even if the offences are non-compoundable. While exercising such powers under Section 482 Cr.P.C., even though the matter has not fully been settled between the parties or relates to offences which are not compoundable, the Courts are required to give due regard to the nature and gravity of the offence. In cases of heinous and serious offences involving offences ought not be exercised normally.

The 10 page-long judgement concluded:"It is expected that the parties shall jettison their differences and would file necessary applications before the Court below seeking to withdraw such prosecution for their common good. On the filing of such applications by the parties before the Court below, the Court below shall pass necessary orders in accordance with law, which shall be in consonance with the spirit in which the present order of quashing of the prosecution has been passed."

 

Chargesheet filed, no ground for refusal to exercise jurisdiction under Section 482, Cr.P.C.: Supreme Court

Saving of inherent powers of High Court-Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice.

-Section 482 in The Code of Criminal Procedure, 1973

In Abhishek Mishra v. The State of Uttar Pradesh & Ors. [Special Leave to Appeal (Crl.) No(s). 2227/2025, Supreme Court's division bench of Justices B.R. Gavai and A.G. Masih observed that even after a charge sheet is filed, the High Courts must assess whether a prima facie case exists against the accused. The case was filed in the Supreme Court on January 27, 2025. It was registered on February 12, 2025. 

The order reads:"The High Court has non-suited the petitioner only on the ground that the charge-sheet was filed and as such the petition filed under Section 482 Cr.P.C. for quashing does not merit consideration. This Court, time and again, has held that merely filing of charge-sheet is not a ground for refusal to exercise jurisdiction under Section 482 Cr.P.C. Even after filing of the charge-sheet, the High Court is expected to take into consideration whether a prima facie case is made out or not." It refers to Allahabad High Court. 

Besides the State of UP, the other respondents were SP, SHO and Shiv Chand. Supreme Court's website wrongly mentions names of two judges of the High Court as judge of the Gonda District Court, UP.

The case before the Supreme Court arose out of final judgment and order dated December 4, 2024 passed by Justices Vivek Chaudhary and Om Prakash Shukla of the High Court of Judicature at Allahabad, Lucknow Bench.  

The High Court's order reads:"Learned counsel for the petitioner is not present. Learned A.G.A., who is present for the State, on instructions, states that in this case, charge sheet has been filed in Court. In view thereof, no further orders are required to be passed in the present writ petition. Accordingly, the present writ petition is consigned to record. This of course is without prejudice to the rights of the petitioner to challenge the charge sheet or to take appropriate available remedy as per law. Interim order, if any, stands discharged." Notably, counsels for petitioner-A.Z. Siddiqui and Sunny Singh were not present. 

Disapproving High Court's unreasoned order, Supreme Court concluded: "We are of the considered view, that the High Court has totally failed to exercise the jurisdiction vested in it. By way of an ad interim order, there shall be stay of further proceedings before the Trial Court qua the petitioner in connection with Case Crime No.0027/2023 registered at P.S. Kotwali City, District Gonda, until further orders." Significantly, unreasoned orders are void. 

Supreme Court to examine permissibility of piecemeal compromises in criminal cases

In Puneet Kumar @ Punit Kumar vs. State of Haryana and Others (2024), Supreme Court's bench of Justice Hrishikesh Roy and Justice S.V.N. Bhatti  issued notice on a plea challenging a decision of Punjab & Haryana High Court wherein it has been contended that courts cannot accept piecemeal compromises in criminal cases. 

Notably, High Courts have taken contrary positions in this regard. The issue to be considered is whether on the basis of the compromise reached between the informant and the petitioner (one of the accused),  the quashing of the FIR on the petition filed under Section 482 Cr.P.C. should have been ordered by the Court. In this case, the petitioner was not named in the FIR and was roped in on the basis of the statement by a co-accused. 

The Court observed: "On the legal aspect, the counsel draws the attention of the Court to the chart at “Page-D” to point out that different High Courts had taken contrary positions on the issue as to whether on the face of compromise with one or few of the accused in the case, the case can be part quashed by the Court".  The Court issued the notice on December 18, 2024.

The High Court in question has held that piecemeal settlement between the complainant or victim and some of the accused would be in conflict with the mandate of Section 223 (what persons may be charged jointly) of CrPC. This Section had now been numbered as Section 246 of the Bharatiya Nagarik Suraksha Sanhita (BNSS).

In Rakesh Das v. State of Haryana and Another, the High Court's division bench of Justices Sureshwar Thakur and Sudeepti Sharma has passed their judgement on November 12, 2024. It ruled that the courts cannot accept piecemeal compromises to save some of the accused in criminal cases. It observed that if such piecemeal compromises are allowed public prosecutors would be unable to prove the joint criminal liability in the case. If relief is granted in piecemeal manner it will have ramifications on the trial of other accused persons. 

The interim order dated December 18, 2024 reads:"In the meantime, the trial may continue but not qua the petitioner." 

FIR can be quashed even after filing of chargesheet: Supreme Court

The judgment of the Supreme Court in Anand Kumar Mohatta v.State (Govt. of NCT of Delhi), 2019 11 SCC 706 pointed out that there is nothing in the words of Section 482 of Cr.P.C. which restricts the exercise of the power of the Court to prevent the abuse of process of court or miscarriage of justice only to the stage of the FIR. It is settled principle of law that the High court can exercise jurisdiction under Section 482 of Cr.P.C even when the discharge application is pending with the trial court. It observed: "it would be a travesty to hold that proceedings initiated against a person can be interfered with at the stage of FIR but not if it has advanced, and the allegations have materialized into a charge sheet. On the contrary it could be said that the abuse of process caused by FIR stands aggravated if the FIR has taken the form of a charge sheet after investigation. The power is undoubtedly conferred to prevent abuse of process of power of any court."

Section 482 of Cr.P.C reads as follows: - “482. Saving of inherent power of the High Court.- Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice.”

The Court relied on the decision in Indian Oil Corporation v. NEPC India Ltd. and others 2006 (6) SCC 736, wherein the Court observed as follows: - “13. ….. Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure through criminal prosecution should be deprecated and discouraged…..” The Court noticed a growing trend in business circles to convert purely civil dispute into criminal cases. 

The Court drew on Court's decision in Joseph Salvaraj A. v. State of Gujarat (2011) 7 SCC 59. In the case of Joseph Salvaraj A., the Court while deciding the question whether the High Court could entertain the 482 petition for quashing of FIR, when the charge sheet was filed by the police during the pendency of the 482 petition, observed: -“16. Thus, from the general conspectus of the various sections under which the appellant is being charged and is to be prosecuted would show that the same are not made out even prima facie from the complainant’s FIR. Even if the charge-sheet had been filed, the learned Single Judge could have still examined whether the offences alleged to have been committed by the appellant were prima facie made out from the complainant’s FIR, charge-sheet, documents, etc. or not.”

It also relied on the decision in State of Haryana and Ors. v. Bhajan Lal and Ors.(1992). The Court has set out the categories of cases in which the inherent power under Section 482 of Cr.P.C. can be exercised.  Para 102 of the judgment reads as follows: -“102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.
(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.
(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.
(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.
(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.
(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.
(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.”

 

Cognizance order of Judicial Magistrate 1st Class, Patna quashed: Patna High Court

Relying on the decision of the Supreme Court in Gian Singh v. State of Punjab (2012), Patna High Court's Justice Prabhat Kumar Singh concluded that "the continuance of criminal proceeding after compromise between the parties would amount to an abuse of the process of the court, hence the impugned cognizance order dated 19.12.2022, passed in Complaint Case No. 3309C/2018 stands quashed with respect to these petitioners" in Modi-Mundipharma Beauty Products Pvt. Ltd v. State of Bihar and Om Raj Enterprises (2024). The petitioners were Modi-Mundipharma Beauty Products Pvt. Ltd, Umesh Kumar Modi, Chairman, Modi Mundipharma Beauty Products Pvt. Ltd and Sanjay Kumar Garg.

The petitioners' counsel submitted that Umesh Kumar Modi, petitioner no.2 and Sanjay Kumar Garg, petitioner 3 are respectively Chairman and Director of the Company. They were not directly involved with the day to day affairs of the Company. The allegations made by the complainant are related with settlement of accounts and are out and out a civil dispute and no criminal case is made out in the transaction in question.

It was jointly prayed by the parties that though the offences for which cognizance has been taken are not compoundable, however, good sense has prevailed and dispute has amicably been settled between the parties. The parties have voluntarily and willingly settled the dispute and a joint compromise agreement dated March 15, 2024 has been executed between them. They submit that considering the private and trivial nature of dispute and compromise between the parties, continuation of the criminal proceeding would amount to an abuse of the process of the court. 

They drew on Supreme Court's decision in Naresh Kumar v. State of Karnataka (2024) to state that even in that case was of non- compoundable offences. In view of the compromise arrived at between the parties, they prayed for the quashing of the proceeding by the High Court in exercise of power under Section 482 of Code of Criminal Procedure, 1973. Section 482 reads: "Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice." Section 482 does not grant new powers to the High Court but rather preserves its inherent powers to prevent abuse of court processes and ensure justice. Section 482 can be used to quash even non-compoundable offences.

The application was filed for quashing order dated December 19, 2022, passed by the Judicial Magistrate 1st class, Patna in Complaint Case No. 3309C/2018 by which cognizance has been taken for the offence punishable under sections 418, 468, 471 and 120B of the Indian Penal Code (IPC) against these petitioners as well as for setting aside the entire criminal proceedings.

Supreme Court disapproves of High Court's dismissal of criminal writ petition against questionable FIR, quashes FIR

On March 19, 2024, Supreme Court's bench of Justices B.R. Gavai and Sandeep Mehta concluded that FIR bearing No. 31 of 2020 against Shiv Prasad Semwal, the appellant is nothing but gross abuse of process of law because the allegations as set out in the FIR do not disclose necessary ingredients of any cognizable offence. Hence, the impugned FIR and all proceedings sought to be taken against the appellant are hereby quashed and set aside." The judgement was delivered in Shiv Prasad Semwal v. State of Uttarakhand (2024). It tantamounts to disapproval of the order dated January 20, July, 2020 passed by the Single Judge of High Court of Uttarakhand whereby it had dismissed the Criminal Writ Petition No. 881 of 2020 preferred by the appellant for assailing FIR registered for the offences punishable under Sections 153A, 500, 501, 504, 34 and 120B of the Indian Penal Code, 1860 (IPC) at P.S. Muni Ki Reti, District Tehri Garhwal. 

The appellant submitted that the allegations made in the FIR did not disclose commission of any cognizable offence. But the High Court dismissed the criminal writ petition filed by the appellant which was challenged in the appeal before the Supreme Court. The appellant's counsel urged that admitted allegations as set out in the FIR do not disclose the necessary ingredients constituting the offences under Sections 153A, 504 read with Sections 34 and 120B IPC and hence, the continued investigation of the impugned FIR is nothing short of gross abuse of process of law. He contended that the words ‘spoken’ or ‘written’ attributed to the accused were not such which promoted or attempted to promote on the grounds of religion, race, place of birth, residence, language, caste or community or any other ground whatsoever, disharmony or feelings of enmity, hatred or ill-will between different religions, racial, language or regional groups or castes or communities, or committed any act which is prejudicial to maintenance of harmony between different religions, racial, language or regional groups or castes or communities, andwhich disturbed or was likely to disturb the public tranquillity. It was submitted that there is no communal, caste, religion, race or place of birth based imputation in the news article published on the online news portal of Parvatjan. Thus, ingredients of the offence punishable under Section 153A IPC are not made out from the FIR.

The Court has noted that the entire case as set out in the impugned FIR is based on the allegation that the Facebook news post uploaded by Gunanand Jakhmola, one journalist was caused to be published on Parvatjan news portal being operated by the appellant. It observed that "Upon careful perusal of the offending news article, reproduced (supra), it is crystal clear that there is no reference to any group or groups of people in the said article."

In the case of Manzar Sayeed Khan v. State of Maharashtra (2007), the Supreme Court had held that for applying Section 153A IPC, the presence of two or more groups or communities is essential, whereas in the present case, no such groups or communities were referred to in the news article. The Court relied on  this 2007 verdict. 

The Court examined the rationale behind application of Section 504 IPC by the investigating agency. This offence can be invoked when the insult of a person provokes him to break public peace or to commit any other offence. It found that there is no such allegation in the FIR that owing to the alleged offensive post attributable to the appellant, the complainant was provoked to such an extent that he could indulge in disturbing the public peace or commit any other offence. It inferred that "the FIR lacks the necessary ingredients of the said offence as well. Since we have found that the foundational facts essential for constituting the substantive offences under Sections 153A and 504 IPC are not available from the admitted allegations of prosecution, the allegations qua the subsidiary offences under Sections 34 and 120B IPC would also be non est."

In State of Haryana v. Bhajan Lal (1992), the Supreme Court has held the following:
“102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.

(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused. 

(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156 (1) of the Code except under an order of a Magistrate within the purview of Section 155 (2) of the Code.

(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.

(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.

(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused. 

(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.

(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.

Drawing on Supreme Court's judgement in State of Haryana v. Bhajan Lal, the Court examined the principles governing the scope of exercise of powers by the High Court in a petition under Article 226 of the Constitution of India and under Section 482 CrPC seeking quashing of criminal proceedings, Justice Gavai led bench reached its own conclusion.

All breach of contract cases are not criminal cases, Supreme Court sets aside Karnataka High Court judgement

In Naresh Kumar v. State of Karnataka, the Supreme Court's bench of Justices Sudhanshu Dhulia and Prasanna B. Varale set aside the appeal and the order of Justice Suraj Govindaraj, Karnataka High Court dated December 2, 2020. The Court quashed the criminal proceedings arising out of FIR No.113 of 2017. The Court concluded that "Essentially, the present dispute between the parties relates to a breach of contract....In the case at hand, the dispute between the parties was not only essentially of a civil nature but in this case the dispute itself stood settled later as we have already discussed above. We see no criminal element here and consequently the case here is nothing but an abuse of the process."  

In this case, Naresh Kumar and Rajesh Kapoor, the appellants had challenged the order of the Karnataka High Court by which their petition under Section 482 of Criminal Procedure Code for quashing the FIR has been dismissed in December 2020. The case of the appellants before the High Court of Karnataka was that the FIR which was instituted by Wasim Ahmed, the complainant i.e. respondent no. 2 is primarily a civil dispute and it has no criminal element and the entire criminal proceedings initiated against the appellants is nothing but an abuse of the process and consequently, they had invoked the extraordinary powers of the High Court under Section 482 of the Criminal Procedure Code. 

The two appellants before the Court are the Assistant Manager (Marketing) and the Managing Director of a company, which is a manufacturer of bicycles. Respondent no.2 was given a contract, for the assembly of bicycles, their transport and their delivery, at the rate of Rs.122/- for each bicycle, and since they had assembled 83,267 bicycles, they raised invoices amounting to Rs. 1,01,58,574/- and were liable to be paid the same. But respondent no.2 contended that instead, a payment of only Rs.35,37,390/- was given by the appellants. Hence, it was a case of criminal breach of trust and cheating and the First Information Report No. 113 of 2017 against the appellant no. 1 was filed on May 24, 2017 under Sections 406, 420 and 506 of the Indian Penal Code (IPC) at P.S. Doddaballapura, Bangalore Rural District. Later on, a Chargesheet dated May 30, 2019, was filed in the court where both the appellants were made accused. 

Supreme Court's judgement records that subsequent to the filing of FIR there was an admitted settlement between the appellants and respondent No. 2 by a Compromise Deed dated December 27, 2017 by which as a full and final settlement between the two parties, an additional amount of Rs. 26 lakhs were to be paid by the appellant, which has been duly given and accepted. This amount was deposited in the account of respondent no. 2 on December 29, 2017. This was done by the appellants in order to give a quietus to the whole situation and to bring peace, according to the appellants. Therefore, as of now, a total amount of Rs.62 lakhs as against Rs. 1,01,58,574/- which was claimed by the complainant has been admittedly paid. The case of the respondent no. 2 against the settlement dated December 27, 2017 is that the respondent no. 2 was coerced in entering into this settlement and this is not a settlement arrived at by the free will of the complainant and therefore the prosecution of the appellants is necessary under the  criminal law.

Supreme Court observed that the High Court did not accord any importance to the fact that settlement had  occurred by a Compromise Deed dated December 27, 2017.  It found it strange that the High Court refused to accept the contention of the appellants that the dispute between the parties in any case is civil in nature. The High Court was of the opinion that since the appellants had claimed that the complainant assembled only 28,995 bicycles, which would make them liable to pay only an amount of Rs.35 lakhs, but instead the appellants had paid an amount of Rs.62 lakhs which shows that the actual number of bicycles which were assembled by the complainant was much more than 28,995 bicycles, as claimed by the appellants and therefore, the appellants had an intention to cheat the complainant right from the beginning. Thus, it was held by the High Court that prima facie a case of cheating is made out against the appellants. 

After hearing the counsels for both the parties, the Supreme Court held the considered view that "the findings of the High Court on this aspect are not correct. We do not agree with the findings arrived at by the High Court for two reasons. Firstly, the dispute between the parties is primarily, civil in nature. It is after all a question of how many bicycles the complainant had assembled and the dispute between the parties is only regarding the figure of bicycles and consequently of the amount liable to be paid. This is a civil dispute." 

It observed that "The complainant has not been able to establish that the intention to cheat the complainant was there with the appellants right from the beginning. Merely because the appellants admit that only 28,995 bicycles were assembled, but they have admittedly paid an amount of Rs. 62,01,746/- to the complainant, which is of a much higher number of bicycles, would not prove that the intention of the appellants right from the beginning was to cheat. This amount i.e. the additional amount of Rs. 26 lacs have been paid by the appellants pursuant to a settlement. The reasons and the logic for arriving at a settlement are quite different. In this case it seems, it is primarily to bring a quietus to the dispute and to have peace and to avoid litigation. The mere fact that the appellants have paid an additional amount pursuant to the settlement, cannot be presumed as an act of cheating."

As to the complainant's claim that he was coerced into the settlement, the Court noted that the allegation that the complainant was coerced into a settlement, looks unlikely for two reasons. First, there is no FIR or Complaint that the complainant was coerced into this settlement. Secondly, this amount was duly accepted by the complainant. 

The Court observed that this is a case where the inherent powers should have been exercised by the High Court under Section 482 of the Criminal Procedure Code as the powers are there to stop the abuse of the process and to secure the ends of justice. Section 482 empowers the High Court with inherent power "to prevent abuse of the process of any Court or otherwise to secure the ends of justice." It does not grant new powers to the High Court but rather preserves its inherent powers to prevent abuse of court processes and ensure justice. Section 482 can be used to quash even non-compoundable offences.

Drawing in the judgement in Paramjeet Batra v. State of Uttarakhand (2013), the Court recognized that although the inherent powers of a High Court under Section 482 of the Code of Criminal Procedure should be exercised sparingly, yet the High Court must not hesitate in quashing such criminal proceedings which are essentially of a civil nature. This power is to be used only for the purpose of preventing abuse of the process of any court or otherwise to secure ends of justice. It pointed out that the High Court must see whether a dispute which is essentially of a civil nature is given a cloak of criminal offence. In such a situation, if a civil remedy is available and is, in fact, adopted as has happened in this case, the High Court should not hesitate to quash the criminal proceedings to prevent abuse of process of the court.”  Supreme has held that "criminal proceedings cannot be taken recourse to as a weapon of harassment" in Randheer Singh v. State of U.P. (2021). The Court has reiterated in Usha Chakraborty v. State of West Bengal & (2023) that where a dispute which is essentially of a civil nature, is given a cloak of a criminal offence, then such disputes can be quashed, by exercising the inherent powers under Section 482 of the Code of Criminal Procedure. 

Justice Dhulia authored the judgement dated March 12, 2024. Drawing on the Supreme Court's judgement in Sarabjit Kaur v. State of Punjab (2023), he underlined that "A mere breach of contract, by one of the parties, would not attract prosecution for criminal offence in every case". He also relied on the Court's verdict in Vesa Holdings (P) Ltd. v. State of Kerala, (2015) which dealt with the distinction between the offence of cheating and a mere breach of contractual obligations and held that every breach of contract would not give rise to the offence of cheating, and it is required to be shown that the accused had fraudulent or dishonest intention at the time of making the promise.