Case Note & Summary
The Supreme Court allowed the criminal appeal arising from Special Leave Petition (Criminal) No. 6670 of 2021 and quashed the FIR registered against the appellants -- The dispute originated from a Joint Venture Agreement dated 16.08.2010 between the appellants (first party) and Motor General Sales Ltd. (second party) for development of land at Kanpur -- The agreement contained an arbitration clause in Clause 7 providing for resolution of all disputes through arbitration -- When the joint venture failed to materialize, the second respondent lodged FIR alleging cheating, criminal breach of trust, and forgery -- The Supreme Court held that the allegations essentially constituted breach of contractual obligations and the dispute was civil in nature -- The Court emphasized that the existence of an arbitration clause and the civil nature of the dispute warranted quashing of the criminal proceedings -- The High Court's order dismissing the writ petition seeking quashing of FIR was set aside
Headnote
The Supreme Court allowed the appeal and quashed the FIR No. 0112 of 2021 registered at Police Station Hazratganj, Lucknow under Sections 406, 420, 467, 468 and 471 of Indian Penal Code, 1860 (IPC) -- The Court held that the dispute between the parties was essentially civil in nature arising from a Joint Venture Agreement dated 16.08.2010 which contained an arbitration clause -- The allegations in the FIR regarding non-handing over of possession and non-return of advance money constituted breach of contractual obligations rather than criminal offenses -- The Court emphasized that criminal proceedings cannot be used as a substitute for civil remedies -- The arbitration clause in Clause 7 of the Joint Venture Agreement provided for resolution of all disputes through arbitration under the Indian Arbitration Act -- The High Court erred in not exercising its inherent powers under Section 482 of Code of Criminal Procedure, 1973 (CrPC) to quash the FIR when it was manifestly an abuse of process of court
Premium Content
The Headnote is only available to subscribed members.
Subscribe Now to access key legal points
Issue of Consideration: The Issue of Consideration was whether the FIR registered under Sections 406, 420, 467, 468 and 471 of Indian Penal Code, 1860 (IPC) should be quashed as it essentially involved a civil dispute governed by an arbitration clause in the Joint Venture Agreement
Premium Content
The Issue of Consideration is only available to subscribed members.
Subscribe Now to access critical case issues
Final Decision
The Supreme Court allowed the appeal, set aside the High Court's order dated 30.07.2021, and quashed FIR No. 0112 of 2021 registered at Police Station Hazratganj, Lucknow under Sections 406, 420, 467, 468 and 471 IPC
