FIR Quashed: Supreme Court Rules in Favor of Sarabjit Kaur in Property Dispute Case
The Supreme Court of India recently delivered a significant judgment in Sarabjit Kaur v. State of Punjab & Anr., quashing an FIR related to a property transaction dispute. The case highlights the misuse of criminal proceedings in civil disputes and reaffirms that breach of contract does not automatically amount to cheating unless there is fraudulent intent from the outset.
Background of the Case
The dispute arose when Sarabjit Kaur entered into an Agreement to Sell a plot measuring one kanal to Sarabjit Kaur W/o Darshan Singh (Respondent No. 2) on 18.11.2013. The property was originally owned by Malkit Kaur, who had executed an agreement in favor of the appellant on 27.05.2013. The sale deed was initially scheduled to be executed on 25.06.2014, but the date was later extended to 24.12.2014 upon the payment of an additional sum of ₹75,000.
However, the transaction did not materialize, and instead of seeking legal recourse through civil proceedings, Respondent No. 2 filed multiple complaints with the police, leading to the registration of FIR No. 430 dated 16.10.2017 under Sections 420, 120-B, and 506 of the Indian Penal Code (IPC).
Petitioner’s Arguments (Sarabjit Kaur)
The appellant, represented by her legal counsel, argued:
- The dispute was purely civil in nature and should have been resolved through civil remedies such as a suit for specific performance.
- Respondent No. 2 had filed multiple complaints, with the first complaint dated 30.09.2015 seeking only the return of money, without any allegations of cheating.
- The initial complaint was investigated, and on 18.05.2016, the police concluded that the matter was civil, recommending no police action.
- A second complaint filed on 05.10.2016 was also investigated and closed on similar grounds.
- Only in the third complaint, filed on 15.06.2017, were allegations of cheating added, indicating an attempt to pressure the appellant.
- Respondent No. 2 never issued a legal notice or filed a civil suit before resorting to criminal proceedings.
Respondent’s Arguments (State of Punjab & Darshan Singh)
The respondents, represented by the State of Punjab’s counsel, countered:
- A charge sheet had already been filed, and the appellant could present her defense before the trial court.
- The criminal case should proceed as there were allegations of cheating and criminal conspiracy.
Supreme Court’s Judgment
The Supreme Court bench comprising Abhay S. Oka and Rajesh Bindal ruled in favor of the appellant and quashed the FIR. The Court observed:
“A breach of contract does not give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction. Merely failing to keep a promise does not amount to cheating.”
The Court noted the following key findings:
- The first two complaints made no allegations of cheating, and the FIR was based on a third, improved complaint.
- The complainant (Respondent No. 2) never attempted to enforce the agreement through civil proceedings.
- The complaint was filed nearly three years after the last agreed-upon date for executing the sale deed.
- Using criminal law to pressurize a party in a civil dispute is an abuse of process.
As a result, the Court quashed FIR No. 430 and all subsequent proceedings.
Legal Precedents Considered
The Supreme Court referred to established principles in past judgments:
- Suresh v. Mahadevappa (2005) 3 SCC 670 – Criminal proceedings should not be used to settle civil disputes.
- Thermax Ltd. v. K.M. Johny (2011) 13 SCC 412 – Fraudulent intent must exist at the inception of a transaction for it to be considered cheating.
- Hridaya Ranjan Prasad Verma v. State of Bihar (2000) 4 SCC 168 – Mere breach of contract does not constitute a criminal offense.
Implications of the Judgment
For Civil Disputes:
- Parties must seek civil remedies such as a suit for specific performance instead of resorting to criminal complaints.
- The ruling discourages the misuse of criminal law to recover money in contractual disputes.
For Law Enforcement:
- Police must conduct thorough investigations before registering FIRs in commercial and property disputes.
- The judgment emphasizes that complaints should not be entertained if previous investigations have already ruled them as civil matters.
For Legal Practitioners:
- The ruling provides a strong basis to seek the quashing of FIRs where civil disputes are wrongly criminalized.
- Legal professionals should advise clients to pursue civil litigation when contract enforcement is at issue.
Conclusion
The Supreme Court’s ruling in Sarabjit Kaur v. State of Punjab & Anr. is a landmark judgment reinforcing the distinction between civil and criminal liability. By quashing the FIR, the Court has set an important precedent that breach of contract should not be equated with criminal misconduct unless there is clear evidence of fraud from the beginning of the transaction.
The judgment ensures that individuals and businesses are not harassed with criminal cases for contractual disputes and encourages the use of proper civil remedies. This ruling will significantly impact similar cases where complainants attempt to misuse criminal law for financial recovery.
Petitioner Name: Sarabjit Kaur.Respondent Name: State of Punjab & Anr..Judgment By: Justice Abhay S. Oka, Justice Rajesh Bindal.Place Of Incident: Punjab.Judgment Date: 28-02-2023.
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