Supreme Court Restores Criminal Proceedings in Uttar Pradesh Beer Transport Fraud Case image for SC Judgment dated 10-07-2022 in the case of State of Uttar Pradesh & Anr. vs Akhil Sharda & Ors.
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Supreme Court Restores Criminal Proceedings in Uttar Pradesh Beer Transport Fraud Case

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The case of State of Uttar Pradesh & Anr. vs. Akhil Sharda & Ors. revolves around a large-scale fraud involving the alleged disappearance of trucks carrying beer in Uttar Pradesh. The Supreme Court’s ruling, delivered by a bench comprising M.R. Shah and B.V. Nagarathna, overturned the Allahabad High Court’s decision that had quashed criminal proceedings against the accused. The judgment reinstates the criminal case, emphasizing the importance of fair investigation and due process.

Background of the Case

The case pertains to a supply transaction between M/s. United Breweries Limited and M/s. Beehive Alcoweb, a licensed firm authorized to distribute beer in Uttar Pradesh. On September 7, 2018, Beehive Alcoweb placed an order for three truckloads of beer, transferring Rs. 92,98,902 for delivery—two trucks for Lucknow and one for Varanasi.

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The shipment was dispatched by United Breweries through a third-party logistics provider, M/s. SICAL Logistics Limited, which arranged vehicles for delivery. However, on September 13, 2018, both trucks lost GPS connectivity. When contacted, the drivers claimed the trucks were parked near Junabganj, Lucknow, due to a ‘no-entry’ restriction. Shortly thereafter, the trucks and beer disappeared, prompting Beehive Alcoweb to file an FIR.

Legal Proceedings

  • FIR Case Crime No. 260/2018 was registered under Sections 406 and 420 IPC at Husainganj Police Station, Lucknow, alleging criminal breach of trust and cheating.
  • Another FIR Case Crime No. 390/2018 was filed at Badalpur Police Station, Gautam Buddha Nagar, by the logistics provider, accusing the truck drivers and unknown persons.
  • The police investigation led to a charge sheet being filed against several accused, including the logistics provider, truck drivers, and other intermediaries.

Allahabad High Court’s Decision

The accused, including company officials of United Breweries and SICAL Logistics, approached the Allahabad High Court under Section 482 Cr.P.C. seeking quashing of the criminal proceedings. The High Court ruled in their favor, stating that:

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  • The case was a contractual dispute rather than a criminal matter.
  • There was no loss to the Excise Department as the beer was eventually recovered.
  • The involvement of the accused was not established beyond reasonable doubt.
  • The charge sheet lacked conclusive evidence of a criminal conspiracy.

The High Court thus quashed the criminal proceedings, leading the State of Uttar Pradesh to challenge the ruling before the Supreme Court.

Arguments by the Appellants (State of Uttar Pradesh)

  • The State argued that the High Court had exceeded its jurisdiction by quashing the proceedings without allowing a full trial.
  • The case involved a larger conspiracy of organized misappropriation of excise-controlled goods.
  • The disappearance of trucks carrying regulated goods was a serious criminal offense with broader implications.
  • GPS records indicated a deliberate attempt to manipulate tracking systems.
  • The investigation was still ongoing, and quashing the case prematurely would obstruct justice.

Arguments by the Respondents (Accused)

  • The accused contended that the dispute was purely commercial and should not have resulted in criminal proceedings.
  • They had no role in the disappearance of the beer trucks.
  • The State’s case was based on speculation rather than concrete evidence.
  • The beer was ultimately recovered, causing no financial loss to the complainant.

Supreme Court’s Observations

  • The High Court had wrongly conducted a mini-trial at the pre-trial stage.
  • Quashing criminal proceedings should only occur in rarest of rare cases.
  • The disappearance of excise-controlled goods needed thorough investigation.
  • The case involved serious economic and criminal implications, warranting further scrutiny.

The Court ruled:

“The High Court has exceeded its jurisdiction in quashing the criminal proceedings in exercise of powers under Section 482 Cr.P.C. The allegations require a fair trial and should not be dismissed prematurely.”

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Final Judgment

The Supreme Court issued the following directives:

  • The Allahabad High Court’s order quashing criminal proceedings was set aside.
  • Criminal proceedings in Case No. 5694/2019 were reinstated.
  • The matter was remanded back to the trial court for full investigation and trial.
  • The accused must face due legal process rather than seek summary dismissal.

Implications of the Judgment

  • The ruling strengthens the principle that serious economic crimes must undergo full investigation before any dismissal.
  • It limits the power of High Courts to quash proceedings under Section 482 Cr.P.C. unless an exceptional case is made.
  • The judgment serves as a precedent for similar fraud and conspiracy cases involving excise-controlled goods.
  • It reinforces the state’s authority in investigating organized financial crimes.

This ruling marks a significant moment in criminal jurisprudence, ensuring that financial fraud involving controlled substances like alcohol is thoroughly prosecuted.


Petitioner Name: State of Uttar Pradesh & Anr..
Respondent Name: Akhil Sharda & Ors..
Judgment By: Justice M.R. Shah, Justice B.V. Nagarathna.
Place Of Incident: Lucknow, Uttar Pradesh.
Judgment Date: 10-07-2022.

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