2014 (10) TMI 1055 - SC - Indian Laws

Supreme Court: Prevent Misuse of Criminal Proceedings for Civil Disputes

The Supreme Court allowed the appeals, setting aside the High Court's order and the cognizance taken by the Magistrate. The Court emphasized the ... Maintainability of complaint - public servants and Gazetted officers of the State Government of Chhattisgarh - initiation of criminal proceedingswithout prior sanction from the appointing authority as per Section 197 of the Code of Criminal Procedure - Whether prior sanction of the competent authority to prosecute the Appellants, who are admittedly public servants, is mandatory Under Section 197 of the Code? - whether the complaint filed by the Respondent is motivated and afterthought, after losing the battle in civil litigation and amounts to misuse and abuse of law? - HELD THAT:- The Respondent had filed the civil suit challenging the decision of the Electricity Board in returning his tender documents on the ground that the same were not as per pre-qualifying conditions of the tender. He had thus resorted to the civil remedy. However, he failed therein as for the reasons best known to him, he sought to withdrew the same and accordingly the same was dismissed for non-prosecution. It is trite that once the suit is withdrawn, that acts as constructive res judicata having regard to the provision of Order XXIII Rule 1 of the Code of Civil Procedure. Also, when suit is dismissed under Order IX Rule 8 Code of Civil Procedure, fresh suit under Order IX Rule 9 is barred. The legal implication would be of that the attempt of the Respondent in challenging the decision of the Tender Committee in not considering his tender remained unfaulted. No doubt, the Respondent in his complaint has right to colour his complaint by levelling the allegations that the Appellants herein fabricated the records. However, on the facts of this case, it becomes difficult to eschew this allegation of the Respondent and we get an uncanny feeling that the contents of FIR with these allegations are a postscript of the Respondent after losing the battle in civil proceedings which were taken out by him challenging the action of the Department in rejecting his tender. When he did not succeed in the said attempt, he came out with the allegations of forgery. It is thus becomes clear that the action of the Respondent in filing the criminal complaint is not bonafide and amounts to misuse and abuse of the process of law. The attempt is made by the Respondent to convert a case with civil nature into criminal prosecution. In a case like this, High Court would have been justified in quashing the proceedings in exercise of its inherent powers Under Section 482 of the Code. It would be of benefit to refer to the judgment in the case of INDIAN OIL CORPORATION VERSUS NEPC INDIA LTD & ORS [2006 (7) TMI 575 - SUPREME COURT], wherein the Court adversely commented upon this very tendency of filing criminal complaints even in cases relating to commercial transaction for which civil remedy is available is available or has been availed. Order of the High Court is set aside - appeal allowed. Issues Involved:1. Necessity of prior sanction under Section 197 of the Code of Criminal Procedure for prosecuting public servants.2. Allegations of the complaint being motivated and an abuse of process after failing in civil litigation.Issue-wise Detailed Analysis:1. Necessity of prior sanction under Section 197 of the Code of Criminal Procedure for prosecuting public servants:The appellants, who are public servants, argued that no criminal proceedings could be initiated against them without prior sanction from the appointing authority under Section 197 of the Code of Criminal Procedure. The High Court acknowledged that the appellants are public servants but held that the alleged offences were not committed in the discharge of their official duties. The Supreme Court, however, noted that the actions of the appellants, including the rejection of the respondent's tender, were in furtherance of their official duties. The Court emphasized that the allegations of fabricating records were an afterthought and not part of the appellants' normal duties. The Court concluded that the requirement for prior sanction under Section 197 was applicable, and the absence of such sanction vitiated the proceedings.2. Allegations of the complaint being motivated and an abuse of process after failing in civil litigation:The respondent had initially pursued civil remedies, including a civil suit and a writ petition, both of which were dismissed. After these failures, the respondent filed a criminal complaint alleging conspiracy, cheating, and defamation. The Supreme Court found that the complaint was an attempt to give a criminal color to a civil dispute. The Court noted that the respondent's tender was rejected based on valid grounds, including non-compliance with tender conditions and unsatisfactory performance reports. The Court observed that the respondent's actions in filing the criminal complaint after losing in civil litigation amounted to an abuse of the process of law. The Court highlighted that criminal proceedings should not be used as a means to settle civil disputes or to exert pressure for settlement.Conclusion:The Supreme Court allowed the appeals, setting aside the High Court's order and the cognizance taken by the Magistrate. The Court emphasized the importance of preventing the misuse of criminal proceedings for settling civil disputes and reiterated the necessity of prior sanction for prosecuting public servants under Section 197 of the Code of Criminal Procedure. The judgment underscores the careful scrutiny required in distinguishing between civil and criminal matters and the need to prevent the abuse of legal processes.