The concept of criminalisation of Civil Disputes

The author in this article discusses the issue of criminalisation of civil disputes and how it hampers the process of justice. The author further discusses the issue with the help of various important case laws.

Introduction

There have been multiple instances of situations in which litigants have tried to give criminal nature to a civil dispute with a mala fide intention in order to pressurise the accused person or to pursue enmity towards a person or to harass a  person. It may be for speedy remedy or settlement. Let us discuss the criminalisation of civil disputes.

The courts have expressed it time and again that the civil disputes should not be criminalised for malicious reasons. They have called it an abuse of judicial process and condemned it strictly.  At the same time, courts have said coexistence of elements of civil nature and criminal nature in a series of circumstances is not impossible. However, if a civil dispute has a criminal nature, criminal proceedings can take place, but this is applicable for specific situations for which in-depth study of the facts is required.

Judicial take on the criminalisation of civil disputes

The commissioner of police and ors. Vs. DevenderAnand and ors.[1]

Recently, in this case, the Supreme Court clearly stated that criminalising a case of civil nature is an outright abuse of the process of law. It said that “”The case involves a civil dispute and for settling a civil dispute, the criminal complaint has been filed, which is nothing but an abuse of the process of law”.”The court also questioned High court that if it opined that dispute was of civil nature, no further directions should have been issued and the permission for writ petition should not have been granted. 

Mohammed Ibrahim and others v. State of Bihar and others[2]

In this case, the court decided on making of forged documents. The court stated that “” This court has time and again drawn attention to the growing tendency of complainants attempting to give the cloak of a criminal offence to matters which are essential and purely civil in nature, obviously either to apply pressure on the accused, or out of enmity towards the accused, or to subject the accused to harassment. Criminal courts should ensure that proceedings before it are not used to settle scores or pressurise parties to end civil disputes.

Alpic Finance Ltd vs P. SadasivanAndAnr[3]

The Supreme Court stated that “Though a case of breach of trust may be both a civil wrong and a criminal offence, there would be certain situations where it would predominantly be a civil wrong and may or may not amount to a criminal offence. The present case is one of that type where, if at all, the facts may constitute a civil wrong, and ingredients of the criminal offences are wanting regard to the relevant documents, including trust deed as also the correspondence following the creation of the tenancy, the submissions advanced on behalf of the parties, the natural relationship between the settlor and the trustee as mother and son and the fall out in their relationship and the fact that the wife of the co-trustee was no more interested in the tenancy, it must be held that the criminal case should not be continued”.”Advancing the judgment pronounced in Mohammed Ibrahim case, the court, in this case, explained that some cases can be both civil and criminal but the specific situations need to be analysed in order to sketch out the predominant nature of the case as civil or, criminal.

Pratibha Rani vs. Suraj Kumar[4]

The court, in this case, said that “… There are a large number of cases where criminal law and civil law can run side by side. The two remedies are not mutually exclusive but clearly coextensive and essentially differ in their content and consequence. The object of the criminal law is to punish an offender who commits an offence against a person, property or the State for which the accused, on proof of the offence, is deprived of his liberty and in some cases even his life. This does not, however, affect the civil remedies at all for suing the wrongdoer in cases like arson, accidents, etc. It is an anathema to suppose that when a civil remedy is available, criminal prosecution is completely barred. The two types of actions are quite different in content, scope and import”…..”In this case, as well the court explained that there couldbe circumstances which have elements of both civil and criminal cases side by side. And that civil and criminal remedies can coexist in certain situations. Hence, the nature and specifics of an offence play an important role.

All Cargo Movers (I) Pvt. Ltd. &Ors vs Dhanesh Badarmal Jain &Anr[5]

In this case, the court took the view that “Criminal proceedings should not be encouraged, when it is found to be mala fide or otherwise an abuse of the process of the court. Superior Courts, while exercising this power, should also strive to serve the ends of justice”.”There have been so many instances when parties have tried to manipulate the nature of a civil case into criminal proceedings with malicious reasons. Courts have always been very vocal on this issue and have always expressed displeasure at any attempt of converting a civil dispute into a criminal proceeding for personal benefits.

G. Sagar Suri &Anr. v. State of U.P. &Ors.[6]

“”Jurisdiction under Section 482 of the Code has to be exercised with great care. In exercise of its jurisdiction, the High Court is not to examine the matter superficially. It is to be seen if a matter, which is essential of a civil nature, has been given a cloak of a criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing process, a criminal court has to exercise a great deal of caution. For the accused, it is a serious matter. This court has laid certain principles on the basis of which the High Court is to exercise its jurisdiction under Section 482 of the Code. Jurisdiction under this section has to be exercised to prevent abuse of the process of any court or otherwise to secure the ends of justice”.”

State of Haryana and ors vs. Bhajan Lal and anr.[7]

Dishonest litigants often try to manipulate the court in order to initiate criminal proceedings in a civil dispute, even after getting remedy from the civil proceedings. In the instant case, the court said that where the proceeding is initiated with a mala fide intention, it needs to be quashed and set aside. It said that “”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”.”

Indian Oil Corporation v. NEPC India Ltd. & Others[8]

In a country with a backlog of so many unsolved cases, criminalising a civil dispute can be used by a litigant to spressurisethe other party and also to get speedy remedies. This practice has been condemned for long.  In this case, the Supreme Court tried to understand the various reasons due to which litigants engage in practice of scriminalisingcivil disputes and opined that “”While on this issue, it is necessary to take notice of a growing tendency in business circles to convert purely civil disputes into criminal cases. This is obviously on account of a prevalent impression that civil law remedies are time-consuming and does not adequately protect the interests of lenders/creditors. Such a tendency is seen in several family disputes also, leading to irretrievable break down of marriages/families. There is an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. An 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.”

Anand Kumar Mohattaand anr. Vs. State (Govt. of NCT of Delhi)[9]

In this case, the court again took the view that litigants may maliciously choose to convert a civil dispute into a criminal dispute in order to get speedy settlements. The court stated that “”essence of the offence lay in the use of the property entrusted to a person by that person, in violation of any direction of law or any legal contract which he had made regarding the discharge of such trust. An amount of Rs. 1 crore was to be refunded to the complainant simultaneously upon handing over of possession of the constructed area as per the agreement. It was contended that Appellants have misappropriated the amount or dishonestly used the amount contrary to the contract. The dispute has the contours of a dispute of a civil nature and does not constitute a criminal offence. Further, the complainant had not made any attempt for the recovery of money except by filing a criminal complaint. Their action thus appeared to be mala fide and unsustainable.

Section 482 Crpc

Section 482 of Crpc[10] states that “Saving of the inherent power 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”.”It basically empowers the high court to quash a fire or any criminal proceeding or an investigation in order to prevent abuse of the process of law.It does not provide any new power to court but only acts to preserve its inherent powers.

In the case State of Karnataka v. Muniswami[11] the Allahabad High Court said that “””The section is a sort of reminder to the High Courts that they are not merely courts in law, but also courts of justice and possess inherent powers to remove injustice“.

There have been cases in which the judiciary has discussed whether the High Court can rightfully invoke its powers under theseprovisions to quash the proceedings or not.

State of Andhra Pradesh v. Golconda LingaSwamy and Ors.[12]

In the instant case, the Supreme Court said that nature of powers under section 482 Crpc is of exception and not of a rule. The court also listed three circumstances under which this inherent power can be exercised-

  1. to give effect to an order under the Code,
  2. to prevent abuse of the process of the court, and
  3. To otherwise secure the ends of justice.

The court stated that “”It would be an abuse of process of the court to allow any action which would result in injustice and prevent the promotion of justice. In exercises of the powers, court would be justified to quash any proceeding if it finds that initiation or continuance of it amounts to an abuse of the process of court or quashing of these proceedings would otherwise serve the ends of justice. When no offence is disclosed by the complaint, the court may examine the question of fact”.”

The court said that the high court should not give prima facie decision to a case and that, the mere allegation of mala fide intention by an informant cannot alone be the basis for quashing a proceeding. It further stated that “”It would not be proper for the High Court to analyse the case of the complainant in the light of all probabilities in order to determine whether a conviction would be sustainable and on such premises, arrive at a conclusion that the proceedings are to be quashed. It would be erroneous to assess the material before it and conclude that the complaint cannot be proceeded with. In proceeding instituted on complaint, exercise of the inherent powers to quash the proceedings is called for only in a case where the complaint does not disclose any offence or is frivolous, vexatious or oppressive. It is not necessary that there should be meticulous analysis of the case before the trial to find out whether the case would end in conviction or acquittal”.”

State of Kerala and Ors. v. O.C. Kuttan and Ors.[13]

In this case, the court advance the view of the above case by stating that power conferred under section 482 Crpc has to be used in the rarest of rare case with utmost care. Court stated that “”…..the power of quashing the criminal proceedings should be exercised very sparingly with circumspection and that too in the rarest of rare cases, that the court will not be justified in embarking upon an inquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR “…”It also stated that “”It is too well settled that the first information report is only an initiation to move the machinery and to investigate into a scognizableoffence and, therefore, while exercising power and deciding if investigation in itself should be quashed, utmost care should be taken by the court and at that stage, it is not possible for the court to shift the materials or to weigh the materials and then come to aconclusion one way or the other”

State of U.P. v. O.P. Sharma[14]

Above mentioned view of the court was reiterated in this case when the court stated that “”High Court should be loath to interfere at the threshold to thwart the prosecution exercising its inherent power under Section 482 or under Articles 226 and 227 of the Constitution of India, as the case may be and should allow the law to take its own course. The inherent powers should be exercised sparingly and cautiously only if the court is of the opinion that it would otherwise lead to a gross miscarriage of justice”.

These cases discussed the inherent power of the high court under section 482 Crpc and nature of these inherent powers. The court explained that these powers should only be exercised in rarest of the rare cases and that the investigation should not be quashed at the threshold.

When can a FIR be quashed?

The guidelines for quashing of F.I.R. were discussed by the court in the following ‘cases’

State of Haryana and ors vs. Bhajan Lal and anr.[15]

In this case, the court analysed and devised certain categories in which the High court can exercise its power under Article 226 or inherent powers under Section 482 in order to prevent abuse of process of law, these categories are-

“”(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 scognisableoffence, 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 cognisable offence but constitute only a non-cognisable 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 Act concerned (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 Act concerned, 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”.”

R.P. Kapur v. State of Punjab[16]

In this case also the court categorised cases in which inherent power of the high court can be exercised. These categories are –

  1. “”Cases which cannot be tried or continued because there is a legal bar against the institution or continuance of the criminal proceeding. Absence of the requisite sanction is an instance of this category;
  2. Cases where the allegations in the first information report or complaint taken at its face value and accepted in their entirety do not constitute the offence alleged;
  3. Cases in which the allegations made against the accused person do constitute an offence, but either there is no legal evidence adduced or the evidence adduced clearly or manifestly fails to prove the charge. In exercising its jurisdiction, the High Court is not to embark upon an enquiry as to whether the evidence in question is reliable or not”.”

Hence, the court has provided certain categories in which the High Court can exercise its powers to quash an FIR.

Conclusion and Discussion on criminalisation of civil disputes

Since the court has stated it multiple times that there can be situations where a civil dispute has criminal elements and has to be treated like a criminal dispute, there need to exist certain guidelines in order to ensure their is no abuse of judiciary as well as outline the criminalisation of such civil disputes. Guidelines can include a Preliminary Enquiry into the case in order to ascertain if a cognisable offence has been disclosed or not. Because in case of a cognisable offence, F.I.R. investigation is necessary. In the case LalitaKumari v. Govt. of U.P.[17], the court laid down specific categories in which preliminary enquiry (PE) can be made –

  1. “”Matrimonial disputes/family disputes
  2. Commercial offences
  3. Medical negligence cases
  4. Corruption cases
  5. Cases where there is abnormal delay/laches in initiating criminal prosecution, for example, over 3 months delay in reporting the matter without satisfactorily explaining the reasons for delay”.”

The SHO (Station House Officer) should laydown the directions for the conduct of PE. Also, the PE should be made under separate registration form than that of FIR. There should be close supervision by a supervisory officer, and the enquiry should be time-bound. After PE, a final report should be made and submitted to the supervisory officer. The enquiry should involve scrutiny and examination of records and bare minimum person and should result either in the registration of a criminal case or recommendation for the case of being closed due to lack of criminality.

Hence, the courts should work out and devise the clear guidelines so that the abuse of the process of law can be prevented and also the power of quashing of proceedings can be exercised more responsibly.

Also read Mediation & Negotiation in Resolving Personal Disputes


[1]The commissioner of police and ors. Vs. DevenderAnand and ors., 2019 SCC OnLine SC 996.

[2]Mohammed Ibrahim and others v. State of Bihar and others,(2009) 8 SCC 751.

[3]Alpic Finance Ltd vs P. SadasivanAndAnr, (2001)3 SCC 513.

[4]Pratibha Rani vs. Suraj Kumar,AIR 1985 SC 628.

[5]All Cargo Movers (I) Pvt. Ltd. &Ors vs Dhanesh Badarmal Jain &Anr, AIR 2008 SC 247.

[6]G. Sagar Suri &Anr. v. State of U.P. &Ors., (2000) 2 SCC 636.

[7]State of Haryana and ors vs. Bhajan Lal and anr., 1992 AIR 604.

[8]Indian Oil Corporation v. NEPC India Ltd. & Others,  (2006) 6 SCC 736.

[9]Anand Kumar Mohatta and anr. Vs. State (Govt. of NCT of Delhi), 2018 SCC OnLine SC 2447.

[10]Code of Criminal Procedure, 1973, § 482.

[11]State of Karnataka v. Muniswami, AIR 1977 SC 1489.

[12]State of Andhra Pradesh v. Golconda LingaSwamy and Ors.,(2004) 6 SCC 522.

[13]State of Kerala and Ors. v. O.C. Kuttan and Ors., (1999) 2 SCC 651.

[14]State of U.P. v. O.P. Sharma, (1996) 7 SCC 705.

[15]State of Haryana and ors vs. Bhajan Lal and anr., 1992 AIR 604.

[16]R.P. Kapur v. State of Punjab, AIR 1960 SC 866.

[17]LalitaKumari v. Govt. of U.P., 2014 (2) SCC 1.