DATE: 13.02.2026
COURT: Supreme Court of India
BENCH: Justice Vikram Nath and Justice
Sandeep Mehta
FACTS:
The appellant approached the Supreme Court
by way of a criminal appeal arising out of a Special Leave Petition,
challenging the order dated 16 December 2020 passed by the High Court of
Judicature at Orissa, which had dismissed his criminal revision petition. The
revision petition before the High Court challenged the order of the
Sub-Divisional Judicial Magistrate, Berhampur, dated 24 December 2011, by which
cognizance was taken against the appellant in connection with FIR No. 55 of
2009 for offences under Sections 420, 423, 468, 471, and 201 of the Indian
Penal Code, 1860. The FIR originated from a complaint forwarded to the police
under Section 156(3) of the Code of Criminal Procedure, 1973, and culminated in
the filing of a charge sheet under Section 173(2) CrPC.
The appellant and the
respondent-complainant were biological brothers, though the respondent had been
adopted by one Brundaban Nayak, who died issueless, leaving behind substantial
property that devolved upon the respondent. The appellant claimed that in 1992
the respondent executed a gift deed in his favour, pursuant to which the
appellant sold portions of the property between 1997 and 2005. The relationship
between the parties deteriorated in 2009, leading to the criminal complaint
alleging forgery of signatures, fabrication of a notarised gift deed, illegal
transfer of property, and criminal intimidation. During the pendency of the
proceedings before the Supreme Court, mediation was attempted and eventually
resulted in the appellant paying ₹60 lakhs to the respondent as compensation
for the disputed transactions.
ISSUES: The principal issue before the
Supreme Court was whether the continuation of criminal proceedings for offences
of cheating, forgery, and related charges was justified when the dispute
between close family members was predominantly civil in nature and had
subsequently been resolved through payment of substantial compensation pursuant
to court-facilitated settlement efforts.
JUDGEMENT WITH REASONING:
The Supreme Court allowed the appeal, set
aside the orders of the Sub-Divisional Judicial Magistrate dated 24 December
2011 and the High Court dated 16 December 2020, and quashed all criminal
proceedings against the appellant arising out of FIR No. 55 of 2009 and the
related charge sheet. The Court further directed that no civil or criminal
proceedings shall be initiated by either party in respect of the disputed lands
forming the subject matter of the charge sheet.
The Court noted that the dispute stemmed
from a property transaction between brothers and was deeply rooted in questions
of title, validity of documents, and financial entitlement, which are issues
traditionally adjudicated in civil proceedings. It took into account the
appellant’s contention that the criminal case had been instituted after the
relationship between the parties soured and that the allegations were
essentially an attempt to give a criminal colour to a civil dispute. The Court
also observed that the investigation itself suffered from deficiencies,
including the failure to subject admitted signatures to expert examination,
thereby casting doubt on whether the essential ingredients of the alleged
offences were prima facie established.
A significant factor influencing the
Court’s decision was the subsequent settlement between the parties under the
supervision of the Court. The appellant had paid ₹60 lakhs as compensation to
the respondent-complainant, an amount fixed by the Court after considering
benchmark and market values of the disputed property. The respondent acknowledged
receipt of the entire amount. In these circumstances, the Court held that
permitting the criminal prosecution to continue would not serve the ends of
justice, particularly when the dispute had a predominant civil flavour and had
been effectively resolved. The Court therefore exercised its inherent and
extraordinary jurisdiction to prevent abuse of the criminal process and to
secure a complete and final resolution of the dispute.
ANALYSIS:
The judgment underscores the Supreme
Court’s consistent approach in preventing the misuse of criminal law to settle
disputes that are essentially civil in nature. By closely examining the factual
matrix, the Court reaffirmed that allegations of cheating or forgery arising
out of family property transactions must be scrutinised with caution,
particularly where the dispute centres on title, validity of documents, and
financial entitlement. The case highlights the principle that criminal
proceedings should not be permitted to continue merely because civil remedies
may be time-consuming or less coercive. The Court’s analysis reflects a
balancing exercise between protecting the complainant’s rights and ensuring
that the criminal justice system is not deployed as a pressure tactic in
private disputes.
Equally significant is the Court’s reliance
on subsequent events, especially the court-facilitated settlement and payment
of substantial compensation, in determining whether continuation of prosecution
would serve the interests of justice. The decision demonstrates that while settlement
alone does not automatically extinguish criminal liability, it becomes a
relevant and decisive factor where the offences alleged are not grave in nature
and the dispute has overwhelmingly civil overtones. By quashing the proceedings
and barring future litigation over the same subject matter, the Court ensured
finality, avoided multiplicity of proceedings, and reinforced the principle
that the criminal process should not be allowed to degenerate into an
instrument of harassment once its underlying civil dispute has been
conclusively resolved.
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