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Supreme Court imposes ₹25 lakh costs on litigant for initiating criminal proceedings in civil dispute

The observations came in a judgment quashing the criminal proceedings in a cheating and forgery case. The same arose out of a dispute over a share-pledge agreement and loan disbursement.

The Allahabad High Court had refused to quash the FIR and summons to the appellants before the Supreme Court.

The top court was very critical of the litigation initiated, including the fact that despite the parties being Delhi-based, the complainant filed the first information report at Noida (Uttar Pradesh).

“In the instant case, we find initiation of criminal proceedings before a forum which had no territorial jurisdiction by submitting incorrect facts and giving frivolous reasons to entertain such complaints. A closer look at the respondent’s actions reveals more than just an inappropriate use of jurisdiction. The respondent chose to pursue criminal charges in a quest to abuse the criminal justice system with a motive to seek personal vengeance rather than seeking true justice,” the Court said.

Turning civil issues into criminal matters is unnecessary and only overburdens the criminal justice system and also violates the principles of fairness and right conduct in legal matters, the Court explained.

“The apparent misuse of criminal proceedings in this case not only damages trust in our legal system but also sets a harmful precedent if not addressed,” the Court stated.

It took note of the fact that the parties concerned had already begun arbitration, execution and enforcement proceedings which were pending before the Delhi High Court.

Source: Barandbench

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