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Supreme Court Exempts Lawyers from Consumer Protection Act in Landmark Ruling.

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In a landmark judgment delivered on May 14, 2024, the Supreme Court ruled that lawyers cannot be held liable under the Consumer Protection Act (CPA) of 1986, overturning a previous decision by the National Consumer Disputes Redressal Commission (NCDRC). The ruling redefines the scope of professional accountability for legal services in India. The Supreme Court bench, comprising Justices Bela Trivedi and Pankaj Mithal, stressed that legal representation, although paid, does not constitute a ‘service’ as defined under the CPA due to the unique professional characteristics of the legal profession.

The case originated from an appeal against the NCDRC’s 2007 ruling, which classified legal services as falling within the purview of the CPA. This interpretation allowed clients to file complaints against lawyers for alleged deficiencies in service. Petitioners, including advocate M. Mathias and various lawyer associations, argued that the legal profession should be treated differently from other trades or businesses. They emphasized the unique duties lawyers have toward the court and their opponents, which can often conflict with client interests. Additionally, they highlighted the unpredictability and complexity inherent in legal proceedings, which can influence case outcomes independently of a lawyer’s skill or diligence.

The Supreme Court established a clear distinction between professions and other forms of business under the CPA. Justice Trivedi argued that the term ‘profession’ implies a discipline involving specialized knowledge or learning, distinct from a mere ‘business’ or ‘trade’ driven by commercial interests. The court highlighted that the legal profession is inherently service-oriented and noble, not driven by commercial gains. Lawyers are expected to uphold citizens’ rights and contribute to maintaining judicial independence and the rule of law. The court also noted that the relationship between a lawyer and a client is best described as a ‘personal service contract’ – a category specifically exempted under the CPA.

The ruling suggested revisiting previous judgments that differed in view, such as the inclusion of medical services under the CPA as decided in Indian Medical Association v. V.P. Shantha (1995). This landmark case had concluded that medical services fall under the concept of ‘services’ described in the Consumer Protection Act when a fee is charged, holding medical practitioners accountable to consumer standards of care. However, the Supreme Court signalled a potential revaluation of this definition, hinting that the scope of ‘services’ within the Act might need reinterpretation, specifically concerning medical professionals.

Distinguishing Lawyers from Other Professions
During the hearings, senior advocate Narender Hooda, appearing for the appellants, submitted that lawyers have a duty toward their colleagues and must be fair, unlike doctors who primarily focus on treating patients. Hooda argued that a lawyer cannot be seen as a mere “mouthpiece” for their client, as they have obligations to the court and the opposing counsel.

Justice Trivedi posed a hypothetical question: “Can you say something adverse to the interest of your client, even if you believe that is not, right? In a way, you are a mouthpiece to your client.” Hooda fervently opposed this view, stating, “My duty is to assist the Court in performing the sovereign function. That is the first duty. In that duty, I will espouse the cause of my client within the permissible four corners of law.”

Hooda further elucidated that while a patient can ask a doctor not to prescribe any particular medicine, a client cannot ask a lawyer to not cite any specific judgment. He highlighted, “There the relationship is this, if the patient says that you are prescribing me this medicine, I will not take it. My client cannot say that do not cite this judgment and cite only this judgment. This is how, my lords, my profession is completely different, and this is how public policy element is involved in legal profession.”

The decision has significant implications for the medical profession as well. The Supreme Court directed that the 1996 decision concerning medical professionals be reviewed by a larger bench, potentially reconsidering whether medical services should fall under the CPA.

Legal and Ethical Context
The ruling intervenes in a long-standing debate on whether professional services, like those provided by lawyers and doctors, should be assimilated within the ambit of consumer protection laws. While the judgment distinguished lawyers from other service providers by noting their duties involve elements beyond mere contractual obligations, it is important to note that claims of negligence and malpractice can still be pursued in ordinary courts.

The decision reaffirms the unique nature of the legal profession and its role in upholding the rule of law and judicial independence. However, it also raises questions about the accountability of professionals and the appropriate mechanisms for addressing deficiencies in service. As the implications of this landmark judgment unfold, it is expected to spark further discussions and potential legal challenges on the extent to which various professions should be subject to consumer protection laws or governed by their respective regulatory bodies and ethical codes.

 

Written by Maria Therese Syriac.

PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.

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Raja Gounder Judgment: Supreme Court’s decision on Child’s Inheritance Rights.

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Raja Gounder and Others v. M. Sengodan and Others.

Case No.: SLP(C) No. 13486 OF 2007.

Court: Supreme Court of India.

Quorum: Hon’ble J. M.M. Sundresh, J. S.V.N. Bhatti.

Date: January 19, 2024.

Facts of the Case:

This case revolves around a dispute over the partition and separate possession of three agricultural lands held by the late Muthusamy Gounder. The plaintiffs claimed to be the son and wife, respectively, of Muthusamy Gounder and sought partition of the properties, asserting the existence of a Hindu Undivided Family (HUF). The defendants denied the marriage between Respondent 2 and Muthusamy Gounder, claiming that only Respondent 1 was a member of Muthusamy Gounder’s HUF. Subsequently, the appellants were impleaded, claiming to be the son, daughter, and wife of Muthusamy Gounder, respectively.

Legal Issues:

  1. Whether a valid marriage existed between Muthusamy Gounder and Respondents 2 and the appellants’ mother, giving them the status of coparceners in the HUF?
  2. If the marriages were void or voidable, could the appellants and Respondent 1 still claim a share in Muthusamy Gounder’s property as his children?
  3. How should the relief be moulded if the appellants and Respondent 1 are entitled to a share in Muthusamy Gounder’s property?

Legal Provisions:

  1. Sections 17 and 18 of the Indian Evidence Act, 1872 (defining “admission” and “admission by party to proceeding or his agent”).
  2. Section 16 of the Hindu Marriage Act, 1955 (conferring legitimacy on children born from void or voidable marriages).
  3. Sections 3(j), 6, 8, 10, 15, and 16 of the Hindu Succession Act, 1956 (provisions related to HUF, coparcenary property, and succession).

Arguments of the Petitioners (Appellants):

The appellants, represented by Advocate N.S. Nappinai, accepted the findings of the lower courts regarding the status of Respondents 2 and the appellants’ mother as not being wives of Muthusamy Gounder. However, they argued that the courts erred in not moulding the relief based on the admitted circumstances and evidence.

The appellants relied on Exhibits B-3 to B-6, which included a registered mortgage deed, joint patta, and electoral rolls, to argue that Muthusamy Gounder treated the appellants and Respondent 1 as his sons. They contended that these documents constituted admissions under Sections 17 and 18 of the Indian Evidence Act, binding Respondent 3, who claimed through Muthusamy Gounder.

Relying on the Supreme Court’s decision in Revanasiddappa v. Mallikarjun, the appellants argued that even if the marriages were void or voidable, the children (appellants and Respondent 1) would be entitled to a share in Muthusamy Gounder’s notionally partitioned share.

Arguments of the Respondents:

Advocate Vinodh Kanna B., representing Respondents 3 and 4, contended that the findings of fact recorded by the lower courts did not warrant reconsideration of evidence under Article 136 of the Constitution. Alternatively, he argued that the evidence was lacking to establish the status of the appellants and Respondent 1 as children of Muthusamy Gounder, which is a prerequisite for applying the ratio of Revanasiddappa. He prayed for the dismissal of the appeal.

Judgment and Analysis:

The Supreme Court allowed the appeal and set aside the judgments of the lower courts. The court analysed Exhibits B-3 to B-6 and concluded that they constituted admissions by Muthusamy Gounder regarding the status of the appellants and Respondent 1 as his sons under Sections 17 and 18 of the Indian Evidence Act.

The court relied on the principles laid down in Revanasiddappa and held that even if the marriages were void or voidable, the children (appellants and Respondent 1) would be entitled to equal shares in Muthusamy Gounder’s notionally partitioned share under the Hindu Succession Act, 1956.

The court criticized the lower courts for failing to mould the relief based on the admitted circumstances and evidence, as the suit was for partition. It held that while the claim for partition as coparceners was unacceptable due to the lack of evidence on the factum of marriage, the lower courts should have considered the relief based on the admitted status of the appellants and respondent as Muthusamy Gounder’s children.

The Supreme Court allowed the appeal and passed a preliminary decree of partition, firstly between Respondent 3 and Muthusamy Gounder, and secondly, allotting equal shares in Muthusamy Gounder’s notionally partitioned share to the appellants and the respondents.

Conclusion:

The Supreme Court’s judgment in this case is significant for several reasons. Firstly, it reinforces the principles laid down in Revanasiddappa regarding the rights of children born from void or voidable marriages to inherit their parents’ property. Secondly, it emphasizes the importance of examining and moulding relief based on the admitted circumstances and evidence, even if the original claim is not fully substantiated.

The court’s analysis of Sections 17 and 18 of the Indian Evidence Act and the application of the concept of “admission” provide valuable guidance on the interpretation and application of these provisions.

Overall, this judgment highlights the Supreme Court’s commitment to upholding the rights of children and ensuring fair and equitable distribution of property, even in complex family disputes involving questions of legitimacy and succession.

 

Judgement reviewed by Maria Therese Syriac.

Click here to read the Judgement.

 

PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.

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The Supreme Showdown: Unravelling the Sevika Saga and Nepotism Clauses.

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Date: January 08, 2024.

Court: Supreme Court of India.

Quorum: Hon’ble J. B.R. Gavai, J. Sandeep Mehta.

 

Background of the Case

The case revolves around the appointment of Anganwadi workers (Sevikas) in the state of Bihar. In October 2012, the District Programme Officer in Katihar published a notice for the selection of Anganwadi workers. Both Anjum Ara (the appellant) and the respondent applied for the position. Anjum Ara scored 80.60 marks, while The respondent scored 48.60 marks. Consequently, Anjum Ara was appointed as an Anganwadi Sevika on July 2, 2013.

Aggrieved by Anjum Ara’s appointment, the respondent filed a representation before the District Programme Officer, seeking cancellation of Anjum Ara’s appointment order and a direction for her own appointment. The District Programme Officer rejected her representation on November 13, 2014. The respondent then appealed to the Appellate Authority (the Court of Joint Commissioner-cum-Secretary, Regional Transport Authority, Purnea), which allowed her appeal on July 30, 2015, setting aside Anjum Ara’s appointment order.

 

Legal Issues

Whether Clause 4.9 of the Anganwadi Sevika Guidelines, 2011, which imposed restrictions on the appointment of persons whose family members were employed with the State Government or its organizations, is valid and constitutional under Articles 14 (right to equality) and 16 (equality of opportunity in public employment) of the Constitution of India?

Legal Provisions

The case dealt with the interpretation of Clause 4.9 of the 2011 Guidelines and its compliance with Articles 14 (right to equality) and 16 (equality of opportunity in public employment) of the Constitution of India.

Contentions of the Petitioner

Anjum Ara contended that Clause 4.9 of the 2011 Guidelines, which formed the basis for her disqualification, had been found to be in violation of Articles 14 and 16 of the Constitution by the High Court of Judicature at Patna in another case (CWJC No. 13210 of 2014). However, the learned Division Bench of the High Court ignored this fact while dismissing her appeal.

Contentions of the Respondents

The State of Bihar and The respondent asserted that Clause 4.9 of the 2011 Guidelines was a valid restriction to prevent nepotism in public employment. They argued that the High Court’s decision striking down the clause in a separate case was not binding on Anjum Ara since she did not challenge it herself. The respondents emphasized the selection process was a matter of administrative discretion where courts should not interfere unless there is a constitutional violation. They contended that setting aside Anjum Ara’s appointment in favour of the lower scoring The respondent was justified based on principles of merit and fair selection.

Judgment and Analysis

The Supreme Court allowed Anjum Ara’s appeal and set aside the judgments of the learned Single Judge and the Division Bench of the High Court. The Court found that both the learned Single Judge and the Division Bench had erred in dismissing Anjum Ara’s writ petition and appeal.

The Court observed that Clause 4.9 of the 2011 Guidelines had been struck down by the High Court in CWJC No. 13210 of 2014 as violating Articles 14 and 16 of the Constitution. Once the clause was declared invalid, it ceased to exist. Therefore, it was not necessary for Anjum Ara to challenge the validity of the clause separately, as it had already been held invalid by the same High Court.

The Supreme Court held that the reasoning adopted by the learned Division Bench was unsustainable in law. When a provision has been declared unconstitutional and invalid by a court, it cannot be applied to deny someone’s rights, even if the person did not challenge the provision individually.

Conclusion

The Supreme Court allowed Anjum Ara’s appeal, quashed the judgments of the High Court, and directed her reinstatement forthwith. Although she would not be entitled to wages for the period she was out of employment, she would be granted continuity in service for all other purposes.

This judgment reinforces the principle that once a provision or law has been declared unconstitutional by a court, it ceases to have any legal effect, and no person can be denied their rights based on such an invalid provision. The judgment upholds the principles of equality and non-discrimination enshrined in the Constitution and ensures that individuals are not deprived of their rightful employment opportunities based on arbitrary and unconstitutional criteria.

Judgement reviewed by Maria Therese Syriac.

 

PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.

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Supreme Court Verdict: Importance of Following Proper Statutory Procedure

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Khengarbhai Lakhabhai Dambhala v. State of Gujarat.

Case No.: Criminal Appeal No. of 1547 of 2024.

Date: April 08, 2024.

Court: Supreme Court of India.

Quorum: Hon’ble J. Pankaj Mithal, J. Bela M. Trivedi.

 

Facts of the Case:

The appellant, claiming to be the owner of the vehicle Eicher 10.80 (Blue) bearing registration number GJ 05-BT-0899, filed a Special Criminal Application before the High Court of Gujarat at Ahmedabad, seeking the release of the said vehicle. The vehicle was seized as “Muddamal Article” in connection with an FIR registered against the appellant’s son, Lakhabhai Khengarbhai, and others at the Pardi Police Station, District Valsad, for offenses under the Gujarat Prohibition Act and the Indian Penal Code (IPC).

According to the police, they intercepted the vehicle based on a secret information while on patrol duty. It was alleged that the driver of the vehicle was carrying 1240.200 litres of English Liquor worth Rs. 7 lakhs without any valid permit or pass. The High Court dismissed the appellant’s application, leading to the filing of the present appeal before the Supreme Court.

 

Legal Issues

  1. Whether the appellant should have approached the concerned criminal court under Section 451 of the CrPC instead of invoking the High Court’s extraordinary jurisdiction under Article 226/227 of the Constitution for seeking the release of the seized vehicle?
  2. Whether the interpretation and scope of Section 98(2) of the Gujarat Prohibition Act, particularly the embargo against the release of a conveyance used for carrying liquor exceeding the prescribed quantity until the final judgment of the court was accurate?

Legal Provisions

  1. Section 451 of the Code of Criminal Procedure (CrPC): This section deals with the order to be passed by the Criminal Court for the custody and disposal of property produced before the court pending an inquiry or trial.
  2. Section 98 of the Gujarat Prohibition Act, 1949: This section pertains to the articles liable to confiscation whenever an offense punishable under the Act has been committed. Subsection (2) deals with the confiscation of receptacles, packages, coverings, animals, carts, vessels, or other conveyances used in carrying such articles.
  3. Section 132 of the Gujarat Prohibition Act, 1949: This section lays down the procedure to be followed after the seizure of articles by the Prohibition Officer or the Police Officer.

Sure, here’s an expanded version with more details on the contentions of the petitioner (appellant) and respondent (State of Gujarat):

Contentions of the Petitioner (Appellant):

The appellant invoked the High Court’s extraordinary jurisdiction under Article 226/227 of the Constitution, filing a Special Criminal Application seeking the release of the seized vehicle. He argued that the High Court had the power to grant such relief under its writ jurisdiction. He challenged the legality and propriety of the seizure of the vehicle by the police. He contended that the seizure was arbitrary and without following due process of law. The appellant claimed to be the rightful owner of the seized vehicle and asserted his legal right to possess and use the vehicle for lawful purposes.

The primary relief sought by the appellant was the release of the seized vehicle, either unconditionally or subject to appropriate conditions or furnishing bonds/sureties as deemed fit by the High Court.

Contentions of the Respondent (State of Gujarat):

The respondent heavily relied on Section 98(2) of the Gujarat Prohibition Act, which prohibits the release of a vehicle used for carrying liquor exceeding the prescribed quantity until the final judgment of the court. In the present case, the seized quantity of 1240 litres exceeded the prescribed limit of 20 litres. The respondent opposed the release of the seized vehicle, arguing that it would be in contravention of Section 98(2) of the Act, which mandates that such vehicles cannot be released on bond or surety until the final judgment.

The respondent justified the seizure of the vehicle by the police, contending that it was carried out based on credible information and in accordance with the provisions of the Gujarat Prohibition Act and other applicable laws. He argued that the seized vehicle should remain in the custody of the appropriate authorities until the final disposal of the case, as per the legal provisions governing such situations.

The respondent challenged the appellant’s invocation of the High Court’s writ jurisdiction under Article 226/227 of the Constitution, contending that there were specific statutory remedies available under the Code of Criminal Procedure (CrPC) and the Gujarat Prohibition Act, which should have been exhausted first.

Analysis of the Judgement:

The Supreme Court dismissed the appeal and upheld the High Court’s order. They observed that the appellant should have approached the concerned criminal court under Section 451 of the CrPC for seeking the custody of the seized vehicle instead of invoking the High Court’s extraordinary jurisdiction under Article 226/227 of the Constitution. Section 98(2) of the Gujarat Prohibition Act is not happily worded, and there is a lack of co-relation between the first and second parts of the sub-section. Applying the doctrine of harmonious construction, the Court harmonized the provisions with other relevant provisions of the Act and the CrPC.

The Court distinguished between the powers of “seizure” and “confiscation.” Seizure is a preliminary step leading to confiscation, and the power to seize is exercised by statutory authorities like the police or prohibition officers, while the power of confiscation is typically exercised by the jurisdictional courts. The Court clarified that Section 98 deals with the confiscation of articles, while Section 132 deals with the procedure to be followed after the seizure of articles by the Prohibition Officer or Police Officer. It observed that there was no factual material on record to suggest whether the seized vehicle was produced before the concerned court to invoke Section 451 of the CrPC or forwarded by the police officer to the concerned Magistrate as per Section 132(a) of the Gujarat Prohibition Act.

The Court rightly emphasized the importance of following the proper statutory procedure laid down in Section 451 of the CrPC for seeking the custody of seized property from the concerned criminal court. Invoking the High Court’s extraordinary jurisdiction under Article 226/227 of the Constitution was deemed inappropriate in this case, as there was a specific statutory provision available. The Court’s analysis of Section 98(2) of the Gujarat Prohibition Act and its harmonious interpretation with other provisions is commendable. The Court acknowledged the lack of clarity in the wording of Section 98(2) and applied the doctrine of harmonious construction to resolve any ambiguity or inconsistency. The Court also relied on the precedent set in the case of Sunderbhai Ambalal Desai v. State of Gujarat, wherein it was held that it is incumbent upon the magistrate to pass appropriate orders for the proper custody of seized vehicles during the pendency of the trial, as keeping them at police stations for an extended period serves no purpose.

 

Conclusion:

The Supreme Court’s judgment in the case of Khengarbhai Lakhabhai Dambhala v. State of Gujarat provides valuable guidance on the proper procedure to be followed for seeking the custody of seized property in cases involving offenses under the Gujarat Prohibition Act. The Court clarified the interplay between the relevant provisions of the Act and the Code of Criminal Procedure, emphasizing the importance of following the statutory procedure laid down in Section 451 of the CrPC. While the Court dismissed the present appeal due to the appellant’s failure to approach the concerned criminal court, it left the door open for the appellant to approach the appropriate court where the seized vehicle is sought to be produced during the inquiry or trial.

Judgement reviewed by Maria Therese Syriac.

Click here to read the Judgement.

PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.

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Brake on Abuse: Supreme Court Halts Misuse of Criminal Law.

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Naresh Kumar & Anr. v. State of Karnataka & Anr.

Case No.: Criminal Appeal No.         of 2024

                 (Arising out SLP (CRL.) No. 1570 of 2021).

Date: March 12, 2024.

Court: Supreme Court of India.

Quorum: Hon’ble J. Sudhanshu Dhulia, J. Prasanna B. Varale.

 

Facts of the Case

The appellants, Naresh Kumar (Assistant Manager-Marketing) and the Managing Director of a bicycle manufacturing company, challenged the Karnataka High Court’s order dismissing their petition to quash an FIR filed against them by Respondent. The respondent, a contractor, was given a contract by the appellants’ company to assemble, transport, and deliver bicycles at a rate of Rs. 122 per bicycle. After assembling 83,267 bicycles and raising invoices amounting to Rs. 1,01,58,574, Respondent No. 2 was paid only Rs. 35,37,390 by the appellants, leading to a dispute over the outstanding amount.

Consequently, an FIR No. 113/2017 was filed against the appellants under Sections 406 (criminal breach of trust), 420 (cheating), and 506 (criminal intimidation) of the Indian Penal Code (IPC) at P.S. Doddaballapura, Bengaluru Rural District. Subsequently, a chargesheet dated 30.05.2019 was filed in the court, making both the appellants accused in the case.

However, later a compromise deed was executed on 27.12.2017, wherein the appellants agreed to pay an additional Rs. 26 lakhs as a full and final settlement to Respondent. This additional amount of Rs. 25,75,442 (after deducting TDS) was duly paid to Respondent through a NEFT bank transaction on 29.12.2017, taking the total amount paid by the appellants to Rs. 62 lakhs against the claimed amount of Rs. 1,01,58,574. The appellants claimed that this settlement was reached to bring a quietus to the dispute and to avoid further litigation.

Legal Issues:

  1. Whether the dispute between the parties was of a civil nature or had criminal elements?
  2. Whether the High Court erred in refusing to quash the criminal proceedings under Section 482 of the Code of Criminal Procedure (CrPC)?

Legal Provisions:

  1. Indian Penal Code, 1860:
  • Section 406 – Criminal breach of trust.
  • Section 420 – Cheating.
  • Section 506 – Criminal intimidation.
  1. Section 482 of the CrPC grants inherent powers of the High Court to prevent abuse of the process of any court or to secure the ends of justice.

Contentions of petitioners:

The petitioners put forth several arguments to contend that the High Court erred in dismissing their petition to quash the FIR. Firstly, they argued that the central dispute between the parties was primarily civil in nature, centring around the number of bicycles assembled by Respondent and the consequent amount payable by the appellants’ company. They asserted that this did not constitute a criminal offense.

Secondly, the petitioners highlighted the fact that a compromise deed was executed, wherein they agreed to pay an additional sum of Rs. 26 lakhs as a full and final settlement. They contended even after paying an additional amount pursuant to a settlement, it cannot be construed that the parties had the intent to cheat. the act of payment was not admission to a fraudulent intent, but the act intended to settle the matter. The settlements are often reached to bring a quietus to disputes and avoid protracted litigation, even in cases where the parties may not agree on the precise quantum of claims. The petitioners argued that Respondent had accepted the additional amount paid under the compromise deed without any protest or allegation of coercion at that time. This negated the respondent’s subsequent claim that he was coerced into entering the settlement.

The petitioners asserted that the High Court failed to appreciate the civil nature of the dispute and should have exercised its inherent powers under Section 482 of the CrPC to quash the criminal proceedings, which amounted to an abuse of the process of the court.

Contentions of Respondents:

The learned counsel for the respondent, on the other hand, alleged that the appellants had harboured a dishonest intention to cheat him from the very beginning. This was evident from the fact that the appellants paid an additional amount that was significantly higher than what they initially claimed was due, based on their assessment of the number of bicycles assembled. The respondent further alleged that he was coerced into entering the settlement agreement, and therefore, the compromise deed should not be treated as a voluntary and binding settlement. He argued that the prosecution of the appellants was necessary under criminal law to hold them accountable for their alleged misdeeds.

Analysis of Judgement:

The Supreme Court carefully evaluated the arguments put forth by both parties and sided with the petitioners. The Court agreed that the dispute was of a civil nature, relating to the number of bicycles assembled and the consequent amount payable. It held that merely paying an additional amount pursuant to a settlement cannot be presumed as an act of cheating, as settlements are often made to bring a quietus to disputes and avoid litigation.

Significantly, the Court observed that respondent had accepted the additional amount paid under the compromise deed, casting doubt on his subsequent allegation of coercion. The Court relied on several precedents, including Paramjeet Batra v. State of Uttarakhand, Randheer Singh v. State of U.P., and Usha Chakraborty & Anr. v. State of West Bengal & Anr., to reinforce the principle that where a dispute is civil in nature, the High Court should exercise its inherent powers under Section 482 of the CrPC to quash criminal proceedings and prevent an abuse of the process of the court.

The Court also drew a clear distinction between a mere breach of contract and the offense of cheating, emphasizing that every breach of contract would not give rise to the offense of cheating unless it is shown that the accused had fraudulent or dishonest intention at the time of making the promise.

Conclusion

The Supreme Court’s judgement reaffirms the principle that criminal proceedings should not be initiated in disputes that are civil in nature unless there is unambiguous evidence of fraudulent or dishonest intention from the outset. The Court rightly exercised its inherent powers to quash the criminal proceedings, which were an abuse of the process of the court and prevented the misuse of criminal law in a contractual dispute.

Judgement reviewed by Maria Therese Syriac.

Click here to read the Judgement.

PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.

 

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