New Delhi: The Supreme Court has slapped a cost of Rs 25 lakh on a litigant, saying unscrupulous litigants should not be allowed to go scot-free and it is time to check with firmness such litigation initiated and laced with concealment, falsehood, and forum hunting.
The litigant had filed an FIR in Uttar Pradesh based on a "false and frivolous complaint with non-disclosure of necessary facts" in a civil dispute, arising out of commercial dealings in Delhi.
A bench comprising Justices Vikram Nath and Rajesh Bindal said, "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 bench said unscrupulous litigants should be put to strict terms and conditions including costs, and "it is high time to check with firmness litigation initiated and laced with concealment, falsehood, and forum hunting".
The bench said the core issue of the dispute, which involves financial transactions and agreements, clearly places it in the realm of civil and commercial law. "Yet, 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," said the bench, in its judgment delivered on January 11.
The bench said it was constrained to impose a cost on complainant Karan Gambhir with a view to curb others from such acts leading to abuse of judicial remedies.
"A criminal complaint was filed and an FIR was registered against appellants despite the commercial nature of the dispute. Such ill-intended acts of abuse of power and legal machinery seriously affect the public trust in judicial functioning," noted the bench.
The bench stressed that 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. Gambhir, Delhi-based company D D Global's promoter, lodged an FIR in Uttar Pradesh's Gautam Budh Nagar for cheating and other offenses against appellants Dinesh Gupta and Rajesh Gupta, promoters of the companies.
The complainant's company had extended short-term loans of Rs 5,16,00,000 to Gulab Buildtech and Rs 11,29,50,000 to Verma Buildtech respectively, which were subsequently converted into debt equity allegedly promising high returns from real estate business.
The top court quashed the FIR and other proceedings, saying, that if proceeded further, it would result in absolute abuse of process of court and it is a clear case of malicious prosecution. "Even state actions or conduct of government servants being party to such malicious litigation should be seriously reprimanded," it added.
The apex court observed that though the complainant had invested crores of rupees in equity of the two companies based in New Delhi, yet in those cases, incomplete addresses showing them at Sector 20, Gautam Budh Nagar, were deliberately mentioned. "The idea was to falsely create jurisdiction in Gautam Budh Nagar which did not actually lie there," the bench said.
In 2010, the short-term loan was advanced for a period of one year. The bench noted that when the same was not returned, no steps were taken by the complainant to recover it until the FIR in question was registered on July 29, 2018, i.e. eight years and seven months later.
"The entire factual matrix and the timelines clearly reflect that the complainant deliberately and unnecessarily has caused substantial delay and had been waiting for an opportune moment for initiating false and frivolous litigation," said the bench.
"We impose costs of Rs 25 lakhs on the respondent Karan Gambhir to be deposited within four weeks from today with the Registry of this Court. Upon receipt of the said amount, the same will be transmitted in equal amount to the SCBA & SCAORA to be utilised for the development and benefit of their members," said the bench.
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