'Why should HC help recover money?' SC deplores order refusing to quash FIR against film producer

The Supreme Court has said money cannot be recovered by filing an FIR and seeking help from the police as it quashed a cheating case against the producer of Bollywood film Tanu Weds Manu.

A bench of Justices J.B. Pardiwala and R. Mahadevan expressed displeasure over the approach of the Allahabad High Court in dealing with the petition of producer Shailesh R. Singh for quashing of the FIR against him by complainant Kunal Jain.

"Money cannot be recovered, more particularly, in a civil dispute between the parties by filing a first information report and seeking the help of the police. This amounts to abuse of the process of law," the bench said.

Singh was one of the producers of the 2011 film starring R. Madhavan and Kangana Ranaut. Advocate Sana Raees Khan, appearing for Singh, said the complainant got the FIR registered by dragging a civil dispute into a criminal case. The court, Khan said, must ensure that criminal prosecution was not used as an instrument of harassment to pressurise the accused.

She said the high court directed the petitioner to undergo mediation and deposit Rs 25 lakh to the complainant upfront before the mediation, which would prejudge the outcome and defeat the very purpose of filing the quashing petition.

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While noting Khan's submissions, the bench said Jain might have parted with some money in accordance with the oral agreement and it could be that Singh owes a particular amount to him.

"We are quite disturbed by the manner in which the high court has passed the impugned order. The high court first directed the appellant to pay Rs 25,00,000 to respondent 4 (Jain) and thereafter directed him to appear before the Mediation and Conciliation Centre for the purpose of settlement," it said.

The order went on, "That’s not what is expected of a high court to do in a writ petition filed under Article 226 of the Constitution or a miscellaneous application filed under Section 482 of the Code of Criminal Procedure, 1973 for quashing of FIR or any other criminal proceedings."

Whether a prima facie offence of cheating was committed by Singh was the question, the court said. “How many times the high courts are to be reminded that to constitute an offence of cheating, there has to be something more than prima facie on record to indicate that the intention of the accused was to cheat the complainant right from the inception," it said.

The plain reading of the FIR does not disclose any element of criminality, it added.

The top court referred to its 2024 verdict in the case of Delhi Race Club v. Uttar Pradesh, which it said "exhaustively explained" the law on what constitutes cheating and criminal breach of trust.

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The bench said instead of looking into the matter on its merits, the high court thought it fit to direct Singh to go for mediation, that too after paying Rs 25 lakh to Jain.

"We fail to understand why should the high court undertake such an exercise. The high court may either allow the petition saying that no offence is disclosed or may reject the petition saying that no case for quashing is made," the top court noted.

The bench continued, "Why should the high court make an attempt to help the complainant to recover the amount due and payable by the accused? It is for the civil court or commercial court as the case may be to look into in a suit that may be filed for recovery of money or in any other proceedings, be it under the Arbitration Act, 1996 or under the provisions of the IB Code, 2016."

The top court wondered why the high court was unable to realise the dispute was of civil nature. If Jain had to recover a particular amount, the bench said, he could either file a civil suit or seek other appropriate legal remedies but ought not be allowed to take recourse to criminal proceedings.

"What is expected of the high court is to look into the averments and the allegations levelled in the FIR along with the other material on record, if any. The high court seems to have forgotten the well-settled principles as enunciated in the decision of this court…," the bench said and quashed the FIR against Singh.