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Remedies Against False Criminal Complaints


Businesses in India are increasingly facing the menace of false criminal complaints filed with the sole objective to coerce an out-of-court settlement. While it may be difficult to prevent a disgruntled business associate from filing false criminal cases to coerce a settlement, not only can the prosecution be quashed, but the person behind the suit can be subject to both penal punishment and damages for malicious prosecution. By Abhixit Singh and Durgesh Singh, Titus & Co. Date: July 2007 Businesses in India face the menace of false and vexatious criminal complaints which are filed with the sole objective to influence and coerce an out-of-court settlement of civil disputes. Generally disputes arising out of commercial contracts are civil in nature, such as claim for damages or specific performance. However, nowadays there is a growing tendency in business circles to convert purely civil disputes into criminal prosecution. Typically, litigants convert a case of breach of contract into criminal prosecution by making a criminal complaint for breach of trust, cheating and criminal conspiracy. Such complaints can lead to registration of a First Information Report by the police and issuance of summons and warrants of arrests by the court. These criminal complaints have an added nuisance value for foreign companies as the accused person has to be personally present in court at each hearing. In the event an accused person is not present in court despite service of summons on him, the court may issue non-bailable warrants of arrest against that person. In India, the criminal procedure law is set out by the Code of Criminal Procedure, 1973 (CrPC). Besides conferring powers on the criminal courts to try and adjudicate criminal complaints, the CrPC also places certain restraints on the exercise of these powers by the criminal courts. The laws in India provide for the following remedies to a person who has been falsely implicated and embroiled in criminal complaints: Quashing the Complaint The state high courts in India have been given supervisory and regulatory powers over the conduct of the lower criminal courts within their respective territorial jurisdiction, including inherent powers under section 482 of CrPC. section 482 confers inherent powers on the state high courts to intervene in any criminal proceedings, to prevent abuse of the process of the court and to secure the ends of justice. Faced with a false criminal complaint, a person can file a petition under section 482 of the CrPC with the state high court and seek quashing of the criminal complaint. The following principles govern the exercise of the inherent jurisdiction by the high courts under section 482: (i) The power is not to be resorted to if there is a specific provision in the CrPC to redress the grievance of the petitioner.
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(ii) It should be exercised very sparingly to prevent abuse of the process of any court or otherwise to secure the end of justice. (iii) It should not be exercised as against the express bar of the law engrafted in any other provision of CrPC. In the landmark case State of Haryana vs. Bhajan Lal [1992 Supp. (1) SCC 335], a two judge bench of the Supreme Court of India considered in detail the provisions of section 482 and the power of the high court to quash criminal proceedings. The Supreme Court summarized the legal position by laying the following guidelines to be followed by high courts in exercise of their inherent powers to quash a criminal complaint: (i) The criminal complaint can be quashed when allegations made in the complaint, even if they are taken at their face value and accepted in their entirety, do not, prima facie, constitute any offence or make out a case against the accused person. (ii) The criminal complaint can be quashed when allegations made in the complaint are so absurd and inherently improbable that on the basis of which no prudent person can ever reach a conclusion that there are sufficient grounds for continuing the proceedings against the accused person. (iii) The criminal complaint can be quashed when the allegations made in the complaint and evidence collected in support of the complaint do not disclose the commission of any offence against the accused person. (iv) The criminal complaint can be quashed when the complaint is manifestly attended with mala fide or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused person and with a view to spite him due to private and personal grudge. (v) The criminal complaint can be quashed when there is an express legal bar under any of the provisions of the CrPC or any other legislation (under which a criminal proceeding is instituted) to the institution and continuance of criminal complaint. The exercise of inherent powers by the state high courts to quash a criminal complaint is largely dependent on the facts and circumstances of the complaint. However, the aforesaid guidelines laid by the Supreme Court in State of Haryana vs. Bhajan Lal summarize the important factors which are generally considered by the state high courts in India while exercising their inherent powers under section 482. If the high court is convinced that the criminal complaint does not disclose a cognizable offence and the continuation of an investigation is not based on sound foundations and would amount to an abuse of power of police necessitating interference to secure the ends of justice, the high court will exercise its inherent power to quash the proceedings. However it has been held by the Supreme Court of India in Om Prakash Singh vs. State of UP [2004 CrLJ 3567] that if a complaint discloses the commission of a cognizable offence, it would not be a sound exercise of discretion to quash the criminal complaint. In the case of Indian Oil Corporation vs. NEPC India Ltd. and Others [(2006) 6 SCC 736], a petition under section 482 was filed to quash two criminal complaints. The high court by common judgments allowed the petition and quashed the two complaints. The order was challenged in the appeal to Supreme Court of India. While deciding the appeal, the Supreme Court of India laid down following principles: (i) The high courts should not exercise their inherent powers to stifle or scuttle a legitimate prosecution. The power to quash criminal complaints should be used sparingly and with abundant caution. (ii) The criminal complaint is not required to verbatim reproduce the legal ingredients of the alleged offence. If the necessary factual foundation is laid in the criminal complaint, merely on the ground that a few ingredients have not been stated in detail, the criminal proceedings should not be quashed. Quashing of the complaint is warranted
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only where the complaint is bereft of even the basic facts which are absolutely necessary for making out the alleged offence. (iii) It was held that a given set of facts may make out (a) purely a civil wrong, or (b) purely a criminal offence, or (c) a civil wrong as also a criminal offence. A commercial transaction or a contractual dispute, apart from furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. As the nature and scope of civil proceedings are different from a criminal proceeding, the mere fact that the complaint relates to a commercial transaction or breach of contract, for which a civil remedy is available or has been availed, is not by itself a ground to quash the criminal proceedings. The test is whether the allegations in the complaint disclose a criminal offence or not. In Pepsi Foods Ltd. vs. Special Judicial Magistrate [AIR 1998 SC 128], the Supreme Court of India observed that though the magistrate can discharge the accused at any stage of the trial if he considers the charges to be groundless, this does not mean that the accused cannot approach the high court under section 482 to have the complaint quashed if the complaint does disclose the commission of a cognizable offence against the accused person. In this case the Supreme Court held that the order of the high court refusing to quash the complaint on the ground that alternate remedy was available under the CrpC to the accused person was not proper. In Kurukshetra University vs. State of Haryana [AIR 1977 SC 2229], the Supreme Court observed that inherent powers under section 482 do not confer an arbitrary jurisdiction on the high court to act according to whim or caprice. It was observed that the statutory and inherent powers of the high court have to be exercised sparingly, with circumspection and in the rarest of rare cases. Criminal prosecution against persons making baseless FIRs The Indian Penal Code, 1860 (IPC) also provides for criminal prosecution against persons making baseless complaints leading to the registration of a First Information Report (FIR) by the police. Section 182 of the IPC provides for punitive measures against a person who makes baseless complaints by making false representations to a public servant. Section 182 of the IPC serves as a basis for punishing a person by imprisonment up to six months and/or a fine for giving a public servant any information which he knows or believes to be false or knowing it to be likely that he will thereby cause such public servant (i) to do or omit to do anything which such public servant ought not to do, or (ii) to use the lawful power of such public servant to the injury or annoyance of any person The Calcutta high court in Pasupati Banerji vs. King [AIR 1950 Cal 97] has observed that in order to attract the provisions of section 182 of the IPC, it must be established that the person gave information to a public servant which he knew or believed to be false and that he intended thereby to cause the public servant to use his lawful power to the injury or annoyance of any person. It was further observed by the Punjab and Haryana high court in Sukhdeo Singh vs. State [63 Punj L. R. 566] that to constitute an offence under section 182 of the IPC, it is necessary that the information given should be such information which the accused knows or believes to be false. It is not sufficient that the person had reasons to believe it was false or that he did not believe it to be true; what is necessary that the person must have positive knowledge or belief that it was false. A reference may also be made to section 211 of the IPC, which is analogous to section 182 of the IPC. Section 211 of the IPC serves as basis to punish a person who with the intent to cause injury (i) institutes or causes to be instituted any criminal proceeding against that person or (ii) falsely charges any person with having committed an
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offence, knowing that there is no just or lawful ground for such proceeding or charge. Section 211 of the IPC provides for imprisonment for up to two years and/or a fine for the commission of an offence under the section. Further, section 211 of the IPC provides imprisonment for up to seven years and a fine for initiating criminal proceedings on a false charge for an offence punishable with death, imprisonment for life or imprisonment for up to seven years or more. In Maiz vs. Rosen [(1966) 1 W.L.R 1008], it was observed that if a person goes to the police with an account which he knows to be untrue, not only has he no reasonable or possible ground for the prosecution but also that fact in itself would be strong evidence of the ingredient of malice necessary for a successful action for malicious prosecution. Damages for Malicious Prosecution Another remedy against persons filing false criminal complaints is bringing an action for malicious prosecution against the person. In an action for malicious prosecution, damages can be claimed under three heads: (i) damage to reputation, (ii) damage to person and (iii) damage to property. It has been held by Indian courts that in an action for malicious prosecution a plaintiff can claim all legitimate expenses incurred by him in defending himself in the criminal case. (See Annun Doll Das Sony vs. S Singhara Singh [AIR 1992 Delhi 264].) Conclusion While it may be difficult to prevent a disgruntled business associate from filing false criminal cases to coerce a settlement, by mounting an aggressive defense such criminal prosecution can not only be quashed but the person indulging in such practice can be subject to both penal punishment and damages for malicious prosecution. About the author Abhixit Singh is a Partner at Titus & Co. Advocates and can be reached at asingh@titus-india.com. Durgesh Singh assisted with this article.

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