Diksha Karhade
News Editor
In a landmark judgment, Justice J.B. Pardiwala and Justice R. Mahadevan have quashed the FIR filed against Shailesh Kumar Singh alias Shailesh R. Singh and clearly stated that criminal proceedings cannot be resorted to for recovering money in civil disputes.
Justice J.B. Pardiwala and Justice R. Mahadevan, while allowing the appeal of Shailesh Singh, set aside the order of the Allahabad High Court dated March 7, 2025, in which the High Court had referred the matter to arbitration and directed the appellant to pay Rs. 25 lakh to the complainant.
Background of the case…
Shailesh Kumar Singh, co-founder and head of production at Karma Media & Entertainment LLP, had moved the Allahabad High Court seeking quashing of the FIR lodged against him under sections 60(b), 316(2) and 318(2) of the Indian Penal Code, 2023 (BNS).
The complainant, who runs a media finance and co-production business called Polaroid Media, had alleged that the transaction was fraudulent as per mutual oral agreements.
The appellant argued in the High Court that the case was purely a commercial dispute, which was wrongly given a criminal colour. He said that the FIR was filed only with the intention of creating pressure, while there was no criminal element in the case.
Advocate Sana Rais Khan, appearing for the appellant, argued that the FIR was merely an attempt to convert a civil dispute into a criminal dispute.
On the other hand, advocate Anand Mishra, appearing for the complainant, said that the appellant should pay the amount as per the oral agreement. Advocate Shaurya Krishna, appearing for the state, supported the High Court order.
Judicial Analysis…
The bench raised the question of how a cognizable offence is determined in an FIR and how the element of fraud is proved. The court said that even if the appellant is due to pay some amount under the oral agreement, it does not prove that his intention was fraudulent from the beginning.
Citing Delhi Race Club (1940) Ltd. v. State of Uttar Pradesh (2024) 10 SCC 690, the court held that to prove fraud, dishonesty and fraudulent intention must exist from the beginning.
The High Court should not attempt to assist the complainant or recover the dues from the accused. If any amount is to be recovered, a suit may be filed in a civil court or a commercial court or appropriate proceedings may be initiated under the Arbitration Act, 1996 or the Insolvency and Bankruptcy Code, 2016.”
The court also noted that the complainant has not yet initiated any civil suit or other proceedings to recover the money.
The Supreme Court said…
“We take special exception to the fact that the High Court first directed the appellant to pay ₹ 25,00,000 and then asked him to appear before the mediation centre.
“The High Court is not expected to quash the FIR in a writ petition filed under Section 226 or in a petition filed under Section 482 of the Code of Criminal Procedure, 1973.”
The Supreme Court allowed the appeal, quashed the FIR and clarified that the complainant can approach the competent forum for appropriate legal remedies.
Case Details…
Case: Shailesh Kumar Singh alias Shailesh R. Singh vs. State of Uttar Pradesh and Others
Case No.: Criminal Appeal No.
2963/2025 (@ Special Leave Petition (Criminal) No. 4880/2025)
*****
Important….
Strict action should also be taken against those who give illegal money…..
Personal financial transactions are known only to both the parties involved. Therefore, the truth and reality of the financial transaction is known only to both the parties.
Those who give illegal money in the course of business or invest in illegal business, It has been seen that they are exchanging money. There have also been cases where the lenders are taking illegal and excessive interest under the exchange of money.
There are cases of exchange for financial gain in financial matters.
In some financial matters, the lenders are not firm on their words, roles and actions, so they insist on demanding money within the given time and put the borrowers in trouble. On the contrary, it has also been seen that they unjustly defame the borrowers.
Similarly, those who lend money on written or unwritten terms or those who invest money in business terms repeatedly put pressure on the borrowers with their financial and human resources, harass them, take away their household goods, use force to conveniently write them off in their own way, defame them in society and in public in an inappropriate manner, send false notices through lawyers, and after giving notices, they commit false cases with the help of the police. They file crimes.This is also a kind of illegal reality.
However, it should be noted that those who deal in illegal money transactions in financial transactions are also criminals because they are dealing in money for financial gain. And therefore, legal action must be taken against them first.
*****
Police officers..
Many police officers are legally experienced and ideologically sound when dealing with personal financial transactions. Due to this, they know the scope and reality of such cases.
That is why police officers clearly tell the complainants, verbally or in writing, that they should seek redress in court rather than getting involved in improper financial transactions.
