1 August 2025 Legal Updates

CRIMINAL CASE SHOULD BE QUASHED WHEN CIVIL CASE IS PENDING ON SAME ISSUE & CRIMINALITY ELEMENT IS ABSENT: SUPREME COURT

(a) Case Title:

• S. N. Vijayalakshmi & Ors. v. State of Karnataka & Anr.

(b) Court:

• Supreme Court of India

(c) Date of Decision:

• July 31, 2025

(d) Bench:

• Justice Sudhanshu Dhulia & Justice Ahsanuddin Amanullah

Key Facts

The case involved a property dispute over land in Bhoopasandra Village, Bangalore, originally owned by appellants' family members who had passed away. In 2015, the appellants executed an Agreement to Sell with complainant Keerthiraj Shetty for ₹3.5 crores, along with a General Power of Attorney (GPA), after the complainant helped resolve legal issues regarding the property title. After the property title became marketable in 2020, the appellants refused to honor the agreement, revoked the GPA, and transferred the property among themselves through release deeds and gift deeds.

The complainant filed a private complaint, leading to registration of FIR under Sections 405, 406, 415, 417, 418, 420, 504, 506, 384, and 120B read with 34 of the IPC.

Legal Issues

• Whether criminal proceedings should continue when essential ingredients of alleged offences are absent?
• Whether civil and criminal proceedings can run simultaneously on the same facts?
• Compliance with procedural requirements under Priyanka Srivastava case.

Supreme Court's Decision

1. Sections 406 & 420 IPC Cannot Coexist:

• The Court reaffirmed that the same person cannot be charged under both Sections 406 (criminal breach of trust) and 420 (cheating) for the same transaction, as their ingredients are mutually exclusive.

2. Section 406 (Criminal Breach of Trust):

• Requires "entrustment" of property. Here, appellants were owners of the property, not trustees. No entrustment established.

3. Section 420 (Cheating):

• Requires fraudulent inducement to deliver property. No delivery of property to complainant was established. Possession was to be given only after execution of sale deed.

Key Legal Findings:

1. No Criminal Ingredients:

• The Court found that essential ingredients of the alleged criminal offences were not made out

2. Civil vs Criminal:

• While civil and criminal proceedings can run simultaneously, there must be an "overwhelming element of criminality" - which was absent here

3. Procedure Compliance:

• The procedural requirements under Priyanka Srivastava were satisfied as the required affidavit was filed before the magistrate passed the referral order

Judgment

The Supreme Court quashed the FIR and all consequential proceedings including the chargesheet. Appellants cannot create third-party rights in the property pending other proceedings.

BAIL SHOULDN'T BE GRANTED SOLELY BASED ON ANY UNDERTAKING GIVEN BY ACCUSED: SUPREME COURT TO HIGH COURTS & TRIAL COURTS

(a) Case Title:

• Gajanan Dattatray Gore v. The State of Maharashtra & Anr.

(b) Court:

• Supreme Court of India

(c) Date of Decision:

• July 28, 2025

(d) Bench:

• Justice J.B. Pardiwala and Justice R. Mahadevan

Facts of the Case

The appellant, Gajanan Dattatray Gore, was arrested in connection with allegations of misappropriating ₹1.66 crores from his employer's funds. He was charged under various sections of the Indian Penal Code including criminal breach of trust, cheating, and forgery. When the trial court refused regular bail, he approached the Bombay High Court.

Issue

The central issue was whether courts can grant bail based on an accused person's undertaking to deposit money, and what happens when such undertakings are violated.

History

1. Initial Bail Grant:

• The Bombay High Court granted bail to the appellant on April 1, 2024, after he filed an affidavit undertaking to deposit ₹25 lakhs within 5 months.

2. Breach of Undertaking:

• The appellant took advantage of the bail order but failed to deposit the promised amount.

3. Bail Cancellation:

• The complainant filed an application seeking cancellation of bail. The High Court cancelled the bail on July 1, 2025, directing the appellant to surrender within four weeks.

Key Directions:

1. No Conditional Bail on Monetary Undertakings:

• Courts cannot grant regular bail or anticipatory bail based on any undertaking by the accused to deposit money.

2. Merit-Based Decisions Only:

• All bail applications must be decided strictly on legal merits, considering factors like Nature and gravity of offense, Criminal antecedents, Flight risk, Likelihood of tampering with evidence and Duration of custody must be evaluated before granting bail.

3. Prohibition on Conditional Orders:

• High Courts and trial courts are prohibited from passing conditional bail orders requiring monetary deposits.

Legal Principles Established

1. Abuse of Process:

• The Court condemned the practice where accused persons make undertakings to secure bail and then renege on them, calling it an abuse of the judicial process.

2. Professional Ethics:

• The Court criticized lawyers who make statements about monetary deposits without proper authority from their clients.

3. Judicial Dignity:

• The judgment emphasizes that such practices undermine the dignity and honour of courts.

Judgment

The Supreme Court dismissed the appeal and imposed a cost of ₹50,000 on the appellant for abuse of process. Court also directed that the appellant could file a fresh bail application, which would be decided purely on merits. Additionally, ordered circulation of this judgment to all High Courts.