Supreme Court Quashes FIR Where Allegations Do Not Prima Facie Constitute Any Offence, Invokes Section 482

A bench of Justices Sudhanshu Dhulia and K. Vinod Chandran heard an appeal against a Jharkhand High Court order which had refused to quash an FIR registered against officers of a company accused of concealing a restrictive covenant in a subcontract; the appellants contended that the FIR was a "strong arm tactic" to recover contractual dues while arbitration and insolvency proceedings, including a moratorium, were pending.

The Court allowed the appeal, held that the High Court erred in declining to exercise its power under Section 482 CrPC, and quashed the FIR against the appellants. The judges examined the complaint as a whole and concluded that, even taking the allegations at face value, they did not prima facie disclose criminality. The Court, in its reasoning, observed: “Going by the binding precedents, it is trite that a complaint can be quashed when the allegation made in the complaint, even when taken on its face value and accepted in its entirety, do not prima facie constitute any offence or make out the case alleged against the accused. What is required is the examination of the complaint as a whole, without examining the merits of the allegations; desisting from a detailed inquiry or meticulous analysis of the material nor an assessment of the reliability or genuineness of the allegations in the complaint.” The bench further noted that “we do not find any criminality arising from the allegations and prima facie, the allegations do not constitute any offence or make out any case against the accused persons,” and concluded, “we invoke the same and quash the FIR on which no further proceedings will be taken.”

Background The dispute arose from a construction contract chain: a company (the first accused) obtained a contract from NBCCL and sublet a portion of the work to the complainant (second respondent). The complainant alleged that the first accused suppressed a restrictive covenant in its principal contract with NBCCL which barred subletting without consent, and that this suppression amounted to dishonest and fraudulent conduct attracting offences under Sections 406, 420, 467, 468 and 471 read with Section 34 IPC. The complainant narrated bills submitted, part payments received and alleged outstanding dues; it had sought intervention in related High Court proceedings and later invoked arbitration, which was stayed because of an insolvency moratorium ordered by the NCLT in separate proceedings (C.P. (IB) No. 891/KB/2020).

The Jharkhand High Court quashed the FIR against the Deputy General Manager of NBCCL but refused relief to the company officers, relying on precedents governing Section 482 CrPC and finding that the allegations could not be said, prima facie, to be non‑criminal. The Supreme Court reviewed the complaint (Annexure P II) and the High Court record, referenced authority including Prof. R.K. Vijayasarathy v. Sudha Seetharam and Indian Oil Corporation v. NEPC, and applied the established test for exercise of inherent jurisdiction: whether the allegations, on their face, constituted an offence. The Court observed that even assuming non‑disclosure of the restrictive covenant, any remedy against breach of that covenant lay with the principal (NBCCL) and that the absence of privity meant NBCCL could not pursue the subcontractor’s counterparty; moreover, a contractual breach or claim for money did not automatically translate into criminal liability. Finding that the allegations related essentially to recovery of money and contractual obligations and that there was “no criminality arising from the allegations,” the Court invoked Section 482 CrPC and quashed the FIR, directing that no further proceedings be taken. The appeal was allowed and pending applications were disposed of.

Case Details: Case No.: Criminal Appeal No. (@ Special Leave Petition (Crl.) No.15413 of 2023) (2025 INSC 575) (Non‑Reportable) Case Title: Aaditya Khaitan @ Aditya Khaitan & Ors. v. The State of Jharkhand & Ors. Appearances: For the Petitioner(s): Mr. Gopal Sankarnarayanan, Senior Counsel For the Respondent-State: Mr. Rajiv Shankar Dwivedi, Standing Counsel For the Respondent(s): Mr. Deepak Dhingra, Counsel