Supreme Court restores criminal trial over alleged forged settlement deeds and sets aside High Court quashment

A bench of Justices Sanjay Karol and Prashant Kumar Mishra heard an appeal against the Madras High Court's order quashing criminal proceedings arising from FIR No. 229 of 2021 registered by the Central Crime Branch, Land Grabbing Cell, Egmore, Chennai. The appeal challenged the High Court's use of its inherent jurisdiction under Section 482 CrPC to quash the charges of cheating, forgery and related offences (Sections 417, 420, 465, 468, 471 and 120B IPC) against respondent Nos. 1 to 3.

The Court allowed the appeal, set aside the High Court's order dated 22.10.2024 and restored C.C. No. 2 of 2023 for trial before the Special Metropolitan Magistrate-I, Special Court for Exclusive Trial of Land Grabbing Cases, Allikulam, Egmore, Chennai. The Court held that the High Court had erred by embarking on a mini-trial and by treating civil adjudication as determinative of criminal culpability at the threshold. The Court emphasised that while exercising jurisdiction under Section 482 CrPC the High Court must not "embark upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR/complaint" and must examine whether the uncontroverted allegations, taken at their face value, disclose a cognizable offence. The Court, in its reasoning, observed: "In the impugned order, the High Court has quashed the proceedings primarily on the ground that the validity of the settlement deeds has been upheld in the proceedings before the Civil Court. We are of the view that this approach adopted by the High Court is not correct. It is a settled principle of criminal jurisprudence that civil liability and criminal liability may arise from the same set of facts and that the pendency or conclusion of civil proceedings does not bar prosecution where the ingredients of a criminal offence are disclosed. In Kathyayini vs. Sidharth P.S. Reddy and Others, this Court had made it crystal clear that 'pendency of civil proceedings on the same subject matter, involving the same parties is no justification to quash the criminal proceedings if a prima facie case exists against the accused persons.'"

Background

The dispute arose from three registered settlement deeds executed by Late Dr. C. Satyanarayana and Late Smt. C. Lakshmi Devi in favour of their elder son (respondent No.1) in respect of properties in Chennai (documents dated 31.12.2010, 14.02.2012 and 30.03.2012). A Power of Attorney dated 28.03.2012 authorised respondent No.1 to present documents for registration. The executants died in April 2012. In 2014 respondent No.5 filed O.S. No. 2190 of 2014 seeking declaration that the three settlement deeds were null and void; the appellant was impleaded as defendant No.2 but the record showed he remained ex parte. The appellant later lodged a police complaint on 08.01.2020 alleging fraud and forgery; after preliminary inquiry the police closed the complaint as a civil dispute. By private complaint under Section 156(3) CrPC a Magistrate directed registration and FIR No.229 of 2021 followed; the Police filed a final report and the Magistrate took cognizance, registering C.C. No.2 of 2023.

The Civil Court, by judgment dated 24.01.2023, dismissed O.S. No. 2190 of 2014 upholding the settlement deeds; an appeal before the High Court produced an interim injunction restraining alienation. The Madras High Court quashed the criminal proceedings against respondent Nos.1–3 on grounds that the allegations did not disclose the ingredients of the offences, the dispute was essentially civil, the appellant had suppressed material facts and had delayed prosecution, and continued criminal prosecution would be an abuse of process. The Supreme Court found that the High Court impermissibly examined the credibility of allegations and the appellant's conduct at the quashing stage, and that the allegations in the complaint, taken at face value, disclosed dishonest intention, fabrication and wrongful use of documents warranting trial. The Supreme Court allowed the appeal, restored the trial and left all merits and evidentiary questions to the Trial Court, observing that "none of the observations contained herein shall have a bearing on the main trial."

Case Details: Case No.: Criminal Appeal No. 140 of 2026 (Arising out of S.L.P. (Crl.) No. 397 of 2025) (2026 INSC 39) Case Title: C.S. Prasad v. C. Satyakumar and Others Appearances: For the Petitioner(s): [Counsel not specified in the reported judgment text] For the Respondent(s): [Counsel not specified in the reported judgment text]