Supreme Court Sets Aside High Court Direction for Further Probe, Restores Closure Report in Mining-lease Dispute

A bench of Justices Vikram Nath and Sandeep Mehta (Justice Mehta authored the judgment) heard appeals arising from a Calcutta High Court order dated 17 October 2023 that had allowed a criminal revision filed by a company and directed the police to carry out further investigation into allegations of fraud and forgery connected with the transfer of a mining lease. The appeals challenged the High Court’s direction to reopen the probe after a magistrate had accepted the police closure report.

The Court allowed the appeals, quashed the impugned High Court order and restored the trial court order dated 5 October 2015 which had accepted the final report filed under Section 173(2) CrPC. The Supreme Court held that the material collected during investigation showed the dispute was essentially civil, arising from breach of a Memorandum of Understanding, and that the complaint had been filed after an unexplained delay of approximately six years. The Court noted that the complainant “twisted and manipulated the facts in the highly belated complaint” and found no prima facie evidence of forgery. The Court, in its reasoning, observed: "We have no hesitation in holding that the admitted allegations as set out in the complaint do not disclose the necessary ingredients of any offence whatsoever, what to say, of a cognizable offence. Directing further investigation into such a frivolous complaint, filed after gross, undue and unexplained delay of six years, is nothing but a sheer abuse of the process of law." The bench held that directing further investigation under those circumstances would itself amount to an abuse of process.

Background The dispute arose when Suresh Kumar Agarwal allegedly represented to officers of a steel company that he was proprietor of Haryana Minerals and held a mining lease for manganese in Madhya Pradesh, and that he would convert the proprietorship into a private limited company and transfer the shares to the company in consideration of payments. The complainant-company claimed payment of advance sums (variously pleaded in the record, including an initial payment of Rs.50 lakhs and other entries indicating Rs.96,20,350/-) and alleged non-supply of ore and falsification of transfer documents. The appellant incorporated Haryana Mineral Manganese Ore (P) Ltd. (HMMOPL) and, on the investigating officer’s findings, transferred about 28% shares to nominees of the complainant while a balance of the contractual price under the MOU (which contemplated total consideration of Rs.3,20,00,000/-) remained unpaid.

The police registered FIR and investigated, ultimately filing a closure report on 1 April 2015 concluding that the matter was a contractual dispute and that no offence was made out. The learned Chief Metropolitan Magistrate accepted the closure report and rejected the complainant’s protest petition on 5 October 2015. The High Court, on revision, set aside those orders and ordered further investigation under Section 173(8) CrPC, expressing concern about the credibility of the lease transfer. The Supreme Court found that the High Court had been unduly influenced by a belated and newly advanced theory of forgery and that the admitted facts and documentary record supported the police conclusion that the controversy was civil. The High Court order dated 17 October 2023 was quashed, the magistrate’s order accepting the negative final report was restored, and the appeals were allowed. No interim directions or additional liberty were issued.

Case Details: Case No.: 2025 INSC 636 Case Title: Suresh Kumar Agarwal v. M/s. Haldia Steels Limited & Anr. Appearances: For the Petitioner(s): Not indicated in the judgment For the Respondent(s): Not indicated in the judgment