Facts of the Case

This is not a GST case. The petitioner sought quashing of FIR No. 65/2023 registered at Sion Police Station, Mumbai, for offences under Sections 406, 420, 465, 467, 468 and 471 read with 34 of the Indian Penal Code, along with directions to defreeze certain bank accounts and return a mobile phone seized during investigation.

The FIR arose from an investment dispute: the petitioner had represented to the complainant (Director of a company in the eco-friendly waste-products business) that he had secured a municipal contract to set up a bio-gas plant from waste, requiring an investment of Rs. 2.70 crore, on an assurance of 50% profit-sharing. The complainant agreed to purchase machinery to be rented to the petitioner and deposited Rs. 2,70,10,270/- with vendors who allegedly supplied machinery. It later transpired that no such municipal contract existed, no land had been allotted, and no machinery was delivered — the invoices were allegedly forged, and the funds were routed to the petitioner's company (Siddhi Waste to Green Pvt. Ltd.) 'after deducting GST', and then to the petitioner's personal account.

After the FIR was registered, the parties arrived at an amicable settlement, under which the petitioner agreed to repay Rs. 1,85,00,000/- to the complainant in full and final settlement (after adjusting Rs. 23,00,000/- separately due from the complainant to the petitioner's company).

Issues Involved

  1. Whether the FIR, involving offences that are not merely compoundable but relate to a settled civil/business dispute, should be quashed in view of the settlement between the parties.
  2. Whether any conditions or costs should attach to such quashing.

Petitioner's Arguments

  • The parties had entered into an amicable settlement, with the petitioner returning Rs. 1,85,00,000/- to the complainant in full and final settlement.
  • Since the dispute was personal/business in nature and had been resolved, continuation of criminal proceedings would serve no purpose.

Respondent's Arguments

  • The complainant (Respondent No. 2) confirmed receipt of the settlement amount by demand draft and had no objection to quashing the FIR against the petitioner and the co-accused directors of his company.
  • The other co-accused directors also filed affidavits accepting the settlement.

Court Order / Findings

  • The Division Bench found that the matter had been amicably settled and that, on perusal of the complaint, the allegations were essentially personal in nature.
  • Relying on the Supreme Court's guidance in Narinder Singh v. State of Punjab [2014 AIR SCW 2065], the Court held that no purpose would be served by continuing criminal proceedings that would only burden already overburdened criminal courts.
  • At the same time, since the machinery of criminal law and the judicial process had been invoked to settle what was essentially a personal/business dispute, the Court imposed costs of Rs. 50,000/- payable by the petitioner to Tata Memorial Hospital, Mumbai, within two weeks.
  • Subject to payment of costs, the FIR was quashed, and the writ petition was disposed of, with the matter listed for compliance on a later date.

Important Clarification

The reference to funds being transferred 'after deducting GST' is a purely factual detail describing how money moved between the accused's companies — it has no bearing on any GST liability, refund, or interpretation question, and the Court does not examine any GST provision. This is a criminal-law quashing order based on settlement, governed by Section 482 CrPC principles.

Sections Involved

  • Section 482 of the Code of Criminal Procedure, 1973 (inherent powers of High Court)
  • Sections 406, 420, 465, 467, 468 and 471 read with 34 of the Indian Penal Code, 1860

Decision – In Favour of

Decided in favour of the petitioner — the FIR was quashed on the basis of settlement, subject to payment of costs, with no adjudication of any GST issue.

Case Details

Court: High Court of Judicature at Bombay, Criminal Appellate Jurisdiction
Case No.: Criminal Writ Petition No. 3189 of 2023
Neutral Citation: 2023:BHC-AS:29008-DB
Coram: Smt. Anuja Prabhudessai and N.R. Borkar, JJ.
Date of Order: 26.09.2023

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