Emphasizing that the issuance of summons in criminal cases is a serious judicial act requiring careful consideration, the Delhi High Court has quashed a summoning order against a man accused in a ₹98 lakh cheating case, ruling that the trial court had failed to apply its mind while passing the order.
Justice Amit Mahajan, in a judgment delivered on June 23, set aside the trial court’s September 28, 2013, order summoning the accused under Section 420 (cheating) of the Indian Penal Code on the basis of a complaint filed by M/S Indiabulls Securities Limited. The company had alleged that the man fraudulently availed margin trading facilities to purchase shares and failed to repay, despite repeated margin calls.
The high court observed that while the presence of civil remedies does not bar criminal proceedings, a mere breach of contract is not sufficient to establish the offence of cheating. “It is to be shown that the accused had dishonest intention at the time of making the promise,” the court stated.
“Issuance of summons is a serious issue and it is thus imperative that the summoning order shows due application of mind and examination of the facts of the case as well as the evidence on record. Merely taking note of the facts and recording prima facie satisfaction, without giving any reasons for the same, is insufficient,” the court said.
The accused, a senior citizen, contended that the criminal complaint was nothing more than a civil dispute being given a criminal color. He alleged that Indiabulls Securities had, in fact, sold his shares worth ₹7 crore without his express instructions, causing him losses.
Agreeing with the petitioner, the court found that “prima facie, the allegations taken at their face value, do not disclose an element of criminality and commission of a cognisable offence.” It held that continuing criminal proceedings in such circumstances would amount to “an abuse of the process of law.”
“The impugned order is unreasonable and summons have been arbitrarily issued against the petitioner,” the court said, adding that the complaint and accompanying evidence lacked the necessary ingredients of the offence alleged.
In quashing the summoning order, the High Court reiterated that criminal proceedings must not be misused to “wreak vengeance or harass the other side,” and must not serve as a tool to pressurize parties in civil disputes.
