Court Finds No Prima Facie Case for Criminal Charges; Dispute Deemed Civil in Nature
In a significant ruling on June 17, 2026, the Calcutta High Court quashed the criminal proceedings against bank officials Kundan Kumar Singh and another, who were accused of criminal conspiracy, cheating, criminal breach of trust, and forgery. The case, stemming from a disputed auction sale conducted under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), was deemed a civil dispute by the court.
The dispute revolved around a car parking space in Kolkata, which was auctioned by the State Bank of India on an "as is where is" basis. The complainant, Parag Mukhopadhyay, alleged that despite being the highest bidder and paying the full auction price, he was not given possession of the property, which he later discovered was claimed by another party, Mrs. Chobi Kar Roy.
Justice Dr. Ajoy Kumar Mukherjee, presiding over the case, emphasized that criminal proceedings cannot be a tool to settle civil disputes and highlighted the necessity of establishing a prima facie case under the Indian Penal Code (IPC) to continue with criminal charges. The court found that the allegations lacked the essential ingredients required to constitute the alleged offences and determined that the matter was inherently civil, given the nature of the auction terms and the existing civil remedies available to the complainant.
The judgment noted that during the investigation, the bank had taken steps to hand over possession and had communicated with the complainant to complete the transaction. Furthermore, the court observed that the complainant had not disclosed an order from the Consumer Disputes Redressal Commission, which directed him to take possession of the property, indicating possible malafide intentions.
The court also referenced the Supreme Court's guidelines on the exercise of jurisdiction under Section 482 of the Criminal Procedure Code, which allows for the quashing of proceedings when the allegations lack sufficient grounds for a criminal case. The decision emphasized the importance of judicial scrutiny in the issuance of summons and the prevention of misuse of the criminal justice system to exert pressure in civil disputes.
In quashing the proceedings, the court underscored the need for parties to pursue civil remedies for resolving disputes related to auction sales under the SARFAESI Act, reaffirming the separation between civil and criminal jurisdictions.
Bottom line:-
Criminal proceedings cannot be used to settle civil disputes. A prima facie case must be established under the IPC for continuation of criminal proceedings.
Statutory provision(s):
- Indian Penal Code, 1860 Sections 120B, 420, 409, 467, 468, 471
- Criminal Procedure Code, 1973 Section 482
- SARFAESI Act, 2002
- Consumer Disputes Redressal Commission Order
Kundan Kumar Singh v. Parag Mukhopadhyay, (Calcutta) : Law Finder Doc id # 2925978
