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Criminal Law Is Not a Tool for Civil Recovery Supreme Court’s Consistent Stand Against Misuse of Process

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Introduction:

In recent years, there has been a sharp increase in people filing criminal complaints to put pressure on others in purely civil or commercial matters. Instead of approaching a civil court for breach of contract, money recovery, or business disagreements, parties often misuse the criminal justice system by making allegations of cheating, fraud, or criminal breach of trust. This misuse clogs courts and causes great inconvenience, as the threat of arrest or investigation is used as leverage in business negotiations.

Recognising this disturbing trend, the Hon’ble Apex Court has repeatedly warned against the misuse of criminal proceedings to settle civil and commercial disputes and has time and again emphasized that the criminal justice system cannot be used to recover dues, enforce contracts, or pressure parties in financial or business matters.

Judicial Trend

Over the years, the Hon’ble Supreme Court has made its position crystal clear through several landmark judgments set out below —

  • Delhi Race Club (1940) Ltd. v/s. State of U.P. [2024) 10 SCC 690]
  • Usha Chakraborty v/s. State of W.B. [2023) 15 SCC 135], and
  • Paramjeet Batra v/s. State of Uttarakhand [2013) 11 SCC 673]

— the Court quashed FIRs where commercial defaults were disguised as a criminal complaint. The Court held that non-payment or breach of contract does not amount to cheating unless fraudulent intent existed from the very beginning. The Hon’ble Supreme Court emphasized that if a civil remedy is available and has been adopted, the High Court should quash criminal proceedings to prevent abuse of process.

  • In Indian Oil Corporation v/s. NEPC India Ltd. [(2006) 6 SCC 736], the Court cautioned against the 'growing trend of converting civil disputes into criminal cases' for tactical advantage. The Court emphasized that those who initiate or continue criminal proceedings knowing they are unwarranted should be held accountable. It further suggested that such complainants should face legal consequences after the criminal proceedings are found to be baseless and civil remedies should be pursued instead.
  • Likewise, in Inder Mohan Goswami v/s. State of Uttaranchal [2007) 12 SCC 1] a dispute arose from a land deal where a charitable society cancelled an agreement after the buyer allegedly failed to pay the full amount. In response, the buyer filed a criminal case for cheating. The Court stepped in and stopped the criminal proceedings, calling it a clear "abuse of the process of the court." The Court declared that the matter was purely a civil dispute over a contract that should be decided by a civil court. It delivered a strong warning that the criminal law cannot be used as an "instrument of harassment or for seeking private vendetta" to pressure someone in a business disagreement.
Recent Reaffirmation

In the recent case of Shailesh Kumar Singh v. State of U.P. [(2025) 2025 INSC 869], Court took an even firmer stance, against using criminal courts for debt recovery. In this case High Court had ordered an individual, accused in a commercial dispute, to pay ₹25 Lakhs to the complainant just to be eligible for mediation. The Supreme Court was "quite disturbed" by this and strongly condemned the order, holding that forcing someone to pay money as a condition in a criminal proceeding amounts to a "misuse of process," especially when the dispute is clearly civil in nature. The Court made it clear that money cannot be recovered by filing an FIR and seeking police help, and it quashed the entire criminal case, reiterating that criminal law cannot be used as a debt recovery mechanism and that such actions offend the guarantee of personal liberty under Article 21 of the Constitution.

Conclusion

Through a consistent line of judgments, the Hon’ble Supreme Court has drawn a firm boundary between civil liability and criminal culpability. Its message is unambiguous: Criminal law exists to punish genuine offences against society — not to enforce private contracts or recover debts.

The Hon’ble Supreme Court has therefore placed a dual obligation — upon Litigants to approach the correct forum and act with bona fides, and upon Courts to exercise vigilant scrutiny while entertaining criminal complaints arising from civil disputes.