Civil remedies being time-consuming should not lead to criminal misuse. The law must not be reduced to a tool of harassment; When Civil Disputes Become Criminal: Supreme Court's Stern Reminder in Rikhab Birani & Anr. vs. State of Uttar Pradesh & Anr., ; Hon'ble Court imposed a ₹50,000 cost on the State of Uttar Pradesh, warning against the misuse of criminal law to settle civil scores.

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When Civil Disputes Become Criminal: Supreme Court's Stern Reminder in Birani Case

Rikhab Birani & Anr. vs. State of Uttar Pradesh & Anr., Civil  Appeal No. of 2025 | Date: April 16, 2025 | Justices: Sanjiv Khanna (CJI) and Sanjay Kumar, J.

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Background of the Dispute

• In June 2020, appellants Rikhab Birani and Sadhna Birani orally agreed to sell a godown in Kanpur to Shilpi Gupta for ₹1.35 crore.

• Shilpi and her husband claimed to have paid ₹19 lakhs as advance by September 2020.

• A cheque of ₹10 lakhs issued by Shilpi bounced; the remaining payment was never made.

• The Biranis later sold the godown to another buyer in September 2021 for a lower price of ₹90 lakhs, citing changed circumstances.

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Legal Journey

• 2021–2023: Shilpi Gupta filed two criminal complaints before the Magistrate under Section 156(3) CrPC; both were dismissed as purely civil disputes.

• In July 2023, she directly filed an FIR under IPC Sections 420 (cheating), 406 (criminal breach of trust), 354, 504, and 506, which led to a chargesheet and summons.

• The appellants approached the Allahabad High Court under Section 482 CrPC to quash the case; the High Court refused, stating a prima facie case exists.

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Supreme Court's Findings

The Supreme Court quashed the FIR and all criminal proceedings, ruling:

1. Civil Dispute ≠ Criminal Case

• Merely not fulfilling a contract or bouncing a cheque without malicious intent does not constitute cheating.

• There was no mens rea (guilty mind) or dishonest intent at the beginning of the transaction—a necessary ingredient for IPC Sections 420 and 406.

2. Repeated Judicial Errors

• The Court criticized lower courts and police in UP for ignoring precedents and turning civil breaches into criminal cases.

• Referred to cases like Lalit Chaturvedi (2024), V.Y. Jose (2009), and Sharif Ahmed (2024) to reiterate that:

  • Cheating requires dishonest intention from the start.

  • Criminal breach of trust requires entrustment of property, which was absent here.

  • Criminal intimidation (Section 506) demands intent to cause alarm, not just casual threats.

3. Faulty Chargesheet

• The FIR and chargesheet merely restated the complaint without any evidentiary support.

• The Magistrate should have scrutinized whether ingredients of alleged offences were made out before summoning the accused.

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Landmark Observations

“Civil remedies being time-consuming should not lead to criminal misuse. The law must not be reduced to a tool of harassment.”

• The Court imposed a ₹50,000 cost on the State of Uttar Pradesh, warning against the misuse of criminal law to settle civil scores.

• It also directed the Chief Secretary of UP to ensure payment and fix responsibility on erring officers.

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Conclusion

This judgment reinforces the civil-criminal divide and calls for strict judicial scrutiny before criminal proceedings are allowed in cases that are essentially contractual in nature. It is a reminder that criminal law is not a shortcut to civil remedies, and abuse of the legal system has real consequences.

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Legal Takeaway for Lawyers & Aspirants

• Always assess whether the core of the grievance is contractual or criminal.

• Ensure that mens rea is clearly demonstrated before invoking Sections 406 or 420 IPC.

• For judiciary aspirants, this case is a key precedent for understanding Section 482 CrPC, criminal vs. civil wrong, and the scope of quashing FIRs.

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