Litigation laced with concealment, falsehood: Supreme Court slaps Rs 25 lakh fine on complainant

New Delhi: The Supreme Court has imposed a whopping fine of Rs 25 lakh on a litigant for filing an FIR in Uttar Pradesh on the basis of "false and frivolous complaint with non-disclosure of necessary facts" in a dispute of civil nature arising out of commercial dealings in Delhi.

"It is high time to check with firmness litigation initiated and laced with concealment, falsehood, and forum hunting," a bench of Justices Vikram Nath and Rajesh Bindal said.

The court said it was constrained to impose a fine on complainant Karan Gambhir to curb others from such acts leading to abuse of judicial remedies, adding he had used judicial mechanisms to raise his grievances but filed a criminal complaint despite the commercial nature of dispute. 

"Such ill intended acts of abuse of power and of legal machinery seriously affect the public trust in judicial functioning," the bench said.

Delhi-based company D D Global's promoter Gambhir lodged an FIR in Uttar Pradesh's Gautam Budh Nagar for cheating and other offences against appellants Dinesh Gupta and Rajesh Gupta, promoters of the companies.

The complainant's company had extended short-term loans of Rs 5,16,00,000 to Gulab Buildtech and Rs 11,29,50,000 to Verma Buildtech respectively, which were subsequently converted into debt equity allegedly promising high returns from real estate business.

The court quashed the FIR and other proceedings, saying "if proceeded further, it will result in absolute abuse of process of court."

"It is a clear case of malicious prosecution," the bench noted.

The bench said, "Unscrupulous litigants should not be allowed to go scot-free. They should be put to strict terms and conditions including costs. Even State actions or conduct of government servants being party to such malicious litigation should be seriously reprimanded."

Going through the facts, the bench noted though the complainant had invested crores of rupees in equity of the two companies based in New Delhi, knowing well their place of business, yet in those cases incomplete addresses showing them at Sector 20, Gautam Budh Nagar, were deliberately mentioned.

"The idea was to falsely create jurisdiction in Gautam Budh Nagar which did not actually lie there," the bench said.

The short-term loan was advanced in the year 2010 for a period of one year. However, when the same was not returned, no steps were taken by the complainant to recover it until the FIR in question was registered on July 29, 2018 i.e. eight years and seven months later, it said.

"The entire factual matrix and the time lines clearly reflects that the complainant deliberately and unnecessarily has caused substantial delay and had been waiting for opportune moment for initiating false and frivolous litigation," the bench said.

The registration of FIR at Noida despite having registered offices of companies in question at Delhi showed a "wishful forum shopping" by the complainant, casting serious doubts on their bona fides, the bench said.