18 April 2025 Legal Updates

  'PEACEFUL PROTESTS BY CONSUMERS NOT DEFAMATION': SUPREME COURT QUASHES BUILDER'S CRIMINAL COMPLAINT AGAINST HOMEBUYERS  

(a) Case Name:  

• Shahed Kamal & Ors. v. M/s A. Surti Developers Pvt. Ltd. & Anr.  

(b) Court:  

• Supreme Court of India  

(c) Date of Decision:  

• 17th April 2025  

(d) Bench:  

• Justice K.V. Viswanathan and Justice N. Kotiswar Singh  

Key Facts:

The Appellants who were the Homebuyers protested against the builder by erecting a public banner listing grievances like poor maintenance, leakage and non-formation of a housing society. The respondent builder filed a criminal defamation case under Section 500 Cr.P.C.(defamation) read with Section 34 (common intention) against the homebuyers alleging that this act of the homebuyers harmed their reputation.

Issue:

Whether the act of the homebuyers in carrying out the protest amounted to criminal defamation?  

Procedural History:

• Metropolitan Magistrate & Sessions Court: Issued summons to homebuyers.  
• Bombay High Court: Refused to quash the complaint, stating the banner could harm the builder’s reputation. 

Supreme Court's Judgement:

1. Defamation is denied under Section 499 IPC:

• Defamation requires an imputation harming reputation with intent or knowledge of harm.  
• Exceptions apply, such as good faith (9th Exception) if the statement protects the speaker’s/public interest.  

2. Applicability of 9th Exception:

• The homebuyers’ banner was a peaceful protest highlighting genuine grievances (e.g., poor maintenance, water issues).  
• No abusive/false allegations were made; language was temperate and factual.  
• Protest was in good faith to protect their rights as homebuyers.  

3. Freedom of Speech (Article 19(1)(a)):  

• Peaceful dissent is a fundamental right.  
• Courts must balance free speech with defamation laws, ensuring no chilling effect on legitimate protests.  

Decision

• The SC quashed the criminal proceedings, ruling the complaint was an abuse of process.  
• Builder-buyer disputes should not be criminalized if protests are lawful and in good faith.  

Key Legal Principles:

• Defamation (Section 499 IPC): Requires harmful imputation + intent/knowledge of harm.  
• 9th Exception: Protects statements made in good faith for self-interest/public good.  
• Fundamental Rights: Peaceful protest is protected under Article 19(1)(a) (free speech) and Article 19(1)(b) (assembly).  

  THE PRINCIPLE OF RES JUDICATA  APPLIES IN CRIMINAL PROCEEDINGS; FINDINGS IN ONE CASE BIND PARTIES IN SUBSEQUENT CASE: SUPREME COURT  

(a) Case Name:

• S.C. Garg vs. State of Uttar Pradesh & Anr.  

(c) Court:

• Supreme Court of India  

(c) Date of Decision:  

• April 16, 2025  

(d) Bench:

• Justice Pankaj Mithal & Justice Prashant Kumar Mishra  

Key Facts:

The appellant, S.C. Garg (Managing Director of Ruchira Papers Ltd.), was accused of cheating under Section 420 IPC for allegedly encashing 4 out of 11 cheques issued by respondent R.N. Tyagi (partner of ID Packaging) despite receiving payment via demand drafts.  Earlier, Tyagi was convicted under Section 138 of the Negotiable Instruments Act (NI Act) for dishonoring 7 cheques. His defense—that the liability was settled via demand drafts—was rejected by courts, which held the drafts pertained to other transactions.  Tyagi later filed an FIR against Garg, alleging double payment fraud. The High Court dismissed Garg’s plea to quash the FIR, leading to this appeal.  

Issues:

• Whether criminal proceedings against Garg can continue without arraigning the company (Ruchira Papers Ltd.) as an accused.  
• Whether the principle of res judicata applies in criminal proceedings, barring Tyagi from re-litigating the same issue.  
• Whether the FIR was a vexatious counterblast to the concluded NI Act case.  

Supreme Court’s Analysis:

1. Res Judicata in Criminal Cases:  

• The Court held that findings in the NI Act case (that demand drafts were for separate liabilities) bind subsequent proceedings.  
• Relied on Pritam Singh v. State of Punjab (1956) and Bhagat Ram v. State of Rajasthan (1972) to affirm that res judicata applies to criminal matters when the same issue is conclusively decided.  

2. Vicarious Liability:

• Quashed the FIR, emphasizing that Garg cannot be prosecuted alone without implicating the company.  
• Cited Aneeta Hada v. Godfather Travels (2012): Vicarious liability under statutes (e.g., NI Act) requires the company to be arraigned as an accused.  

3. Abuse of Process:

• The FIR was deemed vexatious and a retaliatory move against the NI Act conviction.  

Final Order:

The Supreme Court quashed the criminal proceedings against Garg, holding the prosecution unsustainable due to:  

• Absence of the company as an accused,  
• Binding findings in the NI Act case, and  
• Lack of specific allegations against Garg.  

Legal Principles Clarified:

• Res Judicata in Criminal Law: Earlier judgments on the same issue (e.g., liability of cheques) bar re-litigation.  
• Vicarious Liability: Company must be prosecuted first for its officers to be held liable.  
• Quashing FIRs: Courts can intervene if proceedings are frivolous or retaliatory.  

  THE ACCUSED CANNOT SEEK DISCHARGE OR DELETION OF CHARGES UNDER SECTION 216 CRPC AFTER THE CHARGES HAVE ALREADY BEEN FRAMED UNDER SECTION 228 CRPC: SUPREME COURT  

(a) Case Title:

• Directorate of Revenue Intelligence vs. Raj Kumar Arora & Ors.

(b) Court:

• Supreme Court of India

(c) Bench:

• Justice J.B. Pardiwala

(d) Date of Decision:

• 17th April 2025 

Background:

The Directorate of Revenue Intelligence (DRI) filed appeals against decisions of the Delhi High Court, which held that no offence under the Narcotic Drugs and Psychotropic Substances (NDPS) Act, 1985 was made out in cases involving the substance Buprenorphine Hydrochloride, because it is not listed in Schedule I of the NDPS Rules, though it is included in the Schedule of the NDPS Act.

Key Issues:

• Whether a person can be prosecuted under Section 8(c) of the NDPS Act for dealing with a psychotropic substance not listed in Schedule I of the NDPS Rules, but listed in the Schedule of the Act itself.
• Whether the precedent laid down in Sanjeev V. Deshpande should apply prospectively or retrospectively.
• Whether charges once framed under CrPC can be altered under Section 216 CrPC to discharge the accused.

Supreme Court's Key Observations:

1.    Substances in the Act vs. Rules:

• The Court clarified that Section 8(c) of the NDPS Act applies to all psychotropic substances listed in the Schedule of the Act, not just those in Schedule I of the Rules. The Rules do not limit the scope of the Act but only provide procedural mechanisms.

2.    Retrospective Application of Precedents:

• The Court held that the decision in Sanjeev V. Deshpande, which clarified the applicability of Section 8(c), applies retrospectively since the Court did not expressly state it to be prospective. This judgment removed the loophole that was being used by many accused to claim that they could not be prosecuted under the NDPS Act if the drug wasn't in the NDPS Rules’ Schedule I.

3.    Section 216 CrPC:

• The accused cannot seek discharge or deletion of charges under Section 216 CrPC after the charges have already been framed under Section 228 CrPC. The Special Judge erred by transferring the case to a Magistrate under the Drugs and Cosmetics Act (D&C Act) after charges under NDPS were already framed.

Decision:

The Supreme Court allowed the appeals, set aside the High Court orders, and held that the accused must face trial under the NDPS Act. It reaffirmed that possession of a psychotropic substance listed in the NDPS Act Schedule (even if not listed in the Rules) can still attract prosecution under Section 8(c), provided the conditions for medical/scientific use and proper licensing are not met.