Supreme Court Takes a Stand Against Misuse of Legal System, Levies Rs 25 Lakhs Fine on Unscrupulous Litigant

In a decisive move on January 11, the Supreme Court rebuked a litigant for abusing the legal system through the filing of false and frivolous complaints while withholding essential information. The Court, comprising Justices Vikram Nath and Rajesh Bindal, strongly condemned the respondent for engaging in forum shopping and registering an FIR against appellants despite the commercial nature of the dispute.

Expressing its disapproval of such deliberate misuse of power, the Division Bench imposed a hefty cost of โ‚น25 lakhs on the respondent, Karan Gambhir. The Court directed the amount to be deposited within four weeks with the Registry, with equal portions to be allocated to the Supreme Court Bar Association (SCBA) and the Supreme Court Advocates-on-Record Association (SCAORA) for the development and benefit of their members.

The Court, emphasizing that “unscrupulous litigants should not be allowed to go scot-free,” asserted that stringent measures, including costs, should be applied. It stressed the need to scrutinize litigation marked by concealment, falsehoods, and forum hunting, urging serious reprimands for state actions or government servants involved in such malicious litigation.

In the case at hand, the respondent had filed an FIR against the promoters of three companies, alleging forgery and cheating in connection with short-term loans. The Court, addressing the issue of false jurisdiction, pointed out the respondent’s wishful forum shopping, as the FIR was registered in Noida while the accused companies had their registered offices in Delhi.

Criticizing the Trial Court’s lack of diligence, the Supreme Court stated that it failed to consider crucial details, including the addresses of the complainant and the accused companies. The Court noted the complainant’s deliberate concealment of material facts, constructing a false narrative of document forgery to give the matter a criminal color. It expressed concern that criminal charges were pursued with a motive for personal vengeance rather than genuine justice, overburdening the criminal justice system.

Highlighting the apparent misuse of criminal proceedings, the Court emphasized the damage to trust in the legal system and the harmful precedent set if not addressed. Additionally, the Court noted the significant delay in pursuing the case, as the short-term loan was extended in 2010, yet the FIR was filed more than eight years later.

Concluding that this was a clear case of malicious prosecution, the Court quashed the FIR against the appellants in the matter of DINESH GUPTA v. THE STATE OF UTTAR PRADESH & ANR.

 

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