The Supreme Court has held that criminal proceedings cannot be used to settle disputes that are essentially civil in nature, quashing an FIR lodged against Vandana Jain and others in connection with a Joint Venture Agreement (JVA) dispute.
The Court ruled that the allegations, even if taken at face value, did not disclose the commission of offences such as cheating, criminal breach of trust, or forgery.
The Bench of Justices Pamidighantam Sri Narasimha and Manoj Misra set aside the order of the Allahabad High Court, which had earlier refused to interfere with the criminal proceedings.
The dispute arose from a Joint Venture Agreement dated August 16, 2010, between the appellants, who were landowners, and Motor General Sales Ltd., a developer. Under the agreement, development rights were granted in respect of a 1,500 square yard property in Kanpur. The developer agreed to construct residential apartments at its own cost, and both parties were to share the developed project equally. As part of the arrangement, the developer paid ₹1 crore as security money for due performance of the agreement.
More than a decade later, in 2021, the developer lodged an FIR alleging that the landowners had failed to hand over possession, had not refunded the ₹1 crore security amount, had suppressed pending litigation relating to the property, and had submitted forged documents regarding title. The FIR invoked Sections 406, 420, 467, 468 and 471 of the IPC.
Before the Supreme Court, the central issue was whether these allegations disclosed a cognizable criminal offence or whether the matter was essentially a contractual dispute dressed up as a criminal case. The Court reiterated that while examining a plea for quashing an FIR, courts must assess whether the complaint truly reveals criminal intent or merely reflects a civil disagreement given a “cloak of criminality.”
On examining the Joint Venture Agreement, the Court found that there was no specific representation that no litigation was pending concerning the property. The agreement only assured that the property was not under attachment and that no restraint order prevented the landowners from entering into the arrangement. It also contained an indemnity clause to safeguard the developer in case of title-related issues. Therefore, the allegation of false representation regarding litigation was found to be unsupported by the contract itself.
Regarding the ₹1 crore security deposit, the Court noted that the agreement clearly provided that the amount was not refundable but adjustable against the landowners’ share in the sale proceeds of the project. In such circumstances, non-refund of the amount could not constitute criminal breach of trust and, at best, gave rise to a civil cause of action.
As to the allegation of forgery, the complainant relied on the claim that a Tehsildar’s letter certifying title was not traceable in official records. The Court observed that mere non-availability of a document after several years does not automatically establish forgery within the meaning of Section 464 IPC. There were no specific allegations showing that a false document had been dishonestly or fraudulently created.
The Court also found it significant that the FIR was lodged eleven years after the execution of the agreement. It observed that if there had been dishonest intention from the very beginning, the grievance would likely have surfaced much earlier. The long delay further reinforced the conclusion that the dispute was civil in nature.
Holding that the allegations did not disclose the essential ingredients of cheating, criminal breach of trust, or forgery, the Supreme Court allowed the appeal. It set aside the High Court’s order and quashed the FIR along with all proceedings arising from it.
Case Details
Case Title: Vandana Jain & Ors. Versus State Of Up
Citation: JURISHOUR-109-SC-2026
Case No.: Criminal Appeal No. 1127 Of 2026
Date: 25/02/2026
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