HC quashes FIR, says civil dispute cannot be given criminal colour

08/08/2026

JAMMU, Aug 7: The High Court of Jammu & Kashmir and Ladakh has quashed an FIR registered by Budgam Police for offences including cheating, outraging modesty and criminal conspiracy, holding that criminal law cannot be invoked to exert pressure in disputes that are essentially civil in nature.
Justice Sanjay Dhar allowed two connected petitions filed by Ghulam Rasool Rather and Ghulam Mohammad Rather and others, quashing FIR No. 252/2021 registered at Police Station Budgam under Sections 420, 354 and 120-B of the IPC, along with all consequential proceedings.
The FIR stemmed from a complaint filed by Gazala Gulzar over the transfer and subsequent operation of Vision Public School. The complaint alleged irregularities relating to the transfer of the school, its condition following flash floods, admission of a student that was later investigated by the Crime Branch, and an allegation of outraging modesty.
Examining the offence of cheating, the High Court observed that an offence under Section 420 IPC requires fraudulent or dishonest intention at the inception of the transaction. Mere breach of contract, the court said, does not constitute cheating unless such intention existed from the beginning.
Justice Dhar held that the allegations concerning flash floods, the condition of the school building and the subsequent Crime Branch investigation into a student's admission did not establish any dishonest intention on the part of the petitioners at the time of transferring the school.
The court observed that the trustees who transferred the management of the school along with its goodwill could not be held responsible for flash floods, describing the natural calamity as an "act of God". It further held that a later investigation into a student's admission could not, by itself, indicate an intention to cheat at the time of the transaction.
The High Court found that the real dispute between the parties related to payment of rent for the school premises. It noted that the monthly rent had been enhanced from Rs. 30,000 under an earlier agreement to Rs. 66,000 under a subsequent rent deed. The record also showed that Ghulam Rasool Rather had filed a civil suit for recovery of rent, while the complainant had instituted separate civil proceedings regarding the rent deed and possession of the premises.
Observing that the criminal proceedings had been initiated against the backdrop of pending civil litigation, Justice Dhar held that the FIR appeared to have been lodged to pressurise the petitioners into a settlement favourable to the complainant.
The court also examined the allegation under Section 354 IPC against Ghulam Rasool Rather. It noted that the alleged incident was said to have taken place in the first week of April 2017 but was reported to police only on August 12, 2021, after more than four years, without any explanation for the delay, including in the complainant's statement recorded under Section 164 CrPC.
Considering the overall circumstances, the High Court observed that the allegation of outraging modesty appeared to have been made to "wreak vengeance" and harass the petitioner because of a personal grudge arising from the civil dispute.
Referring to Supreme Court precedents, Justice Dhar reiterated that criminal proceedings should not be used to settle civil disputes or gain leverage over the opposite party, observing that such misuse of criminal law must be discouraged.
Holding that the case warranted exercise of inherent powers under Section 482 CrPC to prevent abuse of the process of law and secure the ends of justice, the court allowed both petitions and quashed the FIR and all consequential proceedings.
Advocate Asma Rashid appeared for Ghulam Rasool Rather in one petition, Advocate Shakir Haqani represented the petitioners in the connected matter, while Younis Hafeez, Assisting Counsel, appeared for the respondents.

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