In Criminal Appeal No. 3259/2023 -SC- ‘High Court erred in evaluating disputed facts’: Supreme Court overturns Gujarat High Court order quashing FIR against Gitanjali Gems in alleged criminal breach of trust case
Justice Sanjiv Khanna & S.V.N. Bhatti [29-11-2023]

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Read Order: Digvijaysinh Himmatsinh Jadeja V. The State of Gujarat & Ors.

 

Chahat Varma

 

New Delhi, December 6, 2023: The Supreme Court has allowed an appeal against an order of the Gujarat High Court that had quashed an FIR filed by Digvijaysinh Himmatsinh Jadeja against Geetanjali Gems Limited and Geetanjali Jewellery Retail Limited (GJRL) for alleged criminal breach of trust and cheating.

 

In the said case, there were disputed questions of fact, as the private respondent(s) had asserted that the two agreements dated 25.07.2013 and 13.08.2013 were not binding on the company-GJRL, a subsidiary of Gitanjali Gems Limited. However, the counsel representing the appellant, Digvijaysinh Himmatsinh Jadeja, acknowledged that the agreements were valid and binding. It was further asserted that, pursuant to the agreement dated 13.08.2013, the private respondent(s) had agreed to return 24 karat pure gold bars, for which the consideration or price had been paid but were held in deposit with GJRL in a fiduciary capacity.

 

The impugned judgment dated 05.05.2017, passed by the Gujarat High Court, had involved a thorough factual examination and evaluation. The judgment had granted the prayer for quashing the FIR.

 

However, the division bench of Justice Sanjiv Khanna and S.V.N. Bhatti remarked, “We are of the opinion that the said examination and evaluation should not have been done by the High Court.”

 

The bench acknowledged that the counsel for the appellant, had pointed out documents such as confirmation letters signed by Mr. Santosh Srivastava as the Managing Director at GJRL and Mr. Shivendra Singh, Associate Vice-President (Finance), on behalf of GJRL. Additionally, the statement of accounts, also signed by the aforementioned individuals, was highlighted, asserting that these documents confirmed the fiduciary nature of the deposit. The stand of the private respondent(s) was that Mr. Santosh Srivastava had resigned on 09.12.2013, and the agreements executed by him were without authority.  The bench held that these assertions were disputed factual questions. The private respondents did not dispute the signatures of Mr. Santosh Srivastava or Mr. Shivendra Singh, nor their designation.

 

The bench also took note of the contention raised by the counsel for the private respondent(s) regarding contradictions in the stand taken by the appellant in the notice dated 15.07.2014, which mentioned a breach of contract, and another notice/letter dated 23.08.2014. The bench decided not to delve into these aspects, considering them matters to be examined during the investigation. It was emphasized that while a wrong may be a civil wrong, in some cases, it may also constitute a criminal offense. However, the bench refrained from making detailed observations on this matter.

 

The counsel for the private respondent(s) further raised a contention that the appellant had failed to account for and pay the sale proceeds as per the Operational and Commercial Agreement dated 13.08.2013.  The appellant contested this reasoning on various grounds. The bench remarked that the High Court should not have examined and recorded conclusions on disputed facts to quash the FIR.

 

In view of the aforesaid, the impugned judgment was set aside and the appeal was allowed.

 

The Court added that the observations in the order should not be construed as comments or opinions on the merits of the case. The Court clarified that, during the investigation, the Investigating Officer(s) should consider the rulings of this Court and High Courts interpreting Sections 406, 420, 464, and 465, etc., of the Indian Penal Code.

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