Introduction:

The Andhra Pradesh High Court has declined to exercise its inherent jurisdiction to quash criminal proceedings arising out of a ₹50 lakh financial dispute involving a retired bank manager, his wife and the manager’s father-in-law. In G.V. Srinivasa Rao & Anr. v. State of Andhra Pradesh & Ors., Criminal Petition No. 6992 of 2025, a Single Judge Bench comprising Justice Subhendu Samanta held that the allegations contained in the complaint, when taken at face value, disclosed a prima facie case warranting continuation of the criminal proceedings. The Court consequently refused to interfere under Section 482 of the Code of Criminal Procedure, corresponding to Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023.

The proceedings arose from a prolonged dispute concerning a financial transaction of ₹50 lakh. According to the complainant’s case, his mother had advanced the amount to a retired bank manager and his wife for the purpose of investing in real estate and conducting business. The borrowers allegedly agreed to repay the amount along with interest and executed a promissory note and other documents in connection with the transaction. Three title deeds relating to immovable properties were also allegedly mortgaged as security for the debt.

The dispute intensified when the amount was allegedly not repaid. As part of the repayment arrangement, the retired bank manager and his wife allegedly issued a cheque for ₹25 lakh towards partial discharge of the outstanding liability. The cheque was dishonoured, resulting in criminal proceedings under Section 138 of the Negotiable Instruments Act, 1881. The cheque dishonour proceedings subsequently became an important part of the factual background considered by the High Court.

While the Section 138 proceedings were pending, the bank manager’s wife initiated separate criminal proceedings through a private complaint against the complainant and his parents. She alleged that they had trespassed into her house, threatened her and forcibly obtained her signatures on blank stamp papers. She further alleged that blank cheques and original land documents had also been taken from her. The police investigated these allegations and eventually filed a charge sheet.

The complainant and his parents thereafter approached the High Court seeking quashing of the criminal proceedings arising from the wife’s complaint. A coordinate Bench of the High Court allowed their petition and concluded that the allegations made in that complaint were impossible and false. The earlier proceedings therefore became significant to the subsequent complaint filed by the complainant.

Following the coordinate Bench’s decision, the complainant approached the Magistrate under Section 340 of the Code of Criminal Procedure. His case was that the retired bank manager, his wife and the bank manager’s father-in-law had deliberately instituted a false criminal case and had made false assertions in order to frustrate the earlier proceedings arising from the dishonoured cheque. Allegations were made not merely of perjury, but also of filing a false case, cheating, criminal conspiracy, misappropriation and dishonestly or fraudulently preventing the recovery of the debt.

The Magistrate took cognizance of the complaint and summoned the accused. The retired bank manager and his father-in-law then approached the Andhra Pradesh High Court seeking quashing of the proceedings. Their principal contention was that the essential ingredients for an offence of perjury were absent because they had not made any statement on oath before a competent Court. According to them, Section 340 proceedings could not be sustained merely on the basis of statements allegedly made during police investigation or in a private complaint.

The High Court, however, found that the petitioners’ challenge was too narrow when the allegations in the complaint were considered as a whole. The complaint was not confined to perjury. It contained allegations concerning the institution of a false criminal case, cheating, fraudulent conduct relating to properties and an alleged attempt to defeat the lawful claim of the complainant’s mother. The Court therefore considered whether the entire criminal proceeding could be characterised as groundless at the threshold.

In examining that question, the Court took note of the previous litigation between the parties. It also considered the admitted relationship between the accused persons and the fact that the retired bank manager and his wife had jointly signed the cheque that was subsequently dishonoured. The Court further noticed the allegation that properties involved in the civil dispute had been transferred in the name of the bank manager’s father-in-law for the alleged purpose of defeating future claims.

The case thus presented the High Court with a familiar but important question concerning the limits of its inherent jurisdiction: whether a criminal proceeding should be terminated at the threshold when the complaint contains allegations which, if ultimately established, may constitute offences, or whether disputed questions concerning the truthfulness of those allegations should be left for the appropriate stage of the criminal process. The Court ultimately concluded that the present case did not warrant the exceptional exercise of its quashing jurisdiction.

Arguments of the Parties:

The petitioners, namely the retired bank manager and his father-in-law, sought termination of the criminal proceedings primarily on the ground that the complaint did not satisfy the legal requirements necessary to initiate proceedings for perjury. Their argument was that an allegation of giving false evidence cannot be sustained unless the alleged false statement was made on oath before a competent Court or judicial authority in circumstances recognised by law. According to them, there was no such statement attributable to the petitioners.

The petitioners therefore contended that the very foundation of the proceedings was legally defective. They sought to distinguish between a statement made during police investigation and evidence given before a Court. In their submission, a statement recorded by the police under Section 161 of the Code of Criminal Procedure could not, by itself, be treated as sworn testimony capable of forming the basis of a prosecution for perjury.

The petitioners further questioned the manner in which the subsequent complaint had been instituted. Their case, in substance, was that the complainant was attempting to use criminal law as a means of continuing a private financial dispute. They suggested that the allegations against them were motivated by the earlier cheque dishonour litigation and the civil dispute concerning the properties.

The petitioners also sought to rely upon the principle that inherent powers of the High Court can be exercised where continuation of criminal proceedings would amount to an abuse of the process of law. They urged that the Court should examine the basic ingredients of the offences alleged and determine whether the material placed before it was sufficient to justify continuation of the prosecution.

Their principal submission was therefore that even if the factual allegations were accepted at their highest, they did not establish the ingredients of the offences alleged against them. In particular, the absence of a sworn statement before a competent Court, according to them, rendered the allegation of perjury unsustainable. They argued that the criminal proceedings should not be permitted to continue merely because the parties had been involved in earlier litigation.

The respondents, on the other hand, opposed the prayer for quashing and contended that the complaint had disclosed sufficient material to justify its consideration by the competent criminal Court. The complainant’s case was that the criminal proceedings were not an isolated or independent allegation but formed part of a sequence of events arising from the ₹50 lakh transaction, the dishonoured cheque and the subsequent criminal complaint filed by the bank manager’s wife.

The complainant relied upon the earlier proceedings in which the coordinate Bench had quashed the criminal case initiated by the bank manager’s wife after finding the allegations to be impossible and false. According to the complainant, this earlier judicial finding provided important context for his subsequent allegation that the criminal case had been deliberately instituted to obstruct or frustrate the proceedings arising from the dishonoured cheque.

The respondents also relied upon the fact that the retired bank manager and his wife had jointly signed the cheque for ₹25 lakh, which was issued towards partial discharge of the debt and subsequently dishonoured. This, according to the complainant, demonstrated their direct connection with the financial transaction and the proceedings under Section 138 of the Negotiable Instruments Act.

Another important allegation concerned the properties that had been offered as security for the financial transaction. The complaint alleged that properties involved in the civil dispute had subsequently been disposed of or transferred in the name of the bank manager’s father-in-law with the object of defeating the complainant’s mother’s future claim. The respondents argued that such allegations, taken together with the previous litigation, raised questions that could not appropriately be decided in a petition seeking quashing at the threshold.

The State also supported continuation of the proceedings. Its position was essentially that the competent jurisdictional Court had already taken cognizance after considering the complaint and that there was no sufficient ground for the High Court to conclude that the prosecution was inherently barred or manifestly baseless.

The respondents therefore maintained that the petitioners were asking the High Court to conduct a detailed assessment of disputed factual circumstances at a stage when the Court was required to determine only whether the allegations, if accepted on their face, disclosed the commission of an offence. They contended that questions relating to the truth, falsity and evidentiary value of the allegations were matters for the trial Court.

Court’s Judgment:

The Andhra Pradesh High Court dismissed the criminal petition and refused to quash the proceedings. Justice Subhendu Samanta examined the allegations in the complaint as a whole and concluded that the case was not one in which the Court could appropriately exercise its inherent jurisdiction to terminate the prosecution at the threshold.

A significant aspect of the judgment was the Court’s refusal to examine the complaint exclusively through the lens of the allegation of perjury. The petitioners had focused heavily on the argument that they had not made any statement on oath before a competent Court. The Court acknowledged the substance of this contention but observed that the complaint contained allegations extending beyond perjury.

The complaint also alleged that a false criminal case had been instituted, that the accused had acted in concert, that there had been fraudulent conduct concerning the properties and that steps had allegedly been taken to prevent the complainant’s mother from recovering the amount due to her. The Court therefore considered the totality of the allegations rather than treating the complaint as though it depended entirely upon proof of perjury.

This distinction was important because the existence or absence of a legally sustainable allegation of perjury did not automatically determine the fate of the remaining accusations. If other allegations independently disclosed prima facie criminal conduct, the entire proceeding could not be quashed merely because one aspect of the complaint might ultimately fail.

The Court also attached significance to the earlier proceedings between the parties. It noted that the private complaint had been lodged by A2, who was the wife of the retired bank manager, while the other accused persons were her close relatives. The Court referred to the earlier order in which the coordinate Bench had concluded that the private complaint was lodged to frustrate the criminal proceedings initiated by the complainant’s mother under Section 138 of the Negotiable Instruments Act.

The previous cheque dishonour proceedings were therefore not treated as an irrelevant collateral circumstance. The Court noticed that the first petitioner and A2 had jointly signed the cheque which had been dishonoured. The cheque itself was the subject matter of the earlier criminal litigation. This circumstance connected the petitioners and the subsequent criminal complaint with the underlying financial dispute.

The Court also referred to statements allegedly made by the petitioners during the police investigation of the earlier case. Although such statements could not automatically be treated as sworn evidence for the purpose of establishing perjury, their existence formed part of the factual background relied upon in the complaint. The High Court was not, at the quashing stage, required to determine conclusively whether those statements were true or false.

Another factor considered by the Court was the alleged disposal of the properties involved in the civil proceedings. The complaint alleged that the properties had been transferred or dealt with in the name of the third accused, namely the bank manager’s father-in-law, with the object of defeating the future claim of the complainant’s mother. The Court specifically noted the allegation that the transaction had been undertaken “only for the purpose of defrauding future claim.”

At this stage, the Court did not finally determine whether the alleged transfer was in fact fraudulent or whether the accused persons had acted pursuant to a common design. Instead, it asked the more limited question relevant to a petition for quashing: whether the allegations, if accepted at face value, disclosed sufficient material to justify continuation of the criminal process.

The answer was in the affirmative.

The Court emphasised that the allegations, taken as they stood in the complaint, prima facie disclosed offences and therefore could not be dismissed at the threshold. This approach is consistent with the established principle governing the exercise of inherent jurisdiction that the High Court ordinarily does not conduct a mini-trial while deciding whether criminal proceedings should be quashed.

The inherent power under Section 482 CrPC, now corresponding to Section 528 BNSS, is extraordinary in nature. It exists to prevent abuse of the process of a Court and to secure the ends of justice. However, the power is not intended to substitute the High Court for the trial Court in determining disputed questions of fact, assessing witness credibility or deciding whether the prosecution will ultimately succeed.

Where the allegations in a complaint, taken at their face value, disclose the ingredients of an offence, the normal course is for the criminal process to proceed in accordance with law. Quashing becomes appropriate in circumstances where the allegations, even if accepted in their entirety, fail to constitute an offence, where the prosecution is legally barred, or where continuation of the proceedings would plainly amount to abuse of process.

The High Court found that the present case did not fall within those exceptional circumstances.

The Court also rejected the suggestion that the proceedings were necessarily motivated by mala fides. It noted that the complaint itself contained the reasons and circumstances on the basis of which the complainant alleged that the accused had acted improperly. The complaint had also been entertained by a competent jurisdictional Court, which had taken cognizance and summoned the accused.

The fact that the parties were involved in a financial and civil dispute did not, by itself, make the criminal allegations legally impermissible. A transaction may give rise simultaneously to civil and criminal consequences if the factual ingredients of a criminal offence are independently established. The mere existence of a civil dispute cannot automatically immunise conduct alleged to constitute cheating, conspiracy, fraudulent disposition of property or institution of a false criminal case.

At the same time, the Court did not pronounce a final finding of guilt against the petitioners. Its conclusion was limited to the threshold question of whether the criminal proceedings should be terminated before trial. By holding that a prima facie case was disclosed, the Court left the factual and evidentiary issues to be examined by the competent Court in accordance with law.

The Court’s reasoning also demonstrates why the petitioners’ argument regarding perjury could not, at that stage, dispose of the entire matter. Even assuming that the allegation of perjury required proof of a statement made on oath before a competent judicial forum, the complaint contained other allegations concerning the alleged institution of a false case, fraudulent conduct and prevention of recovery of the debt. The Court therefore declined to treat the alleged defect in one component of the complaint as sufficient to invalidate the entire prosecution.

The High Court ultimately held that it was not a fit case for exercise of its inherent power. In clear terms, it observed that after a thorough perusal of the complaint, the Court could not conclude that the proceedings were liable to be quashed under Section 482 CrPC or Section 528 BNSS.

The criminal petition filed by the retired bank manager and his father-in-law was accordingly dismissed as devoid of merit. The Court imposed no costs.

The ruling is significant for reiterating the restrained approach that High Courts are expected to adopt when exercising their extraordinary jurisdiction in criminal matters. A petition for quashing is not ordinarily the stage for deciding whether allegations are ultimately proved. Where the complaint contains allegations which, if accepted as true, constitute offences, and where the competent Court has taken cognizance in accordance with law, the High Court will ordinarily allow the criminal process to run its course unless a clear case for intervention is established.

The decision also illustrates the importance of considering the entire factual matrix rather than isolating one legal allegation from the rest of the complaint. Although the petitioners concentrated on the absence of a sworn statement for the purpose of perjury, the High Court found that the complainant’s case was broader and involved allegations of a coordinated attempt to frustrate recovery of a substantial debt through a supposedly false criminal case and dealings with disputed properties.

Ultimately, the judgment does not decide whether the accused are guilty of the offences alleged against them. It decides only that the allegations cannot be rejected as legally non-existent at the threshold. Whether the complainant will be able to prove the alleged conspiracy, fraudulent conduct, false accusation or other offences remains a matter for the competent criminal Court. The Andhra Pradesh High Court’s refusal to quash therefore preserves the distinction between examining the existence of a prima facie case and determining guilt after a full trial.