The Supreme Court has set aside the Madras High Court order that quashed criminal proceedings in a family property dispute involving alleged forgery and cheating. The Court held that even if a civil court has upheld documents, criminal prosecution can continue where fraud allegations exist.
New Delhi: The Supreme Court of India on January 8, 2026, delivered a significant ruling clarifying the limits of the High Court’s power to quash criminal proceedings at the threshold, especially in cases where allegations of fraud and forgery arise out of family property disputes.
Setting aside a Madras High Court order, the apex court held that criminal prosecution cannot be terminated merely because a civil court has upheld the validity of documents arising from the same transaction.
The judgment was passed in Criminal Appeal No. 140 of 2026, filed by Dr. C.S. Prasad, who challenged the Madras High Court’s October 22, 2024 order quashing criminal proceedings against his elder brother Dr. C. Satyakumar, his sister-in-law Dr. Swarnakumari and their son S. Ravi Chitturi.
The High Court had held that the dispute was purely civil in nature and that continuation of the criminal case would amount to abuse of process.
The dispute relates to three registered settlement deeds executed between 2010 and 2012 concerning valuable immovable properties in Chennai, originally owned by late Dr. C. Satyanarayana and his wife late Smt. C. Lakshmi Devi.
A power of attorney was executed shortly before the third settlement deed, authorising the elder son to present documents for registration. Both parents passed away in April 2012.
In 2014, a civil suit was filed by another family member challenging the settlement deeds and seeking partition. Dr. Prasad was arrayed as a defendant but did not contest the suit and allowed it to proceed ex parte against him.
The civil court eventually dismissed the suit in January 2023 and upheld the validity of all three settlement deeds. An appeal against that judgment is still pending.
Separately, in January 2020, Dr. Prasad lodged a criminal complaint alleging cheating, forgery, impersonation and criminal conspiracy in relation to the settlement deeds.
Though the police initially treated the matter as civil, an FIR was later registered in December 2021 on the direction of a Magistrate. After investigation, a charge sheet was filed and the trial court took cognisance in 2023.
The accused approached the High Court, which quashed the entire criminal proceedings, noting that the civil court had already upheld the settlement deeds, that the complainant had suppressed material facts, and that there was an unexplained delay of nearly six years in initiating criminal action.
Allowing the appeal, the Supreme Court reiterated that the inherent powers under Section 482 of the Code of Criminal Procedure must be exercised sparingly.
Referring to its landmark decision in State of Haryana vs. Bhajan Lal, the Court recalled the settled categories where quashing may be justified and reproduced the guiding principle:
“102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we have given the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised….”
The Court also relied on Neeharika Infrastructure Private Limited vs. State of Maharashtra and reiterated that quashing at the initial stage is an exception and not the rule. Reproducing the conclusions from that judgment, the Court emphasised:
“Courts would not thwart any investigation into the cognizable offences.”
“The power of quashing should be exercised sparingly with circumspection, as it has been observed, in the ‘rarest of rare cases’.”
“While examining an FIR/complaint, quashing of which is sought, the court cannot embark upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR/complaint.”
“Criminal proceedings ought not to be scuttled at the initial stage.”
Examining the facts, the Supreme Court noted that the complaint contained clear allegations that the accused abused the advanced age and medical vulnerability of the parents to procure the settlement deeds and later used those documents as genuine to derive unlawful benefit.
The Court held that at the stage of quashing, such allegations must be accepted at face value and tested only during trial.
The apex court strongly disagreed with the High Court’s focus on the complainant’s conduct and delay. It reproduced the High Court’s observations, which stated:
In the said suit, the de facto complainant C.S. Prasad was arrayed as 2nd defendant. He had entered appearance through a counsel, but had not contested the suit neither he filed statement or adduced evidence challenging the validity of the registered documents.
He remained exparte. If really he had any material to establish that he was cheated by his elder brother by making false documents and forgery, he should have participated in the suit proceedings or at least filed a complaint immediately.
He had filed a complaint to the Commissioner of Police only on 08.01.2020 and the same after enquiry, was closed on 17.03.2020 as civil dispute. When his complaint was closed as dispute is civil in nature, the suit O.S.No.2190 of 2014 was pending.
Hence, he had all opportunities to file application to set aside the exparte order passed against him on 08.06.2015 and participate in the suit where the validity of the 3 settlement deeds were one of the issues under consideration.
Instead of participating in the civil proceeding, the private complaint filed on 12.10.2021 under Section 156(3) of Cr.P.C., suppressing the fact that settlement deeds are subject matter in the pending suit.
In this regard it can be safely presumed that the 2nd respondent herein had knowledge about the settlement deeds if not earlier at least on the date of receipt of suit summons in O.S.No.2190 of 2014. Whereas no plausible explanation placed by him in his complaint for delay of 6 years in filing the complaint.
Rejecting this approach, the Supreme Court held that delay in filing a complaint is not, by itself, a ground to quash criminal proceedings. It observed that issues relating to delay, credibility of allegations, mental state of executants and existence of fraudulent intent are all matters requiring evidence and full-fledged trial.
The Court cautioned that permitting quashing solely on the ground that a civil dispute exists would encourage accused persons to defeat criminal prosecution by initiating or relying upon civil proceedings. It reiterated that civil adjudication does not determine criminal intent and that civil and criminal liability can coexist on the same set of facts.
Accordingly, the Supreme Court allowed the appeal, set aside the Madras High Court’s quashing order and restored the criminal case for trial before the Special Metropolitan Magistrate, Land Grabbing Court, Egmore, Chennai.
It clarified that all observations were confined to the quashing issue and would not influence the trial court, which must independently assess the evidence and decide the case on merits.
Read Judgement:
Case Title:
C.S. Prasad v. C. Satyakumar & Ors.
Criminal Appeal No. 140 of 2026 SLP (Crl.) No. 397 of 2025
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