KIM WANSOO VS STATE UTTARPRADESH & ORS [2025 INSC 8

Authored By – AISHWARYA G, KSLU

A) HEADNOTE

Vague allegations in an FIR without prima facie evidence of a specific criminal offense—quashing of FIR under Article 226 of the Constitution and Section 482 of the Cr.P.C. The High Court’s refusal to quash the FIR resulted in a miscarriage of justice. The Supreme Court set aside the order of the High Court.

Keywords:

Commercial Transaction, Default Payment, Criminal Proceeding, Quash FIR, Criminal Breach of Trust, False Accusation, Constitution of India, Criminal Procedure Code, Jurisdiction, High Court, Supreme Court, Prima Facie.

B) CASE DETAILS

i) Judgment Cause Title / Case Name: Kim Wansoo Vs State of Uttar Pradesh & Ors [2025 INSC8]
ii) Case Number: SLP (Crl) No. 4848/2020
iii) Judgment Date: 02.01.2025
iv) Court: Supreme Court of India
v) Quorum / Constitution of Bench: Justice C.T. Ravi Kumar; Justice Sanjay Kumar
vi) Author / Name of Judges: Justice C.T. Ravi Kumar
vii) Citation: 2025 INSC 8 SPL CRL A.4849/2020
viii) Legal Provisions Involved: Article 226 of the Constitution, Section 482 of the Cr.P.C.

C) INTRODUCTION AND BACKGROUND OF JUDGMENT

The case revolves around a commercial transaction dispute between companies due to a default in the payment of ₹9 crore. The complainant alleged criminal breach of trust, criminal conspiracy, cheating, and assault, leading to the filing of an FIR. The appellant, a foreign national and head of the project (HEC), was accused under criminal provisions. Subsequently, the appellant filed a writ petition under Article 226 before the Allahabad High Court seeking to quash the FIR, arguing that the matter was purely a commercial dispute. However, the High Court dismissed the petition. The appellant then approached the Supreme Court for relief.

D) FACTS OF THE CASE

  1. Hyundai Motor India Limited (HMIL) awarded a contract named ‘Gurgaon’ to Hyundai Engineering & Construction India (HEC), an associate company of HMIL. The project manager, Kim Wansoo (a foreign national), is the appellant.

  2. HEC subcontracted the project work to KOTEC India Pvt Ltd., which further subcontracted the construction work to YSSS India Construction. YSSS, in turn, subcontracted manpower acquisition to M/S R.T. Construction (the respondent).

  3. M/S R.T. Construction filed FIR No. 64/2020, alleging fraud, criminal conspiracy, and intimidation due to the non-payment of ₹9 crore related to the project.

    • The respondent claimed that YSSS issued cheques worth ₹8.31 crore for the work done in 2018-2019, which were dishonored.
    • A reconciliation meeting was arranged by Hyundai Motor India (HMI), where YSSS agreed not to initiate any legal action, and it was decided that KOTEC India Pvt Ltd. would make the payment.
    • KOTEC issued two cheques:
      • ₹61,38,446/-
      • ₹2,45,53,864/- (dishonored)
    • The complainant, his brother, and their partner frequently visited the company office and made several phone calls regarding the pending payment, allegedly leading to adverse reactions from the concerned persons.
    • On their last visit, the complainant’s brother, Nasis Ali Khan, was allegedly assaulted and abused by the accused, leading to severe trauma. He passed away on 30.01.2020, following which a complaint was filed at Sadar Bazar Police Station, Meerut.

  4. The appellant challenged the FIR by filing a writ petition before the Allahabad High Court seeking its quashing, which was dismissed.

E) LEGAL ISSUES RAISED

  1. Whether the FIR prima facie disclosed a criminal offense against the appellant.
  2. Whether the Allahabad High Court exercised its power under Article 226 of the Constitution and Section 482 of the Cr.P.C. while dismissing Writ Petition No. 8063 of 2020.
  3. Whether the High Court’s decision to allow criminal proceedings complied with the principles of law.

F) PETITIONER / APPELLANT’S ARGUMENTS

  1. The FIR contained generalized allegations without specifically mentioning the appellant’s involvement in the alleged offenses.
  2. The appellant, as the project manager of HEC, had no contractual obligation with the complainant or M/S R.T. Construction.
  3. The criminal proceedings arose from a purely commercial transaction, which is civil in nature, and proceeding with the FIR would result in a miscarriage of justice.
  4. The FIR was filed with the intention of coercing payment for the defaulted amount rather than genuinely reporting a criminal offense.
  5. The Allahabad High Court failed to prevent the abuse of the judicial process by not quashing the FIR.

G) RESPONDENT’S ARGUMENTS

  1. The High Court lawfully exercised its discretion by dismissing the petition and allowing criminal proceedings against the accused.
  2. The FIR clearly outlined the accused persons’ actions, including breach of trust, cheating, fraud, assault, and criminal intimidation.
  3. As the project manager, the appellant was responsible for the non-payment of dues and was aware of the involvement of other accused persons.
  4. The appellant was accountable for the complainant’s significant financial loss due to the default in payment.

IMPORTANT LEGAL PROVISIONS

i. Article 226 – High Court’s Writ Jurisdiction for Quashing an FIR in Exceptional Cases

The appellant filed a writ petition in the High Court of Allahabad seeking to quash the FIR, citing a miscarriage in the provision. The petition was dismissed, leading to an appeal before the Supreme Court for justice.

ii. Section 482 – Inherent Power of High Court to Quash Proceedings to Prevent Abuse of Process

The appellant approached the High Court to quash misleading criminal proceedings, as the sections mentioned in the FIR pertained to a commercial transaction involving a default in payment.

H) RATIO DECIDENDI

i. High Court’s Power to Quash FIR under Article 226 of the Constitution and Section 482 of Cr.P.C.

The High Court has the authority to quash an FIR when the allegations are false and the initiation of proceedings is done with mala fide intent.

ii. Filing of FIR Must Be Based on Specific Allegations Supported by Prima Facie Evidence

An FIR should be registered based on clear and specific allegations that establish a prima facie case, ensuring that injustice is not inflicted upon the accused.

iii. Civil Disputes Cannot Be Transformed into Criminal Accusations to Coerce Payment

A commercial dispute arising from a civil transaction should not be wrongfully characterized as a criminal offense to exert undue pressure on a party for payment.

I) OBITER DICTA

i. Misuse of Criminal Law for Commercial Transactions is a Misconception of Law

Criminal law should not be used as a tool for settling business disputes, as it leads to an incorrect application of legal principles.

ii. Courts Must Prevent the Misuse of the Criminal Justice System for Business Transactions

Judicial intervention is necessary to ensure that criminal proceedings are not exploited for resolving financial disputes.

iii. Corporate Liability Should Not Extend to Individuals Without Active Involvement

An individual should not be prosecuted merely based on their designation in a company unless they have actively participated in the alleged offense.

J) JUDGEMENT

i. Supreme Court Sets Aside the Allahabad High Court’s Order

The Supreme Court overturned the order of the High Court of Allahabad, which had dismissed Writ Petition No. 8063 of 2020, reaffirming its power under Section 482 of the Cr.P.C. and Article 226 of the Constitution.

ii. FIR Lacked Specific Criminal Allegations Against the Accused

The Supreme Court observed that the FIR failed to establish a specific criminal offense, leading to a miscarriage of justice.

iii. Supreme Court Quashes FIR No. 64/2020

The Court ordered the quashing of FIR No. 64/2020 registered at Sadar Bazar Police Station and set aside further proceedings initiated in pursuance of the FIR.

K) CONCLUSION

The judgment upholds the principle that civil disputes should not be maliciously converted into criminal proceedings for commercial transactions. It serves as a precedent to ensure that business disputes are addressed through appropriate legal channels without the misuse of criminal law.

L) REFERENCES

I) Important Statutes Referred

  1. Indian Penal Code, 1860 (IPC)

    • Section 406 – Criminal Breach of Trust
    • Section 420 – Cheating and Dishonestly Inducing Delivery of Property
    • Section 323 – Voluntarily Causing Hurt
    • Section 504 – Intentional Insult with Intent to Provoke Breach of Peace
    • Section 506 – Criminal Intimidation
    • Section 120-B – Criminal Conspiracy

  2. Code of Criminal Procedure, 1973 (Cr.P.C.)

    • Section 157 – Procedure for Investigation
    • Section 173(2) – Report of the Police Officer on Completion of Investigation
    • Section 91 – Summons to Produce Document or Other Thing
    • Section 482 – Inherent Powers of High Court

  3. Constitution of India

    • Article 226 – Power of High Courts to Issue Writs

II) Important Cases Referred

  1. Joginder Kumar v. State of U.P. (1994 Cr.L.J. 1981)
  2. State of Haryana & Ors. v. Bhajan Lal & Ors. (AIR 1992 SC 604; 1990 INSC 363)
  3. Pepsi Foods Ltd. & Anr. v. Special Judicial Magistrate & Ors. (AIR 1998 SC 128; 1997 INSC 714)
  4. Eastern Spinning Mills v. Rajiv Poddar (AIR 1985 SC 1668)
  5. State of A.P. v. Golconda Linga Swamy ((2004) 6 SCC 522; 2004 INSC 404)
  6. Mohammad Wajid & Another v. State of U.P. & Anr. (2023 SCC Online SC 951; 2023 INSC 683)
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