Criminal Proceedings Cannot Be Invoked To Interdict An Arbitral Award: Supreme Court
Kiran Raj
The Supreme Court Division Bench of Justice M.M. Sundresh and Justice Rajesh Bindal set aside the High Court’s refusal to quash a criminal case and ordered that the complaint and all proceedings pending before the Hyderabad Magistrate be quashed, while also asking that the enforcement petition for the foreign arbitral award be heard expeditiously. The Court noted that comity of courts is a globally accepted principle that this Court has recognised on several occasions and found that it was sought to be undermined through criminal proceedings in India after an arbitral tribunal seated in London had already examined the same manuscript forming the basis of the parties’ agreement. The Court treated the criminal complaint, alleging document-related offences, as an attempt to bypass the London award.
The dispute arose from a manuscript dated 17.05.2013, which formed the basis of an agreement between the parties. Arbitral proceedings were initiated with the seat in London, where witnesses were examined and the tribunal heard the parties on the admissibility, relevancy, and proof of the manuscript. The tribunal recorded findings on the document, including that respondent no.2 did not allege that the appellant had made markings on the manuscript dishonestly, and awards were passed at different stages.
Thereafter, respondent no.2 filed a claim petition before the Commercial Court at Dubai and also moved an anti-suit injunction application in London; the Dubai claim petition was later withdrawn. An enforcement petition was filed in India for giving effect to the arbitral award, and an interim injunction was obtained restraining respondent no.2 from dealing with its assets.
A few days later, respondent no.2 initiated a criminal complaint under Section 200 of the Code of Criminal Procedure, 1973, alleging offences under Sections 465, 468, 471 and 420 of the Indian Penal Code, 1860, relating to the manuscript and its markings, and raised issues regarding Section 202 of the Code. The appellant invoked Section 482 of the Code seeking quashing, while respondent no.2 maintained that the arbitration and criminal allegations operated in different fields and that the complaint disclosed a cognizable offence.
The Court observed: “Comity of Courts is a principle well recognized throughout the world. The said principle has not only been duly recognized, but also reiterated by this Court time and again.” It stated: “This is a case where the aforesaid principle has not only been violated, but an attempt has also been made by respondent No.2 to get over the arbitral award that was passed by a jurisdictional forum in London after affording an adequate opportunity of hearing to the parties concerned, by way of initiating criminal proceedings, after exhausting few other options.”
On the core subject matter, the Court recorded: “The subject matter of the criminal complaint is with respect to a manuscript dated 17.05.2013 which led to an agreement inter se the parties.” It noted the arbitration record on the same document: “On the admissibility, relevancy and proof pertaining to the document dated 17.05.2013, the Arbitral Tribunal heard the parties at length. Specific findings have been given by the Arbitral Tribunal on that aspect.” It also stated: “The Arbitral Tribunal had noted that there was no allegation by the respondent No. 2 that the appellant had put markings on the aforesaid manuscript dishonestly.”
The Court stated: “The arbitral award has become final inter-se the parties and the proceedings are pending at present before the Bombay High Court for its enforcement.”
On the criminal complaint being pursued after the arbitration findings, the Court stated: “this is nothing but an abortive attempt being made by the respondent No.2 to ensure that the arbitral award is not given effect to. In other words, this is nothing but an abuse of the process of law.” It recorded: “The very same document has been considered threadbare by the Arbitral Tribunal at London. On the said document, evidence has been led by both the sides.” It further stated: “As against the evidence lead by respondent No.2, the evidence lead on behalf of the appellant and the respondent No.3 found favour with the Arbitral Tribunal.”
On the effect of a foreign-seated award and the use of criminal proceedings, the Court stated: “It is the duty of the Court not only to accept the arbitral award passed by a forum having jurisdiction outside the country, but also to see to it that it is given effect to, unless law so prohibits.” It added: “By way of a criminal proceeding, the arbitral award passed cannot be interdicted or set aside.”
The Court directed: “In such view of the matter, the order passed by the High Court declining to exercise its jurisdiction by invoking Section 482 of the Code stands set aside and consequently, the criminal complaint and criminal proceedings arising out of CC No.581 of 2017 pending before the XIV Additional Chief Metropolitan Magistrate, Hyderabad stand quashed.”
“We request the High Court to consider expediting the hearing of the petition filed for the enforcement of the arbitral award at the instance of the respondent No.3. The appeal stands allowed accordingly. Pending application(s), if any, shall also stand disposed of.”
Advocates Representing the Parties
For the Petitioners: Mr. Mukul Rohatgi, Sr. Adv.; Mr. Sidharth Luthra, Sr. Adv.; Mr. Omar Ahmad, Adv.; Mr. Ishan Gaur, Adv.; Mr. Vikram Shah, Adv.; Mr. Ritik Kumar Rath, Adv.; Mr. Tuhin Dey, Adv.; Ms. Kritika Khurana, Adv.; Ms. Ritika Gambhir Kohli, AOR
For the Respondents: Ms. Devina Sehgal, AOR; Mr. S Uday Bhanu, Adv.; Mr. Avinash Desai, Sr. Adv.; Mr. Divyam Agarwal, Adv.; Mr. Ritesh Kumar, AOR; Mr. Sajan Poovayya, Sr. Adv.; Mrs. Sanjanthi Sajan Poovayya, Adv.; Mrs. Raksha Agarwal, Adv.; Mr. Prastut Mahesh Dalvi, Adv.; Ms. Vidhi Pankaj Thaker, AOR
Case Title: PUSHKAR JAMNERKAR VERSUS THE STATE OF TELANGANA & ORS.
Case Number: CRIMINAL APPEAL NO. 1704 /2025 [@ SLP (CRL.) NO.2410/2024]
Bench: Justice M.M. Sundresh, Justice Rajesh Bindal
