he Jaipur Bench of the Rajasthan High Court, in Smt. Shobha Rani Kushwah v. State of Rajasthan & Ors., S.B. Criminal Misc. Petition No. 3302/2023, has quashed the criminal proceedings arising out of FIR No. 17/2017 registered at Police Station Mathura Gate, Bharatpur, for offences under Sections 420, 406 and 120-B IPC. The judgment was delivered by Hon’ble Mr. Justice Sameer Jain on 3 December 2025. The petitioner is an MLA from Dholpur belonging to a non-ruling party, and the matter was taken up on priority in view of the Supreme Court’s directions regarding early disposal of cases relating to MPs and MLAs. 

The petition was filed under Section 482 CrPC (now Section 528 of the Bharatiya Nagarik Suraksha Sanhita) challenging two specific orders: the cognizance order dated 18.10.2022 passed by the Additional Chief Judicial Magistrate No. 2, Bharatpur in Criminal Case No. 522/2022, and the revisional order dated 12.05.2023 passed by the Additional Sessions Judge (Women Atrocities Cases), Bharatpur in Criminal Revision No. 05/2023. The core complaint of the petitioner was that she had been unnecessarily dragged into criminal proceedings despite the absence of any material against her during investigation.

On facts, the High Court noted that after registration of the FIR in 2017, the police investigation culminated in a charge-sheet only against certain co-accused. No charge-sheet was ever filed against the petitioner, nor were proceedings kept pending against her under Section 173(8) CrPC. This, in the Court’s view, clearly reflected that there was no incriminating material found to link the petitioner with the alleged offences. Despite this, cognizance came to be taken and the revisional court declined to interfere, leading to the present petition.

A central plank of the petitioner’s case was her status in relation to the company involved in the transaction. It was specifically argued, and not disputed by any material on record, that she was neither part of the management nor a member of the Board of Directors. She was only a shareholder holding 8,000 shares. The Court accepted the submission that mere shareholding, without involvement in the day-to-day affairs or decision-making of the company, cannot by itself give rise to vicarious criminal liability. The judgment reiterates the basic criminal law principle of actus non facit reum nisi mens sit rea—an act does not render a person guilty unless accompanied by a guilty mind—and holds that no mens rea or overt act had been attributed to the petitioner in the investigation record.

Another important facet considered by the Court was the nature of the dispute and the subsequent developments. The underlying dispute was essentially between investors and the company, arising out of financial/commercial transactions. The Court accepted the contention that the controversy had an overwhelmingly civil and commercial flavour, rather than a purely criminal one. It was brought to the Court’s notice that similar proceedings had earlier been initiated in Chhattisgarh and Punjab, where also the petitioner was neither named nor implicated, indicating that she was never considered a principal actor in the business dealings in question.

Significantly, a compromise had been entered into between the complainant and the accused persons whose service had been effected. On behalf of the respondents, counsel expressly did not dispute the factum of compromise and rather supported it. Furthermore, the co-accused against whom charge-sheets had been filed were acquitted on 11.11.2024. With the co-accused already acquitted and the complainant having settled the dispute, the Court found that the very substratum of the prosecution case against the petitioner no longer survived. Continuation of proceedings against her alone would serve no useful purpose and would only amount to harassment.

The Public Prosecutor opposed the petition in form, but the Court recorded that no substantive or convincing rebuttal was offered to the factual position presented on behalf of the petitioner. After a detailed consideration of the record and rival submissions, the Court framed its reasoning within the well-settled contours of Section 482 CrPC. It reiterated that inherent powers of the High Court exist to prevent miscarriage of justice, to secure the ends of justice and to prevent abuse of the process of the Court. The judgment relies on the Latin maxim quando lex aliquid alicui concedit, concedere videtur et id sine quo res ipsa esse non potest—when the law gives anything, it gives that without which the thing itself cannot exist—emphasising that effective exercise of inherent power is essential to preserve justice in appropriate cases.

In support of quashing, the Court referred to the leading Supreme Court authorities in Gian Singh v. State of Punjab, (2012) 10 SCC 303; State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335; and Narinder Singh v. State of Punjab, (2014) 6 SCC 466. These decisions lay down that criminal proceedings arising out of commercial or financial transactions, where the dispute is predominantly civil in nature, where there is a compromise between the parties, and where the possibility of conviction is remote due to lack of evidence, can and should be quashed to secure the ends of justice. The judgment specifically reproduces the broad summary from Gian Singh on the scope of the High Court’s inherent powers and the test of “ends of justice” and “prevention of abuse of process.”

Applying these principles, the Court concluded that the present case clearly falls within the parameters identified by the Supreme Court. There was no mens rea on the petitioner’s part, no overt act alleged, and no vicarious liability that could be legally fastened to her on the mere basis of shareholding. No charge-sheet had been filed against her, no material indicated her participation in the alleged acts, the dispute had been amicably settled by a compromise deed, and the co-accused already stood acquitted. In such a scenario, compelling the petitioner to face a criminal trial would be nothing but an abuse of the process of law.

In its operative part, the Rajasthan High Court, Jaipur Bench, allowed the criminal miscellaneous petition. It quashed and set aside the order dated 12.05.2023 passed by the Additional Sessions Judge (Women Atrocities Cases), Bharatpur in Criminal Revision No. 05/2023, as well as the cognizance order dated 18.10.2022 passed by the Additional Chief Judicial Magistrate No. 2, Bharatpur in Criminal Case No. 522/2022. Invoking its inherent jurisdiction under Section 482 CrPC, now reflected in Section 528 of the BNSS, the Court held that continuation of proceedings against the petitioner would amount to abuse of process, and all pending applications were disposed of accordingly.

From a broader legal perspective, this judgment is significant for several reasons. First, it reinforces that an ordinary shareholder, without any managerial role or specific involvement in alleged fraudulent acts, cannot be mechanically roped in to face criminal prosecution merely because of her financial interest in a company. Second, it affirms that in cases involving MPs and MLAs, even though matters are to be prioritised for early disposal, the judiciary will not permit such cases to be used as instruments of pressure when the basic ingredients of criminal liability are absent. Third, it once again underlines the High Court’s duty under Section 482 CrPC / Section 528 BNSS to step in where a criminal case is essentially a civil or commercial dispute which stands settled, and where the chance of conviction is negligible.

For practitioners and litigants alike, this Jaipur Bench decision serves as a clear reminder that criminal law cannot be used as a tool to coerce shareholders or investors without specific allegations and evidence of criminal intent and participation. It also demonstrates that where the substratum of a case has disappeared due to compromise and acquittal of principal accused, and where there is no independent material against a residual accused, the High Court will not hesitate to exercise its inherent powers to protect individuals from unnecessary and protracted criminal trials.

Read the entire judgment here

By Advocate Bhuvnesh Kumar Goyal