SC Rules Educational Institution Cannot Be Prosecuted Over Fire NOC That Was Never Required

The Supreme Court of India, in Jupally Lakshmikantha Reddy v. State of Andhra Pradesh (2025 INSC 1096), has delivered a significant judgment reaffirming that criminal liability for cheating and forgery cannot be sustained in the absence of material inducement, wrongful gain, wrongful loss, or evidence connecting the accused to the creation of a forged document.

What's The Matter?

The case arose from allegations that a college operated by the appellant's educational society had obtained recognition from the education authorities by submitting a forged No Objection Certificate (NOC) purportedly issued by the Fire Department.

A complaint filed by the District Fire Officer led to the registration of an FIR under Sections 420, 465, 468 and 471 of the Indian Penal Code.

However, upon completion of the investigation, the police filed a charge sheet only under Section 420 IPC, alleging that the appellant had used a fabricated fire safety NOC to secure recognition and continue operating the institution.

A crucial fact emerged during the proceedings.

Under the National Building Code, 2016, educational institutions operating from buildings4 below fifteen metres in height were not required to obtain a fire safety NOC.

The appellant's institution functioned from a building measuring 14.20 metres in height.

In fact, educational institutions had already approached the High Court challenging the insistence on such NOCs, and the High Court had directed the authorities to renew affiliations without requiring fire department clearance for buildings falling below the prescribed threshold.

What Court Said?

Against this backdrop, the Supreme Court examined whether the alleged submission of a forged NOC could constitute the offence of cheating. Justice Joymalya Bagchi, speaking for the Bench, emphasized that the offence of cheating requires more than a false representation.

The Court reiterated that deception alone is insufficient; the prosecution must establish dishonest or fraudulent inducement that causes a person to part with property or act in a manner they otherwise would not have. The concepts of "wrongful gain" and "wrongful loss" remain central to the offence.

Applying these principles, the Court found a fundamental defect in the prosecution's case. Since the institution was legally entitled to recognition without producing a fire safety NOC, the alleged representation regarding the existence of such a certificate could not have induced the authorities to grant recognition.

The Court observed that the alleged false statement did not concern a material fact upon which the grant of recognition depended. Consequently, the essential causal connection between the alleged deception and the benefit obtained was entirely absent.

The judgment is particularly noteworthy for its emphasis on materiality in criminal fraud prosecutions.

The Court held that penal consequences can arise only when a false representation influences a decision-maker to confer a benefit, part with property, or undertake an act that would otherwise not have occurred.

Where the benefit would have been granted irrespective of the representation, the offence of cheating cannot be established.

The State attempted to salvage the prosecution by arguing that the facts disclosed elements of forgery, even though the charge sheet was filed only under Section 420 IPC.

The Court was unpersuaded. It noted that the original allegedly forged document had never been recovered and that there was no evidence demonstrating that the appellant had created or manufactured the purported NOC.

Referring to its earlier decision in Sheila Sebastian v. R. Jawaharaj, the Court reiterated that forgery requires proof that the accused made the false document.

Mere possession or use, without evidence linking the accused to its creation, is insufficient to attract Section 465 IPC.

By quashing the proceedings and setting aside the High Court's refusal to intervene, the Supreme Court reaffirmed the protective role of judicial review in preventing abuse of criminal process.

The judgment will likely serve as a valuable precedent in future cases involving allegations of forged regulatory documents, educational approvals, licensing disputes, and similar regulatory prosecutions where the prosecution seeks to criminalize conduct without establishing the essential nexus between the alleged falsehood and the benefit obtained.