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Section 120-B IPC read with Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act and Sections 420/471 IPC – Sec.482 of Cr.P.C.- as the parties out side compromised and asked to apply Nikhil Merchant and Gian Singh case to them – High court dismissed the writ and Apex court held that neither Nikhil Merchant (supra) nor Gian Singh (supra) can be understood to mean that in a case where charges are framed for commission of non-compoundable offences or for criminal conspiracy to commit offences under the PC Act, if the disputes between the parties are settled by payment of the amounts due, the criminal proceedings should invariably be quashed. What really follows from the decision in Gian Singh (supra) is that though quashing a non-compoundable offence under Section 482 CrPC, following a settlement between the parties, would not amount to circumvention of the provisions of Section 320 of the Code the exercise of the power under Section 482 will always depend on the facts of each case. = GOPAKUMAR B. NAIR … APPELLANT (S) VERSUS C.B.I. & ANR. … RESPONDENT (S)= 2014 ( April. Part ) http://judis.nic.in/supremecourt/filename=41390

Section  120-B  IPC  read with Section  13(2)  read  with  Section  13(1)(d)   of  the  Prevention  of Corruption Act and Sections 420/471 IPC – Sec.482 of Cr.P.C.- as the parties out side compromised and asked to apply Nikhil Merchant and Gian Singh case to them – High court dismissed the writ and Apex court held that  neither Nikhil Merchant (supra) nor Gian Singh (supra) can  be understood to mean that in a case where charges are  framed  for  commission

of non-compoundable offences or for criminal conspiracy to  commit  offences under the PC Act, if  the  disputes  between  the  parties  are  settled  by payment of the amounts due, the criminal proceedings  should  invariably  be quashed. What really follows from the decision  in  Gian  Singh  (supra)  is that though quashing a non-compoundable  offence  under  Section  482  CrPC, following  a  settlement  between  the  parties,   would   not   amount   to circumvention of the provisions of Section 320 of the Code the  exercise  of the power under Section 482 will always depend on the facts  of  each  case. =

 

   neither Nikhil Merchant (supra) nor Gian Singh (supra) can  be

understood to mean that in a case where charges are  framed  for  commission

of non-compoundable offences or for criminal conspiracy to  commit  offences

under the PC Act, if  the  disputes  between  the  parties  are  settled  by

payment of the amounts due, the criminal proceedings  should  invariably  be

quashed. 

What really follows from the decision  in  Gian  Singh  (supra)  is

that though quashing a non-compoundable  offence  under  Section  482  CrPC,

following  a  settlement  between  the  parties,   would   not   amount   to

circumvention of the provisions of Section 320 of the Code the  exercise  of

the power under Section 482 will always depend on the facts  of  each  case.

Furthermore, in the exercise of such power, the note of caution  sounded  in

Gian Singh (supra) (para 61) must be kept in mind.  This, in  our  view,  is

the correct ratio of the decision in Gian Singh (supra).

 

14.   The aforesaid principle of law may now be applied to the facts of  the

present case.  At the very  outset  a  detailed  narration  of  the  charges

against the  accused-appellant  has  been  made.   The  appellant  has  been

charged with the offence of criminal conspiracy to commit the offence  under

Section 13(1)(d).  

He  is  also  substantively  charged  under  Section  420

(compoundable  with  the  leave  of  the  Court)  and  Section   471   (non-

compoundable).  

A careful consideration of  the  facts  of  the  case  would

indicate that unlike  in  Nikhil  Merchant  (supra)  no  conclusion  can  be

reached that the substratum of the charges against the accused-appellant  in

the present case is one of cheating nor are the facts similar  to  those  in

Narendra Lal Jain (supra) where the accused was charged under Section  120-B

read with Section 420 IPC only.  The offences are  certainly  more  serious;

they are not private in nature.  

The  charge  of  conspiracy  is  to  commit

offences under the Prevention of Corruption Act.  The accused has also  been

charged for commission of the substantive offence  under  Section  471  IPC.

Though the  amounts  due  have  been  paid  the  same  is  under  a  private

settlement between  the  parties  unlike  in  Nikhil  Merchant  (supra)  and

Narendra Lal Jain (supra) where the compromise was a part of the  decree  of

the Court. 

There is no acknowledgement on  the  part  of  the  bank  of  the

exoneration of the criminal liability of the  accused-appellant  unlike  the

terms of compromise decree in the aforesaid two cases.  

In the  totality  of

the facts stated above, if the High  Court  has  taken  the  view  that  the

exclusion spelt out in Gian Singh (supra) (para 61) applies to  the  present

case and on that basis had come to  the  conclusion  that  the  power  under

Section 482 CrPC should not be exercised to quash the criminal case  against

the accused, we cannot find any justification to  interfere  with  the  said

decision.  

The appeal filed by the accused is, therefore, dismissed and  the

order dated 25.06.2013 of the High Court, is affirmed.

 

2014 ( April. Part ) http://judis.nic.in/supremecourt/filename=41390

P SATHASIVAM, RANJAN GOGOI, N.V. RAMANA

REPORTABLE

IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 831 OF 2014
(Arising out of Special Leave Petition (Crl.) No. 8914 OF 2013)
GOPAKUMAR B. NAIR … APPELLANT (S)

VERSUS

C.B.I. & ANR. … RESPONDENT (S)
J U D G M E N T

RANJAN GOGOI, J.

1. Leave granted.

2. The appellant is the second accused (hereinafter referred to as ‘A-
2’) in CC No. 48 of 2011 (RC 27(A)/2004) in the Court of the Special Judge
(SPE/CBI), Thiruvananthapuram. He is aggrieved by the refusal dated
25.06.2013 of the High Court of Kerala to quash the aforesaid criminal
proceeding lodged by the respondent-Central Bureau of Investigation
(hereinafter for short ‘CBI’).

3. The allegations made against the accused-appellant in the FIR dated
30.11.2004 are to the effect that the accused-appellant alongwith one T.K.
Rajeev Kumar (A-1), Branch Manager, Indian Overseas Bank, Killippalam
Branch, Trivandrum and C. Sivaramakrishna Pillai (A-3) (since deceased) had
entered into a criminal conspiracy to obtain undue pecuniary advantage for
themselves. Specifically, it was alleged that in furtherance of the
aforesaid criminal conspiracy the accused-appellant dishonestly applied for
a car loan of Rs. 5 lakhs and opened a bank account bearing No. 1277 on
24.08.2002 without proper introduction. Thereafter, according to the
prosecution, the accused-appellant furnished a forged agreement for
purchase of a second hand Lancer Car bearing No. KL-5L-7447 showing the
value thereof as Rs. 6.65 lakhs though the accused-appellant had purchased
the said vehicle for Rs. 5.15 lakhs only. It is further alleged that A-1,
by abusing his official position as Branch Manager, dishonestly sanctioned
Rs. 5 lakhs towards car loan without prerequisite sanction inspection. It
is also alleged that A-1, who did not have the authority to do so,
sanctioned education loan of Rs.4 lakhs under the Vidyajyothi Scheme to the
accused-appellant for undergoing a course on Digital Film Making at SAE
Technology College, Thiruvananthapuram. According to the prosecution, the
accused-appellant had submitted two forged receipts of the aforesaid
college showing payment of Rs. 1,60,000/- as fees which amount was duly
released in his favour though he had actually paid Rs. 47,500/- to the
college and had attended the course only for three days.

4. It is the further case of the prosecution that A-1, without being
authorised to do so, sanctioned cash credit facility of Rs. 17 lakhs to
one M/s. Focus Infotainments of which the accused-appellant is the
proprietor and in this regard had obtained inflated value of the collateral
security offered by the accused-appellant from deceased accused, A-3.
According to the prosecution in the valuation report submitted by A-3 the
value of the property offered as a collateral security by A-2 was shown at
Rs.17,34,675/- though the subsequent valuation thereof by an approved
valuer was for Rs.8,56,600/-. The prosecution had also alleged that after
sanction of the said loan, A-1 wiped out the over draft facility of Rs.
13,94,000/- given to the accused-appellant without any authority by
transferring the said amount from the cash credit account which was not
only against the banking procedure but had also caused undue pecuniary
advantage to the accused-appellant to the extent of Rs. 23,57,887/-. On
the aforesaid facts, commission of offences under Section 120-B IPC read
with Section 13(2) read with Section 13(1)(d) of the Prevention of
Corruption Act and Sections 420/471 IPC was alleged insofar as the accused-
appellant is concerned.

5. Based on the aforesaid allegations RC Case No. 27(A)/2004 dated
21.7.2005 was registered wherein chargesheet had been filed against the
accused-appellant under the aforesaid sections of the Indian Penal Code as
well as the PC Act. It is not in dispute that charges under the aforesaid
provisions of law have been framed against the accused-appellant in the
court of the Special Judge (SPE/CBI), Thiruvananthapuram on 29.07.2013.

6. Shri H.P. Raval, learned Senior Counsel appearing for the accused-
appellant had contended that all amounts due to the bank from the accused-
appellant has been tendered in full in an out of court settlement between
the parties. An acknowledgement dated 30.3.2009 has been issued on behalf
of the bank to the aforesaid effect wherein it is also stated that the bank
has no further claims and charges against the accused-appellant in view of
the compromise reached. Placing reliance on the decisions of this Court in
Nikhil Merchant vs. Central Bureau of Investigation and Another[1] and
Gian Singh vs. State of Punjab and Another[2] and a recent pronouncement in
CBI, ACB, Mumbai vs. Narendra Lal Jain & Ors.[3] Shri Raval had contended
that in view of the settlement arrived at between the bank and the accused-
appellant, the High Court ought to have exercised its power under Section
482 Cr.P.C. to quash the criminal proceedings against the accused-
appellant. Shri Raval has taken the Court through the details of the
allegations made and the charges framed to contend that the same are
identical with those in Nikhil Merchant (supra). The charges against the
accused in both the cases are identical; the same has been quashed in
Nikhil Merchant (supra) which decision has been endorsed by a larger Bench
in Gian Singh (supra) and also in Narendra Lal Jain (supra). It is,
therefore, contended that the criminal proceeding against the accused-
appellant is liable to be quashed and the impugned order passed by the High
Court set aside.

7. On the contrary, Shri Sidharth Luthra, learned Additional Solicitor
General has submitted that the decision in Nikhil Merchant (supra) turns on
its own facts and what has been approved in Gian Singh (supra) is merely
the principle of law laid down in Nikhil Merchant (supra), namely, that
quashing a non-compoundable offence under Section 482 Cr.P.C., following
the settlement between the parties, does not amount to a circumvention of
the provisions of Section 320 of the Code of Criminal Procedure.
Notwithstanding the above, according to Shri Luthra, whether a criminal
proceeding should or should not be interdicted midway would really depend
on the facts of each case. Shri Luthra has also drawn our attention to the
observations made in para 61 of the judgment in Gian Singh (supra) wherein
this Court had carved out an exception by observing that,

“heinous and serious offences of mental depravity or offences like
murder, rape, dacoity, etc. cannot be fittingly quashed even though
the victim or victim’s family and the offender have settled the
dispute. Such offences are not private in nature and have a serious
impact on society. Similarly, any compromise between the victim and
the offender in relation to the offences under special statutes like
the Prevention of Corruption Act or the offences committed by public
servants while working in that capacity, etc.; cannot provide for any
basis for quashing criminal proceedings involving such offences.”

According to Shri Luthra in view of the above and having regard to the
charges framed in the present case the High Court was fully justified in
declining to quash the criminal proceeding against the accused.

8. Insofar as the judgment in Narendra Lal Jain (supra) is concerned,
Shri Luthra has pointed out that in the aforesaid case the accused was
charged for the offence under Section 120B read with Section 420 of the IPC
whereas in the present case the charges against the accused-appellant are
under Section 120-B read with Section 13(2) read with Section 13(1)(d) of
the Prevention of Corruption Act and Section 420/471 of the Indian Penal
Code. It is submitted that the offences under the Prevention of Corruption
Act and Section 471 of Indian Penal Code are not compoundable.

9. We have also heard Shri P. Suresh Kumar, learned senior counsel for
the respondent No.2-bank who had admitted the payment of the entire amount
due from the accused-appellant under the transaction in question. Learned
counsel has, however, submitted that in written acknowledgment issued by
the Bank there is no mention regarding any ‘settlement’ of the criminal
case against the accused-appellant insofar as the bank is concerned.

10. The charges framed against the accused-appellant, it may be repeated,
are under Section 120-B IPC read with Section 13(2) read with Section
13(1)(d) of the PC Act and Sections 420/471 of the IPC. It is true that in
Nikhil Merchant (supra) the charges framed against the accused were also
under Sections 120-B read with Section 5(2) and 5(1) (d) of the PC Act,
1947 (Section 13(2) read with 13(1)(d) of the PC Act, 1988) and Sections
420, 467, 468, 471 of the Indian Penal Code. However, in para 28 of the
judgment in Nikhil Merchant (supra) on a consideration of the totality of
the facts and circumstances in which the charges were brought against the
accused this Court had come to the following conclusion:-
“28. The basic intention of the accused in this case appears to have
been to misrepresent the financial status of the Company, M/s Neemuch
Emballage Ltd., Mumbai, in order to avail of the credit facilities to
an extent to which the Company was not entitled. In other words, the
main intention of the Company and its officers was to cheat the Bank
and induce it to part with additional amounts of credit to which the
Company was not otherwise entitled.”
The Court, thereafter, took into account the fact that the dispute
between the parties had been settled/compromised and such compromise formed
a part of the decree passed in the suit filed by the bank. After holding
that the power under Section 482 Cr.P.C. to quash a criminal proceeding was
not contingent on the provisions of Section 320 of the Code of Criminal
Procedure, and taking into account the conclusion recorded in para 28 of
the judgment, as noticed above, the Court ultimately concluded that in the
facts of the case (Nikhil Merchant) it would be justified to quash the
criminal proceeding. In this regard, it is important to note that the
Court in Nikhil Merchant (supra) had come to the conclusion that “the
dispute involved herein has overtones of a civil dispute with certain
criminal overtones.”

11. The decisions in Nikhil Merchant (supra) as well as in some other
cases namely B.S. Joshi vs. State of Haryana[4] and Manoj Sharma vs.
State[5] were referred to a larger Bench in Gian Singh (supra) for an
authoritative pronouncement as to whether in the said cases this Court had
“indirectly permitted compounding of non-compoundable offences”. The
larger Bench hearing the matter in its judgment2 took the view that the,
“Quashing of offence or criminal proceedings on the ground of
settlement between an offender and victim is not the same thing as
compounding of offence. …….. Strictly speaking, the power of
compounding of offences given to a court under Section 320 is
materially different from the quashing of criminal proceedings by the
High Court in exercise of its inherent jurisdiction.”
[Para 57]

Eventually, in para 61 the note of caution insofar as heinous and grave
offences and offences under special laws, as already noticed, was sounded
and it was held that Nikhil Merchant (supra), B.S. Joshi vs. State of
Haryana (supra) and Manoj Sharma vs. State (supra) were correctly decided.

12. Reference of a case to a larger Bench necessarily has to be for a
reconsideration of the principle of law on which the case has been decided
and not the merits of the decision. The decision rendered by any Bench is
final inter-parte, subject to the power of review and the curative power.
Any other view would have the effect of conferring some kind of an
appellate power in a larger Bench of this Court which cannot be
countenanced. However, the principle of law on which the decision based is
open to reconsideration by a larger Bench in an appropriate case. It is
from the aforesaid perspective that the reference in Gian Singh (supra) has
to be understood, namely, whether quashing of a non-compoundable offence on
the basis of a compromise/settlement of the dispute between the parties
would be permissible and would not amount to overreaching the provisions of
Section 320 of the Code of Criminal Procedure. In fact, this is the
question that was referred to the larger Bench in Gian Singh (supra) and
not the merits of the decision in Nikhil Merchant (supra).

13. The decision in Gian Singh (supra) holding the decision rendered in
Nikhil Merchant (supra) and other cases to be correct is only an approval
of the principle of law enunciated in the said decisions i.e. that a non-
compoundable offence can also be quashed under Section 482 CrPC on the
ground of a settlement between the offender and the victim. It is not an
affirmation, for there can be none, that the facts in Nikhil Merchant
(supra) justified/called for the due application of the aforesaid principle
of law. Also, neither Nikhil Merchant (supra) nor Gian Singh (supra) can be
understood to mean that in a case where charges are framed for commission
of non-compoundable offences or for criminal conspiracy to commit offences
under the PC Act, if the disputes between the parties are settled by
payment of the amounts due, the criminal proceedings should invariably be
quashed. What really follows from the decision in Gian Singh (supra) is
that though quashing a non-compoundable offence under Section 482 CrPC,
following a settlement between the parties, would not amount to
circumvention of the provisions of Section 320 of the Code the exercise of
the power under Section 482 will always depend on the facts of each case.
Furthermore, in the exercise of such power, the note of caution sounded in
Gian Singh (supra) (para 61) must be kept in mind. This, in our view, is
the correct ratio of the decision in Gian Singh (supra).

14. The aforesaid principle of law may now be applied to the facts of the
present case. At the very outset a detailed narration of the charges
against the accused-appellant has been made. The appellant has been
charged with the offence of criminal conspiracy to commit the offence under
Section 13(1)(d). He is also substantively charged under Section 420
(compoundable with the leave of the Court) and Section 471 (non-
compoundable). A careful consideration of the facts of the case would
indicate that unlike in Nikhil Merchant (supra) no conclusion can be
reached that the substratum of the charges against the accused-appellant in
the present case is one of cheating nor are the facts similar to those in
Narendra Lal Jain (supra) where the accused was charged under Section 120-B
read with Section 420 IPC only. The offences are certainly more serious;
they are not private in nature. The charge of conspiracy is to commit
offences under the Prevention of Corruption Act. The accused has also been
charged for commission of the substantive offence under Section 471 IPC.
Though the amounts due have been paid the same is under a private
settlement between the parties unlike in Nikhil Merchant (supra) and
Narendra Lal Jain (supra) where the compromise was a part of the decree of
the Court. There is no acknowledgement on the part of the bank of the
exoneration of the criminal liability of the accused-appellant unlike the
terms of compromise decree in the aforesaid two cases. In the totality of
the facts stated above, if the High Court has taken the view that the
exclusion spelt out in Gian Singh (supra) (para 61) applies to the present
case and on that basis had come to the conclusion that the power under
Section 482 CrPC should not be exercised to quash the criminal case against
the accused, we cannot find any justification to interfere with the said
decision. The appeal filed by the accused is, therefore, dismissed and the
order dated 25.06.2013 of the High Court, is affirmed.

……………………………CJI.
[P. SATHASIVAM]
………………………………J.
[RANJAN GOGOI]

 

………………………………J.
[N.V. RAMANA]
NEW DELHI,
APRIL 7, 2014.
———————–
[1] (2008) 9 SCC 677
[2] (2012) 10 SCC 303
[3] 2014 (3) SCALE 137
[4] (2003) 4 SCC 675
[5] (2008) 16 SCC 1
2 Gian Singh Vs. State of Punjab & Anr. (2012) 10 SCC 303

———————–
14

 

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