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GOLD QUEST INTERNATIONAL PRIVATE LIMITED – Quashing of FIR on compromise – when can be considered as judicious – complaint as the company failed to give Numismatic Gold coin on payment of membership – single judge quashed all criminal cases on compromise – D.B. set aside the order – Apex court held that we are of the view in the disputes which are substantially matrimonial in nature, or the civil property disputes with criminal facets, if the parties have entered into settlement, and it has become clear that there are no chances of conviction, there is no illegality in quashing the proceedings under Section 482 Cr.P.C. read with Article 226 of the Constitution. However, the same would not apply where the nature of offence is very serious like rape, murder, robbery, dacoity, cases under Prevention of Corruption Act, cases under Narcotic Drugs and Psychotropic Substances Act and other similar kind of offences in which punishment of life imprisonment or death can be awarded. After considering the facts and circumstances of the present case, we are of the view that learned Single Judge did not commit any error of law in quashing the FIR after not only the complainant and the appellant settled their money dispute but also the other alleged sufferers entered into an agreement with the appellant, and as such, they too settled their claims. we are of the opinion that the impugned order dated 7th March, 2008 passed by the Division Bench of the High Court in W.A.No.1178 of 2005 is liable to be set aside. Accordingly, the appeal is allowed, and the order dated 19th April, 2005 passed by the learned Single Judge in W.P. No. 26874 of 2003 stands restored.=CIVIL APPEAL NO.8546 OF 2014 (Arising out of S.L.P.(C) No.20066 of 2008) GOLD QUEST INTERNATIONAL PRIVATE LIMITED ……. APPELLANT VERSUS THE STATE OF TAMIL NADU & ORS. … .. RESPONDENTS = 2014 – Sept. Month – http://judis.nic.in/supremecourt/filename=41891

GOLD QUEST INTERNATIONAL PRIVATE LIMITED    – Quashing of FIR on compromise – when can be considered as judicious –  complaint as the company failed to give Numismatic Gold coin on payment of membership – single judge quashed  all criminal cases on compromise – D.B. set aside the order – Apex court held that we  are  of  the  view  in  the  disputes  which  are  substantially matrimonial in nature, or the civil property disputes with criminal  facets, if the parties have entered into settlement, and it has  become  clear  that there are no chances of conviction, there is no illegality in  quashing  the proceedings  under  Section  482  Cr.P.C.  read  with  Article  226  of  the Constitution.  However, the  same  would  not  apply  where  the  nature  of offence is very serious like rape, murder,  robbery,  dacoity,  cases  under Prevention of Corruption Act, cases under Narcotic  Drugs  and  Psychotropic

Substances Act and other similar kind of offences  in  which  punishment  of life imprisonment or death can be awarded. After considering the  facts  and circumstances of the present case, we are of the view  that  learned  Single Judge did not commit any error of law in quashing the  FIR  after  not  only the complainant and the appellant settled their money dispute but  also  the other alleged sufferers entered into an agreement with  the  appellant,  and as such, they too settled their claims. we are of  the  opinion  that  the impugned order dated 7th March, 2008 passed by the  Division  Bench  of  the High Court in W.A.No.1178 of 2005 is liable to be  set  aside.  Accordingly, the appeal is allowed, and the order dated 19th April, 2005  passed  by  the learned Single Judge in W.P. No. 26874 of 2003 stands restored.=

whether the Division  Bench  of

High Court has erred in law in setting aside the  order  of  learned  Single

Judge quashing the First Information Report (for short, ‘FIR’) on the  basis

of the compromise and settlement between the complainant and the appellant.=

an  International

Numismatic Company which has operations in  over  sixty  countries.   It  is

pleaded that it conducts its business with  necessary  licence.

The  multi

level marketing through direct selling of products is being adopted  by  the

Company in the interest of the consumers by eliminating  the  middleman  and

rewarding the consumer by reducing the  prices.

The  appellant-company  has

over sixteen thousand members/ consumers in and around the city  of  Chennai

alone.

A complaint was made in the year 2003  by  Respondent  No.7   against

the appellant-company alleging  non-compliance  of  issuance  of  numismatic

gold coin on receipt of Rs.16,800/- from wife of  Respondent   No.7  as  per

the promise made by the appellant-company.

Some  other  customers  also  had

complaints on the basis of which Respondent No.4  registered  a  case  under

Section 420 of the Indian Penal Code read with Sections 4,  5  &  6  of  the

Prize Chits and  Money  Circulation  (Banning)  Act,  1978.

The  appellant-

company filed a writ petition being W.P.No.26784 of  2003  before  the  High

Court of Judicature at  Madras  praying  therein  that  the  FIR  registered

against it be quashed. Since all the  claimants  including  the  complainant

settled  the  dispute  with  the  appellant-company  and  entered  into   an

agreement, learned Single Judge of the High Court by its  order  dated  19th

April, 2005 quashed the FIR, and disposed of the  aforesaid  writ  petition.

However, the State-respondents challenged the said order  dated 19th  April,

2005 passed by the learned Single Judge whereby the FIR No.307 of  2003  was

quashed, before the Division Bench of the High  Court.

The  Division  Bench

allowed the writ appeal  being W.A.No.1178  of  2005  filed  by  the  State-

respondents and directed Respondent No.4 to investigate  the  crime.  Hence,

this appeal.=

In view of the principle laid down by this Court  in  the  aforesaid

cases,  we  are  of  the  view  in  the  disputes  which  are  substantially

matrimonial in nature, or the civil property disputes with criminal  facets,

if the parties have entered into settlement, and it has  become  clear  that

there are no chances of conviction, there is no illegality in  quashing  the

proceedings  under  Section  482  Cr.P.C.  read  with  Article  226  of  the

Constitution.  

However, the  same  would  not  apply  where  the  nature  of

offence is very serious like rape, murder,  robbery,  dacoity,  cases  under

Prevention of Corruption Act, cases under Narcotic  Drugs  and  Psychotropic

Substances Act and other similar kind of offences  in  which  punishment  of

life imprisonment or death can be awarded. 

After considering the  facts  and

circumstances of the present case, we are of the view  that  learned  Single

Judge did not commit any error of law in quashing the  FIR  after  not  only

the complainant and the appellant settled their money dispute but  also  the

other alleged sufferers entered into an agreement with  the  appellant,  and

as such, they too settled their claims.

9.    For the reasons as discussed above, we are of  the  opinion  that  the

impugned order dated 7th March, 2008 passed by the  Division  Bench  of  the

High Court in W.A.No.1178 of 2005 is liable to be  set  aside.

Accordingly,

the appeal is allowed, and the order dated 19th April, 2005  passed  by  the

learned Single Judge in W.P. No. 26874 of 2003 stands restored. No order  as

to costs.

2014 – Sept. Month – http://judis.nic.in/supremecourt/filename=41891

REPORTABLE
IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.8546 OF 2014
(Arising out of S.L.P.(C) No.20066 of 2008)
GOLD QUEST INTERNATIONAL
PRIVATE LIMITED ……. APPELLANT

VERSUS
THE STATE OF TAMIL
NADU & ORS. … .. RESPONDENTS
J U D G M E N T

PRAFULLA C.PANT,J.
1. Leave granted.

2. The question before us in this appeal is whether the Division Bench of
High Court has erred in law in setting aside the order of learned Single
Judge quashing the First Information Report (for short, ‘FIR’) on the basis
of the compromise and settlement between the complainant and the appellant.
3. Brief facts of the case are that the appellant is an International
Numismatic Company which has operations in over sixty countries. It is
pleaded that it conducts its business with necessary licence. The multi
level marketing through direct selling of products is being adopted by the
Company in the interest of the consumers by eliminating the middleman and
rewarding the consumer by reducing the prices. The appellant-company has
over sixteen thousand members/ consumers in and around the city of Chennai
alone. A complaint was made in the year 2003 by Respondent No.7 against
the appellant-company alleging non-compliance of issuance of numismatic
gold coin on receipt of Rs.16,800/- from wife of Respondent No.7 as per
the promise made by the appellant-company. Some other customers also had
complaints on the basis of which Respondent No.4 registered a case under
Section 420 of the Indian Penal Code read with Sections 4, 5 & 6 of the
Prize Chits and Money Circulation (Banning) Act, 1978. The appellant-
company filed a writ petition being W.P.No.26784 of 2003 before the High
Court of Judicature at Madras praying therein that the FIR registered
against it be quashed. Since all the claimants including the complainant
settled the dispute with the appellant-company and entered into an
agreement, learned Single Judge of the High Court by its order dated 19th
April, 2005 quashed the FIR, and disposed of the aforesaid writ petition.
However, the State-respondents challenged the said order dated 19th April,
2005 passed by the learned Single Judge whereby the FIR No.307 of 2003 was
quashed, before the Division Bench of the High Court. The Division Bench
allowed the writ appeal being W.A.No.1178 of 2005 filed by the State-
respondents and directed Respondent No.4 to investigate the crime. Hence,
this appeal.
4. We have heard learned counsel for the parties, and perused the papers
on record.
5. The main ground on which the Division Bench appears to have
interfered with the order of the learned Single Judge is that out of 172
claimants, there was no compromise from two persons. However, there was
sufficient evidence on record to suggest that the whereabouts of those two
persons were not known, nor have they ever challenged the order of learned
Single Judge. The Division Bench while accepting the arguments of the State-
Respondents have relied on a decision of this Court in Union of India vs.
Bhajan Lal (AIR 1992 SC 604 : 1992 Supp.(1) SCC 335). The said judgment
appears to have been discussed by this Court in B. S. Joshi & Ors. vs.
State of Haryana & Anr. (2003) 4 SCC 675. Relevant paragraphs of B. S.
Joshi’s case (supra) are reproduced below:
“ 2. The question that falls for determination in the instant case
is about the ambit of the inherent powers of the High Courts under Section
482 of the Code of Criminal Procedure (the Code) read with Articles 226
and 227 of the Constitution of India to quash criminal proceedings. The
scope and ambit of power under Section 482 has been examined by this Court
in a catena of earlier decisions but in the present case that is required
to be considered in relation to matrimonial disputes. The matrimonial
disputes of the kind in the present case have been on considerable increase
in recent times resulting in filing of complaints by the wife under
Sections 498-A and 406 IPC not only against the husband but his other
family members also. When such matters are resolved either by the wife
agreeing to rejoin the matrimonial home or mutual separation of husband and
wife and also mutual settlement of other pending disputes as a result
whereof both sides approach the High Court and jointly pray for quashing of
the criminal proceedings or the first information report or complaint filed
by the wife under Sections 498-A and 406 IPC, can the prayer be declined on
the ground that since the offences are non-compoundable under Section 320
of the Code, therefore, it is not permissible for the court to quash the
criminal proceedings or FIR or complaint.
Xx xx xx
4. The High Court has, by the impugned judgment, dismissed the petition
filed by the appellants seeking quashing of the FIR for in view of the High
Court the offences under Sections 498-A and 406 IPC are non-compoundable
and the inherent powers under Section 482 of the Code cannot be invoked to
bypass the mandatory provision of Section 320 of the Code. For its view,
the High Court has referred to and relied upon the decisions of this Court
in State of Haryana v. Bhajan Lal [1992 suppl.(1) SCC 335], Madhu Limaye v.
State of Maharashtra [(1977) 4 SCC 551] and Surendra Nath Mohanty v. State
of Orissa [(1999) 5 SCC 238].
Xx xx xx
14. There is no doubt that the object of introducing Chapter XX-A
containing Section 498-A in the Indian Penal Code was to prevent torture to
a woman by her husband or by relatives of her husband. Section 498-A was
added with a view to punishing a husband and his relatives who harass or
torture the wife to coerce her or her relatives to satisfy unlawful demands
of dowry. The hypertechnical view would be counterproductive and would act
against interests of women and against the object for which this provision
was added. There is every likelihood that non-exercise of inherent power to
quash the proceedings to meet the ends of justice would prevent women from
settling earlier. That is not the object of Chapter XX-A of the Indian
Penal Code.
15. In view of the above discussion, we hold that the High Court in
exercise of its inherent powers can quash criminal proceedings or FIR or
complaint and Section 320 of the Code does not limit or affect the powers
under Section 482 of the Code.”

6. Subsequent to the case of B.S. Joshi (supra) in Nikhil Merchant vs.
Central Bureau of Investigation & Anr. (2008) 9 SCC 677, this Court has
made the following observations in paragraphs 30 and 31 which are quoted
below:

“30. In the instant case, the disputes between the Company and the Bank
have been set at rest on the basis of the compromise arrived at by them
whereunder the dues of the Bank have been cleared and the Bank does not
appear to have any further claim against the Company. What, however,
remains is the fact that certain documents were alleged to have been
created by the appellant herein in order to avail of credit facilities
beyond the limit to which the Company was entitled. The dispute involved
herein has overtones of a civil dispute with certain criminal facets. The
question which is required to be answered in this case is whether the power
which independently lies with this Court to quash the criminal proceedings
pursuant to the compromise arrived at, should at all be exercised?

31. On an overall view of the facts as indicated hereinabove and keeping in
mind the decision of this Court in B.S. Joshi case [(2003) 4 SCC 675], and
the compromise arrived at between the Company and the Bank as also Clause
11 of the consent terms filed in the suit filed by the Bank, we are
satisfied that this is a fit case where technicality should not be allowed
to stand in the way in the quashing of the criminal proceedings, since, in
our view, the continuance of the same after the compromise arrived at
between the parties would be a futile exercise.”
7. In Gian Singh vs. State of Punjab & Anr. (2012) 10 SCC 303,
judgments in B.S. Joshi (supra) and Nikhil Merchant (supra) were considered
by a three-Judge Bench of this Court and it has found that the view taken
in aforesaid two cases by this Court is correct. Relevant paragraphs of the
judgment in Gian Singh (supra) read as follows:

“ 57. 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. They are different and not interchangeable.
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. In
compounding of offences, power of a criminal court is circumscribed by the
provisions contained in Section 320 and the court is guided solely and
squarely thereby while, on the other hand, the formation of opinion by the
High Court for quashing a criminal offence or criminal proceeding or
criminal complaint is guided by the material on record as to whether the
ends of justice would justify such exercise of power although the ultimate
consequence may be acquittal or dismissal of indictment.
Xx xx xx

59. B.S. Joshi [(2003) 4 SCC 675], Nikhil Merchant [(2008) 9 SCC 677],
Manoj Sharma [(2008) 16 SCC 1 and Shiji [(2011) 10 SCC 705] do illustrate
the principle that the High Court may quash criminal proceedings or FIR or
complaint in exercise of its inherent power under Section 482 of the Code
and Section 320 does not limit or affect the powers of the High Court
under Section 482. Can it be said that by quashing criminal proceedings in
B.S. Joshi, Nikhil Merchant, Manoj Sharma and Shiji this Court has
compounded the non-compoundable offences indirectly ? We do not think so.
There does exist the distinction between compounding of an offence under
Section 320 and quashing of a criminal case by the High Court in exercise
of inherent power under Section 482. The two powers are distinct and
different although the ultimate consequence may be the same viz. acquittal
of the accused or dismissal of indictment.
Xx xx xx

61. The position that emerges from the above discussion can
be summarized thus: the power of the High Court in quashing a criminal
proceeding or FIR or complaint in exercise of its inherent jurisdiction is
distinct and different from the power given to a criminal court for
compounding the offences under Section 320 of the Code. Inherent power is
of wide plenitude with no statutory limitation but it has to be exercised
in accord with the guideline engrafted in such power viz.:(i) to secure the
ends of justice, or (ii) to prevent abuse of the process of any court. In
what cases power to quash the criminal proceeding or complaint or FIR may
be exercised where the offender and the victim have settled their dispute
would depend on the facts and circumstances of each case and no category
can be prescribed. However, before exercise of such power, the High Court
must have due regard to the nature and gravity of the crime. 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. But the criminal cases having overwhelmingly and
predominatingly civil flavour stand on a different footing for the
purposes of quashing, particularly the offences arising from commercial,
financial, mercantile, civil, partnership or such like transactions or the
offences arising out of matrimony relating to dowry, etc. or the family
disputes where the wrong is basically private or personal in nature and the
parties have resolved their entire dispute. In this category of cases, the
High Court may quash the criminal proceedings if in its view, because of
the compromise between the offender and the victim, the possibility of
conviction is remote and bleak and continuation of the criminal case would
put the accused to great oppression and prejudice and extreme injustice
would be caused to him by not quashing the criminal case despite full and
complete settlement and compromise with the victim. In other words, the
High Court must consider whether it would be unfair or contrary to the
interest of justice to continue with the criminal proceeding or
continuation of the criminal proceeding would tantamount to abuse of
process of law despite settlement and compromise between the victim and
the wrongdoer and whether to secure the ends of justice, it is appropriate
that the criminal case is put to an end and if the answer to the above
question(s) is in the affirmative, the High Court shall be well within its
jurisdiction to quash the criminal proceedings.”

8. In view of the principle laid down by this Court in the aforesaid
cases, we are of the view in the disputes which are substantially
matrimonial in nature, or the civil property disputes with criminal facets,
if the parties have entered into settlement, and it has become clear that
there are no chances of conviction, there is no illegality in quashing the
proceedings under Section 482 Cr.P.C. read with Article 226 of the
Constitution. However, the same would not apply where the nature of
offence is very serious like rape, murder, robbery, dacoity, cases under
Prevention of Corruption Act, cases under Narcotic Drugs and Psychotropic
Substances Act and other similar kind of offences in which punishment of
life imprisonment or death can be awarded. After considering the facts and
circumstances of the present case, we are of the view that learned Single
Judge did not commit any error of law in quashing the FIR after not only
the complainant and the appellant settled their money dispute but also the
other alleged sufferers entered into an agreement with the appellant, and
as such, they too settled their claims.
9. For the reasons as discussed above, we are of the opinion that the
impugned order dated 7th March, 2008 passed by the Division Bench of the
High Court in W.A.No.1178 of 2005 is liable to be set aside. Accordingly,
the appeal is allowed, and the order dated 19th April, 2005 passed by the
learned Single Judge in W.P. No. 26874 of 2003 stands restored. No order as
to costs.

.………………………………………..J. (SUDHANSU JYOTI
MUKHOPADHAYA)

…….………………………………………J
(PRAFULLA C. PANT)
NEW DELHI,
SEPTEMBER 8, 2014.

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