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Monday, April 7, 2014

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

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