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Sunday, September 21, 2014

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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