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TMI Blog2024 (10) TMI 212X X X X Extracts X X X X X X X X Extracts X X X X ..... dable offences - This Court specifically noted that though it is alleged that certain documents had been created by the appellant therein to avail of credit facilities beyond the limit to which the Company was entitled, the power of quashing could be exercised. This Court found that in view of a compromise arrived at between the Company and the Bank, it was a fit case where a technicality should not be allowed to stand in the way of quashing of the criminal proceedings. This Court found that in view of the settlement arrived at between the parties, continuance of the same would be an exercise in futility. The facts in the present case are similar to the facts in the case of Sadhu Ram Singla and others [ 2017 (2) TMI 1530 - SUPREME COURT] wherein a dispute between the borrower and the Bank was settled. In the present case also, undisputedly, the FIR and the chargesheet are pertaining to the dispute concerning the loan transaction availed by the accused persons on one hand and the Bank on the other hand. Admittedly, the Bank and the accused persons have settled the matter. Apart from the earlier payment received by the Bank either through Equated Monthly Instalments (EMIs) or sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forged and fabricated. 3.5 The respondent No. 2 Bank, accordingly, lodged a written complaint dated 3rd September 2012. Based on the said complaint, the Central Bureau of Investigation Economic Offence Wing (CBI-EOW) Chennai registered an FIR No. RC.14/E/2012 dated 15th September 2012. 3.6 The CBI-EOW Chennai after investigation prima facie found that offences punishable under Sections 120-B read with 420, 409, 467, 468 and 471 of Indian Penal Code 1860 ( IPC for short) and Section 13(1)(d) and 13(2) of the Prevention of Corruption Act 1988 ( PC Act for short) have been committed. The CBI filed charge-sheet dated 27th December 2013 in the trial Court and prayed that the trial Court take cognizance of the said offences committed by the accused persons. 3.7 Since the proceedings before the DRT were still pending, the borrowers/mortgagors (Accused Nos. 1-5) approached the respondent No. 2 Bank for settlement of the amount due regarding the group loan accounts. To that effect, a One Time Settlement ( OTS for short) dated 19th November 2015 of Rs. 3.8 crores was offered to the respondent No. 2 Bank for settling all the dues. The same was accepted by the respondent No. 2 Bank. The OTS a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank has also realized an amount of Rs. 1,07,54,000/- by auctioning the mortgaged properties. 7. It is further submitted that during the pendency of OA before the DRT, in view of OTS an amount of Rs. 3,80,00,000/- was also paid to the respondent No.2 Bank and as such, the respondent No.2 Bank has closed the loan account. The learned Senior Counsel, therefore, submits that the continuance of the proceedings against the appellants would be an exercise in futility. 8. Shri Naidu in support of his submissions relied on the following judgments of this Court in the cases of: (i) Central Bureau of Investigation, SPE, SIU (X), New Delhi v. Duncans Agro Industries Ltd., Calcutta (1996) 5 SCC 591 ; (ii) Nikhil Merchant v. Central Bureau of Investigation and another (2008) 9 SCC 677 ; (iii) Gian Singh v. State of Punjab and another (2012) 10 SCC 303 ; (iv) Central Bureau of Investigation, ACB, Mumbai v. Narendra Lal Jain and others (2014) 5 SCC 364 ; (v) Narinder Singh and others v. State of Punjab and another (2014) 6 SCC 466 ; (vi) Gold Quest International Private Limited v. State of Tamil Nadu and others (2014) 15 SCC 235 ; and (vii) Central Bureau of Investigation v. Sadhu Ram Singla and o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fence is constituted or not. In recent decisions of this Court, in the case of Bhajan Lal [1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] , P.P. Sharma [1992 Supp (1) SCC 222 : 1992 SCC (Cri) 192] and Janata Dal [(1992) 4 SCC 305 : 1993 SCC (Cri) 36] , since relied on by Mr Tulsi, the guiding principles in quashing a criminal case have been indicated. 27. ... 28. ... 29. In the facts of the case, it appears to us that there is enough justification for the High Court to hold that the case was basically a matter of civil dispute. The Banks had already filed suits for recovery of the dues of the Banks on account of credit facility and the said suits have been compromised on receiving the payments from the companies concerned. Even if an offence of cheating is prima facie constituted, such offence is a compoundable offence and compromise decrees passed in the suits instituted by the Banks, for all intents and purposes, amount to compounding of the offence of cheating. It is also to be noted that a long time has elapsed since the complaint was filed in 1987. It may also be indicated that although such FIRs were filed in 1987 and 1989, the Banks have not chosen to institute any case against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary power, supplementary and complementary to the powers specifically conferred on the Supreme Court by statutes, exercisable to do complete justice between the parties where it is just and equitable to do so. It was further observed that the power under Article 142 of the Constitution was vested in the Supreme Court to prevent any obstruction to the stream of justice. 26. The learned Additional Solicitor General submitted that the power under Article 142 is to be exercised sparingly and only in rare and exceptional cases and in the absence of any exceptional circumstances the appeal was liable to be dismissed. 27. Having carefully considered the facts of the case and the submissions of learned counsel in regard thereto, we are of the view that, although, technically there is force in the submissions made by the learned Additional Solicitor General, the facts of the case warrant interference in these proceedings. 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20. This Court specifically noted that though it is alleged that certain documents had been created by the appellant therein to avail of credit facilities beyond the limit to which the Company was entitled, the power of quashing could be exercised. This Court found that in view of a compromise arrived at between the Company and the Bank, it was a fit case where a technicality should not be allowed to stand in the way of quashing of the criminal proceedings. This Court found that in view of the settlement arrived at between the parties, continuance of the same would be an exercise in futility. 21. A similar view was again taken by 2 Judge Bench of this Court in the case of Manoj Sharma v. State and others (2008) 16 SCC 1 . 22. However, another 2 Judge Bench of this Court in the case of Gian Singh v. State of Punjab and another (2010) 15 SCC 118 doubted the correctness of the view taken by this Court in the cases of B.S. Joshi (supra), Nikhil Merchant (supra), and Manoj Sharma (supra) and referred the matter to a larger Bench. 23. The reference was answered by the learned 3 Judge Bench of this Court in the case of Gian Singh (supra) (2012) 10 SCC 303 . Speaking for the Bench, R.M. Lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns or the offences arising out of matrimony, particularly relating to dowry, etc. or the family dispute, where the wrong is basically to the victim and the offender and the victim have settled all disputes between them amicably, irrespective of the fact that such offences have not been made compoundable, the High Court may within the framework of its inherent power, quash the criminal proceeding or criminal complaint or FIR if it is satisfied that on the face of such settlement, there is hardly any likelihood of the offender being convicted and by not quashing the criminal proceedings, justice shall be casualty and ends of justice shall be defeated. The above list is illustrative and not exhaustive. Each case will depend on its own facts and no hard-and-fast category can be prescribed. 59. B.S. Joshi [(2003) 4 SCC 675 : 2003 SCC (Cri) 848] , Nikhil Merchant [(2008) 9 SCC 677 : (2008) 3 SCC (Cri) 858] , Manoj Sharma [(2008) 16 SCC 1 : (2010) 4 SCC (Cri) 145] and Shiji [(2011) 10 SCC 705 : (2012) 1 SCC (Cri) 101] 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 Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts Recovery Tribunal, the accused was being proceeded with for the commission of the offences under Sections 120- B/420/467/468/471 IPC along with the bank officers who were being prosecuted under Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act. The Court refused to quash the charge against the accused by holding that the Court would not quash a case involving a crime against the society when a prima facie case has been made out against the accused for framing the charge. Ashok Sadarangani [(2012) 11 SCC 321] was again a case where the accused persons were charged of having committed the offences under Sections 120-B, 465, 467, 468 and 471 IPC and the allegations were that the accused secured the credit facilities by submitting forged property documents as collaterals and utilised such facilities in a dishonest and fraudulent manner by opening letters of credit in respect of foreign supplies of goods, without actually bringing any goods but inducing the bank to negotiate the letters of credit in favour of foreign suppliers and also by misusing the cash-credit facility. The Court was alive to the reference made in one of the present matters and also the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riminal case despite full and complete settlement and compromise with the victim. 29. Another 3 Judge Bench of this Court in the case of Narendra Lal Jain and others (supra), following Gian Singh Larger Bench decision (supra) observed thus: 13. In the present case, as already seen, the offence with which the respondentaccused had been charged are under Sections 120-B/420 of the Penal Code. The civil liability of the respondents to pay the amount to the Bank has already been settled amicably. The terms of such settlement have been extracted above (see para 3). No subsisting grievance of the Bank in this regard has been brought to the notice of the Court. While the offence under Section 420 IPC is compoundable the offence under Section 120-B IPC is not. To the latter offence the ratio laid down in B.S. Joshi [B.S. Joshi v. State of Haryana, (2003) 4 SCC 675 : 2003 SCC (Cri) 848 : AIR 2003 SC 1386] and Nikhil Merchant [(2008) 9 SCC 677 : (2008) 3 SCC (Cri) 858] would apply if the facts of the given case would so justify. The observation in Gian Singh [Gian Singh v. State of Punjab, (2012) 10 SCC 303 : (2012) 4 SCC (Civ) 1188 : (2013) 1 SCC (Cri) 160 : (2012) 2 SCC (L S) 988] (para 61) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cising the power the High Court is to form an opinion on either of the aforesaid two objectives. 29.3. Such a power is not to be exercised in those prosecutions which involve heinous and serious offences of mental depravity or offences like murder, rape, dacoity, etc. Such offences are not private in nature and have a serious impact on society. Similarly, for the offences alleged to have been committed under special statute like the Prevention of Corruption Act or the offences committed by public servants while working in that capacity are not to be quashed merely on the basis of compromise between the victim and the offender. 29.4. On the other hand, those criminal cases having overwhelmingly and predominantly civil character, particularly those arising out of commercial transactions or arising out of matrimonial relationship or family disputes should be quashed when the parties have resolved their entire disputes among themselves. 29.5. While exercising its powers, the High Court is to examine as to whether the possibility of conviction is remote and bleak and continuation of criminal cases would put the accused to great oppression and prejudice and extreme injustice would be cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence is almost complete or after the conclusion of the evidence the matter is at the stage of argument, normally the High Court should refrain from exercising its power under Section 482 of the Code, as in such cases the trial court would be in a position to decide the case finally on merits and to come to a conclusion as to whether the offence under Section 307 IPC is committed or not. Similarly, in those cases where the conviction is already recorded by the trial court and the matter is at the appellate stage before the High Court, mere compromise between the parties would not be a ground to accept the same resulting in acquittal of the offender who has already been convicted by the trial court. Here charge is proved under Section 307 IPC and conviction is already recorded of a heinous crime and, therefore, there is no question of sparing a convict found guilty of such a crime. 31. It could thus be seen that this Court reiterates the position that the criminal cases having overwhelmingly and predominantly civil character, particularly those arising out of commercial transactions or arising out of matrimonial relationship or family disputes should be quashed when the parties ..... X X X X Extracts X X X X X X X X Extracts X X X X
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