IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
REPORTABLE
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)
RANJAN GOGOI, J.
1. Leave granted.
J U D G M E N T
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
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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
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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
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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
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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
Another
2
1
and Gian Singh vs. State of Punjab and
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
1
2
3
(2008) 9 SCC 677
(2012) 10 SCC 303
2014 (3) SCALE 137
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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),
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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
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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.
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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
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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
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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 judgment
4
5
2
2
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]
(2003) 4 SCC 675
(2008) 16 SCC 1
Gian Singh Vs. State of Punjab & Anr. (2012) 10 SCC 303
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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
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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
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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
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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
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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.
NEW DELHI,
APRIL 7, 2014.
...…………………………CJI.
[P. SATHASIVAM]
.........………………………
J.
[RANJAN GOGOI]
.........………………………J.
[N.V. RAMANA]
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