REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.517 OF 2014
(Arising out of Special Leave Petition (Crl) No. 6138 OF 2006)
CBI, ACB, MUMBAI ... APPELLANT (S)
VERSUS
NARENDRA LAL JAIN & ORS. ... RESPONDENT (S)
JUDGMENT
RANJAN GOGOI, J.
1. Leave granted.
2. The appellant, Central Bureau of Investigation (CBI)
ACB, Mumbai seeks to challenge an order dated 28.10.2005
passed by the High Court of Bombay quashing the criminal
proceedings against the respondents Narendra Lal Jain,
Jayantilal L. Shah and Ramanlal Lalchand Jain. The aforesaid
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respondents had moved the High Court under Section 482
Code of Criminal Procedure, 1973 (for short "Cr.P.C.")
challenging the orders passed by the learned Trial Court
refusing to discharge them and also questioning the
continuance of the criminal proceedings registered against
them. Of the three accused, Jayantilal L. Shah, the court is
informed, has died during the pendency of the present appeal
truncating the scope thereof to an adjudication of the
correctness of the decision of the High Court in so far as
accused Narendra Lal Jain and Ramanlal Lalchand Jain are
concerned.
3. On the basis of two FIRs dated 22.03.1993, R.C. No.
21(A) of 1993 and R.C. No.22 (A) of 1993 were registered
against the accused-respondents and several officers of the
Bank of Maharashtra. The offences alleged were duly
investigated and separate chargesheets in the two cases were
filed on the basis whereof Special Case No. 15 of 1995 and
Special Case No. 20 of 1995 were registered in the Court of the
Special Judge, Mumbai. In the chargesheet filed, offences
under Sections 120-B/420 IPC and Sections 5(2) read with
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Section 5(1)(d) of the Prevention of Corruption Act, 1947
corresponding to Sections 13(2) read with Section 13(1)(d) of
the Prevention of Corruption Act, 1988 (for short "PC Act")
were alleged against the accused persons. In so far as the
present accused-respondents are concerned the gravamen of
the charge is that they had conspired with the bank officials
and had projected inflated figures of the creditworthiness of
the companies represented by them and in this manner had
secured more advances/loans from the bank than they were
entitled to.
4. While the criminal cases were being investigated the
bank had instituted suits for recovery of the amounts claimed
to be due from the respondents. The said suits were disposed
of in terms of consent decrees dated 23.04.2001. Illustratively,
the relevant clause of the agreement on the basis of which the
consent decrees were passed reads as follows:
"10. Agreed and declared that dispute between
the parties hereto were purely and simply of
civil nature and on payment mentioned as
aforesaid made by the Respondents the
Appellants have no grievance of whatsoever
nature including of the CBI Complaint against
the Respondents."
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5. Applications for discharge were filed by the
accused-respondents which were rejected by the learned Trial
Court by order dated 04.09.2011. The learned Trial Court,
thereafter, proceeded to frame charges against the accused. In
so far as the present accused-respondents are concerned
charges were framed under Sections 120-B/420 of the Indian
Penal Code whereas against the bank officials, charges were
framed under the different provisions of the Prevention of
Corruption Act, 1988 (PC Act). The challenge of the
respondents to the order of the learned Trial Court refusing
discharge and the continuation of the criminal proceedings as
a whole having been upheld by the High Court and the
proceedings in question having been set aside and quashed in
respect of the respondent, the CBI has filed the present appeal
challenging the common order of the High Court dated
28.10.2005.
6. We have heard Mr. P.P. Malhotra, learned Additional
Solicitor General appearing on behalf of the appellant and Mr.
Sushil Karanjkar, learned counsel appearing on behalf of
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Respondent Nos. 1 and 4.
7. Shri Malhotra, learned Additional Solicitor General, has
taken us through the order passed by the High Court. He has
submitted that the High Court had quashed the criminal
proceeding registered against the accused-respondents only on
the ground that the civil liability of the respondents had been
settled by the consent terms recorded in the decree passed in
the suits. Shri Malhotra has submitted that when a criminal
offence is plainly disclosed, settlement of the civil liability,
though arising from the same facts, cannot be a sufficient
justification for the premature termination of the criminal case.
Shri Malhotra has also submitted that the offence under
Section 120-B alleged against the accused-respondents is not
compoundable under Section 320 Cr.P.C.; so also the offences
under the PC Act. Relying on the decision of a three Judges
Bench of this Court in Gian Singh vs. State of Punjab and
Another1, Shri Malhotra has submitted that though it has
been held that the power of the High Court under Section 482
Cr.P.C. is distinct and different from the power vested in a
criminal Court for compounding of offence under Section 320
1 (2012) 10 SCC 303
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of the Cr.P.C., it was made clear that the High Court must
have due regard to the nature and gravity of the offences
alleged before proceeding to exercise the power under Section
482 Cr.P.C. Specifically drawing the attention of the Court to
para 61 of the report in Gian Singh (supra) Shri Malhotra has
submitted that "any compromise between the victim and the
offender in relation to the offences under special statutes like
the Prevention of Corruption Act.... cannot provide for any
basis for quashing criminal proceeding involving such
offences". Shri Malhotra had contended that having regard to
the gravity of the offences alleged, which offences are prima
facie made out, in as much as charges have been framed for
the trial of the accused-respondents, the High Court was not
justified in quashing the criminal proceedings against the
accused-respondents.
8. Per contra, the learned counsel for the respondents
(accused) have submitted that the High Court, while quashing
the criminal proceedings against the respondents (accused),
had correctly relied on the judgments of this Court in Central
Bureau of Investigation, SPE, SIU(X), New Delhi vs.
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Duncans Agro Industries Ltd., Calcutta2 and B.S.Joshi
and Others vs. State of Haryana and Another3. Learned
counsel has submitted that though simultaneous criminal and
civil action on same set of facts would be maintainable, in
Duncans Agro Industries Ltd. (supra) it has been held that
the disposal of the civil suit for recovery, on compromise upon
receipt of payments by the claimants, would amount to
compounding of offence of cheating. No error is, therefore,
disclosed in the order of the High Court insofar as the offence
under Section 420 IPC is concerned. As for the offence under
Section 120-B it is submitted that this Court in B.S. Joshi
(supra) has held that the power under Section 482 Cr.P.C. to
quash a criminal proceeding is not limited by the provisions of
Section 320 Cr.P.C. and even if an offence is not
compoundable under Section 320 Cr.P.C., the same would not
act as a bar for the exercise of power under Section 482
Cr.P.C. As the dispute between the parties have been settled
on the terms of the compromise decrees, it is submitted that
the High Court had correctly applied the principles laid down
in B.S. Joshi (supra) to the facts of the present case.
2 (1996) 5 SCC 591
3 AIR 2003 SC 1387
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9. Learned counsel has further pointed out that the
charges framed against the accused-respondents are under
Section 120-B/420 of the Indian Penal Code and the
respondents not being public servants, no substantive offence
under the PC Act can be alleged against them. The relevance of
the views expressed in para 61 of the judgment of this Court in
Gian Singh (supra), noted above, to the present case is
seriously disputed by the learned counsel in view of the
offences alleged against the respondents. Learned counsel has
also submitted that by the very same impugned order of the
High Court the criminal proceeding against one Nikhil
Merchant was declined to be quashed on the ground that
offences under Sections 468 and 471 of the IPC had been
alleged against the said accused. Aggrieved by the order of the
High Court the accused had moved this Court under Article
136 of the Constitution. In the decision reported in Nikhil
Merchant vs. Central Bureau of Investigation and Another4
this Court understood the charges/allegations against the
aforesaid Nikhil Merchant in the same terms as in the case of
the accused-respondents, as already highlighted. Taking into
4 (2008) 9 SCC 677
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consideration the ratio laid down in B.S. Joshi (supra) and the
compromise between the bank and the accused Nikhil
Merchant (on the same terms as in the present case) the
proceeding against the said accused i.e. Nikhil Merchant was
quashed by the Court taking the view that the power and the
Section 482 Cr.P.C. and of this Court under Article 142 of the
Constitution cannot be circumscribed by the provisions of
Section 320 Cr.P.C. It is further submitted by the learned
counsel that the correctness of the view in B.S. Joshi (supra)
and Nikhil Merchant (supra) were referred to the three
Judges Bench in Gian Singh (supra). As already noted, the
opinion expressed in Gian Singh (supra) is that the power of
the High Court to quash a criminal proceeding under Section
482 Cr.P.C. is distinct and different from the power vested in a
criminal court by Section 320 Cr.P.C. to compound an offence.
The conclusion in Gian Singh (supra), therefore, was that the
decisions rendered in B.S. Joshi (supra) and Nikhil
Merchant (supra) are correct.
10. In the present case, as already seen, the offence with
which the accused-respondents had been charged are under
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Section 120-B/420 of the Indian 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. 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 is not. To the latter offence the ratio laid
down in B.S. Joshi (supra) and Nikhil Merchant (supra)
would apply if the facts of the given case would so justify. The
observation in Gian Singh (supra) (para 61) will not be
attracted in the present case in view of the offences alleged i.e.
under Sections 420/120B IPC.
11. In the present case, having regard to the fact that the
liability to make good the monetary loss suffered by the bank
had been mutually settled between the parties and the accused
had accepted the liability in this regard, the High Court had
thought it fit to invoke its power under Section 482 Cr.P.C. We
do not see how such exercise of power can be faulted or held to
be erroneous. Section 482 of the Code inheres in the High
Court the power to make such order as may be considered
necessary to, inter alia, prevent the abuse of the process of law
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or to serve the ends of justice. While it will be wholly
unnecessary to revert or refer to the settled position in law
with regard to the contours of the power available under
Section 482 Cr.P.C. it must be remembered that continuance
of a criminal proceeding which is likely to become oppressive
or may partake the character of a lame prosecution would be
good ground to invoke the extraordinary power under Section
482 Cr.P.C.
12. We, therefore, decline to interfere with the impugned
order dated 28.10.2005 passed by the High Court and dismiss
this appeal. We, however, make it clear that the proceedings
in Special Case No. 15/95 and 20/95 stands interfered with by
the present order only in respect of accused-respondents
Narendra Lal Jain and Ramanlal Lalchand Jain.
...............................CJI.
[P. SATHASIVAM]
...................................J.
[RANJAN GOGOI]
..................................J.
[N.V.RAMANA]
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NEW DELHI,
FEBRUARY 28, 2014.
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ITEM NO.1A COURT NO.1 SECTION IIA
(For Judgment)
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Crl.A. No.517 of 2014 @
Petition(s) for Special Leave to Appeal (Crl) No.6138/2006
(From the judgement and order dated 28/10/2005 in RC
No.22/1993, CRLA No.832/2002CRLWP No.1339/2005 CRLWP
No.1636/2005 of The HIGH COURT OF BOMBAY)
CBI,ACB,MUMBAI Appellant(s)
VERSUS
NARENDRA LAL JAIN & ORS. Respondent(s)
(With appln(s) for c/delay in filing SLP)
Date: 28/02/2014 This Appeal was called on for Judgment
today.
For Petitioner(s)
Mr. P. Parmeswaran, AOR
For Respondent(s)
Mr. K.N. Rai, AOR
Mr. Sunil Kumar Verma, AOR
Hon'ble Mr. Justice Ranjan Gogoi
pronounced the judgment of the Bench
comprising Hon'ble the Chief Justice of India,
His Lordship and Hon'ble Mr. Justice N.V.
Ramana.
Delay condoned.
Leave granted.
The appeal is dismissed in terms of the
signed reportable judgment.
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(Chetan Kumar) (Savita Sainani)
Court Master Assistant Registrar
(Signed Reportable Judgment is placed on the file)
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