CBI, ACB, MUMBAIversusNARENDRA LAL JAIN & ORS.

                        [2014] 3 S.C.R. 444

A                       CBI, ACB, MUMBAI
                                  V.
                  NARENDRA LAL JAIN & ORS.
                (Criminal Appeal No. 517 of 2014)
                       FEBRUARY 28, 2014
B
          [P. SATHASIVAM, CJI, RANJAN GOGOi AND
                      N.V. RAMANA, JJ.]

         Code of Criminal Procedure, 1973: s.482 - Quashing of
C proceedings - Allegation against accused-respondents that
  they conspired with the bank officials and projected inflated
  figures of the creditworthiness of the companies represented
  by them to secure more advances/loans from the bank than
  they were entitled to - Accused-respondents charged u/ss. 120-
D 81420, /PC - Suit for recovery by Bank - Consent decree - Civil
  liability of the accused to pay the amount to the bank settled
  amicably - No subsisting grievance of the bank in this regard
  - High Court quashed proceedings u/s. 482 - Held: There is
  no fault in the order of the High Court exercising power uls. 482
E - s.482 inheres in High Court the power to make such order
  as may be considered necessary to, inter alia, prevent the
  abuse of the,process of law or to serve the ends of justice -
  Continuance of a criminal proceeding which is likely to
  become oppressive or may partake the character of a ·fame
F prosecution would be good ground to invoke the extraordinary
  power uls.482 - Penal Code, 1860 - ss ..120-81420.
      The prosecution case was that the accused-
  respondents conspired with the bank officials and by
  projecting inflated figures of the creditworthiness of the
G companies represented by them secured more
  advances/loans from the bank than they were entitled to.
  FIR was registered against the accused-respondents and
  several officers of the Bank of Maharashtra. In the
  chargesheet filed, offences under Sections 120-81420 IPC
H                             444
 CBI, ACB, MUMBAI v. NARENDRA LAL JAIN & ORS. ~45


and Sections 5(2) read with Section 5(1 )(d) of the              A
Prevention of Corruption Act, 1947 corresponding to
Sections 13(2) read with Section 13(1)(d) of the Prevention
of Corruption Act, 1988 were alleged against the accused
persons.
                                                                 B
     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. Thereafter
the respondents applied for discharge which was                  C
rejected by the trial court. The trial court thereafter framed
charges under Sections 1208/420 IPC and against the
bank officials under the Prevention of Corruption Act,
1988. The respondents filed application under Section
482, Cr.P.C. which was allowed. The instant appeal was
filed challenging the said order of the High Court.              D

    Dismissing the appeal, the Court

     HELD: 1. In the instant case, the offence with which
the accused-respondents had been charged were under              E
Section 120-8/420, IPC. The civil liability of the
respondents to pay the amount to the bank was already
settled amicably. No subsisti.-,g grievance of the bank in
this regard was brought to the notice of the Court. While
the offence under Section 420 IPC is compoundable the
offence under Section 120-B is not. [para 10] [451-G]            F

     2. In the instant case, having regard to the fact that
the liability to make good the monetary loss suffered by
the bank was mutually settled between ;the parties and
the accused having accepted the liability in this regard,        G
the High Court had thought it fit to invoke its power under
Section 482 Cr.P.C. There is no fault in the order of the
High Court exercising of power under Section 482 Cr.P.C.
Section 482 Cr.P.C. inheres in the High Court the power
to make such order as may be considered necessary to,            H
    446      SUPREME COURT REPORTS               [20l4] 3 S.C.R.

A inter alia, prevent the abuse of the process of law or to
  serve the ends of justice. 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
B Section 482 Cr.P.C. [para 11] [452-B-E]

         B.S.Joshi and Others vs. State of Haryana and Anr. AIR
    2003 SC 1387; Nikhil Merchant vs. Central Bureau of
    Investigation and Anr. (2008) 9 SCC 677: 2008 (12) SCR 236
    ·relied on.
c
          Gian Singh vs. State of Punjab and Anr. (2012) 10 SCC
    303: 2012 (8) SCR 753 • held inapplicable.

       Central Bureau of Investigation, SPE, SIU(X), New Delhi
D vs. Duncans Agro Industries Ltd., Calcutta (1996) 5 SCC 591:
    1996 (3) Suppl. SCR 360 • referred to

                         Case Law Reference:

       2012 (8) SCR 753              held inapplicable Para 7
E      1996 (3) Suppl. SCR 360       referred to        Para 8

       AIR 2003 SC 1387              relied on          Para 8

       2008 (12) SCR 236             relied on          Para 9

F       CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
    No. 517 of 2014.

       From the Judgment & Order dated 28.10.2005 of the High
  Court of Judicature at Bombay in Criminal Writ Petition Nos.
G 1339/2005, 1636/2005 and Crl. Application No. 838/2002 in
  Special Case Nos. 20/1996 and 15/1995 arising out of RC.
  21 (A)/93 Born. And RC. 22(A)/93-Bom.

       P.P. Malhotra, ASG, Rajiv Nanda, T.A. Khan, B.V.
  Balramdas, P. Parmeswaran, Sushil Karanjkar, K.N. Rai, A.P.
H Mayee, Sunil Kumar Verma for the Appearing Parties.
 CBI, ACB, MUMBAI v. NARENDRA LAL JAIN & ORS. 447


      The Judgment of the Court was delivered by                     A
      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            B
 proceedings against the respondents Narendra Lal Jain,
 Jayantilal L. Shah and Ramanlal Lalchand Jain. The aforesaid
 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            C
 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              o
 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 v.iere registered        E
  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        F
  the Special Judge, Mumbai. In the chargesheet filed, offences
  under Sections 120-B/420 IPC and Sections 5(2) read with
  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   G
  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               H
    448      SUPREME COURT REPORTS                 [2014] 3 S.C.R.


A   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
9   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
c         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."
D
       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-1espondents are concerned charges were
E 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
F 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.
G
         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
    Respondent Nos. 1 and 4.
H
CBI, ACB, MUMBAI v. NARENDRA LAL JAIN & ORS. 449
             [RANJAN GOGOi, J.]
      7. Shri Malhotra, learned Additional Solicitor General, has         A
taken us through the order passed by the High Court. He has
submitted that the High Court had quashed the criminal
proceeding registeredagainst 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             B
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           c
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 Another\ Shri Malhotra
has submitted that though it has been held that the power of              0
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 of the Cr.P.C., it
was made clear thatthe High Court must have due regard to
the nature and gravity of the offences alleged before proceeding          E
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 ~alhotra 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             F
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             G
criminal proceedings against the accused-respondents.

    8. Per contra, the learned counsel for the respondents
(accused) have submitted that the High Court, while quashing
1.   c2012) 10 sec 303.                                                   H
     450       SUPREME COURT REPORTS                 [2014] 3 S.C.R.

. A 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. Duncans
     Agro Industries Ltd., Calcutta 2 and B.S.Joshi and Others vs.
     State of Haryana and Another3. Learned counsel has
  8 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
  c 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 120-8 it is
     submitted that this Court in 8.S. Joshi (supra) has held that the
     power under Section 482 Cr.P.C. to quash a criminal
  D 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
  E correctly applied the principles laid down in 8.S. Joshi (supra)
     to the facts of the present case.

        9. Learned ~ounsel has further pointed out that the charges
   framed against the accused-respondents are under Section
 F 120-8/420 of the)ndian 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
 G 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
     2.   (1996) s sec 591.
 H   3.   AIR 2003 SC 1387.
CBI, ACB, MUMBAI v. NARENDRA LAL JAIN & ORS. 451
             [RANJAN GOGOi, J.]
to be quashed on the ground that offences under Sections1468         A
and 471 of the IPC had been alleged against the said accJsed.
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 Another+ this Court understood the charges/        B
allegations against the aforesaid Nikhil Merchant in the same
terms as in the case of the accused-respondents, as already
highlighted. Taking into 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         C
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       0
(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       E
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.
                                                                     F
     10. In the present case, as already seen, the offence with
which the accused-respondents had been charged are under
Section 120-8/420 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        G
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 120-8 is not. To the latter offence the ratio laid
4. c2ooa) 9 sec en.                                                  H
    452     SUPREME COURT REPORTS                  [2014] 3 S.C.R.

A down in 8.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 420/1208 IPC.
B        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
C 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
  or to serve the ends of justice. While it will be wholly
D 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
E 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
F 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.

    D.G.                                       Appeal dismissed.