GOLD QUEST INTERNATIONAL PRIVATE LIMITEDversusTHE STATE OF TAMIL NADU & ORS.

                     [2014] 7 S.C.R. 677


     GOLD QUEST INTERNATIONAL PRIVATE LIMITED                    A
                              v.
           THE STATE OF TAMIL NADU & ORS.
             (Civil Appeal No. 8546 OF 2014)
                   SEPTEMBER 08, 2014
                                                                 B
       [SUDHANSU JYOTI MUKHOPADHAYA AND
              PRAFULLA C. PANT, JJ.] .

        Code. of Criminal Procedure, 1973: s. 482 - Quashing of
  FIR - Complaint uls. 420 /PC rlw ss. 4, 5 and 6 of the Prize C
  Chits and Money Circulation (Banning) Act, 1978 against
  appellant - FIR - Writ petition seeking quashing of FIR -
  Settlement between the complainant and appellant-company
  - Single Judge quashed the FIR - Division Bench of the High
  Court interfered with the order of Single Judge on the ground D
  that out of 172 claimants there was no compromise with two
  persons (of whom whereabouts not known) - Held: 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 is clear that there are no E
  chances of conviction, there is no illegality in quashing the
  proceedings u/s. 482 rlw Article 226 of the Constitution - The
  facts and circumstances of the instant case showed that the
, Single Judge did not commit any error of law in quashing the
  FIR when after not only the complainant and the appellant · F
  settled their money dispute but also the other alleged
  sufferers too settled their claims - FIR was rightly quashed by
  the Single Judge of the High Court.

      The appellant is an International Numismatic
 company. A complaint was made by respondent no. 7               G
 against the appellant-company alleging non-compliance
 of issuance of numismastic gold coin on receipt of Rs.
 16,800 from wife of respondent no. 7 as per the ~romise

                              677                                H
    678      SUPREME COURT REPORTS               [2014] 7 S.C.R.


A 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, IPC read with
  Sections 4, 5 & 6 of the Prize Chits and Money. Circulation
  (Banning) Act, 1978. The appellant-company filed a writ
B petition seeking quashing of FIR registered against it.
  Since all the claimants including respondent no. 7 settled
  the dispute with the appellant-company and entered into
  an agreement, the Single Judge of the High Court
  disposed of the said writ petition. However, the State-
C respondents challenged the order passed by the Single
  Judge whereby the FIR was quashed, before the Division
  Bench of the High Court. The Division Bench interfered
  with the order of the Single Judge on the ground that out
  of 172 claimants there was no compromise from two
  persons and directed Respondent No. 4 to investigate
0
  the crime. Hence the appeal.

          Allowing the appeal, the Court

         HELD: In the disputes which are substantially
E   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
F   226 of the Constitution. However, the same would not
    apply where the nature of offence is serious like rape,
    murder, robbery, dacoity, cases under Prevention of
    Corruption Act, cases under Narcotic Drugs and
    Psychotropic Substances Act and other similar kind in
G   which punishment of life imprisonment or death can be
    awarded. The facts and circumstances of the instant
    case, showed the 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
H   other alleged sufferers entered into an agreement with the
GOLD QUEST INTERNATIONAL PVT. LTD. v. STATE 679
              OF TAMIL NADU
appellant, and as such, they too settled their claims. [Para     A
8] [686-E-H]

     Union of India vs. Bhajan Lal AIR 1992 SC: 1992 Supp.
(1) SCC 335:1990 (3) Suppl. SCR 259; B.S. Joshi & Ors.
vs. state of Haryana & Anr. 2003 (4) SCC 675: 2003 (2) SCR        B
1104; Nikhil Merchant vs. Central Bureau of Investigation &
Anr. 2008 (9) SCC 677: 2008 (12) SCR 236; Gian Singh vs.
State of Punjab & Anr. 2012 (10) SCC 303: 2012 (8) SCR
753 - relied on.

                     Case Law Reference:                          c
    1990 (3) Suppl. SCR 259        Relied on         Para 5

    2003 (2) SCR 1104              Relied on         Para 5
    2008 (12) SCR 236              Relied on         Para 6       D
    2012 (8) SCR 753               Relied on         Para 6

    CIVIL APPELLATE JURISDICTION : Civil Appeal No(s).
8546 of 2014.
                                                                  E
    From the Judgment and Order dated 07-03-2008 of the
High Court of Judicature at Madras in W.A. No.1178 of 2005.

   Altaf Ahmad, V.G. Pragasam, S.J. Aristole, Prabu
Ramasubramanian for the Appellant.
                                                                  F
    Subramonium Prasad, AAG, B. Balaji, R. Rakesh Sharma,
Rajeev Dalal, Neha Agarwal, Dharmendra Kumar Sinha for the
Respondents.-- ·

    The Judgment of the Court was delivered by
                                                                  G
                                               I
    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 · H
    680     SUPREME COURT REPORTS                  [2014] 7 S.C.R.


A   Report (for short, 'FIR') on the basis of the compromise and
    s.ettlement 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
B   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
C   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.
D   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'
E   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,
F   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
G   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.
H
 GOLD QUEST INTERNATIONAL PVT. LTD. v. STATE 681
    OF TAMIJ- NADU [PRAFULLA C. PANT, J.]
     5. The main ground on which the Division Bench appears          A
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 ch~llenged the order of learned            B
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.       c
State of Haryana & Ahr. (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                D
     Pro~edure (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        E
     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.          F
     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        G
     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 tc:>   H
    682        SUPREME COURT REPORTS              [2014] 7 S.C.R.


A         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
B         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
c         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].
D
          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
E 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
F 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.

G       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."
H
 GOLD QUEST INTERNATIONAL PVT. LTD. v. STATE 683
    OF TAMIL NADU [PRAFULLA C. PANT, J.]
    6. Subsequent to the case of B.S. Joshi (supra) in Nikhil           A
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                 B
     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          C
     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         D
   . 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         E
     in B. S. Joshi case [(2003) 4 sec 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       F
     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          G
  (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:
                                                                        H
    684        SUPREME COURT REPORTS                [2014] 7 S.C.R.


A         "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
B
          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
c         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
D         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
E
          [(2011) 10 sec 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
F         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
G         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.
H
GOLD QUEST INTERNATIONAL PVT. LTD. v. STATE 685
   OF TAMIL NADU [PRAFULLA C. PANT, J.]
  Xx                    xx                         xx               A
  61. The position that emerges fro!"l 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
                                                                    8
  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.    C
  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,            D
  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.        E
  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       F
  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               G
  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      H
    686       SUPREME COURT REPORTS                   [2014] 7 S.C.R.


A         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
c         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
D
          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
E 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,
F 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
G 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
H with the appellant, and as such, they too settled their claims.
GOLD QUEST INTERNATIONAL PVT. LTD. v. STATE 687
   OF TAMIL NADU [PRAFULLA C. PANT, J.]
     9. For the reasons as discussed above, we are of the         A
opinion that the impugned order elated 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             B
restored. No order as to costs.

Devika Gujral                                   Appeal allowed.