GOPAKUMAR B. NAIRversusC.B.I. & ANR.

                        [2014] 4 S.C.R. 792


A                      GOPAKUMAR B. NAIR
                                  v.
                           C.BJ &ANR.
                (Criminal Appeal No. 831 of 2014)
                           APRIL 7, 2014
B
          [P. SATHASIVAM, CJ1, RANJAN GOGOi AND
                      N.V. RAMANA, JJ.]

        CODE OF CRIMINAL PROCEDURE, 1973:
c
         s. 482 - Power of High Court to quash proceedings -
   Settlement of dispute between parties - Effect of - Criminal
   proceedings against accused-appellant for offences
   punishable uls 120B /PC, s.13 (2) rlw s. 13(1)(d) of PC Act
0 and ss. 420 and 471, !PC - Held: In the instant case, charge-
   sheet has been submitted and charges have been framed -
   Appellant has been charged u/s 13(1)(d) of PC Act, u/s 420
   /PC (compoundable with leave of court) ands. 471, /PC (non
   -compoundable) - The offences are serious and not private
E in nature - Charge of conspiracy is to commit offence under
   PC Act - Though amounts due to bank have been paid under
   a private settlement, there is no acknowledgement by the
   bank of exoneration of accused-appellant from criminal
  liability - Since High Court has come to the conclusion that
F power u/s 482 should not be exercised to· quash criminal
  proceedings against accused-appellant, there is no
  justification to interfere with the said decision - Prevention of
   Corruption Act, 1988 - s, 13 (2) rlw s.13(1)(d) - Penal Code,
   1860 - SS. 120 B, 420 and 471.
                                  - -·

G       REFERENCE TO LARGER BENCH:

        Judgement - Binding effect of - Held: 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
H                                792
       GOPAKUMAR B. NAIR v. C.B.I. & ANR.               793


been decided and not the merits of the decision -- The         A
decision rendered by any Bench is final inter-parte, subject
to the power of review and the curative power.

    The instant appeal arose out of the order of the High
Court passed in a petition filed by the appellant u/s 482 . B
Cr.P.C., declining to quash the criminal proceedings
against the appellant-accused for offences punishable u/
s 120-B, IPC, and s. 13(2) read with s. 13 (1) (d) of the
Prevention of Corruption Act, 1988 and ss. 420/471, IPC
registered against the appellant-accused and two other C
persons, namely, A-1, a Branch Manager of respondent
no. 2-Bank and A-3 (since deceased). After investigation,
charge-sheet was submitted by respondent no. 1 CBI and
charges were framed. The stand of the appellant before
the High Court was that the accused-appellant had
tendered all the amounts due to the Bank and an 0
acknowledgement dated 303.2009 was issued by the
Bank stating that it did not have any further claims and
charges against the accused-appellant.

    Dismissing the appeal, the Court                           E
     HELD: 1.1 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
                                                               F
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 is based, is open to reconsideration by a         G
larger Bench in an appropriate case. [Para 12] [801-G;
802-A-B]

    1.2 The decision in Gian Singh holding the decision
rendered in Nikhil Merchant and other cases to be correct      H
    794   SUPREME COURT REPORTS             [2014] 4 S.C.R.


A 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 uls. 482 CrPC on the ground of a
  settlement between the offender and the victim. Neither
  Nikhil Merchant nor Gian Singh can be understood to
B mean that in a case where charges are framed for
  commission of non-compoundable offences or for
  criminal conspiracy to commit offences under the PC Act,
  if the disputes between the parties are settled by
  payment of the amounts due, the criminal proceedings
c should invariably be quashed. What really follows from
  the decision in Gian Singh is that though quashing a non-
  com pound able offence uls. 482 CrPC, following a
  settlement between the parties, would not amount to
  circumvention of the provisions of s. 320 of the Code, the
D exercise of the power uls. 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 (para
  61) must be kept in mind. [Para 13] [802-D-H]
      Gian Singh vs. State of Punajb and Another - 2012 (8)
E SCR 753 = 2012 (10) SCC 303; 8. S. Joshi vs. State of
  Haryana -2003 (4) SCC 675; Nikhil Merchant vs. Central
  Bureau of Investigation and Another - 2008 (14) SCR 539 =
  (2008) 9 SCC 677 and Manoj Sharma vs. State 2008 (4)
  SCR 1= (2008) 16 SCC 1 - relied on.
F      1.3 In the instant case, the appellant has been
  charged with the offence of criminal conspiracy to
  commit the offence uls. 13(1)(d). He is also substantively
  charged uls. 420 (compoundable with the leave of the
  court) and s. 471 (non-compoundable). A careful
G consideration of the facts of the case would indicate that
  unlike in Nikhil Merchant, no conclusion can be reached
  that the substratum of the charges against the accused-
  appellant in the instant case is one of cheating nor are ·
  the facts similar to those in Narendra Lal Jain where the
H accused was charged uls. 120-B read with s. 420 IPC
        GOPAKUMAR B. NAIR v. C.B.I. & ANR.               795


only. The offences are certainly more serious; they are A
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 uls. 471 IPC. Though the amounts
due have been paid, the same is under a private settlement B
between the parties unlike in Nikhil Merchant and
Narendra Lal Jain 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 unlike the terms of c
compromise decree in the said two cases. [Para 14) (803-
A-F]

     CBI, ACB, Mumbai vs. Narendra Lal Jain & Ors. - 2014
(3) SCALE 137- referred to.
                                                                  D
     1.4 In the totality of the facts, the High Court has taken
the view that the exclusion spelt out in Gian Singh (para
61) applies to the instant case and on that basis has come
to the conclusion that the power uls. 482 CrPC should
not be exercised to quash the criminal case against the           E
accused and, as such, there is no justification to interfere
with the said decision. The order dated 25.06.2013 of the
High Court, is affirmed. [Para 14] (803-F-G]

                     Case Law Reference:
                                                                  F
    2012 (8) SCR 753          relied on             Para 6
    2008 (14) SCR 539         relied on             Para 6
    2014 (3) SCALE 137        referred to           Para 6
                                                                  G
    2008 (4 ) SCR 1           relied on             Para 11
    2003 (4) sec 675          relied on             Para 11
    CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
No. 831 of 2014.
                                                                  H
    796      SUPREME COURT REPORTS                   [2014] 4 S.C.R.


A       From the Judgment and order dated 25 06.2013 of the
    High Court of Kerala at Ernakulam in CRLMC No. 2480 of
    2013.

       Sidharth Luthra, ASG, H.P. Raval, P. Suresh Kumar, Abid
B Ali Beeran, Anando Mukherjee, Divya Anand, Sudha Gupta,
  Charul Sarin, Sanbha, B.V. Bairam Das, Rajeev Mishra, Sanand
  Ramakrishnan for the appearing parties.

          The Judgment of the Court was delivered by

c         RANJAN GOGOi, J. 1. Leave granted.
       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
D Court of Kerala to quash the aforesaid criminal proceeding
  lodged by the respondent-Central Bureau of Investigation
  (hereinafter for short 'CBI').
         3. The allegations made against the accused-appellant in
E   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
F   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
G   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 Branch Manager, dishonestly sanctioned
H   Rs. 5 lakhs towards car loan without prerequisite sanction
        GOPAKUMAR 8. NAIR v. C.8.1. & ANR.                      797
              [RANJAN GOGOi, J.]
inspection. It is also alleged that A-1, who did not have the          A
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            B
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   C
being authorised to do so, sanctioned cash credit facility of Rs.
17 lakhs to one Mis. 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                 D
prosecution in the valuation report 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       E
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.                F
23,57,887/-. On the aforesaid facts, commission of offences
under Section 120-8 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.                                                G
     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 as the PC
Act. It is not in dispute that charges under the aforesaid             H
    798       SUPREME COURT REPORTS                 [2014] 4 S.C.R.


A   provisions of law have been framed against the accused-
    a ppel la nt in the court of the Special Judge (SPE/CBI),
    Thiruvananthapuram on 29 072013.
         6. Shri H.P. Raval, learned Senior Counsel appearing for
    the accused-appellant had contended that all amounts due to
8
    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
C   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 Another1 and Gian Singh
    vs. State of Punjab and Anothefl and a recent pronouncement
    in CB/, ACB, Mumbai vs. Narendra Lal Jain & Ors. 3 Shri Raval
D   had contended that in view of the settlement arrived at between
    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
E   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)
F   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
G Solicitor General has submitted that the decision in Nikhil
  Merchant (supra) turns on its own facts and what has been
    1.   c2ooa) s sec 677.
    2.   c2012) 10 sec 303
H   3.   2014 (3) SCALE 137
        GOPAKUMAR B. NAIR v. C.B.I. & ANR.                   799
              [RANJAN GOGOi, J]
approved in Gian Singh (supra) is merely the principle of law       A
laid down in Nikhil Merchant (supra), 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         8
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           C
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        D
    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              E
    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   F
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          G
1208 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/
4 71 of the Indian Penal Code. It is submitted that the offences
                                                                    H
    800       SUPREME COURT REPORTS                     (2014] 4 S.C.R.


A   under the Prevention of Corruption Act and Section 471 of
    Indian Penal Code are not compoundable.
       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-
B 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.
c      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
D 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
E circumstances in which the charges were 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, Mis Neemuch Emballage Ltd., Mumbai,
F
          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."
G
       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
H Section 482 Cr.P.C. to quash a criminal proceeding was not
          GOPAKUMAR B. NAIR v. C.B.I. & ANR.                    801
                [RANJAN GOGOi, J.]
contingent on the provisions of Section 320 of the Code of            A
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 to note that the Court    B
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         C
and Manoj Sharma vs. State5 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 judgment2 took the view that the,     D
      "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      E
      from the quashing of criminal proceedings by the High
      Court in exercise of its inherent jurisdiction." {Para 57)
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             F
(supra), 8. 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      G
case has been decided and not the merits of the decision. The
decision rendered by any Bench is final inter-parte, subject to
4.   c2003J 4   sec 675.
5.   c2oos) 16   sec 1.
2.   Gian Singh Vs. State of Punjab & Anr. (2012) 10 SCC 303.         H
    802     SUPREME COURT REPORTS                  [2014] 4 S C.R.


A the powe.r 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
8 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 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
C 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
0 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
E 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
F 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
G 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
H of the decision in Gian Singh (supra).
        GOPAKUMAR 8. NAIR v. C.B.I. & ANR.                    803
              [RANJAN GOGOi. J.]
      14. The aforesaid principle of law may now be applied to        A
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 Section 420         8
(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      C
(supra) where the accused was charged under Section 120-8
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               o
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            E
of the criminal liability of the accused-appellant 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         F
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,           G
is affirmed.
R.P.                                         Appeal dismissed.