K. BHARTHI DEVI AND ANR.versusSTATE OF TELANGANA AND ANR.

                 [2024] 10 S.C.R. 650 : 2024 INSC 750

                       K. Bharthi Devi and Anr.
                                   v.
                      State of Telangana and Anr.
                    (Criminal Appeal No. 4113 of 2024)
                               03 October 2024
              [B.R. Gavai* and K.V. Viswanathan, JJ.]

                           Issue for Consideration
       Despite the dispute involved having predominantly overtures of a
       civil dispute and the matter having been compromised between
       the parties, whether the High Court was justified in dismissing
       the quashing petition filed by the accused persons including the
       appellants seeking quashing of the chargesheet.

                                  Headnotes†

       Code of Criminal Procedure, 1973 – s.482 – Penal Code, 1860 –
       s.120-B r/w ss.420, 409, 467, 468, 471 – Prevention of Corruption
       Act, 1988 – s.13(1)(d), 13(2) – Quashing – Of criminal cases
       having predominantly civil character when parties have settled
       the dispute – Dispute regarding the loan transaction availed
       by accused persons-borrowers – Matter settled between the
       Bank and the accused persons in proceedings before DRT –
       Accused persons including the appellants sought quashing
       of the chargesheet filed by CBI before trial Court, rejected
       by High Court:

       Held: Criminal cases having overwhelmingly and predominantly
       civil character, particularly those arising out of commercial
       transactions or matrimonial relationship/family disputes should
       be quashed when the parties have settled the dispute – In the
       present case, the dispute involved predominantly had overtures of
       a civil dispute – Further, it is undisputed that upon payment of the
       amount under the One Time Settlement (OTS), the loan account
       of the borrower was closed and the matter was compromised/
       settled between the borrowers and the Bank rendering the
       possibility of conviction remote and bleak – Present is a fit
       case wherein the High Court ought to have exercised its jurisdiction
       u/s.482, CrPC and quash the criminal proceedings – Impugned

* Author
[2024] 10 S.C.R.                                                          651

        K. Bharthi Devi and Anr. v. State of Telangana and Anr.


     judgment and the criminal proceedings against the appellants are
     quashed and set aside. [Paras 11, 31, 34, 35]

                             Case Law Cited
     Central Bureau of Investigation, SPE, SIU (X), New Delhi v. Duncans
     Agro Industries Ltd., Calcutta [1996] Supp. 3 SCR 360 : (1996) 5
     SCC 591; Nikhil Merchant v. Central Bureau of Investigation and
     Another [2008] 12 SCR 236 : (2008) 9 SCC 677; Gian Singh v.
     State of Punjab and Another [2012] 8 SCR 753 : (2012) 10 SCC
     303; Central Bureau of Investigation, ACB, Mumbai v. Narendra Lal
     Jain and Others [2014] 3 SCR 444 : (2014) 5 SCC 364; Narinder
     Singh and Others v. State of Punjab and Another [2014] 4 SCR
     1012 : (2014) 6 SCC 466; Gold Quest International Private Limited
     v. State of Tamil Nadu and Others [2014] 7 SCR 677 : (2014) 15
     SCC 235; Central Bureau of Investigation v. Sadhu Ram Singla
     and Others [2017] 1 SCR 907 : (2017) 5 SCC 350; B.S. Joshi
     and Others v. State of Haryana and Another [2003] 2 SCR 1104 :
     (2003) 4 SCC 675; Manoj Sharma v. State and Others [2008] 14
     SCR 539 : (2008) 16 SCC 1; Gian Singh v. State of Punjab and
     Another [2012] 8 SCR 753 : (2010) 15 SCC 118 – referred to.

                                List of Acts

     Code of Criminal Procedure, 1973; Penal Code, 1860; Prevention
     of Corruption Act, 1988.

                             List of Keywords
     Section 482 of Code of Criminal Procedure, 1973; Quashing;
     Criminal Cases Having Predominantly Civil Character; Loan
     Transaction; Borrowers; Bank; Commercial Transactions;
     Matrimonial Relationship/Family Disputes; Compromise/Settlement
     Between The Parties; Criminal Proceedings Quashed; Debts
     Recovery Tribunal.

                            Case Arising From

     CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 4113
     of 2024
     From the Judgment and Order dated 01.09.2017 of the High Court
     of Judicature at Hyderabad for the State of Telangana and the State
     of Andhra Pradesh in CRLP No. 5778 of 2016
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                          Appearances for Parties
       Dama Seshadri Naidu, Gaurav Agarwal, Sr. Advs., Rajiv Yadav,
       Nishant Bhatia, Vivek Singh, Ms. Shivali Chaudhary, R Chandrachud,
       Ramesh Allanki, Ms. Aruna Gupta, Syed Ahmed Naqvi, Siddhant
       Buxy, Ms. Rupinder Kaur, Vansh Verma, Yash Gupt, Rabin Majumder,
       Advs. for the Appellants.
       Vikramjeet Banerjee, A.S.G., Mukesh Kumar Maroria, Ms. Bani
       Dikshit, Mrs. Priyanka Das, B K Satija, Ayush Anand, Ms. Vimla
       Sinha, Ms. Devina Sehgal, Vineet George, Brijesh Kumar Tamber,
       Vinay Singh Bist, Prateek Kushwaha, Ms. Arani Mukherjee, Yashu
       Rustagi, Sahas Bhasin, Himanshu Munshi, Anitesh Choudhary,
       Siddhant Munshi, Advs. for the Respondents.
                  Judgment / Order of the Supreme Court
                                  Judgment
       B.R. Gavai, J.
1.     Leave granted.
2.     The present appeal challenges the final judgment and order dated
       1st September 2017 passed by the High Court of Judicature at
       Hyderabad for the State of Telangana and the State of Andhra
       Pradesh, whereby the High Court dismissed the Criminal Petition
       No. 5778 of 2016 filed by the accused persons, including the appellants
       herein, under Section 482 of the Code of Criminal Procedure, 1973
       (“CrPC.” for short) thereby seeking quashing of the charge-sheet in
       C.C. No. 16 of 2014 on the file of Principal Special Judge for CBI
       Cases, Nampally, Hyderabad (“trial Court” for short).
3.     Shorn of details, the case of the prosecution is as given below.
       3.1 K. Suresh Kumar (Accused No. 1), the Sole Proprietor of M/s
           Sirish Traders, a firm engaged in processing of Uradh Dhall,
           was granted various credit facilities in the group loan account by
           the Indian Bank, Osmanganj Branch, Hyderabad (“respondent
           No. 2 Bank” for short). The credit facilities were secured by
           collateral security executed by the accused persons including
           the present appellants who are Accused No. 3 & 4.
       3.2 Since the borrowers/mortgagors (Accused Nos. 1-5) failed to
           service the interest and re-pay the dues, the group loan account
           was declared a Non-Performing Asset on 31st March 2010.
[2024] 10 S.C.R.                                                  653

        K. Bharthi Devi and Anr. v. State of Telangana and Anr.


     3.3 To realize the outstanding amount, the respondent No. 2 Bank
         filed an Original Application being OA No. 253 of 2010 before
         the Debts Recovery Tribunal, Hyderabad (“DRT” for short) for
         recovery of amounts due.
     3.4 During the pendency of the proceedings before the DRT, the
         respondent No. 2 Bank came to know that some of the title
         documents executed by the accused persons by virtue of which
         equitable mortgage was created were not original documents,
         rather the same were fake, forged and fabricated.
     3.5 The respondent No. 2 Bank, accordingly, lodged a written
         complaint dated 3 rd September 2012. Based on the said
         complaint, the Central Bureau of Investigation – Economic
         Offence Wing (CBI-EOW) Chennai registered an FIR
         No. RC.14/E/2012 dated 15th September 2012.
     3.6 The CBI-EOW Chennai after investigation prima facie found that
         offences punishable under Sections 120-B read with 420, 409,
         467, 468 and 471 of Indian Penal Code 1860 (“IPC” for short)
         and Section 13(1)(d) and 13(2) of the Prevention of Corruption
         Act 1988 (“PC Act” for short) have been committed. The CBI
         filed charge-sheet dated 27th December 2013 in the trial Court
         and prayed that the trial Court take cognizance of the said
         offences committed by the accused persons.
     3.7 Since the proceedings before the DRT were still pending,
         the borrowers/mortgagors (Accused Nos. 1-5) approached
         the respondent No. 2 Bank for settlement of the amount due
         regarding the group loan accounts. To that effect, a One Time
         Settlement (“OTS” for short) dated 19th November 2015 of
         Rs. 3.8 crores was offered to the respondent No. 2 Bank for
         settling all the dues. The same was accepted by the respondent
         No. 2 Bank. The OTS amount was paid, and the respondent
         No. 2 Bank issued a No Dues Certificate dated 21st November
         2015 to the borrowers/guarantors.
     3.8 When the matter stood thus, the Accused Nos. 1 to 5, including
         the present appellants, filed a Criminal Petition bearing No.
         5778 of 2016 on 18th April 2016 before the High Court under
         Section 482 CrPC seeking quashing of the charge-sheet filed
         before the trial Court by the CBI.
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       3.9 During the pendency of the Criminal Petition before the High
           Court, the DRT vide order dated 4th May 2016, recorded that
           the matter has been settled as per the OTS and disposed of the
           OA as settled, in full satisfaction of the dues of the respondent
           No. 2 Bank.
       3.10 The High Court, however, vide the impugned final judgment
            and order dismissed the Criminal Petition filed by the Accused
            Nos. 1 to 5 holding that the settlement arrived at was only a
            private settlement and was not a part of any decree given by
            any court. The charges include the use of fraudulent, fake and
            forged documents that were used to embezzle public money
            and if these are proved, they would be grave crimes against
            the society as a whole and hence, merely due to a private
            settlement between the Bank and the accused, it cannot be
            said that the prosecution of the accused persons would amount
            to abuse of process of the court.
       3.11 Aggrieved thereby, two of the accused persons (Accused
            Nos. 3 & 4) have filed the present appeal.
4.     We have heard Shri Dama Seshadri Naidu, learned Senior Counsel
       for the appellants and Shri Vikramjeet Banerjee learned Additional
       Solicitor General (“ASG” for short) appearing for the CBI, Ms. Devina
       Sehgal, learned counsel for the respondent No.1-State and Mr.
       Himanshu Munshi, learned counsel for the respondent No.2-Bank.
5.     Shri Naidu submits that the appellants before this Court had no active
       role to play. It is submitted that the Appellant No.1 (Accused No.3)
       is the wife of Accused No.2 and Appellant No.2 (Accused No.4) is
       the wife of Accused No.1. It is submitted that even from the perusal
       of the chargesheet it would reveal that no active role is attributed
       to the present appellants.
6.     Shri Naidu further submits that in the proceedings before the DRT, the
       matter has been amicably settled between the respondent No.2 Bank
       and the accused persons. It is submitted that in addition to the total
       amount paid by the borrowers to the tune of Rs. 7,78,25,143/- , the
       Bank has also realized an amount of Rs. 1,07,54,000/- by auctioning
       the mortgaged properties.
7.     It is further submitted that during the pendency of OA before the
       DRT, in view of OTS an amount of Rs. 3,80,00,000/- was also paid
[2024] 10 S.C.R.                                                       655

              K. Bharthi Devi and Anr. v. State of Telangana and Anr.


      to the respondent No.2 Bank and as such, the respondent No.2
      Bank has closed the loan account. The learned Senior Counsel,
      therefore, submits that the continuance of the proceedings against
      the appellants would be an exercise in futility.
8.    Shri Naidu in support of his submissions relied on the following
      judgments of this Court in the cases of:
      (i)       Central Bureau of Investigation, SPE, SIU (X), New Delhi
               v. Duncans Agro Industries Ltd., Calcutta;1
      (ii)      Nikhil Merchant v. Central Bureau of Investigation and
               another;2
      (iii)     Gian Singh v. State of Punjab and another;3
      (iv)     Central Bureau of Investigation, ACB, Mumbai v. Narendra
               Lal Jain and others;4
      (v)       Narinder Singh and others v. State of Punjab and another;5
      (vi)     Gold Quest International Private Limited v. State of Tamil
               Nadu and others;6 and
      (vii) Central Bureau of Investigation v. Sadhu Ram Singla and
            others.7
9.    Mr. Himanshu Munshi, learned counsel for the respondent No.2 Bank
      confirms the fact regarding the settlement entered into between the
      Bank and the borrowers.
10. Shri Vikramjeet Banerjee, learned ASG, appearing on behalf of the
    CBI, however, submits that merely because the matter is settled
    between the Bank and the borrowers, it does not absolve the
    accused persons of their criminal liability. It is submitted that the
    learned judge of the High Court has rightly, upon consideration



1    [1996] Supp. 3 SCR 360 : (1996) 5 SCC 591
2    [2008] 12 SCR 236 : (2008) 9 SCC 677
3    [2012] 8 SCR 753 : (2012) 10 SCC 303
4    [2014] 3 SCR 444 : (2014) 5 SCC 364
5    [2014] 4 SCR 1012 : (2014) 6 SCC 466
6    [2014] 7 SCR 677 : (2014) 15 SCC 235
7    [2017] 1 SCR 907 : (2017) 5 SCC 350
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       of the legal position, dismissed the petition under Section 482 of
       the CrPC. The learned ASG, therefore, prays for dismissal of the
       present appeal.
11. The facts in the present case are not in dispute. It is not disputed
    that the matter has been compromised between the borrowers and
    the Bank. It is also not in dispute that, upon payment of the amount
    under the OTS, the loan account of the borrower has been closed.
12. Therefore, the only question would be, as to whether the continuation
    of the criminal proceedings against the present appellants would be
    justified or not.
13. At the outset, we may state that we are only considering the cases
    only of two women i.e. Accused Nos. 3 and 4, who are wives of
    original Accused Nos. 2 and 1 respectively.
14. A perusal of the chargesheet would reveal that the specific role
    is attributed to Accused No.1-K. Suresh Kumar. The allegations
    against the present appellants are that they were involved in criminal
    conspiracy with Accused No.1.
15. We may gainfully refer to the following observations of this Court
    in the case of Duncans Agro Industries Ltd., Calcutta (supra):
            “26. After giving our careful consideration to the facts and
            circumstances of the case and the submissions made by
            the respective counsel for the parties, it appears to us that
            for the purpose of quashing the complaint, it is necessary
            to consider whether the allegations in the complaint prima
            facie make out an offence or not. It is not necessary to
            scrutinise the allegations for the purpose of deciding
            whether such allegations are likely to be upheld in the trial.
            Any action by way of quashing the complaint is an action
            to be taken at the threshold before evidences are led in
            support of the complaint. For quashing the complaint by
            way of action at the threshold, it is, therefore, necessary to
            consider whether on the face of the allegations, a criminal
            offence is constituted or not. In recent decisions of this
            Court, in the case of Bhajan Lal [1992 Supp (1) SCC
            335 : 1992 SCC (Cri) 426], P.P. Sharma [1992 Supp (1)
            SCC 222 : 1992 SCC (Cri) 192] and Janata Dal [(1992)
            4 SCC 305 : 1993 SCC (Cri) 36], since relied on by Mr
[2024] 10 S.C.R.                                                           657

        K. Bharthi Devi and Anr. v. State of Telangana and Anr.


          Tulsi, the guiding principles in quashing a criminal case
          have been indicated.
          27. ……………………………………………...
          28. ……………………………………………...
          29. In the facts of the case, it appears to us that there
          is enough justification for the High Court to hold that the
          case was basically a matter of civil dispute. The Banks
          had already filed suits for recovery of the dues of the
          Banks on account of credit facility and the said suits
          have been compromised on receiving the payments
          from the companies concerned. Even if an offence
          of cheating is prima facie constituted, such offence
          is a compoundable offence and compromise decrees
          passed in the suits instituted by the Banks, for all
          intents and purposes, amount to compounding of the
          offence of cheating. It is also to be noted that a long
          time has elapsed since the complaint was filed in 1987.
          It may also be indicated that although such FIRs were
          filed in 1987 and 1989, the Banks have not chosen to
          institute any case against the alleged erring officials despite
          allegations made against them in the FIRs. Considering
          that the investigations had not been completed till 1991
          even though there was no impediment to complete the
          investigations and further investigations are still pending
          and also considering the fact that the claims of the Banks
          have been satisfied and the suits instituted by the Banks
          have been compromised on receiving payments, we do
          not think that the said complaints should be pursued any
          further…………..”
                                                  [Emphasis supplied]
16. It could thus be seen that this Court in the case of Duncans Agro
    Industries Ltd found that the Banks had already filed suits for
    recovery of the dues of the Banks on account of credit facility and
    the said suits had been compromised on receiving the payments from
    the companies concerned. The Court found that even if an offence of
    cheating is prima facie constituted, such offence is a compoundable
    offence and compromise decrees passed in the suits instituted by
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       the Banks, for all intents and purposes, amounted to compounding
       of the offence of cheating.
17. In the case of Nikhil Merchant (supra), this Court was considering
    a civil dispute with certain criminal facets. The matter also involved
    offences which were not compoundable in nature. This Court,
    therefore, considered the question as to whether the criminal
    proceedings could be quashed under Article 142 of the Constitution
    of India on the basis of compromise, even where non-compoundable
    offences are involved.
18. An argument was advanced on behalf of the Union that this Court
    should not exercise its powers under Article 142 of the Constitution
    of India in order to quash the proceedings for non-compoundable
    offences. This Court observed thus:
           “25. It was urged that even if no steps have been taken
           by CBI since the charge-sheet was filed in 1998, the same
           would not be a ground for quashing the criminal proceedings
           once the charge-sheet had been filed. He submitted that
           in view of the decision of this Court in Supreme Court Bar
           Assn. v. Union of India [(1998) 4 SCC 409] this Court would
           possibly not be justified in giving directions in the instant
           case even under Article 142 of the Constitution, since the
           Constitution Bench had held that in exercise of its plenary
           powers under Article 142, this Court could not ignore any
           substantive statutory provision dealing with the subject. It
           is a residuary power, supplementary and complementary
           to the powers specifically conferred on the Supreme Court
           by statutes, exercisable to do complete justice between
           the parties where it is just and equitable to do so. It was
           further observed that the power under Article 142 of the
           Constitution was vested in the Supreme Court to prevent
           any obstruction to the stream of justice.
           26. The learned Additional Solicitor General submitted that
           the power under Article 142 is to be exercised sparingly
           and only in rare and exceptional cases and in the absence
           of any exceptional circumstances the appeal was liable
           to be dismissed.
           27. Having carefully considered the facts of the case and
           the submissions of learned counsel in regard thereto, we
[2024] 10 S.C.R.                                                          659

        K. Bharthi Devi and Anr. v. State of Telangana and Anr.


          are of the view that, although, technically there is force in
          the submissions made by the learned Additional Solicitor
          General, the facts of the case warrant interference in
          these proceedings.
          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.
          29. Despite the ingredients and the factual content of an
          offence of cheating punishable under Section 420 IPC, the
          same has been made compoundable under sub-section
          (2) of Section 320 CrPC with the leave of the court. Of
          course, forgery has not been included as one of the
          compoundable offences, but it is in such cases that the
          principle enunciated in B.S. Joshi case [(2003) 4 SCC
          675 : 2003 SCC (Cri) 848] becomes relevant.
          30. In the instant case, the disputes between the 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 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 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 in B.S. Joshi
          case [(2003) 4 SCC 675 : 2003 SCC (Cri) 848] and the
          compromise arrived at between the Company and the Bank
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             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 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.”
19. This Court found that though the offence punishable under
    Section 420 of the IPC was compoundable under sub-section (2) of
    Section 320 CrPC with the leave of the Court, the offence of forgery
    was not included as one of the compoundable offences. However,
    the Court found that in such cases the principle enunciated in the
    case of B.S. Joshi and others v. State of Haryana and another8
    should be applied.
20. This Court specifically noted that though it is alleged that certain
    documents had been created by the appellant therein to avail of
    credit facilities beyond the limit to which the Company was entitled,
    the power of quashing could be exercised. This Court found that
    in view of a compromise arrived at between the Company and the
    Bank, it was a fit case where a technicality should not be allowed to
    stand in the way of quashing of the criminal proceedings. This Court
    found that in view of the settlement arrived at between the parties,
    continuance of the same would be an exercise in futility.
21. A similar view was again taken by 2 Judge Bench of this Court in
    the case of Manoj Sharma v. State and others.9
22. However, another 2 Judge Bench of this Court in the case of Gian
    Singh v. State of Punjab and another10 doubted the correctness
    of the view taken by this Court in the cases of B.S. Joshi (supra),
    Nikhil Merchant (supra), and Manoj Sharma (supra) and referred
    the matter to a larger Bench.
23. The reference was answered by the learned 3 Judge Bench of this
    Court in the case of Gian Singh (supra).11 Speaking for the Bench,
    R.M. Lodha, J. (as His Lordship then was), observed thus:


8    [2003] 2 SCR 1104 : (2003) 4 SCC 675
9    [2008] 14 SCR 539 : (2008) 16 SCC 1
10   [2012] 8 SCR 753 : (2010) 15 SCC 118
11   [2012] 8 SCR 753 : (2012) 10 SCC 303
[2024] 10 S.C.R.                                                          661

        K. Bharthi Devi and Anr. v. State of Telangana and Anr.


          “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
          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
          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
          consequence may be acquittal or dismissal of indictment.
          58. Where the High Court quashes a criminal proceeding
          having regard to the fact that the dispute between the
          offender and the victim has been settled although the
          offences are not compoundable, it does so as in its opinion,
          continuation of criminal proceedings will be an exercise in
          futility and justice in the case demands that the dispute
          between the parties is put to an end and peace is restored;
          securing the ends of justice being the ultimate guiding
          factor. No doubt, crimes are acts which have harmful effect
          on the public and consist in wrongdoing that seriously
          endangers and threatens the well-being of the society and
          it is not safe to leave the crime-doer only because he and
          the victim have settled the dispute amicably or that the
          victim has been paid compensation, yet certain crimes
          have been made compoundable in law, with or without
          the permission of the court. In respect of serious offences
          like murder, rape, dacoity, etc., or other offences of mental
          depravity under IPC or offences of moral turpitude under
          special statutes, like the Prevention of Corruption Act or the
          offences committed by public servants while working in that
          capacity, the settlement between the offender and the victim
          can have no legal sanction at all. However, certain offences
          which overwhelmingly and predominantly bear civil flavour
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       having arisen out of civil, mercantile, commercial, financial,
       partnership or such like transactions or the offences arising
       out of matrimony, particularly relating to dowry, etc. or the
       family dispute, where the wrong is basically to the victim
       and the offender and the victim have settled all disputes
       between them amicably, irrespective of the fact that such
       offences have not been made compoundable, the High
       Court may within the framework of its inherent power, quash
       the criminal proceeding or criminal complaint or FIR if it is
       satisfied that on the face of such settlement, there is hardly
       any likelihood of the offender being convicted and by not
       quashing the criminal proceedings, justice shall be casualty
       and ends of justice shall be defeated. The above list is
       illustrative and not exhaustive. Each case will depend on its
       own facts and no hard-and-fast category can be prescribed.
       59. B.S. Joshi [(2003) 4 SCC 675 : 2003 SCC (Cri) 848],
       Nikhil Merchant [(2008) 9 SCC 677 : (2008) 3 SCC (Cri)
       858], Manoj Sharma [(2008) 16 SCC 1 : (2010) 4 SCC
       (Cri) 145] and Shiji [(2011) 10 SCC 705 : (2012) 1 SCC
       (Cri) 101] 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 Section482. Can
       it be said that by quashing criminal proceedings in
       B.S. Joshi [(2003) 4 SCC 675 : 2003 SCC (Cri) 848],
       Nikhil Merchant [(2008) 9 SCC 677 : (2008) 3 SCC (Cri) 858],
       Manoj Sharma [(2008) 16 SCC 1 : (2010) 4 SCC (Cri) 145]
       and Shiji [(2011) 10 SCC 705 : (2012) 1 SCC (Cri) 101]
       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
       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.
       60. We find no incongruity in the above principle of law
       and the decisions of this Court in Simrikhia [(1990) 2 SCC
[2024] 10 S.C.R.                                                       663

        K. Bharthi Devi and Anr. v. State of Telangana and Anr.


          437 : 1990 SCC (Cri) 327], Dharampal [(1993) 1 SCC 435 :
          1993 SCC (Cri) 333 : 1993 Cri LJ 1049], Arun Shankar
          Shukla [(1999) 6 SCC 146 : 1999 SCC (Cri) 1076 : AIR
          1999 SC 2554], Ishwar Singh [(2008) 15 SCC 667 : (2009)
          3 SCC (Cri) 1153], Rumi Dhar [(2009) 6 SCC 364 : (2009)
          2 SCC (Cri) 1074] and Ashok Sadarangani [(2012) 11 SCC
          321]. The principle propounded in Simrikhia [(1990) 2 SCC
          437 : 1990 SCC (Cri) 327] that the inherent jurisdiction
          of the High Court cannot be invoked to override express
          bar provided in law is by now well settled. In Dharampal
          [(1993) 1 SCC 435 : 1993 SCC (Cri) 333 : 1993 Cri LJ
          1049] the Court observed the same thing that the inherent
          powers under Section 482 of the Code cannot be utilised
          for exercising powers which are expressly barred by the
          Code. Similar statement of law is made in Arun Shankar
          Shukla [(1999) 6 SCC 146 : 1999 SCC (Cri) 1076 : AIR
          1999 SC 2554]. In Ishwar Singh [(2008) 15 SCC 667 :
          (2009) 3 SCC (Cri) 1153] the accused was alleged to
          have committed an offence punishable under Section 307
          IPC and with reference to Section 320 of the Code, it was
          held that the offence punishable under Section 307 IPC
          was not compoundable offence and there was express
          bar in Section 320 that no offence shall be compounded
          if it is not compoundable under the Code. In Rumi Dhar
          [(2009) 6 SCC 364 : (2009) 2 SCC (Cri) 1074] although
          the accused had paid the entire due amount as per the
          settlement with the bank in the matter of recovery before
          the Debts Recovery Tribunal, the accused was being
          proceeded with for the commission of the offences under
          Sections 120-B/420/467/468/471 IPC along with the bank
          officers who were being prosecuted under Section 13(2)
          read with 13(1)(d) of the Prevention of Corruption Act. The
          Court refused to quash the charge against the accused by
          holding that the Court would not quash a case involving
          a crime against the society when a prima facie case
          has been made out against the accused for framing the
          charge. Ashok Sadarangani [(2012) 11 SCC 321] was
          again a case where the accused persons were charged
          of having committed the offences under Sections 120-B,
          465, 467, 468 and 471 IPC and the allegations were that
664                                                      [2024] 10 S.C.R.

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       the accused secured the credit facilities by submitting
       forged property documents as collaterals and utilised such
       facilities in a dishonest and fraudulent manner by opening
       letters of credit in respect of foreign supplies of goods,
       without actually bringing any goods but inducing the bank to
       negotiate the letters of credit in favour of foreign suppliers
       and also by misusing the cash-credit facility. The Court
       was alive to the reference made in one of the present
       matters and also the decisions in B.S. Joshi [(2003) 4
       SCC 675 : 2003 SCC (Cri) 848], Nikhil Merchant [(2008)
       9 SCC 677 : (2008) 3 SCC (Cri) 858] and Manoj Sharma
       [(2008) 16 SCC 1 : (2010) 4 SCC (Cri) 145] and it was
       held that B.S. Joshi [(2003) 4 SCC 675 : 2003 SCC (Cri)
       848] and Nikhil Merchant [(2008) 9 SCC 677 : (2008) 3
       SCC (Cri) 858] dealt with different factual situation as the
       dispute involved had overtures of a civil dispute but the
       case under consideration in Ashok Sadarangani [(2012)
       11 SCC 321] was more on the criminal intent than on a
       civil aspect. The decision in Ashok Sadarangani [(2012)
       11 SCC 321] supports the view that the criminal matters
       involving overtures of a civil dispute stand on a different
       footing.
       61. The position that emerges from the above discussion
       can be summarised 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
       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. 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,
       the High Court must have due regard to the nature and
       gravity of the crime. Heinous and serious offences of
[2024] 10 S.C.R.                                                          665

        K. Bharthi Devi and Anr. v. State of Telangana and Anr.


          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 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.
          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 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 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 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 affirmative,
          the High Court shall be well within its jurisdiction to quash
          the criminal proceeding.”
24. It could thus be seen that the learned 3 Judge Bench of this Court
    held that B.S. Joshi, Nikhil Merchant, and Manoj Sharma were
    correctly decided.
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25. It has been held that there are certain offences which overwhelmingly
    and predominantly bear civil flavour having arisen out of civil,
    mercantile, commercial, financial, partnership or such like transactions
    or the offences arising out of matrimony, particularly relating to dowry,
    etc. or a family dispute, where the wrong is basically to the victim
    and the offender and the victim have settled all disputes between
    them amicably, the High Court would be justified in quashing the
    criminal proceedings, even if the offences have not been made
    compoundable.
26. In paragraph 60, His Lordship considers the cases where the Court
    has refused to quash the proceedings irrespective of the settlement.
    The Court considers the different factual positions arising in the cases
    of B.S. Joshi, Nikhil Merchant, and Manoj Sharma on one hand and
    the other cases where the Court refused to quash the proceedings.
27. In the cases of the first type, this Court found that the dispute involved
    had overtures of a civil dispute but in the other line of cases, the
    disputes were more on the criminal aspect than on a civil aspect.
28. In paragraph 61, this Court observes that, in which 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. However, the
    Court reiterates that the criminal cases having an overwhelmingly
    and predominatingly civil flavour stand on a different footing for the
    purposes of quashing. The Court particularly refers to the offences
    arising out of commercial, financial, mercantile, civil, partnership
    or such like transactions or the offences arising out of matrimony
    relating to dowry, etc. or family disputes where the wrong is basically
    private or personal in nature and the parties have resolved their
    entire dispute. The Court finds that in such cases, 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.
29. Another 3 Judge Bench of this Court in the case of Narendra Lal Jain
    and others (supra), following Gian Singh12 (supra) observed thus:


12   Larger Bench decision
[2024] 10 S.C.R.                                                          667

        K. Bharthi Devi and Anr. v. State of Telangana and Anr.


          “13. In the present case, as already seen, the offence
          with which the respondent-accused had been charged
          are under Sections 120-B/420 of the 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 (see para 3).
          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 IPC is not. To the latter offence the ratio
          laid down in B.S. Joshi [B.S. Joshi v. State of Haryana
          (2003) 4 SCC 675 : 2003 SCC (Cri) 848 : AIR 2003 SC
          1386] and Nikhil Merchant [(2008) 9 SCC 677 : (2008)
          3 SCC (Cri) 858] would apply if the facts of the given
          case would so justify. The observation in Gian Singh
          [Gian Singh v. State of Punjab (2012) 10 SCC 303 : (2012)
          4 SCC (Civ) 1188 : (2013) 1 SCC (Cri) 160 : (2012) 2 SCC
          (L&S) 988] (para 61) will not be attracted in the present
          case in view of the offences alleged i.e. under Sections
          420/120-B IPC.
          14. 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 CrPC. 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 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 CrPC
          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 CrPC.”
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30. Subsequently, a 2 Judge Bench of this Court in the case of
    Narinder Singh and others (supra), after considering the earlier
    pronouncements of this Court, culled out the position thus:
         “29. In view of the aforesaid discussion, we sum up
         and lay down the following principles by which the High
         Court would be guided in giving adequate treatment to
         the settlement between the parties and exercising its
         power under Section 482 of the Code while accepting the
         settlement and quashing the proceedings or refusing to
         accept the settlement with direction to continue with the
         criminal proceedings:
         29.1. Power conferred under Section 482 of the Code is
         to be distinguished from the power which lies in the Court
         to compound the offences under Section 320 of the Code.
         No doubt, under Section 482 of the Code, the High Court
         has inherent power to quash the criminal proceedings
         even in those cases which are not compoundable, where
         the parties have settled the matter between themselves.
         However, this power is to be exercised sparingly and with
         caution.
         29.2. When the parties have reached the settlement and on
         that basis petition for quashing the criminal proceedings is
         filed, the guiding factor in such cases would be to secure:
              (i) ends of justice, or
              (ii) to prevent abuse of the process of any court.
         While exercising the power the High Court is to form an
         opinion on either of the aforesaid two objectives.
         29.3. Such a power is not to be exercised in those
         prosecutions which involve heinous and serious offences
         of mental depravity or offences like murder, rape, dacoity,
         etc. Such offences are not private in nature and have a
         serious impact on society. Similarly, for the offences alleged
         to have been committed under special statute like the
         Prevention of Corruption Act or the offences committed by
         public servants while working in that capacity are not to
         be quashed merely on the basis of compromise between
         the victim and the offender.
[2024] 10 S.C.R.                                                          669

        K. Bharthi Devi and Anr. v. State of Telangana and Anr.


          29.4. On the other hand, those criminal cases having
          overwhelmingly and predominantly civil character,
          particularly those arising out of commercial transactions
          or arising out of matrimonial relationship or family disputes
          should be quashed when the parties have resolved their
          entire disputes among themselves.
          29.5. While exercising its powers, the High Court is to
          examine as to whether the possibility of conviction is
          remote and bleak and continuation of criminal cases would
          put the accused to great oppression and prejudice and
          extreme injustice would be caused to him by not quashing
          the criminal cases.
          29.6. Offences under Section 307 IPC would fall in the
          category of heinous and serious offences and therefore
          are to be generally treated as crime against the society
          and not against the individual alone. However, the High
          Court would not rest its decision merely because there is
          a mention of Section 307 IPC in the FIR or the charge
          is framed under this provision. It would be open to the
          High Court to examine as to whether incorporation of
          Section 307 IPC is there for the sake of it or the prosecution
          has collected sufficient evidence, which if proved, would
          lead to proving the charge under Section 307 IPC. For this
          purpose, it would be open to the High Court to go by the
          nature of injury sustained, whether such injury is inflicted
          on the vital/delicate parts of the body, nature of weapons
          used, etc. Medical report in respect of injuries suffered by
          the victim can generally be the guiding factor. On the basis
          of this prima facie analysis, the High Court can examine
          as to whether there is a strong possibility of conviction or
          the chances of conviction are remote and bleak. In the
          former case it can refuse to accept the settlement and
          quash the criminal proceedings whereas in the latter case it
          would be permissible for the High Court to accept the plea
          compounding the offence based on complete settlement
          between the parties. At this stage, the Court can also be
          swayed by the fact that the settlement between the parties
          is going to result in harmony between them which may
          improve their future relationship.
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          29.7. While deciding whether to exercise its power under
          Section 482 of the Code or not, timings of settlement play
          a crucial role. Those cases where the settlement is arrived
          at immediately after the alleged commission of offence
          and the matter is still under investigation, the High Court
          may be liberal in accepting the settlement to quash the
          criminal proceedings/investigation. It is because of the
          reason that at this stage the investigation is still on and
          even the charge-sheet has not been filed. Likewise, those
          cases where the charge is framed but the evidence is yet to
          start or the evidence is still at infancy stage, the High Court
          can show benevolence in exercising its powers favourably,
          but after prima facie assessment of the circumstances/
          material mentioned above. On the other hand, where
          the prosecution evidence is almost complete or after the
          conclusion of the evidence the matter is at the stage of
          argument, normally the High Court should refrain from
          exercising its power under Section 482 of the Code, as in
          such cases the trial court would be in a position to decide
          the case finally on merits and to come to a conclusion as
          to whether the offence under Section 307 IPC is committed
          or not. Similarly, in those cases where the conviction is
          already recorded by the trial court and the matter is at the
          appellate stage before the High Court, mere compromise
          between the parties would not be a ground to accept the
          same resulting in acquittal of the offender who has already
          been convicted by the trial court. Here charge is proved
          under Section 307 IPC and conviction is already recorded
          of a heinous crime and, therefore, there is no question of
          sparing a convict found guilty of such a crime.”
31. It could thus be seen that this Court reiterates the position that
    the criminal cases having overwhelmingly and predominantly civil
    character, particularly those arising out of commercial transactions
    or arising out of matrimonial relationship or family disputes should
    be quashed when the parties have resolved their entire disputes
    among themselves.
32. Though in the said case, the High Court had refused to exercise
    its jurisdiction under Section 482 CrPC to quash the proceedings
[2024] 10 S.C.R.                                                        671

         K. Bharthi Devi and Anr. v. State of Telangana and Anr.


     wherein a serious offence under Section 307 IPC was involved, this
     Court after taking into consideration various factors including that
     the elders of the village, including the Sarpanch, had intervened in
     the matter and the parties had not only buried their hatchet but had
     decided to live peacefully in the future, quashed and set aside the
     criminal proceedings under Section 307 IPC.
33. The aforesaid view has consistently been followed by this Court in
    various cases including Gold Quest International Private Limited
    (supra) and Sadhu Ram Singla and others (supra).
34. The facts in the present case are similar to the facts in the case of
    Sadhu Ram Singla and others (supra) wherein a dispute between
    the borrower and the Bank was settled. In the present case also,
    undisputedly, the FIR and the chargesheet are pertaining to the
    dispute concerning the loan transaction availed by the accused
    persons on one hand and the Bank on the other hand. Admittedly,
    the Bank and the accused persons have settled the matter. Apart
    from the earlier payment received by the Bank either through Equated
    Monthly Instalments (EMIs) or sale of the mortgaged properties, the
    borrowers have paid an amount of Rs.3,80,00,000/- under OTS.
    After receipt of the amount under OTS, the Bank had also decided
    to close the loan account. The dispute involved predominantly had
    overtures of a civil dispute.
35. Apart from that, it is further to be noted that in view of the settlement
    between the parties in the proceedings before the DRT, the possibility
    of conviction is remote and bleak. In our view, continuation of the
    criminal proceedings would put the accused to great oppression
    and prejudice.
36. In any case, as discussed hereinabove, both the appellants have
    been arraigned as wives of the Accused Nos. 1 and 2. The specific
    role that was attributed in the chargesheet was pertaining to Accused
    No.1.
37. In the result, we find that this was a fit case wherein the High Court
    ought to have exercised its jurisdiction under Section 482 CrPC and
    quash the criminal proceedings.
38. We are therefore inclined to allow the present appeal.
39. We accordingly pass the following order:
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       (i)     The appeal is allowed.
       (ii)    The impugned judgment and order dated 1st September 2017
               passed by the High Court of Judicature at Hyderabad for the
               State of Telangana and the State of Andhra Pradesh in Criminal
               Petition No. 5778 of 2016 is quashed and aside.
       (iii) The criminal proceedings against the appellants in C.C. No. 16
             of 2014 on the file of Principal Special Judge for CBI Cases,
             Nampally, Hyderabad is also quashed and set aside.
40. For the reasons stated in I.A. No. 68579 of 2021 for discharge of
    AOR, the same is allowed.

       Result of the Case: Appeal allowed.



       †
           Headnotes prepared by: Divya Pandey