Holding

The Supreme Court held that continuation of the criminal proceedings after a lawful compromise between the trust and the accused would be an abuse of the process of law, and therefore the proceedings must be quashed.

Summary

The Somvashi Arya Samaj Trust entered into an agreement with the accused to construct a community hall, which the accused failed to do, leading the Trust’s Chief Managing Trustee to file a criminal complaint under Sections 418, 409, 166 read with 114 IPC. The accused obtained a compromise with the Trust, and a connected civil suit was held non‑maintainable. The accused sought to quash the criminal case under Section 482 of the CrPC, but the High Court dismissed the petition. The Supreme Court examined whether the compromise barred continuation of the criminal prosecution and whether Section 482 could be invoked to prevent abuse of process. Relying on the earlier finding that the civil suit was barred by the compromise, the Court held that proceeding with the criminal case would be an abuse of the process of law. Consequently, the High Court’s order was set aside and the criminal proceedings were quashed.

Issues considered

Whether a compromise between a trust and the accused precludes continuation of criminal proceedings under the IPC.
Whether Section 482 of the Code of Criminal Procedure can be invoked to quash criminal proceedings on the ground of abuse of process.

Legislation cited

Code of Criminal Procedure, 1973s. 202, s. 482
Indian Penal Code, 1860s. 114, s. 166, s. 409, s. 418

Subjects

compromiseabuse of processSection 482 CrPCtrustcivil suitquashcriminal prosecutioncheatingpublic trust

Judgment

A NALINI SHANKARAN AND ORS.
v. ~ ..
NEELKANTH MAHADEO KAMBLE AND ORS.

FEBRUARY 27, 2007

B [DR. ARIJIT PASA YAT AND TARUN CHATTERJEE, JJ.]

Code of Criminal Procedure, 1973-Section 482-Criminal case filed
against accused by Chief Managing trustee of the trust-Quashing of
proceedings-Held: Since the trust and accused persons entered into a
c compromise, continuance of criminal proceedings in the criminal case sheer
abuse of process of law-Thus, proceedings quashed

A Trust and accused persons entered into an agreement to carry out
construction work. Since the construction work was not carried out as per
D the agreement, the complainant-respondent No.I in his capacity as Chief
Managing Trustee of a trust filed criminal case against the accused.
Magistrate issued process against the accused. Accused filed criminal revision
challenging the process issued. It was contended that since the parties had
(
entered into a compromise, the proceedings should not be continued. Sessions
Judge rejected the revision. Appellants filed petition under section 482 CrPC fl

E to quash the order of Sessions Judge and the proceedings in the Criminal
Case. Petition was dismissed. Hence the present appeal.

Allowing the appeal, the Court

HELD: In view of what has been held in respect of the connected civil
F suit which was held to be not maintainable in view of the compromise arrived

-
at by the Trust and accused persons, the continuance of proceedings will be
sheer abuse of the process of law. Thus, the order of the High Court is set r

aside and proceedings in Criminal· Case stand quashed. [Para 71 [375-Fj

Ravi Construction Co. v. Somvanshi Arya Kshatriya Samaj and Ors.,
G (2006) 9 SCALE 174, relied on.

CRIMrNAL APPELLATE JURISDICTION: Criminal Appeal No. 811 of
~
1999. '

H 372
NALINI SHANKARANr. NEELKANTH MAHADEOKAMBLE[PASA YAT,J.] 373

From the Judgment and final Order dated 3.12.1998 of the High Court A
of Judicature at Bombay in Criminal A. No. 173/1997.

S. Bhatnagar and Rekha Palli for the Appellants.

Sushi! Karanjkar, Vishwajit Singh, Ravindra Keshavrao Adsure and
Gautam Godara for the Respondents. B
The Judgment of the Court was delivered by

DR. ARIJIT PASA YAT, J. I. Challenge in this appeal is to the judgment
of a learned Single Judge of the Bombay High Court dismissing the petition
filed under Section 482 of the Code of Criminal Procedure, 1973 (in short the C
'Code'). A prayer was made to quash the order of learned JMFC, Kalyan
dated 2.12.1996 and the proceedings i.e. Criminal Case No.248of1991.

2. The criminal case No. 248 of 1991 was initiated by the Respondent
No.1-Neelkanth Mahadeo Kamble alleging commission of offences punishable
under Sections 418, 409, 166 read with 114 of the Indian Penal Code, 1860 (in D
short the '!PC'). The complainant-respondent No.I filed the complaint in his
capacity of Chief Managing Trustee of Somvashi Arya Samaj Trust, the Trust
f- registered under the Bombay Public Trust Act. As per the facts given in the

.' complaint, the Trust owned and possessed certain land within the limits of
Kalyan Municipal Corporation. The accused approached the trust with the E
proposal of development of the aforesaid land. As a consequence, an agreement
came to be executed between the Trust and the accused Nos. I and 2 on
7.7.1985. Under this agreement, accused Nos.I and 2 agreed to construct at
their own cost a multi-purpose community hall with an area of 4,500 sq. ft.
as per the specifications given in the agreement. This hall was to be
constructed on an area of about 13,500 sq. ft. which was to be demarcated F
and bounded by compound wall to be constructed by the accused. In
consideration thereof, the accused Nos. I and 2 were to get all the rights of
development of the remaining land. Total land was 9952.25 sq. yards. Further,
according to the complainant in this agreement no cash consideration was
shown in favour of the trust and therefore as per the directions given by the G
Charity Commissioner, some nominal consideration ofRs.50,000/- or so was
subsequently added by consent of the accused.

3. In short, it is the case of the complainant that even though the
accused were under legal and contractual obligation to complete the
construction of the community hall of the size and specifications given in the H
374 SUPREME COURT REPORTS [2007] 3 S.C.R.

A complaint, they did not do so initially, sold the construction, earned crores
of rupees and ultimately constructed in place and instead of the community
hall, 10 rooms which do not fulfil the requirements of the agreement and
specifications of the community hall and, therefore, the accused are guilty of
the offences alleged. The complainant also alleged that right from the beginning
the intention of the accused was to cheat the Trust and ultimately they
B succeeded in cheating the Trust. Their further contention was that there is
no construction of the community hall as per the agreement and as per the
specifications and the I 0 rooms constructed by the accused in lieu thereof
cannot be construed as a community hall. On the basis of these facts, the
complaint was filed. The Magistrate ordered an enquiry under section 202 of
C the Code but since police report was not received in time, the Magistrate
ordered issue of process against the accused Nos.I to 14 on 25.10.1991 under
sections 418, 409, 166 read with 114 of the !PC. It appears that this order for
issue of process was challenged by the accused Nos. I to 11 before the
additional Sessions Judge, Thane, by filing Criminal Revision No.206 of 1991
but the Sessions Judge rejected the same. Stand before learned Sessions
D Judge and High Court by the petitioners was that a compromise had been
effected and, therefore, the proceedings were not to be continued.

4. The High Court held that the prayer to quash the proceedings was
not to be entertained. The basis for coming to the said conclusion was that
E had the complaint not been by the Public Trust registered under the Bombay
Public Trust Act but by an individual then the compromise could have
certainly come in the way of prosecuting the accused for cheating; but the
complaint was filed by the Trust through its Managing Trustee and in the
agreement referred to between the Trust and the accused it has been repeatedly
stated that the accused persons were being given the land for the purpose
F of constructing a community hall which will benefit the community at large.
Therefore, signing of the agreement by some of the trustees of the Trust
cannot come in the way of the complaint which was filed against the accused
persons.

5. Learned counsel for the appellants submitted that this Court had
G occasion to consider the question of legality of the compromise and
maintainability of a civil suit filed by the Trust.

6. In Ravi Construction Co. v. Somvanshi Arya Kshatriya Sama) and
Ors., (2006) 9 SCALE 174 it was, inter alia, observed as follows:

H "8. Further both the trial court and th~ first appellate court categorically
NALINI SHANKARANv. NEELKANTH MAHADEOKAMBLE[PASAYAT.J.] 375
observed that the resolution adopted by all the trustees including the A
_.... chief trustee and the advocate for the trust who was himself a trustee
... clearly established that the earlier suit was filed with the knowledge
and consent of all the trustees and on behalf of all the trustees.
Significantly the trust deed was not produced. It could have shown,
as rightly contended by learned counsel for the appellant, !hilt the
trust could be sued or can sue in the name of chief trustee. In any B
event the categorical factual finding recorded that the suit was filed
with the knowledge and consent of all the trustees has not been
disturbed and in fact no reference has been made in the impugned
judgment to this aspect. If the trustees had no knowledge of the suit
they could not have adopted a resolution for compromise in a particular c
mode indicating three alternatives. They specifically authorized the
chief trustee and the advocate who was also a trustee to enter into
a compromise. In that view of the matter the Higli Court was not
justified in holding that the suit was maintainable.

Looked at from any angle the High Court's judgment is indefensible D
and is set aside. Learned counsel for the appellant during course of
hearing had stated that as a matter of genuine gesture, the appellant
}-
shall pay to the respondent no. I-trust a sum of Rs.3,00,000/-.
Notwithstanding the fact that the appeal has been allowed, let the
~,

statement made by learned counsel for the appellant be translated into
reality and the amount be paid within three months." E

7. In view of what has been held in respect of the connected civil suit
which was held to be not maintainable in view of the compromise arrived at
by the Trust and the accused persons, the continuance of proceedings will
be sheer abuse of the process of law. Accordingly, the order of the High Court F
is set aside and proceedings in Criminal Case No. 248 of 1991 on the file of
learned JMFC, Kalyan stand quashed.

8. The appeal is allowed.

N.J. Appeal allowed.