Be Slow In Quashing Criminal Proceedings On The Basis Of Settlement Between Complainant & Accused When Offences Are Capable Of Impacting Others : Supreme Court

The Supreme Court observed that the courts should be slow to excercise their jurisdiction to quash criminal proceedings on the basis of settlement, when the offences are capable of having an impact not merely on the complainant and the accused but also on others.

Cases involving abuse of official position and adoption of corrupt practices cannot be treated like suits for specific performance, where the refund of the money paid may also satisfy the agreement holder, the bench comprising Justices S. Abdul Nazeer and V. Ramasubramanian observed.

The bench observed thus while setting aside a Madras High Court judgment that quashed a criminal complaint arising out of cash for job scam, on the ground that all the victims have compromised their claims with the accused. Four persons by name Senthil Balaji (the then Transport Minister),  Ashok Kumar (the brother of the Minister),  Shanmugam (Personal Assistant to the Minister) and  Raj Kumar were cited as the accused in the FIR. The final report was filed against these accused under Sections 406, 409, 420, 506(1) read with Section 34 IPC. Shanmugam thereafter filed a petition before the High Court which came to be allowed after the de facto complainant  K. Arulmani filed an affidavit supporting the accused and praying for quashing of the final report.

In the appeals filed before the Apex Court, the issues raised were regarding (i) the locus standi of the appellants; (ii) the effect of the compromise entered into between the de facto complainant and 13 named victims on the one hand and the four 16 accused on the other hand; and (iii) the non­inclusion in the charge­sheet of the offences under the P.C. Act.

On the issue of locus standi, the bench noted that the appellant in one of these appeals, is a victim, as he could not get selected on account of the alleged corrupt practices. Therefore, the contention regarding the locus standi of the appellants is to be rejected, it said.

Court has to go slow 

On the second issue re: effect of compromise, the bench, referred to various judgments, and observed:

"Thus it is clear from the march of law that the Court has to go slow even while exercising jurisdiction under Section 482 Cr.PC or Article 226 of the Constitution in the matter of quashing of criminal proceedings on the basis of a settlement reached between the parties, when the offences are capable of having an impact not merely on the complainant and the accused but also on others.. As seen from the final report filed in this case and the counter affidavit filed by the I.O., persons who have adopted corrupt practices to secure employment in the Transport Corporation fall under two categories namely, (i) those who paid money and got orders of appointment; and (ii) those who paid money but failed to secure employment. If persons belonging to the 2nd category are allowed to settle their dispute by taking refund of money, the same would affix a seal of approval on the appointment of persons belonging to the 1st category. Therefore, the High Court ought not to have quashed the criminal proceedings on the basis of the compromise."

Corruption is an offence against society at large

The court added that corruption by a public servant is an offence against the State and the society at large. The Court cannot deal with cases involving abuse of official position and adoption of corrupt practices, like suits for specific performance, where the refund of the money paid may also satisfy the agreement holder, it said.

Willing to strike but afraid to wound

Regarding the non­inclusion in the final report, of the offences under the P.C. Act, the court observed:

We are constrained to say that even a novice in criminal law would not have left the offences under the P.C. Act, out of the final report. The attempt of the I.O. appears to be of one, "willing to strike but afraid to wound" (the opposite of what Alexander Pope wrote in "Epistle to Dr.Arbuthnot")

Allowing the appeal, the bench thus restored the criminal complaint to file and issued following directions

"The I.O. shall now proceed under Section 173(8) of the Code to file a further report, based on the observations made in the preceding paragraphs. Additionally/alternatively, the Special Court before which the CC is pending, shall exercise power under Section 216 of the Cr.P.C., if there is any reluctance on the part of the State/I.O. If two other cases where offences under the P.C. Act are included, are under the orders of stay passed by the High Court, the State should take appropriate steps to have the stay vacated. The Court dealing with those two cases should also keep in mind the disastrous effect of putting on hold the prosecution under the P.C. Act."

Case details

P Dharamaraj vs Shanmugam | 2022 LiveLaw (SC) 749 | 8 September 2022 | CrA 1514 OF 2022 | Justices S. Abdul Nazeer and V. Ramasubramanian

Counsel: Sr. Adv Siddharth Bhatnagar, Sr. Adv Gopal Sankaranarayanan, Sr. Adv Rakesh Dwivedi, Sr. Adv Mukul Rohtagi, Sr. Adv C.A. Sundaram, Sr.Adv Manan Kumar Mishra, Sr. Adv S. Prabhakaran, Adv Prashant Bhushan

Headnotes

Code of Criminal Procedure, 1973 ; Section 482 - Court has to go slow even while exercising jurisdiction under Section 482 Cr.PC or Article 226 of the Constitution in the matter of quashing of criminal proceedings on the basis of a settlement reached between the parties, when the offences are capable of having an impact not merely on the complainant and the accused but also on others. (Para 42)

Code of Criminal Procedure, 1973 ; Section 482 - Prevention of Corruption Act, 1988 -  Corruption by a public servant is an offence against the State and the society at large. The Court cannot deal with cases involving abuse of official position and adoption of corrupt practices, like suits for specific performance, where the refund of the money paid may also satisfy the agreement holder. (Para 44)

Code of Criminal Procedure, 1973 ; Section 2(wa) , 372 -  Right of appeal to the victims - Public, who are recipients of these services, also become victims, though indirectly, because the consequences of such appointments get reflected sooner or later in the work performed by the appointees - The appellant in one of these appeals, is a victim, as he could not get selected on account of the alleged corrupt practices. Therefore, the contention regarding the locus standi of the appellants is to be rejected. (Para 18- 24)

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