In the High Court of Judicature at Madras Dated: 7.03.2008 Coram: The Honourable Mr.Justice ELIPE DHARMA RAO and The Honourable Mr.Justice S.R.SINGHARAVELU Writ Appeal No.1178 of 2005 and WAMP.No.2155 of 2005 1. The State of Tamil Nadu, rep.by its Secretary to Government, Home Department, Fort St.George, Chennai-9. 2. The Director General of Police, Crime Branch, Egmore, Chennai. 3. The Commissioner of police, Office of the Police Station, Chennai-600 008. 4. The Inspector of Police, Central Crime Branch, Egmore, Chennai. .. Appellants ..vs.. 1. GoldQuest International Pvt.Ltd., rep.by its Authorised Signatory Wilfred Royce Lane, having its Office at Rain Tree Place, 9th Floor, No.7, McNicholas Road, Chetpet, Chennai-600 031. 2. The Secretary, Union of India, Ministry of Finance, North Block, New Delhi-110 001. 3. The Secretary, Union of India, Ministry of Home Affairs, Food and Distribution, New Delhi. 4. Sarumathy Chandrasekaran .. Respondents Writ Appeal filed under Clause 15 of the Letters Patent, against the Order dated 19.04.2005 made in W.P.No.26874 of 2003 by the learned single Judge of this Court. For Appellants : Mr.P.Subramaniam, Govt.Advocate For Respondent : Mr.K.M.Vijayan, Senior Counsel for Ms.Gladys Daniel for R1 Mr.P.Wilson, ASG., for R2 and R3 JUDGMENT
S.R.SINGHARAVELU, J.,
The writ appeal is directed against the order dated 19.04.2005 of the learned single Judge in W.P.No.26874 of 2003, allowing the writ petition and quashing the F.I.R. No.307/2003 lodged against the first respondent/writ petitioner.
2. The first respondent/writ petitioner is an International numismatic company dealing in numismatic gold products having its operations in over 60 countries. It is a registered company under the Indian Companies Act 1956. The first respondent is conducting its business in India particularly in all products imported into India, through the Government of India owned State Trading Corporation and all its receipts and remittances were made only through the Bank/RBI. It was also assessed to Sales tax and Income tax.
3. There was a complaint made on 23.4.2003 against the first respondent/writ petitioner by Mr.N.Chandrasekaran, Advocate, Chennai, alleging non compliance of issuance of gold coin on earlier receipt of Rs.16,800/- from his wife viz., Mrs.Sarumathy Chandrasekaran, under such promise. It was alleged that apart from the claim of the wife of the above complainant there were such claims running to 172 in number from among the public. Upon this allegation of fraudulent and dishonest inducement on the part of the first respondent/writ petitioner huge sum was collected and therefore, the Inspector of Police, Central Crime Branch, Egmore, Chennai, had registered a case in F.I.R.No.307 of 2003 dated 23.04.2003 against the 1st respondent/writ petitioner for offence punishable under Section 420 IPC read with sections 4,5 and 6 of Prize Chits and Money Circulation (Banning) Act, 1978.
4. As a matter of fact, there was also a similar complaint as against the first respondent/writ petitioner in which a case was registered in Crime No.68/2002 by the Inspector of Police, CCB, Madurai City, that was found as a mistake of fact by the Judicial Magistrate No.I, Madurai in its RCS No.381/2002, dated 30.7.2002.
5. Even after lodging the FIR No.307/2003 dated 23.4.2003, the first respondent had moved W.P.M.P.No.15355 of 2003 in W.P.No.12231 of 2003 for an interim order to restrain the Deputy Commissioner of Police, Crime Branch, Egmore, Chennai and other Police Authorities from treating Multi Level Marketing as money circulation scheme; whereupon in the above W.P.M.P. an order of injunction was passed on 22.4.2003 with a clarification that the said order would not stand in the way of the officials from investigating the matter as directed in Crl.O.P.No.2347 of 2003 dated 9.4.2003. Alleging that despite the above order dated 22.4.2003 the office premises of the first respondent/writ petitioner were sealed and the bank account of the first respondent/writ petitioner was frozen under the guise of investigation, in view of the ex-facie mala fide act on the part of the the police officials, this writ petition was filed.
6. After having gone into the facts and circumstances of the case and referring the judgment of case reported in KANWAR DEEP SINGH ..vs.. STATE OF WEST BENGAL (2004 CRL.L.J.1116), where a Special Officer was appointed, to settle all the claims, the learned single Judge has passed an order appointing two Advocates as Commissioners to settle all the claims as per the terms and conditions of the agreement. Following directions were also made by the learned single Judge by his order dated 19.4.2005:
“(a) … are appointed as Advocate Commissioners to settle all the claims as on date as per the terms and conditions of the agreement within a period of two months from 04.05.2005. (underline now made) …
(c) Learned Additional Chief Metropolitan Magistrate, Chennai is directed to hand over the gold products to the Advocate Commissioners so as to enable them to settle the claims as per the terms and conditions of the agreement between the (underline now made) petitioner and the claimants immediately on production of a copy of this order.
(d) Learned Additional Chief Metropolitan Magistrate is also directed to pass orders to release the deposit of Rs.30 lakhs which was made at the time of the grant of ball to the petitioner as well as to release the bank guarantee to the extent of Rs.25 lakhs which was offered already by the petitioner. …
(g) The impugned order, namely the F.I.R. pertaining to F.I.R. No.307 of 2003 stands quashed. If the above directions are not complied with, the order passed herein stands automatically cancelled and the said F.I.R. will become operative in law. (underline now made)…
7. The writ petition is disposed of in the above terms. No costs. W.P.M.P. is closed.”
7. Subsequent thereto, the learned single Judge has passed an order on 4.8.2005 upon the Memo SR.No.26874 of 2005 filed in this writ petition, wherein the period of commission was extended to a further period of one month by finding that out of 172 claims 170 claims were settled and in respect of two other claims whereabouts of the individuals were not traceable.
8. At the outset it is to be mentioned that even as per the impugned order dated 19.4.2005 of the learned single Judge if the directions are not complied with, the FIR otherwise quashed will become operative in law. The first direction made by the learned single Judge while appointing two Advocate Commissioners was to settle all the claims as on date as per the terms and conditions of the agreement, within a period of two months from 4.5.2005. Inasmuch as two claims have not been settled among the 172 claims the condition or direction is not fulfilled making the FIR to become operative in law.
9. Mr.Vijayan, learned Senior Counsel appearing for the 1st respondent/writ petitioner company submitted that out of 172 claims, 170 have been settled and in respect of two claims, the whereabouts of the individuals were not traceable. Further, the learned senior counsel submitted that all the creditors in 170 claims have compounded the matter and therefore the order of the learned single Judge in quashing the FIR may be confirmed. This cannot be countenanced in view of the fact that even by virtue of the impugned order dated 19.04.2005 if there is non-compliance of any of the directions issued including the direction that there should be settlement to all claims as on date as per the terms and conditions of the agreement within two months from 4.5.2005, the FIR which was otherwise quashed would become operative in law. It is a matter of fact that two claims out of 172 remain unsettled and in such a manner the directions issued by the learned single Judge has not been fully complied. On this ground itself the FIR would become alive.
10. The learned Government Advocate appearing for the appellants submitted that there could not be compounding of an offence of Section 420 IPC read with 4 to 6 of the Prize Chits and Money Circulation (Banning) Act, 1978 under the provisions of which the impugned FIR in Crime No.307 of 2003 was registered. The learned Government Advocate further submitted that even though Section 320 Cr.P.C. contemplates upon compounding of offences, Section 420 IPC could be compounded by the affected creditors only with the permission of the Court and that power of permission should be exercised in a Judicial manner. It was also brought to our notice that according to Sub-Clause (7) of Section 320 Cr.PC, No offence shall be compounded if the accused is, by reason of a previous conviction, liable either to enhanced punishment or to a punishment of a different kind for such offence.
11. We do not know as to whether the first respondent/writ petitioner has got previous conviction or not. No material is available in that regard. Suppose the Magistrate before whom the FIR was pending could see previous conviction against the first respondent/writ petitioner at a later stage when the prosecuting agency could file a charge sheet, then the Magistrate may not be inclined to give permission for compounding.
12. However, in a grave nature of offence against the public, where hundreds of families are deprived of their deposits and when the first respondent/writ petitioner had flouted their own promises, thereby committing the offence of not only cheating but also offence under the Prize Chits and Money Circulation (Banning) Act, 1978, burying the case by preventing further investigation in a matter where public interest is greatly involved and that too under the guise of compounding which could not be made lawfully for the reasons mentioned supra, we are not inclined to record the settlement. Compounding is also a process to be done only in accordance with law, especially in criminal cases, and strict adherence to Section 320 Cr.PC is required. Any power including the inherent power is to be exercised only in the interest of justice and flouting the process under Section 320 Cr.PC against the interest of justice may not be desirable even in exercise of inherent power.
13. We have already said the impugned FIR becomes alive due to non-compliance of the directions made by the learned singe Judge in the writ petition. Therefore, the Inspector of Police, Crime Branch, Egmore, Chennai would proceed with the investigation and file charge sheet in which event the learned Magistrate would exercise the power of either permitting the compounding or otherwise.
14. In a case reported in (2008)1 SCC page 474 cited (supra) it has been held as follows:-
“It is well-established principle that inherent power conferred on the High Courts under Section 482 Cr.PC has to be exercised sparingly with circumspection and in rare cases and that too to correct patent illegalities or when some miscarriage of justice is done. The content and scope of power under Section 482 Cr.PC were examined in considerable details in Madhu Limaye v. State of Maharashtra and it was held as under: (SCC p.555, para 8)
The following principles may be stated in relation to the exercise of the inherent power of the High Court:
(1) that the power is not to be restored if there is a specific provision in the Code for the redress of the grievance of the aggrieved party;
(2) that it should be exercised very sparingly to prevent abuse of process of any court or otherwise to secure the ends of justice;
(3) that it should not be exercised as against the express bar of law engrafted in any other provision of the Code.
8. In State v. Navjot Sandhu after a review of large number of earlier decisions, it was held as under:(SCC p.657, para 29)
“29…. The inherent power is to be used only in cases where there is an abuse of the process of the court or where interference is absolutely necessary for securing the ends of justice. The inherent power must be exercised very sparingly as cases which require interference would be few and far between. The most common case where inherent jurisdiction is generally exercised is where criminal proceedings are required to be quashed because they are initiated illegally, vexatiously or without jurisdiction.”
15. In the above circumstances, we are of the considered view that both on law and on facts, it is not a fit case to record compromise and quash the FIR on the ground of settlement of the money-claim. Apart from and more than money-claim, it is the element of public offence that is involved. Therefore, the order of the learned single Judge is set aside and FIR.No.307/2003 is restored to the file of the 4th appellant and we direct the 4th appellant/the Inspector of Police, Crime Branch, Egmore, Chennai to proceed with the investigation and file final report for consideration of the concerned Magistrate and appropriate action in accordance with law. However, the first respondent/writ petitioner is at liberty to put forth his case before the Judicial Magistrate concerned about the settlement and compounding of offence and the Magistrate will act in accordance with law. With the above observations the writ appeal is allowed. The order of the learned single Judge dated 19.4.2005 made in W.P.No.26874 of 2003 is set aside. No order as to costs. Consequently, W.A.M.P.No.2155 of 2005 is closed.
Index: Yes (E.D.R,J.,) (S.R.S,J.,) Internet: Yes 7.03.2008 gr. To 1. The Secretary, Union of India, Ministry of Finance, North Block, New Delhi-110 001. 2. The Secretary, Union of India, Ministry of Home Affairs, Food and Distribution, New Delhi. ELIPE DHARMA RAO, J. While agreeing with the views expressed and the decision arrived at by my learned brother Judge, Justice S.R.Singharavelu, I add the following to the judgment:
2. In UNION OF INDIA vs. BAJANLAL [AIR 1992 SC 604], the Honourable Apex Court has categorised the cases, wherein the High Court may exercise powers under Article 226 of the Constitution of India or under Section 482 of the Code of Criminal Procedure. The said judgment reads as follows:
“In following categories of cases, the High Court may in exercise of powers under Art.226 or under S.482 Cr.P.C. may interfere in proceedings relating to cognizable offences to prevent abuse of the process of any Court or otherwise to secure the ends of justice. However, power should be exercised sparingly and that too in the rarest of rare cases.
1) Where the allegations made in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.
2) Where the allegations in the First Information Report and other materials, if any, accompanying the F.I.R. do not disclose a cognizable offence, justifying an investigation by police officers under S.156(1) of the Code except under an order of a Magistrate within the purview of S.155(2) of the Code.
3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.
4) Where, the allegations in the F.I.R. do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under S.155(2) of the code.
5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.
6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.
7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.”
“Where allegations in the complaint did constitute a cognizable offence justifying registration of a case and investigation thereon and did not fall in any of the categories of cases enumerated above, calling for exercise of extraordinary powers or inherent powers, quashing of FIR was not justified.”
3. A close scrutiny of the entire materials placed on record, would reveal, that the case of the accused in the case on hand does not fall within any one of the categories mentioned by the Honourable Supreme Court, thus disentitling him to claim quashing of the FIR.
4. Further, in MOHD.MALEK MONDAL vs. PRANJAL BARDALAI AND ANOTHER [(2005) 10 SCC 608, the Honourable Apex Court has held that:
“… wide extraordinary power of quashing vested in the High Court is to be exercised sparingly and with caution and not to stifle legitimate prosecution. Such a power is required to be exercised in a case where the complaint does not disclose any offence and it is frivolous, vexatious or oppressive. At that stage, there cannot be meticulous analysis of the case….”
5. The law on this point is well settled by the Honourable Apex Court and time and again it has been held by the Honourable Apex Court that though power of the High Court to quash the lower court proceedings is wide, the same has to be exercised sparingly and cautiously. The judicial pronouncements further reveal that while exercising the powers of quashing the lower court proceedings, the High Court does not function as a court of appeal or revision and the authority of the court exists for advancement of justice and if any attempt is made to abuse that authority so as to produce injustice, the court has the power to prevent abuse.
6. The extraordinary power of quashing vested in the High Court is to be exercised sparingly and with caution and not to stifle legitimate prosecution. Such a power is required to be exercised in a case where the complaint does not disclose any offence and it is frivolous, vexatious or oppressive. It would be an abuse of process of the court to allow any action which would result in injustice and prevent promotion of justice. In exercise of the powers, the court would be justified in quashing any proceeding if it finds that initiation/continuance of it amounts to abuse of the process of court or quashing of the proceedings would otherwise serve the ends of justice. The power of the High Court in matters of quashing the criminal complaints would not ordinarily embark upon an enquiry whether the evidence in question is reliable or not or whether on a reasonable appreciation of it, accusation would not be sustained, which is the function of the trial Court and judicial process should not be an instrument of oppression or needless harassment. Such an inherent power conferred on the High Court should not be exercised to stifle a legitimate prosecution and such a relief provided for under the legislature to the accused is not an instrument for him to short-circuit a prosecution and bring about its sudden death. The High court being the highest court of a State should normally refrain from giving a prima facie decision in a case where facts are incomplete and hazy, more so when evidence has not been collected and produced before the court and the issues involved, whether factual or legal, are of magnitude and cannot be seen in their true perspective without sufficient material.
7. In the case on hand, though it is stated that the accused has settled the claims of several complainants and most of them have given necessary letters withdrawing the complaints given as against him, the element of criminality attached to the acts perpetrated by the accused on the date of complaints is not erased. It is also to be remembered that even the offences alleged against the accused are non-compoundable ones, except the one under Section 420 IPC. It is evident from the facts of the case that 172 persons were cheated by the accused, as against the terms and conditions entered into by them with the customers. Thus, when serious allegations of cheating general public of their hard-earned moneys, by giving false hopes and making use of such amounts collected from the public for self and gained at the public expense, are made against the accused, the learned single Judge is not right in quashing the FIR, merely on the ground that some of the complainants have withdrawn their complaints, forgetting the fact that the criminality attributed to the accused is not erased.
8. To quash the proceedings and to appoint the Advocate-commissioners, the learned single Judge has relied on a judgment in KANWAR DEEP SINGH vs. STATE OF WEST BENGAL [2004 CRL.L.J. 1116], mentioning it as a judgment of the Hon’ble Apex Court. However, it is not so. It is a judgment delivered by a learned single Judge of the Calcutta High Court, wherein the learned Judge has quashed the FIR since the investigating agency has circumvented the expressed bar provided under Section 624 of the Companies Act, however, the complainants were permitted to take recourse under the provisions of the Companies Act.
9. When the Hon’ble Supreme Court has held, in no uncertain terms, that quashing of the FIR should be done sparingly and when no such exceptional circumstances are found in the case on hand to quash the proceedings, the order of the learned single Judge quashing the FIR, nipping the investigation at the budding stage itself, cannot be appreciated. Further more, on the date of FIR, the accused has not discharged his obligation, which fact has not been considered by the learned single Judge. Therefore, the order of the learned single Judge is liable to be set aside giving free hands to the investigating agency to conduct investigation and file the final report before the court concerned.
Therefore, the order of the learned single Judge is set aside and FIR.No.307/2003 is restored to the file of the 4th appellant and we direct the 4th appellant/the Inspector of Police, Crime Branch, Egmore, Chennai to proceed with the investigation and file final report for consideration of the concerned Magistrate and appropriate action in accordance with law. However, the first respondent/writ petitioner is at liberty to put forth his case before the Judicial Magistrate concerned about the settlement and compounding of offence and the Magistrate will act in accordance with law. With the above observations the writ appeal is allowed. The order of the learned single Judge dated 19.4.2005 made in W.P.No.26874 of 2003 is set aside. No order as to costs. Consequently, W.A.M.P.No.2155 of 2005 is closed.
Index:Yes
Internet: Yes
Rao (E.D.R., J.) (S.R.S., J.)
7.3.2008
ELIPE DHARMA RAO, J.,
and
S.R.SINGHARAVELU, J.,
gr/Rao
Pre-deliverty judgment in Writ Appeal No.1178 of 2005
7.03.2008