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REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO.1580 OF 2013 (arising out of SLP(CRL.)No.8762 of 2010)

CENTRAL BUREAU OF INVESTIGATION … APPELLANT

VERSUS

JAGJIT SINGH … RESPONDENT

J U D G M E N T  

SUDHANSU JYOTI MUKHOPADHAYA, J.

Leave granted.

2. By this appeal, the appellant­Central Bureau of  

Investigation (‘CBI’ for short) has challenged the  

impugned order dated 31st March, 2010 passed by the  

High Court of Calcutta in CRR No.719 of 2010. By the  

impugned order, learned Judge of the High Court allowed  

the application preferred by the respondent, Jagjit  

Singh, under Section 482 of the Criminal Procedure  

Code, 1973 and quashed the proceedings being G.R. Case  

No.1508 of 2006 pending before the 12th Court of  

Metropolitan Magistrate, Calcutta.

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3. The said case relates to CBI:SPE:ACB:Kolkata Case  

No.R.C. 12(A)/2003 under Sections 420/471 of the Indian  

Penal Code. The First Information Report(FIR) in  

question was lodged on the basis of a reliable  

information which was received in the office of the SP,  

CBI, ACB, Kolkata to the effect that one Shri Sanjib  

Kumar Chatterjee while functioning as Sr. Manager,  

Indian Overseas Bank (IGS), Shreemani Market Branch,  

Kolkata during the year 1998­2000 had entered into a  

criminal conspiracy with private persons, namely, Shri  

Jagjit Singh, Director of M/s. Tag Reachers (P) Ltd.  

(respondent herein), Shri Raj Kumar Agarwal, Shri  

Virendra Jain and unknown officers of the Regional  

Office, Business Department of Indian Overseas Bank,  

Kolkata in order to cause wrongful loss to the said  

Bank in the matter of term/demand loans, in favour of  

M/s. Tag Reachers (P) Ltd.  It was further alleged in  

the FIR that in furtherance of said criminal  

conspiracy, term/demand loans amounting to Rs.1,94,50  

lakhs were fraudulently and dishonestly sanctioned to  

the said Company by the Regional Office of Indian  

Overseas Bank(IOB), Kolkata and out of the said amount  

Rs.1.5 crores remained outstanding due to non­payment  

by the party. All the accounts of parties involved  

became inoperative, and this resulted in corresponding  

wrongful loss to the said Bank.

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4. It is further alleged that on the recommendation  

of the said Shri Sanjib Kumar Chatterjee, Sr. Manager,  

three term loans were sanctioned by the Regional Office  

of IOB in August, 1998, October, 1999 and August, 2000  

in favour of M/s. Tag Reachers (P) Ltd. for purchase of  

13 Nos.  of LPG Tankers (4+4+5 respectively)  without  

proper verification, documentation and by manipulating  

exorbitant price of the collateral properties offered  

by M/s. Tag Reachers (P) Ltd.

5. The said information has also disclosed that when  

M/s. Tag Reachers (P) Ltd. started defaulting the  

repayment in the aforesaid term loan accounts, the  

accused persons connived together and in pursuance of  

the said criminal conspiracy Shri Jagjit Singh as  

Director of M/s. Tag Reachers (P) Ltd. approached Shri  

Sanjib Kumar Chatterjee, Sr. Manager in the month of  

March, 2000 for a demand loan of Rs.32.50 lakhs against  

the security of National Saving Certificate/Kishan  

Vikash Patra of the face value of Rs.50 lakhs. The said  

securities were in the form of NSC for Rs.7 lakhs and  

Kishan Vikash Patra of Rs.18 lakhs standing in the name  

of the aforesaid Shri Raj Kumar Aggarwal and Kishan  

Vikash Patra of Rs.25 lakhs standing in the name of the  

aforesaid Shri Virendra Jain. All the NSCs and KVPs  

were alleged to be forged and fabricated and were not  

issued from the Middleton Row and Park Street Post

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Offices from where they were shown to have been  

reportedly purchased. Similarly, no  lien on  them in  

favour of the IOB were created by the aforesaid two  

Post Offices. Lien were found to be forged and no Bank  

Officer had in fact ever approached these two Post  

Offices for the same. In spite of this and   knowing  

fully well that the amount of the aforesaid term loans  

were diverted by Shri Jagjit Singh to his restaurant  

business, Shri Sanjib Kumar Chatterjee, Sr. Manager  

recommended sanction of Demand loan for Rs.32.50 lakhs  

in favour of M/s. Tag Reachers (P) Ltd. With the help  

of unknown officials of the Regional Office of IOB,  

Kolkata a demand loan of Rs.32.50 lakhs was sanctioned  

in favour of the said company on 30th March, 2002.

6. It has also been disclosed by the said information  

that though it was the last day of the financial year,  

Rs.27.25 lakhs out of Rs.32.50 lakhs was transferred to  

the Term Loan Account of M/s. Tag Reachers (P) Ltd. on  

30th March, 2002 itself towards partial adjustments of  

the aforesaid term loan account whereas the rest of the  

amount was withdrawn by M/s. Tag Reachers (P) Ltd.,  

Kolkata.

7. It is found that for the acts of the omissions on  

the  part of  the  accused  persons, entire  Term/Demand  

loans became unsecured and inoperative now. The Bank  

suffered a loss of Rs.1.5 crores (approx. Rs.1.59

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crores with accrued interest) since all the loan  

accounts have become NPA (Non Performing Assets).

8. It was further alleged that since the above  

information reveals commission of offences punishable  

under Sections 120B/420/467/468/471/472 IPC and Section  

13(1)(d) read with Section 13(2) of Prevention of  

Corruption Act, 1988 by the aforesaid accused persons,  

namely, Shri Sanjib Kumar Chatterjee, Sr. Manager,  

Indian Overseas Bank, Shri Jagjit Singh, Director of  

M/s. Tag Reachers (P) Ltd., Shri Raj Kumar Agarwal,  

Shri Virendra Jain and unknown officers of the Regional  

Office, Business Department of Indian Overseas Bank,  

Kolkata, a regular case was registered against them and  

the said case was entrusted to Shri B.R. Roy Inspector  

of Police, CBI, ACB, Kolkata for Investigation.  

9. It appears that the respondent, Jagjit Singh  

thereafter settled the dispute with the Indian Overseas  

Bank and paid the amount, pursuant to an order No.31  

dated 29th August, 2006 passed by the Presiding  

Officer, Debts Recovery Tribunal, Calcutta  in Case No.  

OA/35/2003.  Giving reference to the above said order  

passed by the Debts Recovery Tribunal the respondent,  

Jagjit Singh moved an application under Section 482 of  

Cr.P.C. in C.R.R. No.719 of 2010 before the Calcutta  

High Court for quashing the proceedings being G.R. Case  

No.1508 of 2006.

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10. From the impugned order, it would be evident that  

in view of such amicable settlement made between the  

respondent and the Bank officials, learned Judge of the  

High Court by the impugned order set aside the criminal  

proceedings with the following observation:

“Be that as it may, there cannot be any  rigid formula in regard to permitting  the parties to effect a compromise. The  offences alleged are undoubtedly non­ compoundable and certainly, of serious  nature.

The question that arises whether in  view of such amiable settlement between  the parties, any fruitful purpose is  likely to be served by allowing the  criminal proceedings to proceed  further.

In the present case, as indicated  earlier and that too, being rightly  shown by the learned senior counsel,  Mr. De, for reasons not known, the  principal accused, Sanjib Kumar  Chatterjee, had been left out.

In the aforesaid facts and  circumstances, I am inclined to hold  that further proceedings of the case  before the learned trial court is not  likely to serve any fruitful purpose  and, as such, in exercise of this  court’s inherent jurisdiction, the same  be quashed bond at once.

This disposes of C.R.R. No.719 of 2010.”

11. Learned senior counsel for the appellant submitted  

that by a mere settlement between two offenders, the

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personal intent of criminal conspiracy under Sections  

420 and 471 IPC which are even otherwise not  

compoundable cannot be compounded.   According to him,  

the impugned order passed by the learned Judge of the  

Calcutta High Court is in the teeth of well established  

and settled law laid down by this Court.

12. Per contra, according to the respondent, it is  

always open to the Court to quash the criminal  

proceedings if the dispute is of civil nature and if  

matter is settled between the parties. It was contended  

that the dispute being civil in nature and the parties  

to the dispute being reached settlement, the High Court  

rightly set aside the criminal proceedings arising out  

of the same very dispute.  

13. The very same issue fell for consideration  

recently before a three­Judge Bench of this Court in  

Gian Singh v. State of Punjab and another, 2012 (10)  

SCC 303.    In the said case, this Court discussed the  

relative scope of inherent power of the High Court  

under Section 482 Cr.PC to quash criminal proceedings  

involving non­compoundable offences in view of  

compromise arrived at between the parties.  That was a  

case wherein when the special leave petition came up  

for hearing, a two­Judge Bench vide order reported in  

Gian Singh vs. State of Punjab and another, (2010) 15  

SCC 118  doubted the correctness of the decisions of

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this Court in  B.S. Joshi and others vs. State of  

Haryana and another, (2003) 4 SCC 675, Nikhil Merchant  

vs. Central Bureau of Investigation and another, 2008  

(9) SCC 677  and  Manoj Sharma vs. State and others,  

(2008) 16 SCC 1  and referred the matter to a larger  

Bench.  Hence, the question before the Bench was with  

regard to the inherent power of the High Court under  

Section 482 Cr.PC in quashing the criminal proceedings  

against an offender who has settled his dispute with  

the victim of the crime but the crime in which he was  

allegedly involved was not compoundable under Section  

320 Cr.PC. Discussing different provisions and taking  

into consideration the different decisions of this  

Court, the larger Bench in Gian Singh (supra) held as  

follows:  

“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

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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 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

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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.”

14. In the present case, the specific allegation made  

against the respondent­accused is that he obtained the  

loan on the basis of forged document with the aid of  

officers of the Bank.  On investigation, having found  

the ingredients of cheating and dishonestly inducing  

delivery of property of the bank (Section 420 IPC) and  

dishonestly using as genuine a forged document (Section  

471  IPC), charge sheet was submitted under Sections  

420/471 IPC  against the accused persons.  

15. The debt which was due to the Bank was recovered  

by the Bank pursuant to an order passed by Debts  

Recovery Tribunal.  Therefore, it cannot be said that  

there is a compromise between the offender and the  

victim.  The offences when committed in relation with  

Banking activities including offences under Sections

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420/471 IPC have harmful effect on the public and  

threaten the well being of the society.  These offences  

fall under the category  of offences  involving moral  

turpitude committed by public servants while working in  

that capacity.   Prima facie, one may state that the  

bank as the victim in such cases but, in fact, the  

society in general, including customers of the Bank is  

the sufferer.  In the present case, there was neither  

an allegation regarding any abuse of process of any  

Court nor anything on record to suggest that the  

offenders were entitled to secure the order in the ends  

of justice.   

In the instant case, the High Court has not  

considered the above factors while passing the impugned  

order. Hence, we are of the opinion that the High Court  

erred in addressing the issue in right perspective.  

16. In such circumstances, we set aside the impugned  

judgment and order dated 31st March, 2010 passed by the  

High Court in CRR No.719 of 2010 and direct the trial  

court to proceed the matter in accordance with law and  

to conclude the trial expeditiously. The appeal is  

allowed with the aforesaid observation.  

…………………………………………………………………….J.             (SUDHANSU JYOTI MUKHOPADHAYA)

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…………………………………………………………………….J.                (RANJAN GOGOI)

NEW DELHI, OCTOBER 1,2013.