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IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO.1723 OF 2017 [Arising out of SLP(CRL) No 9549 of 2016]

PARBATBHAI AAHIR @ PARBATBHAI  BHIMSINHBHAI KARMUR AND ORS        ..Appellants  

VERSUS

STATE OF GUJARAT AND ANR.      ..Respondents  

J U D G M E N T

Dr D Y CHANDRACHUD, J

1 Leave granted.

REPORTABLE

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2 By its judgment dated 25 November 2016, the High Court of Gujarat

dismissed  an  application  under  Section  482  of  the  Code  of  Criminal

Procedure, 1973. The appellants sought the quashing of a First Information

Report  registered against them on 18 June 2016 with the City ‘C’ Division

Police  Station,  District  Jamnagar,  Gujarat  for  offences  punishable  under

Sections  384,  467,  468,  471,  120-B  and  506(2)  of  the  Penal  Code.  The

second respondent is the complainant.  

3 In his complaint dated 18 June 2016, the second respondent stated that

certain land admeasuring 17 vigha comprised in survey 1408 at Panakhan

Gokulnagar in Jamnagar city was his ancestral agricultural land. The land was

converted  to  non-agricultural  use  on  21  June  1995  and  5  January  2000

pursuant to orders of the District Collector.  One hundred and three plots were

carved out of the land.  Amongst them, plots 45 to 56 admeasuring 32,696

sq.ft.  were in the joint names of six brothers and a sister (represented by the

complainant).   According  to  the  complainant,  a  broker  by  the  name  of

Bachhubhai Veljibhai Nanda approached him with Parbatbhai  Ahir, the first

appellant stating that he desired to purchase the land.  On the next day, the

first  appellant  approached  the  complainant  with  his  partner  Hasmukhbhai

Patel  (the  third  appellant)  to  purchase  the  land.   The  complainant  was

requested to provide a photocopy of the lay out plan of the plot, which he did.

On the following day the first appellant is alleged to have gone to the house of

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the complainant with the second and the third appellants at which point in

time, parties agreed that the land would be sold at the rate of Rs 4,221 per

sq.ft.  and a deal  was struck for  a consideration of  Rs.1,13,58,711/-  out  of

which an amount of Rs 11 lakhs was given in cash to the complainant for plot

no.56.  The complainant’s case is that while the discussion was on, he was

requested by the second and the third appellants  that  since the power  of

attorney was old and unreadable all the plot holders should give their passport

size photographs. Accordingly, a document was reduced to writing by which it

was agreed that the sale transaction for plot no.56 would be completed within

two months against  full  payment.   According to the complainant,  when he

demanded  the  remaining  payment  for  the  plot  from the  second  and  third

appellants,  the second appellant  provided him seven cheques each in the

amount of Rs 6 lakhs in the name of the six brothers (one brother being given

two cheques).  Thereafter when the complainant followed up for the payment

of the remaining amount with the purchasers, the balance was not paid and,

on the contrary, the complainant was threatened of a forcible transfer of the

land.   According  to  the  complainant,  when  he  visited  the  office  of  the

Sub-registrar about three days before lodging the complaint, it came to his

knowledge that a sale deed has been registered not only in respect of the plot

in question (which was agreed to be sold) but also in respect of plot nos.45 to

55 on 27 January 2016.  It was then that the complainant realised that the

purchaser  in  the  sale  deed  was  shown  as  the  fourth  appellant,  Jayesh

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Arvindbhai Patel, and the name of the seventh appellant, Jitudan Nankudan

Gadhavi, resident of Payalnagar society, Naroda, Ahmedabad was shown as

the holder of a power of attorney.  The witnesses to the registered sale deed

were  the  fifth  appellant,  Rabari  Hiteshbhai  and  the  sixth  appellant,  Patel

Indravaden Dineshbhai.   

4 The complaint came to be lodged on the complainant having realised

that the power of attorney in the name of his siblings had been forged.  The

complainant stated that neither he nor any of his siblings had given a power of

attorney in favour of the seventh appellant.   According to the complainant,

neither  the  non-judicial  stamp  dated  25  January  2016  in  the  amount  of

Rs  10,30,000/-   nor  the  judicial  stamp dated  27  January  2016  has  been

purchased by him.  In fact, according to the complainant, it  was the fourth

appellant who had purchased the judicial stamp dated 27 January 2016.

5 According to the complaint, plots no.45 to 55 admeasuring 30,005 sq.ft.

are valued at Rs 12.50 crores.  It has been alleged that a conspiracy was

hatched by the  appellants  and by  the  other  co-accused resulting  into  the

transfer of valuable land belonging to the complainant and his siblings, on the

basis of forged documents.

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6 The  High  Court  noted  that  the  fourth  appellant  had  moved  Special

Criminal  Application  no.4538  of  2016  which  had  been  rejected  by  the

coordinate bench of the High Court on 3 August 2016.  While rejecting the

earlier application under Section 482, the High Court had observed thus:

“19. Primary  details  revealed  the  complaint  had  led  this  Court examine the papers of the investigation.  The evidence so far collected prima facie reveal the involvement of the petitioner. This Court also could notice that it is a case where under the pretext  of  buying  only  a  particular  Plot  No.56  from  the complainant and his family members, the power of attorney has been forged usurping nearly 10 other plots which value nearly 11 crores and odd by allegedly conniving with each other, and therefore, the payment of Rs 42 lakhs by the cheques to the complainant in relation to one of the plots also would pale into insignificance.  This, by no means, even at a prima facie level, can be said to be a civil dispute, given a colour of criminality.  It would be in the interest of both the sides for this Court to either, at this stage not to make a roving inquiry or divulge anything which may affect the ongoing investigation. Suffice it  to note that, the petition does not deserved to be entertained an the same stands rejected.”    

Before the High Court, the plea for quashing the First Information Report was

advanced on the ground that the appellants had amicably settled the dispute

with  the  complainant.   The  complainant  had also  filed  an  affidavit  to  that

effect.

7 On  behalf  of  the  prosecution,  the  Public  Prosecutor  opposed  the

application  for  quashing  on  two  grounds.   First  -  the  appellants  were

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absconding and warrants had been issued against them under Section 70 of

the Code of Criminal Procedure, 1973. Second, the appellants had criminal

antecedents,  the  details  of  which  are  contained  in  the  following  chart

submitted before the High Court:  

1 Parbatbhai Bhimsinhbhai Karmur a.        City “A” Division Jamnagar             CR   No 1-251/2010

P.1

2 Ramde Bhikha Nanadaniya a. City “A”Division Jamnagar  

          CR No.1-135/2016

b.        City “A” Division Jamnagar             CR No.1-105/2016

c.        City “A” Division Jamnagar             CR No.1-251/2010

P.2

2

2

3 Hasmukh Hansrajbhai Patel a. Gandhinagar M-Case No.1/2014

b. City “A” Division Jamnagar            CR No.1-105/2016

P.3

4 Indravadan Dineshbhai Patel a. City “A: Division Jamnagar             CR   No.1-105/2016

P.6

5 Jitendra Somabhai Modi a. City “A” Division Jamnagar             CR No.1-105/2016

b. Odhav Police Station             CR No.I-180/2015

P.7

6 Vishnu @ Toto Rabari a. Gandhinagar M-Case No.1/2014

b. City “A: Division Jamnagar            CR No.I-105/2016

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The High Court observed that it had been given “a fair idea” about the modus

operandi adopted by the appellants for grabbing the land, in the course of

which they had opened bogus bank accounts.  The High Court held that the

case involves extortion, forgery and conspiracy and all the appellants have

acted as a team. Hence,  in  the view of  the High Court,  it  was not  in  the

interest of society at large to accept the settlement and quash the FIR.  The

High Court held that the charges are of a serious nature and the activities of

the appellants render them a potential threat to society.  On this ground, the

prayer to quash the First Information Report has been rejected.

8 On behalf of the appellants, reliance has been placed on the decisions

rendered by this Court in  Gian Singh v  State of Punjab1 and in  Narinder

Singh v  State  of  Punjab2.  Learned  counsel  submitted  that  the  dispute

between the complainant and the appellants arose from a transaction for the

sale of land.  It was urged that the dispute is essentially of a civil nature and

since parties have agreed to an amicable settlement, the proper course for

the  High  Court  would  have  been  to  quash  the  FIR  in  exercise  of  the

jurisdiction conferred by Section 482 of the Code of Criminal Procedure, 1973.

1  (2012) 10 SCC 303 2  (2014) 6 SCC 466

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9 On the other hand, learned counsel appearing on behalf of the state

has supported the judgment of the High Court.  Learned counsel emphasised

the  circumstances  which  weighed  with  the  High  Court,  including  (i)  the

seriousness of  the allegations; (ii)  the conduct of the appellants who were

absconding; and (iii) the criminal antecedents of the appellants.  Hence, it was

urged that the appellants were not entitled to the relief of quashing the FIR

merely because they had entered into a settlement with the complainant.

10 Section 482 is prefaced with an overriding provision. The statute saves

the inherent power of the High Court, as a superior court, to make such orders

as are necessary (i) to prevent an abuse of the process of any court; or (ii)

otherwise to secure the ends of justice. In  Gian Singh  (supra) a bench of

three learned Judges of this Court adverted to the body of precedent on the

subject and laid down guiding principles which the High Court should consider

in determining as to whether to quash an FIR or complaint in the exercise of

the inherent jurisdiction.  The considerations which must weigh with the High

Court are:

“61…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

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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  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.”

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11 In Narinder Singh (supra), Dr Justice A K Sikri, speaking for a bench of

two learned Judges of this Court observed that in respect of offences against

society, it  is  the duty of  the state to punish the offender. In consequence,

deterrence provides a rationale for punishing the offender.  Hence, even when

there is a settlement, the view of the offender and victim will not prevail since

it is in the interest of society that the offender should be punished to deter

others from committing a similar crime.  On the other hand, there may be

offences falling in the category where the correctional objective of criminal law

would have to be given more weightage than the theory of deterrence. In such

a case, the court may be of the opinion that a settlement between the parties

would lead to better relations between them and would resolve a festering

private  dispute.  The  court  observed  that  the  timing  of  a  settlement  is  of

significance in determining whether the jurisdiction under Section 482 should

be exercised:  

“29.7…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

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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…”

This Court held, while dealing with an offence under Section 307 of the Penal

Code that the following circumstances had weighed with it in quashing the

First Information Report:

"33. We have gone through the FIR as well which was recorded on the basis  of  statement  of  the complainant/victim.  It  gives an indication that the complainant was attacked allegedly by the accused persons because of some previous dispute between the parties, though nature of dispute etc. is not stated in detail. However, a very pertinent  statement appears on record viz., "respectable persons have been trying for a compromise up till now, which could not be finalized". This becomes an important aspect. It appears that there have been some disputes which led to the aforesaid purported attack by the accused on the complainant. In this context when we find that the elders of the village,  including Sarpanch, intervened in the matter  and the parties have not only buried their hatchet but have decided to live  peacefully  in  future,  this  becomes  an  important consideration. The evidence is yet to be led in the Court. It has not even started. In view of compromise between parties, there is a minimal chance of the witnesses coming forward in support of the prosecution case. Even though nature of injuries can still be  established  by  producing  the  doctor  as  witness  who conducted  medical  examination,  it  may  become  difficult  to prove  as  to  who  caused  these  injuries.  The  chances  of conviction, therefore, appear to be remote. It would, therefore, be unnecessary to drag these proceedings...”

12 In  State of Maharashtra v  Vikram Anantrai Doshi3,  a bench of two

learned Judges of this Court explained the earlier decisions and the principles

3  (2014) 15 SCC 29

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which  must  govern  in  deciding  whether  a  criminal  proceeding  involving  a

non-compoundable offence should be quashed.  In that case, the respondents

were alleged to  have obtained Letters  of  Credit  from a  bank in  favour  of

fictitious  entities.  The  charge-sheet  involved offences  under  Sections  406,

420, 467, 468, and 471 read with Section 120-B of the Penal Code.  Bogus

beneficiary companies were alleged to have got them discounted by attaching

fabricated bills.  Mr Justice Dipak Misra (as the learned Chief  Justice then

was) emphasised that the case involved an allegation of forgery;  hence  the

court was not dealing with a simple case where “the accused had borrowed

money from a bank, to divert it elsewhere”.  The court held that the manner in

which  Letters  of  Credit  were  issued  and  funds  were  siphoned  off  had  a

foundation in criminal law:

“… availing of money from a nationalized bank in the manner, as alleged by the investigating agency, vividly exposits fiscal impurity and, in a way, financial fraud. The modus operandi as narrated in the chargesheet cannot be put in the compartment of an individual or personal wrong. It is a social wrong and it has  immense  societal  impact.  It  is  an  accepted  principle  of handling of  finance that  whenever  there is  manipulation and cleverly conceived contrivance to avail of these kind of benefits it  cannot  be regarded as a case having overwhelmingly and predominatingly  of  civil  character.  The  ultimate  victim  is  the collective.  It  creates a  hazard in the financial  interest  of  the society.  The  gravity  of  the  offence  creates  a  dent  in  the economic spine of the nation.”

The judgment of the High Court quashing the criminal proceedings was hence

set aside by this Court.

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13 The same principle was followed in Central Bureau of Investigation v

Maninder Singh4  by a bench of two learned Judges of this Court.  In that

case, the High Court had, in the exercise of its inherent power under Section

482 quashed proceedings under Sections 420, 467, 468 and 471 read with

Section  120-B  of  the  Penal  Code.  While  allowing  the  appeal  filed  by  the

Central Bureau of Investigation Mr Justice Dipak Misra (as the learned Chief

Justice then was) observed that the case involved allegations of forgery of

documents to embezzle the funds of the bank. In such a situation, the fact that

the dispute had been settled with the bank would not justify a recourse to the

power under Section 482:

“…In economic offences Court must not only keep in view that money has been paid to the bank which has been defrauded but also the society at large. It is not a case of simple assault or a theft of a trivial amount; but the offence with which we are concerned is well planned and was committed with a deliberate design  with  an  eye  of  personal  profit  regardless  of consequence to the society at large. To quash the proceeding merely on the ground that the accused has settled the amount with  the  bank  would  be  a  misplaced  sympathy.  If  the prosecution against the economic offenders are not allowed to continue, the entire community is aggrieved."  

14 In  a  subsequent  decision  in  State  of  Tamil  Nadu v  R  Vasanthi

Stanley5, the court rejected the submission that the first respondent was a

4  (2016) 1 SCC 389 5  (2016)1 SCC 376

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woman “who was following the command of her husband” and had signed

certain documents without being aware of the nature of the fraud which was

being perpetrated on the bank.  Rejecting the submission, this Court held that:

“... Lack  of  awareness,  knowledge or  intent  is  neither  to  be considered nor accepted in economic offences. The submission assiduously presented on gender leaves us unimpressed. An offence under the criminal  law is an offence and it  does not depend upon the gender of an accused. True it is, there are certain  provisions  in  Code of  Criminal  Procedure  relating  to exercise of jurisdiction Under Section 437, etc. therein but that altogether pertains to a different sphere. A person committing a murder  or  getting  involved  in  a  financial  scam or  forgery  of documents, cannot claim discharge or acquittal on the ground of her gender as that is neither constitutionally nor statutorily a valid argument. The offence is gender neutral in this case. We say no more on this score…” “…A grave criminal offence or serious economic offence or for that matter the offence that has the potentiality to create a dent in the financial health of the institutions, is not to be quashed on the ground that there is delay in trial or the principle that when the matter has been settled it should be quashed to avoid the load on the system…”

15 The broad principles which emerge from the precedents on the subject,

may be summarised in the following propositions :  

(i)  Section 482 preserves the inherent powers of the High Court to prevent an

abuse of the process of any court or to secure the ends of justice.  The

provision does not confer new powers. It only recognises and preserves

powers which inhere in the High Court;  

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(ii)  The  invocation  of  the  jurisdiction  of  the  High  Court  to  quash  a  First

Information  Report  or  a  criminal  proceeding  on  the  ground  that  a

settlement has been arrived at between the offender and the victim is not

the same as the invocation of jurisdiction for the purpose of compounding

an offence.   While compounding an offence,  the power of  the court  is

governed  by  the  provisions  of  Section  320  of  the  Code  of  Criminal

Procedure, 1973. The power to quash under Section 482 is attracted even

if the offence is non-compoundable.  

(iii)   In forming an opinion whether a criminal proceeding or complaint should

be quashed in  exercise of  its  jurisdiction under  Section 482,  the High

Court must evaluate whether the ends of justice would justify the exercise

of the inherent power;

(iv) While  the  inherent  power  of  the  High  Court  has  a  wide  ambit  and

plenitude it has to be exercised; (i) to secure the ends of justice or (ii) to

prevent an abuse of the process of any court;  

(v)  The decision as to whether a complaint or First Information Report should

be quashed on the ground that the offender and victim have settled the

dispute, revolves ultimately on the facts and circumstances of each case

and no exhaustive elaboration of principles can be formulated;

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(vi)  In the exercise of the power under Section 482 and while dealing with a

plea that the dispute has been settled, the High Court must have due

regard to the nature and gravity of  the offence.  Heinous and serious

offences involving mental depravity or offences such as murder, rape and

dacoity cannot appropriately be quashed though the victim or the family

of the victim have settled the dispute.  Such offences are, truly speaking,

not  private  in  nature  but  have  a  serious  impact  upon  society.  The

decision  to  continue  with  the  trial  in  such  cases  is  founded  on  the

overriding  element  of  public  interest  in  punishing  persons  for  serious

offences;

(vii)  As  distinguished  from serious  offences,  there  may  be  criminal  cases

which have an overwhelming or predominant element of a civil dispute.

They stand on a distinct footing in so far as the exercise of the inherent

power to quash is concerned;

(viii) Criminal  cases  involving  offences  which  arise  from  commercial,

financial,  mercantile,  partnership  or  similar  transactions  with  an

essentially  civil  flavour  may in  appropriate  situations  fall  for  quashing

where parties have settled the dispute;

(ix)  In such a case, the High Court may quash the criminal proceeding if in

view  of  the  compromise  between  the  disputants,  the  possibility  of  a

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conviction is remote and the continuation of a criminal proceeding would

cause oppression and prejudice; and

(x)   There is yet an exception to the principle set out in propositions (viii) and

(ix)  above.   Economic  offences  involving  the  financial  and  economic

well-being of the state have implications which lie beyond the domain of a

mere  dispute  between  private  disputants.  The  High  Court  would  be

justified in declining to quash where the offender is involved in an activity

akin  to  a  financial  or  economic  fraud  or  misdemeanour.   The

consequences of the act complained of upon the financial or economic

system will weigh in the balance.

16 Bearing in mind the above principles which have been laid down in the

decisions of this Court, we are of the view that the High Court was justified in

declining to entertain the application for quashing the First Information Report

in the exercise of its inherent jurisdiction.  The High Court has adverted to two

significant  circumstances.   Each  of  them  has  a  bearing  on  whether  the

exercise  of  the  jurisdiction  under  Section  482  to  quash  the  FIR  would

subserve or secure the ends of justice or prevent an abuse of the process of

the court.  The first is that the appellants were absconding and warrants had

been  issued  against  them  under  Section  70  of  the  Code  of  Criminal

Procedure,  1973.   The  second  is  that  the  appellants  have  criminal

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antecedents, reflected in the chart which has been extracted in the earlier part

of this judgment.  The High Court adverted to the modus operandi which had

been followed by  the  appellants  in  grabbing  valuable  parcels  of  land  and

noted that in the past as well, they were alleged to have been connected with

such nefarious activities by opening bogus bank accounts.  It was in this view

of the matter that the High Court observed that in a case involving extortion,

forgery and conspiracy where all the appellants were acting as a team, it was

not in the interest of society to quash the FIR on the ground that a settlement

had been arrived at with the complainant. We agree with the view of the High

Court. The present case, as the allegations in the FIR would demonstrate, is

not merely one involving a private dispute over a land transaction between

two contesting parties.  The case involves allegations of extortion, forgery and

fabrication  of  documents,  utilization  of  fabricated  documents  to  effectuate

transfers of title before the registering authorities and the deprivation of the

complainant  of  his  interest  in  land  on  the  basis  of  a  fabricated  power  of

attorney.  If the allegations in the FIR are construed as they stand, it is evident

that  they  implicate  serious  offences  having  a  bearing  on  a  vital  societal

interest in securing the probity of titles to or interest in land.    Such offences

cannot be construed to be merely private or civil disputes but implicate the

societal  interest  in prosecuting serious crime.  In these circumstances, the

High Court was eminently justified in declining to quash the FIR which had

19

been registered under Sections 384, 467, 468, 471, 120-B and 506(2) of the

Penal Code.  

17 We do not, for the above reasons, find any merit in the appeal.  The

Criminal Appeal shall accordingly stand dismissed.  

...........................................CJI           [DIPAK MISRA]

                                                       .............................................J           [A M KHANWILKAR]

                                                   ...........................................J           [Dr  D Y  CHANDRACHUD]

New Delhi; October 04, 2017