Reference of a case to a larger Bench has to be for a reconsideration of the principle of law and not the merits of the decision; SC

A three Judge Bench of the Supreme Court headed by the Chief Justice of India has held that reference of a case to a larger Bench necessarily  has  to  be  for  a reconsideration of the principle of law on which the case has  been  decided and not the merits of the decision. In Gopakumar B Nair Vs CBI and another [SLP (Crl) 8914/2013] the Court was considering the plea by the accused to quash the Criminal Proceedings under Section  13(2)  and  Section  13(1)(d)   of  the  Prevention  of Corruption Act and Sections 420/471 IPC read with S.120B IPC on the ground that they had entered in to an out of Court settlement with the Complainant (bank) and the entire amount due to the bank has been repaid.

Placing reliance on the decisions of Supreme Court  in Nikhil Merchant  vs. Central Bureau  of  Investigation  and  Another and Gian Singh vs. State of Punjab and Another and a recent pronouncement  in CBI, ACB, Mumbai vs. Narendra Lal Jain & Ors. it is  contended that in view of the settlement arrived at between the bank and the  accused, the High Court ought to have exercised its  power  under  Section 482  Cr.P.C.  to  quash  the  criminal  proceedings  against  the   accused. On the contrary, Sidharth Luthra,  Additional  Solicitor General has submitted that the decision in Nikhil Merchant (supra) turns  on its own facts and what has been approved in Gian  Singh  (supra)  is  merely the principle of law laid down in  Nikhil  Merchant  (supra),  namely,  that quashing a non-compoundable offence under  Section  482  Cr.P.C.,  following the settlement between the parties, does not amount to  a  circumvention  of the  provisions  of  Section  320  of  the  Code  of   Criminal   Procedure. According to  Shri  Luthra,  whether  a  criminal proceeding should or should not be interdicted midway  would  really  depend on the facts of each case.

The Court held that decision in Nikhil Merchant (supra) was  referred to a larger  Bench  in  Gian  Singh  (supra)  for  an authoritative pronouncement as to whether in the said cases this  Court  had "indirectly  permitted  compounding  of  non-compoundable  offences". The Court also re-iterated that "reference of a case to a larger Bench necessarily has  to  be  for  a reconsideration of the principle of law on which the case has  been  decided and not the merits of the decision. The decision rendered by  any  Bench  is final inter-parte, subject to the power of review and  the  curative  power. Any other view  would  have  the  effect  of  conferring  some  kind  of  an appellate  power  in  a  larger  Bench  of  this  Court  which   cannot   be countenanced.  However, the principle of law on which the decision based  is open to reconsideration by a larger Bench in an  appropriate  case.   It  is from the aforesaid perspective that the reference in Gian Singh (supra)  has to be understood, namely, whether quashing of a non-compoundable offence  on the basis of a compromise/settlement of  the  dispute  between  the  parties would be permissible and would not amount to overreaching the provisions  of Section 320 of the Code  of  Criminal  Procedure.   In  fact,  this  is  the question that was referred to the larger Bench in  Gian  Singh  (supra)  and not the merits of the decision in Nikhil Merchant (supra) "

After analysing the facts the Court held that the facts in the present case are easily distinguishable from the facts of Nikhil Merchant Case. "The  appellant  has  been charged with the offence of criminal conspiracy to commit the offence  under Section 13(1)(d).  He  is  also  substantively  charged  under  Section  420 (compoundable  with  the  leave  of  the  Court)  and  Section   471   (non- compoundable).  A careful consideration of  the  facts  of  the  case  would indicate that unlike  in  Nikhil  Merchant  (supra)  no  conclusion  can  be reached that the substratum of the charges against the accused-appellant  in the present case is one of cheating nor are the facts similar  to  those  in Narendra Lal Jain (supra) where the accused was charged under Section  120-B read with Section 420 IPC only.  The offences are  certainly  more  serious; they are not private in nature.  The  charge  of  conspiracy  is  to  commit offences under the Prevention of Corruption Act.  The accused has also  been charged for commission of the substantive offence  under  Section  471  IPC".

Though the  amounts  due  have  been  paid  the  same  is  under  a  private settlement between  the  parties  unlike  in  Nikhil  Merchant  (supra)  and Narendra Lal Jain (supra) where the compromise was a part of the  decree  of the Court. There is no acknowledgement on  the  part  of  the  bank  of  the exoneration of the criminal liability of the  accused-appellant  unlike  the terms of compromise decree in the aforesaid two cases.  In the  totality  of the facts stated above, if the High  Court  has  taken  the  view  that  the exclusion spelt out in Gian Singh (supra) (para 61) applies to  the  present case and on that basis had come to  the  conclusion  that  the  power  under Section 482 CrPC should not be exercised to quash the criminal case  against the accused, we cannot find any justification to  interfere  with  the  said decision. The Court said