The Supreme Court held that FIR can be quashed under S. 482 CrPC and Art. 226 of the Constitution in disputes which are substantially matrimonial in nature, or the civil property disputes with criminal facets, if the parties have entered into settlement, and it has become clear that there are no chances of conviction. However, the Court also clarified that such a situation would not apply in where the nature of offence is very serious like rape, murder, robbery, dacoity, cases under Prevention of Corruption Act, cases under Narcotic Drugs and Psychotropic Substances Act and other similar kind of offences in which punishment of life imprisonment or death can be awarded.
The Division Bench consisting of Justice Sudhansu Jyoti Mukhopadhaya and Justice Prafulla C. Pant came up with the judgment in an appeal filed by Gold Quest International Private Limited regarding the question of quashing of FIR after the parties have settled.
The case reached the galleries of the judiciary after complaints were registered against Gold Quest International Private Limited, an International Numismatic Company which has operations in over sixty countries and has over 16 thousand consumers in Chennai alone.
The complaints were regarding non-compliance of issuance of numismatic gold coin on receipt of Rs.16, 800/-as per the promise made. Case under S. 420 read with Sections 4, 5 & 6 of the Prize Chits and Money Circulation(Banning) Act, 1978 were registered against the Company. The Company then filed a writ before the Madras High Court, seeking quashing of all such FIRs and the Single Judge of the High Court by its order dated 19th April, 2005 quashed the FIR.
However, the Division Bench interfered with the order of the Single Judge as that out of 172 claimants, there was no compromise from two persons. The Company then approached the Supreme Court.
The Supreme Court in its judgment has categorically stated that "there was sufficient evidence on record to suggest that the whereabouts ofthose two persons were not known, nor have they ever challenged the order of learned Single Judge."
The Division Bench of the High Court had relied on Union of Indiavs. Bhajan Lal (AIR 1992 SC 604) and held that "HighCourt in exercise of its inherent powers can quash criminal proceedings or FIR or complaint and Section 320 of the Codedoes not limit or affect the powers under Section 482 of the Code." The Supreme Court too came up with the same finding.
The Supreme Court then considered Nikhil Merchant vs. Central Bureau of Investigation & Anr. (2008) 9 SCC 677, wherein was said that "technicality should not be allowed to stand in the way in the quashing of the criminal proceedings, since, in our view, the continuance of the same after the compromise arrived at between the parties would bea futile exercise."
The Bench also referred to the judgment delivered in Gain Singh vs. State of Punjab & Anr. (2012) 10 SCC 303, which had said "Quashing of offence or criminal proceedings on the ground of settlement between an offender and victim is not the same thing as compounding of offence. They are different and not interchangeable. Strictly speaking, the power of compounding of offences given to a court under Section 320 is materially different from the quashing of criminal proceedings by the High Court in exercise of its inherent jurisdiction. In compounding of offences, power of a criminal court is circumscribed by the provisions contained in Section 320 and the court is guided solely and squarely thereby while, on the other hand, the formation of opinion by the High Court for quashing a criminal offence or criminal proceeding or criminal complaint is guided by the material on record as to whether the ends of justice would justify such exercise of power although the ultimate consequence may be acquittal or dismissal of indictment."
The judgment in the present case, also lays down the test which the High Court should follow while dealing with such matters, it said "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 proceedings."
Finally, the Court held that "learned Single Judge did not commit any error of law in quashing the FIR after not only the complainant and the appellant settled their money dispute but also the other alleged sufferers entered into an agreement with the appellant, and as such, they too settled their claims."
The judgment, a very lucid one, also summarizes the law in this regard, it states "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 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 orthe 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."
The question of quashing of FIR has seen some action in the Supreme Court, more can be read here
High Court cannot endeavour a hyper-technical approach for quashing FIR.
Supreme Court issues fresh guidelines on quashing of proceedings of a non-compoundable offence on the basis of settlement between the parties.
You may also read an article by Justice V.Ramkumar, retired Judge of the Kerala High Court here