GOLD QUEST INTERNATIONAL PVT. LTD. vs. THE STATE OF TAMILNADU .

REPORTABLE IN THE SUPREME COURT OF INDIA

CIVIL APPEAL NO.8546 OF 2014 (Arising out of S.L.P.(C) No.20066 of 2008) GOLD QUEST INTERNATIONAL PRIVATE LIMITED ……. APPELLANT VERSUS THE STATE OF TAMIL NADU & ORS. … .. RESPONDENTS JUDGMENT J U D G M E N T PRAFULLA C.PANT,J. 1. Leave granted. 2. The question before us in this appeal is whether the Division Bench of High Court has erred in law in setting aside the order of learned Single 1 Page 1 Judge quashing the First Information Report (for short, ‘FIR’) on the basis of the compromise and settlement between the complainant and the appellant.

pleaded that it conducts its business with necessary licence. The multi level marketing through direct selling of products is being adopted by the Company in the interest of the consumers by eliminating the middleman and rewarding the consumer by reducing the prices. The appellant- company has over sixteen thousand members/ consumers in and around the city of Chennai alone. A complaint was made in the year 2003 by Respondent No.7 against the appellant-company alleging non-compliance of issuance of numismatic gold coin on receipt of Rs.16,800/- from wife of Respondent No.7 as per the promise made by the appellant-company. JUDGMENT Some other customers also had complaints on the basis of which Respondent No.4 registered a case under Section 420 of the Indian Penal Code read with Sections 4, 5 & 6 of the Prize Chits and Money Circulation (Banning) Act, 1978. The appellant-company filed a writ petition being W.P.No.26784 of 2003 before the High Court of Judicature at Madras praying therein that the FIR registered against it be quashed. Since all the 2 Page 2 claimants including the complainant settled the dispute with the appellant- company and entered into an agreement, learned Single Judge of the th High Court by its order dated 19 April, 2005 quashed the FIR, and

Single Judge whereby the FIR No.307 of 2003 was quashed, before the Division Bench of the High Court. The Division Bench allowed the writ appeal being W.A.No.1178 of 2005 filed by the State-respondents and directed Respondent No.4 to investigate the crime. Hence, this appeal. 4. We have heard learned counsel for the parties, and perused the papers on record. 5. The main ground on which the Division Bench appears to have interfered with the order of the learned Single Judge is that out of 172 claimants, there was no compromise from two persons. However, there JUDGMENT was sufficient evidence on record to suggest that the whereabouts of those two persons were not known, nor have they ever challenged the order of learned Single Judge. The Division Bench while accepting the arguments of the State-Respondents have relied on a decision of this Court in Union of India vs. Bhajan Lal (AIR 1992 SC 604 : 1992 Supp. (1) SCC 335) . The said judgment appears to have been discussed by this 3 Page 3 Court in B. S. Joshi & Ors . vs. State of Haryana & Anr. (2003) 4 SCC 675 . Relevant paragraphs of B. S. Joshi’s case (supra ) are reproduced below: “ 2. The question that falls for determination in the instant case is about the ambit of the inherent powers of the High Courts under Section 482 of the Code of Criminal Procedure (the Code) read with Articles 226 and 227 of the Constitution of India to quash criminal proceedings. The scope and ambit of power under Section 482 has been examined by this Court in a catena of earlier decisions but in the present case that is required to be considered in relation to matrimonial disputes. The matrimonial disputes of the kind in the present case have been on considerable increase in recent times resulting in filing of complaints by the wife under Sections 498-A and 406 IPC not only against the husband but his other family members also. When such matters are resolved either by the wife agreeing to rejoin the matrimonial home or mutual separation of husband and wife and also mutual settlement of other pending disputes as a result whereof both sides approach the High Court and jointly pray for quashing of the criminal proceedings or the first information report or complaint filed by the wife under Sections 498-A and 406 IPC, can the prayer be declined on the ground that since the offences are non-compoundable under Section 320 of the Code, therefore, it is not permissible for the court to quash the criminal proceedings or FIR or complaint. JUDGMENT Xx xx xx 4. The High Court has, by the impugned judgment, dismissed the petition filed by the appellants seeking 4 Page 4

Xx xx xx 14. There is no doubt that the object of introducing Chapter XX-A containing Section 498-A in the Indian Penal Code was to prevent torture to a woman by her husband or by relatives of her husband. Section 498-A was added with a view to punishing a husband and his relatives who harass or torture the wife to coerce her or her relatives to satisfy unlawful demands of dowry. The hypertechnical view would be counterproductive and would act against interests of women and against the object for which this provision was added. There is every likelihood that non-exercise of inherent power to quash the proceedings to meet the ends of justice would prevent women from settling earlier. That is not the object of Chapter XX-A of the Indian Penal Code. JUDGMENT 15. In view of the above discussion, we hold that the High Court in exercise of its inherent powers can quash criminal proceedings or FIR or complaint and Section 320 of the Code does not limit or affect the powers under Section 482 of the Code.” 6. Subsequent to the case of B.S. Joshi (supra ) in Nikhil Merchant vs . Central Bureau of Investigation & Anr . (2008) 9 SCC 677 , this Court 5 Page 5 has made the following observations in paragraphs 30 and 31 which are quoted below:

31. On an overall view of the facts as indicated hereinabove and keeping in mind the decision of this Court in B.S. Joshi case [(2003) 4 SCC 675], and the compromise arrived at between the Company and the Bank as also Clause 11 of the consent terms filed in the suit filed by the Bank, we are satisfied that this is a fit case where 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 be a futile exercise .” JUDGMENT 7. In Gian Singh vs. State of Punjab & Anr . (2012) 10 SCC 303, judgments in B.S. Joshi (supra) and Nikhil Merchant (supra) were considered by a three-Judge Bench of this Court and it has found that the view taken in aforesaid two cases by this Court is correct. Relevant 6 Page 6 paragraphs of the judgment in Gian Singh (supra ) read as follows:

Xx xx xx [(2003) 4 SCC 675], [(2008) 9 59. B.S. Joshi Nikhil Merchant SCC 677], Manoj Sharma [(2008) 16 SCC 1 and Shiji [(2011) 10 SCC 705 ] do illustrate the principle that the High Court may quash criminal proceedings or FIR or complaint in exercise of its inherent power under Section 482 of the Code and Section 320 does not limit or affect the powers of the High Court under Section 482. Can it be said that by quashing criminal proceedings in B.S. Joshi, Nikhil Merchant, Manoj Sharma and Shiji this Court has compounded the non- compoundable offences indirectly ? We do not think so. There does exist the distinction between compounding of an offence under Section 320 and quashing of a criminal case by the High Court in exercise of inherent power under Section 482. The two powers are distinct and different although the ultimate consequence may be the same viz. JUDGMENT 7 Page 7 acquittal of the accused or dismissal of indictment. Xx xx xx

JUDGMENT 8 Page 8

8. In view of the principle laid down by this Court in the aforesaid cases, we are of the view in the disputes which are substantially matrimonial in nature, or the civil property disputes with criminal facets, if JUDGMENT the parties have entered into settlement, and it has become clear that there are no chances of conviction, there is no illegality in quashing the proceedings under Section 482 Cr.P.C. read with Article 226 of the Constitution. However, the same would not apply 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 9 Page 9 punishment of life imprisonment or death can be awarded. After considering the facts and circumstances of the present case, we are of the view that learned Single Judge did not commit any error of law in quashing

agreement with the appellant, and as such, they too settled their claims. 9. For the reasons as discussed above, we are of the opinion that the th impugned order dated 7 March, 2008 passed by the Division Bench of the High Court in W.A.No.1178 of 2005 is liable to be set aside. th Accordingly, the appeal is allowed, and the order dated 19 April, 2005 passed by the learned Single Judge in W.P. No. 26874 of 2003 stands restored. No order as to costs. . ………………………………………..J. (SUDHANSU JYOTI MUKHOPADHAYA) JUDGMENT …….………………………………………J (PRAFULLA C. PANT) NEW DELHI, SEPTEMBER 8, 2014. 10 Page 10