Mahalingappa vs The State of Karnataka and Others

P.D. Waingankar, J.—All these petitions are under Section 482 of Cr.P.C. to quash the proceedings in C.C. No. 727/2009, C.C. No. 728/2009 and C.C. No. 729/2009 on the file of the JMFC - II Court, Belgaum.

The facts which gave rise to these petitions are as under:

"The petitioner in all the three petitions is arrayed as accused No. 1 in C.C. No. 727/2009, C.C. No. 728/2009 and C.C. No. 729/2009. He was working as Managing Director of the complainant Belgaum District Milk Producers Societies Union Ltd., Malamaruthi, Belgaum. During his ten years as a Managing Director, he alleged to have created bogus and false traveling allowance bills by signing the vouchers and thereby misused the funds of the society to the tune of Rs. 2,49,452/- and thereby made wrongful gains for himself and two other accused persons who were working as sales officer. After coming to know of the same, a complaint came to be lodged before Malamaruthi Police Station. After investigation, three separate charge-sheets came to be filed against this petitioner in Crime No. 181/2006 for the offences punishable under Sections 406 , 408 , 409 r/w Section 34 of IPC after a period of three years which came to be registered in C.C. No. 727/2009, C.C. No. 728/2009 and C.C. No. 729/2009. All the accused denied the charges levelled against them. The matters were posted for trial. At that stage, accused No. 1 filed an application under Section 320(1) and (2) of Cr.P.C. seeking permission of the Court to compromise the matter before the Magistrate. The complainant and the accused were present before the Court. The application was orally opposed by the prosecutor. However, the learned Magistrate rejected the application by his order dated 27.05.2014 in all the three cases on the ground that the case is set down for trial and the complainant and accused failed to assign the sufficient reason to seek permission of the Court to compound the offences."

Being aggrieved by the separate orders passed in all the three cases, these petitions are preferred to quash the proceedings in view of the compounding of the offences by the parties.

I have heard both the learned counsel appearing for the petitioner/accused and the learned Government Advocate for the respondent/State. Perused the records.

The learned counsel for the petitioner/accused relying upon the decision of the Supreme Court reported in Narinder Singh and Others Vs. State of Punjab and Another, and the decision of the Supreme Court dated 24.09.2012 in Special Leave Petition (Crl.) No. 8989 of 2010 in a case of Gian Singh v. State of Punjab, submitted that provision of Section 482 of Cr.P.C. overrides all other provisions and therefore these are the fit cases to quash the proceedings in view of the compounding of the offence by the parties.

On the other hand, the learned Government Advocate placing reliance on the decision of the Supreme Court in Crl.A.1496/2009 dated 28.08.2015 in a case of Central Bureau of Investigation v. Maninder Singh would submit that since the charges levelled against the petitioner are under Sections 406 and 409 of IPC for having misappropriated the amount, it comes within the purview of economic crimes and as such the proceedings cannot be quashed and hence he sought for dismissal of the petitions.

From reading the decisions relied upon by both the learned counsel, it is obvious that the inherent power of the High Court to quash a non-compoundable offence is not circumscribed by any of the provisions of the Code including Section 320 . Section 482 is a declaration of the inherent powers pre-existing in the High Court and so long as the exercise of the inherent powers falls within the parameters of Section 482 , it shall have an overriding effect over any of the provisions of the Code. In other words, in exercise of its inherent powers under Section 482 , the High Court may permit compounding of a non-compoundable offence provided that in doing so it satisfies the conditions mentioned therein. Thus, the actual exercise of powers under Section 482 will depend on facts of a particular case. The factors to be considered while exercising power under Section 482 of Cr.P.C. to decide whether to quash or not to quash the criminal proceedings in a given case are

"a) the nature and gravity of case

b) does the dispute reflect overwhelming and predominantly civil flavour

c) would the quashing involve settlement of entire or almost the entire dispute

d) the compromise/settlement between the parties and/or other facts and the circumstances render possibility of conviction remote and bleak

e) not to quash would cause extreme injustice and would not serve the ends of justice and

f) not to quash would result in the abuse of process of court."

It is also relevant to note the observation made by the Supreme Court in the matter between Central Bureau of Investigation v. Maninder Singh in para 12 of the judgment:--

"12. In recent decision in Vikram Anantrai Doshi (supra), this Court distinguished Nikhil Merchant''s case and Narendra Lal Jain''s case where the compromise was a part of the decree of the court and by which the parties withdraw all allegations against each other. After referring to various case laws under subject in Vikram Anantrai Doshi''s case, this Court observed that cheating by bank exposits fiscal impurity and such financial fraud is an offence against society at large in para (23), this Court held as under:--

"23....Be it stated, that 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 cleverness which has been skillfully contrived, if the allegations are true, has a serious consequence. A crime of this nature, in our view, would definitely fall in the category of offences which travel far ahead of personal or private wrong. It has the potentiality to usher in economic crisis. Its implications have its own seriousness, for it creates a concavity in the solemnity that is expected in financial transactions. It is not such a case where one can pay the amount and obtain a "no due certificate" and enjoy the benefit of quashing of the criminal proceedings on the hypostasis that nothing more remains to be done. The collective interest of which the Court is the guardian cannot be a silent or a mute spectator to allow the proceedings to be withdrawn, or for that matter yield to the ingenuous dexterity of the accused persons to invoke the jurisdiction under Article 226 of the Constitution or under Section 482 of the Code and quash the proceeding. It is not legally permissible. The Court is expected to be on guard to these kinds of adroit moves. The High Court, we humbly remind, should have dealt with the matter keeping in mind that in these kind of litigations the accused when perceives a tiny gleam of success, readily invokes the inherent jurisdiction for quashing of the criminal proceeding. The court''s principal duty, at that juncture, should be to scan the entire facts to find out the thrust of allegations and the crux of the settlement. It is the experience of the Judge comes to his aid and the said experience should be used with care, caution, circumspection and courageous prudence. As we find in the case at hand the learned Single Judge has not taken pains to scrutinize the entire conspectus of facts in proper perspective and quashed the criminal proceeding. The said quashment neither helps to secure the ends of justice nor does it prevent the abuse of the process of the Court nor can it be also said that as there is a settlement no evidence will come on record and there will be remote chance of conviction. Such a finding in our view would be difficult to record. Be that as it may, the fact remains that the social interest would be on peril and the prosecuting agency, in these circumstances, cannot be treated as an alien to the whole case. Ergo, we have no other option but to hold that the order of the High Court is wholly indefensible".

In the light of the aforesaid factors to be taken into consideration and in the light of the observation made by the Supreme Court let me now consider the case on hand. All these criminal cases were registered wayback on 04.12.2006. The charges are that the petitioner created false travelling bills and thereby misappropriated a sum of Rs. 2,49,452/-. He has repaid the said amount under two installments and the necessary receipts have been issued to him by the complainant for having received the entire amount under receipt No. 9573 dated 29.01.2013 for Rs. 2,20,000/- and under receipt No. 4325 dated 02.07.2013 for Rs. 29,452/- and therefore the parties have decided to compound the offences and filed an application seeking permission. The petitioner is aged about 70 years. Though the crime came to be registered on 04.12.2006, the charge-sheet came to be filed after a period of three years. The matters are pending before the Court since 2006. The evidence is yet to commence, the parties have already settled the matter. In that case, the chances of conviction are bleak even if the trial is held. Since the petitioner is aged about 75 years, he may not lost longer. There is no guarantee that the petitioner would survive by the time the trial is concluded. In that case, the whole exercise would become a futile exercise. Further, this is not a case of fraud committed by the petitioner in crores which hit the headlines so as to continue the proceedings even after the parties have settled the matter. This is not a crime which would fall in the category of offences which travel far ahead of personal or private wrong. It has no potentiality to usher in economic crisis. If the proceedings are quashed there won''t be any serious implications. Thus, taking into consideration the pros and cons, I am of the view that if the proceedings are not quashed it would cause injustice and it would not serve the ends of justice. I am satisfied that this is a fit case where technicality should not be allowed to stand in the way of quashing the proceedings. In my view, the continuation of the proceedings after the compromise arrived at between the parties would be a futile exercise. For all these reasons, I pass the following

Crl.P.Nos.101191/2014, 101192/2014 and 101193/2014 are allowed. Proceedings initiated against the petitioner in C.C. No. 727/2009, C.C. No. 728/2009 and C.C. No. 729/2009 on the file of the JMFC - II Court, Belgaum are hereby quashed.