JUDGMENT : On a source information, the appellant had registered Crime No.39(S)/1991 on 31.12.1991. The appellant filed a report before the XXI Addl. City Civil and Sessions Judge and Spl. Judge for CBI Cases at Bengaluru, under S.173 of Cr.P.C. against (i) John Joshua Mathew (A1), the then Manager of State Bank of Travancore, Pillanna Garden Branch, Bengaluru, (ii) Soudhagar Abdul Basith (A2), and (iii) Mohammed Yousuf (A3), alleging commission of offences punishable under Ss. 120-B read with S.420 and Ss.13(2) and 13(1)(d) of Prevention of Corruption Act, 1988 and was registered as Spl.C.C. No.150/1994. Case against accused No.1 was split up on account of his absconding, vide the proceeding in Spl.C.C. No.117/1997. Accused No.2 having died, the c ase against him stood abated on 26.05.2007. The respondent herein is accused No.3. The prosecution case is, that accused No.1 was working as the Manager of State Bank of Travancore, Pillanna Garden Branch, Bengaluru during the period from 25.01.1990 to 03.04.1991 and accused No.2 was the proprietor of M/s. Bangalore Granites, Bengaluru and 9 other firms and that accused No.3 was the proprietor of M/s. Sundeep Furniture, Bengaluru and 13 other firms. It was alleged that accused No.1 had entered into a criminal conspiracy with accused Nos.2 and 3, in the matter of sanction and disbursal of loans under SSI loan scheme and in furtherance of the conspiracy, accused No.1 sanctioned loan of Rs. 1,00,000/- each, in the names of M/s. Bangalore Granites and 21 other firms, which were alleged to be fictitious and non-existing, as the documents produced relating to their registration was found to be concocted. Default having been committed in making the payment of Rs. 36,99,408/- towards principal and interest to the said Bank and accused No.3 having conspired with accused No.2 by offering his immovable property as collateral security in the matter of availing loan under SSI Scheme by producing concocted documents, after investigation, the charge-sheet dated 08.05.1992 was filed. The accused No.3 appeared and sought discharge by filing an application under S.227 Cr.P.C. The application was rejected and the charge was framed on 17.12.2002. The accused Nos.2 and 3 having pleaded ‘not guilty’ the trial commenced on 05.01.2009. Seeking setting aside of an order dated 23.12.2008 passed by the Trial Judge, the accused No.3 filed Crl.R.P.1369/2008. The accused No.3 appeared and sought discharge by filing an application under S.227 Cr.P.C. The application was rejected and the charge was framed on 17.12.2002. The accused Nos.2 and 3 having pleaded ‘not guilty’ the trial commenced on 05.01.2009. Seeking setting aside of an order dated 23.12.2008 passed by the Trial Judge, the accused No.3 filed Crl.R.P.1369/2008. The said petition was disposed of by an order dated 20.01.2009, permitting the accused No.3 and the Bank to file an application before the Trial Court, seeking compounding of the offence. Accused No.3 and the Bank having filed two separate applications dated 12.02.2009, under Ss.320(2) and 320(8) Cr.P.C. and the Trial Judge having passed an order on 28.02.2009 allowing the application for compounding and thereby, acquitting accused No.3 of the charge under S.120-B read with S.420 IPC and canceling the bail bond, this appeal was filed to set aside the said order. 2. Sri C.H. Jadhav, learned Senior Advocate, by placing reliance on the decision in the case of GOPAKUMAR B. NAIR Vs. CBI, (2014) 5 SCC 800 , contended that the Trial Judge has committed illegality in allowing the application filed by accused No.3 and the Bank under S.320(8) Cr.P.C. and in acquitting the accused No.3 of the charged offences. Learned counsel submitted that the appellant being an independent agency constituted for investigation of the offences and to report to the competent Magistrate, the Trial Judge could not have permitted the compounding, that too, without there being participation of the complainant. He submitted that the information having been received and the case having been registered in R.C.39(S)/91, investigation was undertaken and the charge-sheet was laid by the appellant for the offences committed by the accused, not only against the Bank but also the society at large. He submitted that such being the case, the consent to compound the offence by the Bank alone is incompetent. Learned counsel contented the compromise entered into by the accused No.3 with the Bank has no relevance, since the offences alleged against him and the other accused is against the society. Learned counsel contended that the impugned order is cryptic and shows the lack of application of mind and having been passed mechanically and with undue haste. 3. Learned counsel contented the compromise entered into by the accused No.3 with the Bank has no relevance, since the offences alleged against him and the other accused is against the society. Learned counsel contended that the impugned order is cryptic and shows the lack of application of mind and having been passed mechanically and with undue haste. 3. Sri M.T. Nanaiah, learned Senior Advocate, on the other hand submitted that in view of the observation made in the order passed on 20.01.2009, disposing of Crl.R.P.1369/2008, the applications having been filed, under Ss.320(2) and 320(8) of Cr.P.C., the Trial Judge is justified in passing the impugned order. Learned counsel, by placing reliance on the decision of the Apex Court in NIKHIL MERCHANT Vs. CBI, (2008) 9 SCC 677 , submitted that learned Trial Judge is justified in allowing the application for compounding and in acquitting the accused No.3 of the charge, since he produced a ‘clearance certificate’ issued by the Bank with regard to the full and final settlement of the claim of the Bank, to its satisfaction i.e., with reference to the claim made in O.A.794/1995, on the file of the Debt Recovery Tribunal, Bengaluru. Learned advocate submitted that the permission to compound being one of discretion, no interference with the impugned order is called for. 4. Perused the record and considered the rival contentions. Point for consideration is, whether, the Trial Judge has committed illegality in passing the impugned order? 5. For the purpose of ready reference, the impugned order is extracted, which reads as follows: 28.2.2009 State by CBI – PP A-1 Split up A-2 Dead A-3 MTN Records not received from Hon’ble High Court Later received records from the Hon’ble High Court along with the copies of the Order dated 20.1.2009 in Criminal Revision Petition No.1369/2008 passed by the Hon’ble High Court and the same are put up herewith. A-3 is present. Heard on the application under Sec.320(2) Cr.P.C. In view of the Order in Criminal Revision Petition No.1369/2008 on 20.1.2009 passed by the Hon’ble High Court and having regard to voluntary settlement before me between the Banker and the Accused, I deem it just and expedient to allow the application for compounding. A-3 is acquitted of charges under Sec.120-B r/w of 420 I.P.C. His bail bond, if any stands cancelled. Sd/- 6. A-3 is acquitted of charges under Sec.120-B r/w of 420 I.P.C. His bail bond, if any stands cancelled. Sd/- 6. Since, a reference has been made to the order passed on 20.01.2009, in Crl.R.P.No.1369/2008, the relevant portion of the said order is reproduced herein below for ready reference: “12……….Therefore, without expressing any opinion on the grounds urged in this petition against the order impugned and the right of the accused to question tenability of the prosecution against him, the petitioner and the bank are permitted to file application before the trial court seeking compounding of offence. If such application is filed the trial court may consider the same by granting such permission.” (underlining is mine) 7. With regard to scope of S.320 Cr.P.C., in the case of DASAN Vs. STATE OF KERALA AND ANOTHER, (2014) 12 SCC 666 , Apex Court has held as follows: “7. Section 320 of the Criminal Procedure Code (the Code) pertains to offences punishable under the Penal Code only. It states which offences can be compounded, by whom they can be compounded and which offences can be compounded only with the permission of the court concerned. Sub-sections (3) to (8) thereof further clarify how Section 320 of the Code operates. Sub-section (9) thereof states that no offence shall be compounded except as provided by this section. The legislative intent is, therefore, clear. Compounding has to be done strictly in accordance with Section 320 of the Code. No deviation from this provision is permissible.” (emphasis supplied) 8. In the case of STATE OF KARNATAKA Vs. REVANASIDDAPPA, ILR 1994 KAR 1542, the Magistrates having granted permission for compounding of offences, under Ss. 326 and 380 of IPC and the consequent orders of acquittals criminal appeals were filed by the State on the ground that the offences with which the accused had been charged were non compoundable ones and the learned Magistrates had no jurisdiction to accord permission to compound the said offences and therefore, the entire procedure adopted by the learned Magistrates is illegal and the impugned Judgments / Orders are liable to be set aside. Considering the factual background and the scope of S.320 Cr.P.C., with regard to compounding of offence, not within S.320 Cr.P.C., it was held as follows: “11. Considering the factual background and the scope of S.320 Cr.P.C., with regard to compounding of offence, not within S.320 Cr.P.C., it was held as follows: “11. When our conclusions on the several aspects are as above and when the subsections (1) and (2) of Section 320 of the Code respectively enumerate the offences compoundable and compoundable with the permission of the Court and subsection (9) of the said Section mandates that no offence shall be compounded except as provided by this Section, it is our considered view that the subordinate Criminal Courts or this Court has no power to grant permission to compound a non-compoundable offence i.e., the offence which does not come within either of the two tables occurring under Sections 320(1) and 320(2) of the Code. In that view of the matter, the orders of the trial Court permitting the composition of the offences under Sections 326 and 380 of the Indian Penal Code cannot be sustained and they should be set aside.” (emphasis supplied) This Court, thus has made it clear, that the criminal courts have no power to permit compounding in respect of a non compoundable offence, which does not come within the Tables given under S.320 Cr.P.C. 9. In the present case, the offences alleged are certainly serious. The charge framed by the Trial Judge on 17.02.2002 being relevant is extracted herein below: “Firstly, that you A2 and A3 entered into a criminal conspiracy with A1John Joshua Mathew (absconding) while he was functioning in his official capacity as Manager of the State Bank of Travencore, Pillanna Garden Branch, during the period between 1990 January and March, 1991, with a dishonest intention to cheat the State Bank of Travencore, Pillanna Garden Branch, Bangalore and derive pecuniary advantage for yourself and thereby you the accused have committed an offence punishable under Sec.120-B of the Indian Penal Code and within my cognizance. Secondly, that you A2 and A3 between the above said period, in furtherance of that conspiracy stated in Charge No.1, availed Cash Credit Facilities to the extent of Rs.1,00,000/- each and also overdrawals to the following units in the name of you A2 and A3 and your relatives and employees and in fictitious names and that the names of Units are; 1) Bangalore Granites, 2) M/s. Royal Interiors, 3) M/s. Shabir Furniture Works, 4) M/s. Bangalore Timbers, 5) M/s. Popular Electronics, 6) M/s. Navin Timbers, 7) M/s. Ajantha Furniture Works, 8) M/s. Bombay Furnitures, 9) M/s. Sundeep Furnitures, 10) M/s. Diamond Furniture Works, 11) M/s. Ravi Industries, 12) M/s. Karnataka Engineering Works, 13) M/s. Goodwill Furniture Factory, 14) M/s. Myfair Furniture Works, 15) M/s. Woodsack Furniture, 16) M/s. Dunhill Machine Tools, 17) M/s. A.K. Fabricators, 18) M/s. Moti Garment Factory, 19) M/s. Hitech Electronics, 20) M/s. Alwayn Furniture Works, 21) M/s. Praveen Industries and 22) M/s. Cosmos Builders and that you A2 and A3 falsely preferred loans to the above Units under SSI Scheme even though the said Units were not registered as SSI Units either provisionally or permanently by the Department of Industries and Commerce, Government of Karnataka, Bangalore and that you A2 furnished bogus SSI registration number for your Unit – Bangalore Granites and that you furnished bogus residential address of the proprietors/ proprietrixes of those Units. Further, that you A2 and A3 have availed the loans in the name of Units which are not existing except Bangalore Granites and that you have availed the loans under misrepresentation and under false pretexts to the person shown as the proprietors/proprietrixes of these Units and that you A2 and A3 are the final beneficiaries of these loans. Further, that you A2 stood as guarantor for Units from Sl.Nos.2 to 8 and also offered your land as collateral security for Units from Sl.Nos.1 to 8 and that you A3 stood as guarantor for Units from Sl.Nos.9 to 22 and also offered house site held by you under GPA as collateral security. Further, that you A2 stood as guarantor for Units from Sl.Nos.2 to 8 and also offered your land as collateral security for Units from Sl.Nos.1 to 8 and that you A3 stood as guarantor for Units from Sl.Nos.9 to 22 and also offered house site held by you under GPA as collateral security. That you A2, on 8-6-1991 volunteered to take over the guarantorship of 14 Units from Sl.Nos.9 to 22 and that you have closed the account of Ravi Industries on 6-12-1991 and that the dues totaling to an amount of Rs.36,99,408/- in respect of the remaining 21 Units are still outstanding and have become irrecoverable and thereby the State Bank of Travencore has been made to suffer wrongful loss to that extent and that you A2 and A3 have dishonestly cheated the Bank and thereby committed an offence punishable under Sec.420 of the Indian Penal Code and within my cognizance. And I hereby direct that you be tried by this court on the said charges. Sd/- 17/12/02 (S.V. Patil) XXI Addl. City Civil and Sessions Judge And Special Judge for CBI Cases, Bangalore.” 10. In GIAN SINGH Vs. STATE OF PUNJAB AND ANOTHER, (2012) 10 SCC 303 , Apex Court has held, that proceeding in respect of heinous and serious offences and the offences under Prevention of Corruption Act and all other offences committed by public servants while working in that capacity, are not to be quashed. It has also been emphasized that such offences have a serious impact on society. By also considering the mandate of Sub-section (9) of S.320 Cr.P.C., it has been held as follows: “51. Section 320 of the Code articulates public policy with regard to the compounding of offences. It catalogues the offences punishable under IPC which may be compounded by the parties without permission of the court and the composition of certain offences with the permission of the court. The offences punishable under the special statutes are not covered by Section 320. When an offence is compoundable under Section 320, abatement of such offence or an attempt to commit such offence or where the accused is liable under Section 34 or 149 of the IPC can also be compounded in the same manner. The offences punishable under the special statutes are not covered by Section 320. When an offence is compoundable under Section 320, abatement of such offence or an attempt to commit such offence or where the accused is liable under Section 34 or 149 of the IPC can also be compounded in the same manner. A person who is under 18 years of age or is an idiot or a lunatic is not competent to contract compounding of offence but the same can be done on his behalf with the permission of the court. If a person is otherwise competent to compound an offence is dead, his legal representatives may also compound the offence with the permission of the court. Where the accused has been committed for trial or he has been convicted and the appeal is pending, composition can only be done with the leave of the court to which he has been committed or with the leave of the appeal court, as the case may be. The Revisional Court is also competent to allow any person to compound any offence who is competent to compound. The consequence of the composition of an offence is acquittal of the accused. Subsection (9) of Section 320 mandates that no offence shall be compounded except as provided by this section. Obviously, in view thereof the composition of an offence has to be in accord with Section 320 and in no other manner.” (emphasis supplied) 11. In CBI Vs. JAGJIT SINGH, (2013) 10 SCC 686 , the CBI had sought setting aside of an order passed by the High Court, quashing the criminal proceeding and in the factual backdrop of the accused persons allegedly having dishonestly introduced delivery of the property to the Bank and had used forged documents as genuine, it has been observed as follows: “The offences when committed in relation with banking activities including offences under Sections 420/471, IPC have harmful effect on the public and threaten the well being of the society. These offences fall under the category of offences involving moral turpitude committed by public servants while working in that capacity. Prima facie, one may state that the bank is the victim in such cases but, in fact, the society in general, including customers of the bank is the sufferer.” (emphasis supplied) 12. These offences fall under the category of offences involving moral turpitude committed by public servants while working in that capacity. Prima facie, one may state that the bank is the victim in such cases but, in fact, the society in general, including customers of the bank is the sufferer.” (emphasis supplied) 12. In the case of Gopakumar B. Nair (supra), the Apex Court after making survey of case law and by referring to the cases of Gian Singh and Nikhil Merchant (supra), has clarified as follows: “13. The decision in Gian Singh vs. State of Punjab, (2012) 10 SCC 303 , holding the decision rendered in Nikhil Merchant Vs. CBI (2008) 9 SCC 677 and other cases to be correct is only an approval of the principle of law enunciated in the said decisions i.e. that a non-compoundable offence can also be quashed under Section 482 CrPC on the ground of a settlement between the offender and the victim. It is not an affirmation, for there can be none, that the facts in Nikhil Merchant justified/called for the due application of the aforesaid principle of law. Also, neither Nikhil Merchant nor Gian Singh can be understood to mean that in a case where charges are framed for commission of non-compoundable offences or for criminal conspiracy to commit offences under the PC Act, if the disputes between the parties are settled by payment of the amounts due, the criminal proceedings should invariably be quashed. What really follows from the decision in Gian Singh is that though quashing a non-compoundable offence under Section 482 CrPC, following a settlement between the parties, would not amount to circumvention of the provisions of Section 320 of the Code, the exercise of the power under Section 482 will always depend on the facts of each case. Furthermore, in the exercise of such power, the note of caution sounded in Gian Singh (para 61) must be kept in mind. This, in our view, is the correct ratio of the decision in Gian Singh.” (emphasis supplied) 13. In the case at hand, pursuant to the charge-sheet filed by the appellant, the charge (extracted in para 9 supra) was framed by the Trial Judge. The trial has commenced. The prosecution has examined 12 witnesses and they have also been cross-examined by the accused i.e., between 05.01.2009 and 13.01.2009. 14. In the case at hand, pursuant to the charge-sheet filed by the appellant, the charge (extracted in para 9 supra) was framed by the Trial Judge. The trial has commenced. The prosecution has examined 12 witnesses and they have also been cross-examined by the accused i.e., between 05.01.2009 and 13.01.2009. 14. In view of the allegations made against accused No.3 and in the light of the orders passed rejecting the applications filed for discharge of the accused, the Trial Judge has committed illegality in passing the impugned order, which is certainly cryptic. The criticism of learned Senior Advocate for the appellant, that the impugned order is bald, passed hastily, mechanically and without application of mind and consideration of the record of the case is well founded. Even the observation made by this Court in the order passed on 20.01.2009, (extracted in para 5 supra), required ‘the Trial Court to consider the matter’. When this Court directed the Trial Court to consider the matter, it means the matter should be considered in accordance with law and not ipse dixit. There is non-consideration of the matter and there is abdication of the duty. The impugned order is perverse and in the aforesaid circumstances of the case, the same cannot even be termed as an order, in the eye of law. 15. The complainant has not even been provided with an opportunity of hearing. The complainant having registered the crime based on source information and after the investigation filed the charge-sheet, ought to have been heard prior to the passing of the impugned order and, thereby, terminated the proceeding. 16. Viewed from any angle, the impugned order is bad and illegal. The charge framed against the accused and subjected to trial, extracted in para 9 supra, by no stretch of imagination can be held to be between private parties simpliciter. The offence is serious and will have impact on the society at large. Hence, the permission granted for compounding of the offence under S.120-B IPC, which is non-compoundable is highly arbitrary, unguided and also illegal. Keeping in view the nature of offences alleged and the rejection of the prayer for discharge, the accused will have to necessarily face the trial and come out unscathed. Hence, it is ordered as follows: Appeal is allowed and the order passed by the Trial Judge, impugned herein is set aside. Keeping in view the nature of offences alleged and the rejection of the prayer for discharge, the accused will have to necessarily face the trial and come out unscathed. Hence, it is ordered as follows: Appeal is allowed and the order passed by the Trial Judge, impugned herein is set aside. The Trial Judge is directed to proceed with the trial of the case. However, it is made clear that the observations made in this order are solely in the context of adjudicating the justifiability of the impugned order and the same shall not have any bearing at the time of final decision of the case.