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2017 DIGILAW 1474 (KER)

Venkita Subbu v. State of Kerala

2017-12-05

B.KEMAL PASHA

body2017
JUDGMENT : 1. Petitioners are the accused in CC No.513/2016 of the Judicial First Class Magistrate's Court(Temporary), Thiruvananthapuram based on Annexure-A2 final report in Crime No.879/2015 of Valiathura Police Station for the offence under Section 420 read with Section 34 IPC. Annexure-A1 is the FIR. It seems that from the very beginning, that is from Annexure-A1 onwards, the offence alleged is the offence under Section 420 read with Section 34 IPC. 2. In Annexure-A1, one Dilipkumar A, who was the Chief Manager, SBT, Kochuveli Branch, was the de facto complainant/informant. As per the contents of Annexure-A1, the allegation is that the 1st accused, who was the previous employee of the SBT, Kochuveli Branch, cheated the bank by misappropriating an amount of Rs. 5,79,721/- through the accounts of A1 to A4 in the bank, for the period from 01.10.2009 to 29.06.2015. Almost all the same are the allegations in Annexure-A2 also. 3. The bank filed a civil suit as OS No.1434/2015 before the Principal Munsiff's Court, Thiruvananthapuram for the realisation of the amount. Ultimately, the matter was referred for mediation. The matter was mediated in the presence of the petitioners herein and the plaintiff/Chief Manager, Kochuveli Branch of the SBT. A successful mediation was conducted and Annexure-A3 mediation settlement agreement was prepared. A separate sheet was appended with the mediation settlement agreement under the caption “Compromise Agreement”. Annexure-A3 makes it clear that “the above case has been settled/compromised between the parties subject to the terms and conditions as stated in the sheet separately attached therewith”. The terms and conditions are noted in the said separate sheet. The last condition is clause No.6 in the Compromise Agreement, which reads- “This matter has been fully settled and there is no dispute in this regard. The plaintiff hereby withdraws this civil suit initiated against the defendants in OS No.1434/2015. The plaintiff has no objection in closure of this matter or any proceeding in this regard.” 4. According to the learned Senior Counsel for the petitioners, through Annexure-A3 mediation settlement agreement, not only that the civil suit was compromised; but also, all proceedings in that regard were also compromised and settled and therefore, there was composition of the offence under Section 420 IPC then and there through Annexure-A3. Per contra, learned counsel for the 2nd respondent has argued that what was settled in mediation was the civil suit alone and not the criminal proceedings. Per contra, learned counsel for the 2nd respondent has argued that what was settled in mediation was the civil suit alone and not the criminal proceedings. It is argued that the case number or at least the crime number would have been mentioned in Annexure-A3, had it been compromised. 5. Learned counsel for the 2nd respondent has relied on the decision in Rumi Dhar (Smt) v. State of West Bengal and another [ (2009) 6 SCC 364 ], wherein it was held in paragraphs 14, 15 and 16 as follows:- “14. It is now a well settled principle of law that in a given case, a civil proceeding and a criminal proceeding can proceed simultaneously. Bank is entitled to recover the amount of loan given to the debtor. If in connection with obtaining the said loan, criminal offences have been committed by the persons accused thereof including the officers of the Bank, criminal proceedings would also indisputably be maintainable. 15. When a settlement is arrived at by and between the creditor and the debtor, the offence committed as such does not come to an end. The judgment of a tribunal in a civil proceeding and that too when it is rendered on the basis of settlement entered into by and between the parties, would not be of much relevance in a criminal proceeding having regard to the provisions contained in Section 43 of the Evidence Act, 1872. The judgment in the civil proceedings will be admissible in evidence only for a limited purpose. 16. It is not a case where the parties have entered into a compromise in relation to the criminal charges. In fact, the offence alleged against the accused being an offence against the society and the allegations contained in the first information report having been investigated by the Central Bureau of Investigation, the Bank could not have entered into any settlement at all. CBI has not filed any application for withdrawal of the case. Not only a charge sheet has been filed, charges have also been framed.” It was a case relating to bank fraud and the offences alleged were those under Sections 120B, 420, 467, 468 and 471 IPC and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. 6. Not only a charge sheet has been filed, charges have also been framed.” It was a case relating to bank fraud and the offences alleged were those under Sections 120B, 420, 467, 468 and 471 IPC and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. 6. Learned Senior Counsel for the petitioners has relied on the decision in Nikhil Merchant v. Central Bureau of Investigation [2008 (3) KLT 769 (SC)] and also the decision rendered by the three Judges' Bench of the Supreme Court in CBI, ACB, Mumbai v. Narendra Lal Jain and others [ 2014 (5) SCC 364 ]. In Nikhil Merchant (supra), even when the offences were those under Sections 120B, 420, 467, 468 and 471 and those under the Prevention of Corruption Act, the compromise arrived at between the company and the bank was accepted and the proceedings were terminated. 7. Learned counsel for the 2nd respondent has pointed out that Nikhil Merchant (supra) was dealt with and distinguished in the decision in Central Bureau of Investigation v. Mahinder Singh [AIR 2015 SC 3657], wherein it was held in paragraph 11 as follows:- “The inherent power of the High Court under Section 482 Cr.P.C. should be sparingly used. Only when the Court comes to the conclusion that there would be manifest injustice or there would be abuse of the process of the Court if such power is not exercised, Court would quash the proceedings. In economic offences Court must not only keep in view that money has been paid to the bank which has been defrauded but also the society at large. It is not a case of simple assault or a theft of a trivial amount; but the offence with which we are concerned is a well planned and was committed with a deliberate design with an eye of personal profit regardless of consequence to the society at large. To quash the proceeding merely on the ground that the accused has settled the amount with the bank would be a misplaced sympathy. If the prosecution against the economic offenders are not allowed to continue, the entire community is aggrieved.” 8. To quash the proceeding merely on the ground that the accused has settled the amount with the bank would be a misplaced sympathy. If the prosecution against the economic offenders are not allowed to continue, the entire community is aggrieved.” 8. According to the learned counsel for the 2nd respondent, the offence involved in the matter is, in fact, an offence against the public at large, when the bank is dealing with public money and therefore, it could not have been rightly permitted to be compounded. According to the 2nd respondent, the bank is not amenable for any such composition. 9. The question to be considered is whether a composition is possible in this case and whether the offence has been compounded through Annexure-A3. The aforesaid wordings in Annexure-A3 make it clear that the plaintiff, who was the Chief Manager, Kochuveli Branch, SBT, Thiruvananthapuram, was the plaintiff who had “no objection in closure of this matter or any proceeding in this regard”. Apart from the criminal case and the civil suit, no other proceedings were there in respect of the matter before any court. As rightly pointed out by the Senior Counsel for the petitioners, as per Section 2(1)(a) of the Legal Services Authorities Act, 1987, “case includes a suit or any proceeding before a court”. Therefore, the case settled cannot be said to be the civil suit alone; whereas, any proceeding in respect of the matter before a court also. In such case, it has to be noted that when the civil suit was relating to the amount covered by the very same transactions involved in the present criminal case, what was settled is all the matters covered by the transactions involved in this case. 10. Learned Senior Counsel has pointed out that in order to purchase peace, the petitioners had paid almost double the amount to which the bank was allegedly cheated. It has been further argued that the Chief Manager of the SBT, who was the plaintiff and who is the de facto complainant in the case, was all along ready and willing to get the matter settled and consequently, Annexure-A3 was entered into. At the same time, when the SBT has merged with the SBI, presently, the SBI is not in a position to accept a composition entered into between the parties, it is argued. 11. At the same time, when the SBT has merged with the SBI, presently, the SBI is not in a position to accept a composition entered into between the parties, it is argued. 11. As per the schedule appended to Section 320 Cr.P.C., the offence under Section 420 IPC is compoundable and the person, who can compound the offence, is the person who is cheated. When the Chief Manager of the SBT, Kochuveli Branch, was the person allegedly cheated, he could very well compound the offence. Even though the number of the case or the crime number has not been mentioned in Annexure-A3 compromise agreement, it is evident that the terms 'or any proceedings in this regard' clearly denote the entire proceedings relating to the transaction involved in the case. Of course, there is civil liability as well as criminal liability in relation to an offence under Section 420 IPC. When the civil liability has been compromised and settled with a rider that the said civil liability or any proceeding in that regard were settled, it has to be taken as a composition of the offence by the plaintiff/defacto complainant, in respect of the transaction covered by the criminal case also. Had there been no such composition, the terms “or any proceeding” would not have been incorporated in the matter. 12. The decision in Rumi Dhar (supra), Nikhil Merchant (supra) and CBI, ACB, Mumbai (supra) are relating to very serious criminal offences under Section 120B, 465, 468 and 471 IPC and also offences under the Prevention of Corruption Act. Unfortunately, in this case, even though this Court cannot normally endorse a settlement of such a matter, when the matter had already been settled between the parties and the same was accepted as a mediation settlement agreement through a mediation conducted as per Rules, this Court cannot presently say that this Court cannot endorse such a mediation. Had there been any non-compoundable offence incorporated in this matter, this could have readily discarded Annexure-A3. Here, in this particular case, Section 420 IPC alone is incorporated as the offence, which is compoundable by the person who is cheated. 13. Had there been any non-compoundable offence incorporated in this matter, this could have readily discarded Annexure-A3. Here, in this particular case, Section 420 IPC alone is incorporated as the offence, which is compoundable by the person who is cheated. 13. An identical situation was dealt with by the three Judges' Bench of the Apex Court in CBI, ACB, Mumbai (supra), wherein it was held in paragraph 11 as follows: “In the present case, having regard to the fact that the liability to make good the monetary loss suffered by the bank had been mutually settled between the parties and the accused had accepted the liability in this regard, the High Court had thought it fit to invoke its power under S.482 CrPC. We do not see how such exercise of power can be faulted or held to be erroneous. S.482 of the Code inheres in the High Court the power to make such order as may be considered necessary to, inter alia, prevent the abuse of the process of law or to serve the ends of justice. While it will be wholly unnecessary to revert or refer to the settled position in law with regard to the contours of the power available under S.482 CrPC it must be remembered that continuance of a criminal proceeding which is likely to become oppressive or may partake the character of a lame prosecution would be good ground to invoke the extraordinary power under S.482 CrPC.” In the said decision, the earlier decisions noted above, were considered. 14. Matters being so, Annexure-A3 makes it clear that the matter had already been compounded and therefore, no purpose will be served in proceeding with CC.513/2016 further. In the result, this Crl.M.C. is allowed and all further proceedings against the petitioners in CC No.513/2016 of the Judicial First Class Magistrate's Court(Temporary), Thiruvananthapuram based on Annexure-A2 final report in Crime No.879/2015 of Valiathura Police Station, are quashed.