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2023 DIGILAW 1402 (ALL)

Ajit Singh v. State Of U. P. Thru. CBI

2023-05-23

SUBHASH VIDYARTHI

body2023
JUDGMENT : 1. Heard Sri I. B. Singh, Senior Advocate, assisted by Awinash Vishen Advocate, the learned counsel for the applicant and Sri Shiv P. Shukla, the learned counsel for the respondent-C.B.I and perused the record. 2. By means of an instant application filed under Section 482 Cr.P.C, the applicant has prayed for quashing of the judgment and order of conviction dated 06.06.2019, passed by learned Special Judicial Magistrate, C.B.I. Lucknow in Case No.4603 of 2009, arising out of F.I.R. registered as RC No.01(S)/2006/CBI/SCB/LKO dated 12.01.2006, under Sections 120-B, 420, 466, 467, 468, 471, 477-A I.P.C. and all the consequent proceedings, on the ground that the informant and the accused persons have entered into a settlement. 3. The aforesaid case was registered on the basis of a complaint lodged by the opposite party no. 2 -Arvind Mohan Jauhari, against the applicants alleging that some documents relating to annual returns of M/s Carlton Hotel Private Limited (hereinafter referred to as ‘the Company’) have been forged for the years 1997, 1998 and 1999. After carrying out a preliminary inquiry, the C.B.I. lodged an F.I.R on 12.01.2006, against one V. K. Gupta, F.C.A (applicant no. 3) and some unknown persons, alleging that in the annual returns made up to 30.09.1997, 29.09.1998 and 30.09.1999 filed by the Company, some papers were inserted or changed subsequently, evidencing forgery by the named accused V. K. Gupta, who had inspected the documents of the Company on 22.03.2001 and 10.04.2001. 4. The C.B.I. has submitted the charge-sheet stating that the applicant no. 1 Ajit Singh, was Managing Director of the Company and the applicant no. 2 Udaijit Singh, was its Joint Managing Director. They were the beneficiaries of the aforesaid act committed by the applicant no. 3, as they benefited by removal of the names of the complainants Anand Krishna Johari and Arvind Mohan Johari from the annual returns of the 1997, 1998 and 1999. 5. 2 Udaijit Singh, was its Joint Managing Director. They were the beneficiaries of the aforesaid act committed by the applicant no. 3, as they benefited by removal of the names of the complainants Anand Krishna Johari and Arvind Mohan Johari from the annual returns of the 1997, 1998 and 1999. 5. The trial court passed a judgment and order dated 06.06.2019 holding applicants guilty of commission of offences under Sections 120-B, 420, 466, 467, 468, 471, 477A of the Indian Penal Code and all of them were sentenced to undergo simple imprisonment for a period of one year and a fine of Rs.1000/-for offence under Section 120-B I.P.C., two years’ simple imprisonment and a fine of Rs.2000/-for offence under Section 420 I.P.C., two years’ simple imprisonment and a fine of Rs.2000/-for offence under Section 466 I.P.C., three years’ simple imprisonment and a fine of Rs.4000/-for offence under Section 467 I.P.C., two years’ simple imprisonment and a fine of Rs.1000/-for offence under Section 468 I.P.C., two years’ simple imprisonment and a fine of Rs.1000/-for offence under Section 471 I.P.C. and two years’ simple imprisonment and a fine of Rs.1000/-for offence under Section 477A I.P.C. The applicants have challenged an aforesaid judgment and order dated 06.06.2019 by filing Criminal Appeal No. 221 of 2019 in the court of Sessions Judge, Lucknow and the applicants have been granted bail during pendency of the Appeal. 6. During pendency of the Appeal, the complainants Arvind Mohan Johari, Anand Krishna Johari and Gyanendra Nath Johari have entered into a settlement with Ajit Singh, Udaijit Singh, Sona Singh, Rahul Jit Singh, Kamini Singh and Carlton Hotel Private Limited, stating that due to certain disputes between the Singh group and Johari group, the following litigations have been initiated between the parties: 1) Company Petition No. 76/2002 before the Company Law Board New Delhi, titled ‘Arvind Mohan Johari & Ors. vs. Carlton Hotels Pvt. Ltd. & Ors.’; 2) Company Petition No. 11(ND)/111/2011 before the Company Law Board, New Delhi, titled ‘Arvind Mohan Johari & Anr. vs. Carlton Hotels PvtLtd. &Ors.’; 3) Company Appeal No.1/2015 before the Hon’ble High Court of Judicature at Allahabad, Lucknow Bench titled ‘Carlton Hotels Pvt. Ltd. & Ors. vs. Arvind Mohan Johari & Ors.’; 4) Company Petition no. 354/2001 before the Hon’ble High Court of Delhi, titled ‘Registrar of Companies vs. Cyberspace Ltd. &Ors.’; 5) Criminal Case no. vs. Carlton Hotels PvtLtd. &Ors.’; 3) Company Appeal No.1/2015 before the Hon’ble High Court of Judicature at Allahabad, Lucknow Bench titled ‘Carlton Hotels Pvt. Ltd. & Ors. vs. Arvind Mohan Johari & Ors.’; 4) Company Petition no. 354/2001 before the Hon’ble High Court of Delhi, titled ‘Registrar of Companies vs. Cyberspace Ltd. &Ors.’; 5) Criminal Case no. 4603/2009 before Special Judicial Magistrate CBI, Lucknow, titled ‘State through CBI vs. Udaijit Singh &Ors’; 6) Criminal Appeal no. 220/2019 in the Court of District & Session Judge, Lucknow, titled ‘Udaijit Singh vs. State of UP through CBI’; 7) Criminal Appeal no. 221/2019 in the Court of Session Judge, Lucknow titled, ‘Ajit Singh vs. State of UP through CBI’. 7. The settlement records that after various rounds of discussion, both the parties have settled their disputes in respect of Carlton Hotel to maintain peace and harmony and the terms of settlement have been recorded in the aforesaid memorandum of settlement. It is specifically mentioned in the memorandum of settlement that:- “6. The Parties hereto had confirmed and declared that all the disputes and differences between them in respect of Carlton Hotel stood settled and that none of the parties has any further or other dispute, difference, dues, claims, demands, proceedings under arbitration or any proceedings pending in any Court of law including complaints / applications made to statutory authority inter se the Parties of any nature whatsoever against the other or others of them in that regard and if there is any, the same shall be unconditionally withdrawn and would deem to have been terminated between the parties.” 8. On 03.09.2022, the applicant filed an application before the Special Judge C.B.I 5th Lucknow annexing therewith a copy of the memorandum of settlement and praying that the proceedings be terminated in terms of the compromise. However, no order has been passed on the application by the trial court and, therefore, the applicants have approached this Court seeking quashing of the criminal proceedings against them in view of the compromise entered into between the parties. 9. The offences involved in the present case are non-compoundable offences and, therefore, the Trial Court could not have compounded the same. 9. The offences involved in the present case are non-compoundable offences and, therefore, the Trial Court could not have compounded the same. Moreover, as the applicants already stand convicted by the trial Court and the parties have arrived at a settlement during pendency of an appeal against the conviction, there is no occasion for compounding of the offences by the trial Court. 10. Sri I. B. Singh, the learned Senior Advocate representing the applicants, has submitted that Section 320 (5) of the Criminal Procedure Code provides that “when the accused has been committed for trial or when he has been convicted and an appeal is pending, no composition for the offence shall be allowed without the leave of the Court to which he is committed, or, as the case may be, before which the appeal is to be heard.” Relying on the aforesaid provision, Sri. Singh, has submitted that there is no absolute prohibition against compounding of the offence even after conviction of the accused persons by the trial court. However, since some of the sections for which the applicants have been convicted, are non-compoundable, the Appellate Court would not quash the proceedings on the basis of the compromise. 11. The a law regarding quashing of criminal proceedings involving non-compoundable offences has been enunciated by the Hon’ble Supreme Court in various pronouncements, which are being referred hereinbelow. 12. In B.S. Joshi v. State of Haryana, (2003) 4 SCC 675 , the Hon’ble Supreme Court held that if for the purpose of securing the ends of justice, quashing of FIR becomes necessary, Section 320 would not be a bar to the exercise of power of quashing. 13. In Nikhil Merchant versus Central Bureau of Investigation and Another, (2008) 9 SCC 677 , the CBI had filed a charge-sheet against five accused persons, including three accused are officials of Andhra Bank, under Section 120-B read with Sections 420, 467, 468, 471 of the Penal Code, 1860 read with Sections 5(2) and 5(1) (d) of the Prevention of Corruption Act, 1947 and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. The allegations under the charge-sheet indicated that the accused persons conspired with each other in fraudulently diverting the funds of Andhra Bank. Offences alleging forgery were also included in the charge-sheet. The allegations under the charge-sheet indicated that the accused persons conspired with each other in fraudulently diverting the funds of Andhra Bank. Offences alleging forgery were also included in the charge-sheet. The Bank had filed a suit for recovery of money, in which the parties had entered into a compromise and the suit was decreed accordingly. Clause 11 of the compromise read as follows: - “11. Agreed that save as aforesaid neither party has any claim against the other and parties do hereby withdraw all the allegations and counter-allegations made against each other.” 14. Consequent upon the compromise of the suit and having regard to the contents of Clause 11 of the consent terms, the appellant herein filed an application for discharge from the criminal complaint, in respect of which charge-sheet had been filed by CBI, but the application was rejected by the Trial Court. The Hon’ble Supreme Court held that: - “30. In the instant case, the disputes between the Company and the Bank have been set at rest on the basis of the compromise arrived at by them whereunder the dues of the Bank have been cleared and the Bank does not appear to have any further claim against the Company. What, however, remains is the fact that certain documents were alleged to have been created by the appellant herein in order to avail of credit facilities beyond the limit to which the Company was entitled. The dispute involved herein has overtones of a civil dispute with certain criminal facets. The question which is required to be answered in this case is whether the power which independently lies with this Court to quash the criminal proceedings pursuant to the compromise arrived at, should at all be exercised? 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 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.” 15. In Gian Singh v. State of Punjab, (2012) 10 SCC 303 , the Hon’ble Supreme Court extensively discussed the judgments on this point, including B. S. Joshi and Nikhil Merchant (Supra) and held that: - “61. The position that emerges from the above discussion can be summarised thus : 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 or the 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. 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. In other words, 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 proceeding. 62. In view of the above, it cannot be said that B.S. Joshi, Nikhil Merchant and Manoj Sharma were not correctly decided. We answer the reference accordingly. Let these matters be now listed before the Bench(es) concerned.” (Emphasis supplied) 16. In Parbatbhai Aahir v. State of Gujarat, (2017) 9 SCC 641 , the Hon’ble Supreme Court summarized the principles in this regard as follows: - “16. The broad principles which emerge from the precedents on the subject, may be summarised in the following propositions: 16.1. Section 482 preserves the inherent powers of the High Court to prevent an abuse of the process of any court or to secure the ends of justice. The provision does not confer new powers. It only recognises and preserves powers which inhere in the High Court. 16.2. The invocation of the jurisdiction of the High Court to quash a first information report or a criminal proceeding on the ground that a settlement has been arrived at between the offender and the victim is not the same as the invocation of jurisdiction for the purpose of compounding an offence. While compounding an offence, the power of the court is governed by the provisions of Section 320 of the Code of Criminal Procedure, 1973. While compounding an offence, the power of the court is governed by the provisions of Section 320 of the Code of Criminal Procedure, 1973. The power to quash under Section 482 is attracted even if the offence is non-compoundable. 16.3. In forming an opinion whether a criminal proceeding or complaint should be quashed in exercise of its jurisdiction under Section 482, the High Court must evaluate whether the ends of justice would justify the exercise of the inherent power. 16.4. While the inherent power of the High Court has a wide ambit and plenitude it has to be exercised (i) to secure the ends of justice, or (ii) to prevent an abuse of the process of any court. 16.5. The decision as to whether a complaint or first information report should be quashed on the ground that the offender and victim have settled the dispute, revolves ultimately on the facts and circumstances of each case and no exhaustive elaboration of principles can be formulated. 16.6. In the exercise of the power under Section 482 and while dealing with a plea that the dispute has been settled, the High Court must have due regard to the nature and gravity of the offence. Heinous and serious offences involving mental depravity or offences such as murder, rape and dacoity cannot appropriately be quashed though the victim or the family of the victim have settled the dispute. Such offences are, truly speaking, not private in nature but have a serious impact upon society. The decision to continue with the trial in such cases is founded on the overriding element of public interest in punishing persons for serious offences. 16.7. As distinguished from serious offences, there may be criminal cases which have an overwhelming or predominant element of a civil dispute. They stand on a distinct footing insofar as the exercise of the inherent power to quash is concerned. 16.8. Criminal cases involving offences which arise from commercial, financial, mercantile, partnership or similar transactions with an essentially civil flavour may in appropriate situations fall for quashing where parties have settled the dispute. 16.9. In such a case, the High Court may quash the criminal proceeding if in view of the compromise between the disputants, the possibility of a conviction is remote and the continuation of a criminal proceeding would cause oppression and prejudice; and 16.10. 16.9. In such a case, the High Court may quash the criminal proceeding if in view of the compromise between the disputants, the possibility of a conviction is remote and the continuation of a criminal proceeding would cause oppression and prejudice; and 16.10. There is yet an exception to the principle set out in propositions 16.8. and 16.9. above. Economic offences involving the financial and economic well-being of the State have implications which lie beyond the domain of a mere dispute between private disputants. The High Court would be justified in declining to quash where the offender is involved in an activity akin to a financial or economic fraud or misdemeanour. The consequences of the act complained of upon the financial or economic system will weigh in the balance.” 17. In the case of State of M. P. v. Laxmi Narayan, (2019) 5 SCC 688 , the Hon’ble Supreme Court reiterated the law in this regard as follows: - “15. Considering the law on the point and the other decisions of this Court on the point, referred to hereinabove, it is observed and held as under: 15.1. That the power conferred under Section 482 of the Code to quash the criminal proceedings for the non-compoundable offences under Section 320 of the Code can be exercised having overwhelmingly and predominantly the civil character, particularly those arising out of commercial transactions or arising out of matrimonial relationship or family disputes and when the parties have resolved the entire dispute amongst themselves; 15.2. Such power is not to be exercised in those prosecutions which involved heinous and serious offences of mental depravity or offences like murder, rape, dacoity, etc. Such offences are not private in nature and have a serious impact on society; 15.3. Similarly, such power is not to be exercised for the offences under the special statutes like the Prevention of Corruption Act or the offences committed by public servants while working in that capacity are not to be quashed merely on the basis of compromise between the victim and the offender; 15.4. Offences under Section 307 IPC and the Arms Act, etc. would fall in the category of heinous and serious offences and therefore are to be treated as crime against the society and not against the individual alone, and therefore, the criminal proceedings for the offence under Section 307 IPC and/or the Arms Act, etc. Offences under Section 307 IPC and the Arms Act, etc. would fall in the category of heinous and serious offences and therefore are to be treated as crime against the society and not against the individual alone, and therefore, the criminal proceedings for the offence under Section 307 IPC and/or the Arms Act, etc. which have a serious impact on the society cannot be quashed in exercise of powers under Section 482 of the Code, on the ground that the parties have resolved their entire dispute amongst themselves. However, the High Court would not rest its decision merely because there is a mention of Section 307 IPC in the FIR or the charge is framed under this provision. It would be open to the High Court to examine as to whether incorporation of Section 307 IPC is there for the sake of it or the prosecution has collected sufficient evidence, which if proved, would lead to framing the charge under Section 307 IPC. For this purpose, it would be open to the High Court to go by the nature of injury sustained, whether such injury is inflicted on the vital/delicate parts of the body, nature of weapons used, etc. However, such an exercise by the High Court would be permissible only after the evidence is collected after investigation and the charge-sheet is filed/charge is framed and/or during the trial. Such exercise is not permissible when the matter is still under investigation. Therefore, the ultimate conclusion in paras 29.6 and 29.7 of the decision of this Court in Narinder Singh [Narinder Singh v. State of Punjab, (2014) 6 SCC 466 : (2014) 3 SCC (Cri) 54] should be read harmoniously and to be read as a whole and in the circumstances stated hereinabove; 15.5 [Ed.: Para 15.5 corrected vide Official Corrigendum No. F.3/Ed.B.J./22/2019 dated 3-4-2019.]. While exercising the power under Section 482 of the Code to quash the criminal proceedings in respect of non-compoundable offences, which are private in nature and do not have a serious impact on society, on the ground that there is a settlement/compromise between the victim and the offender, the High Court is required to consider the antecedents of the accused; the conduct of the accused, namely, whether the accused was absconding and why he was absconding, how he had managed with the complainant to enter into a compromise, etc.” 18. Per contra, Sri Shiv. Per contra, Sri Shiv. P. Sukla, the learned counsel for the respondent -C.B.I has relied upon a decision of the Hon’ble Supreme Court in P. Dharamaraj Versus Shanmugam and Others 2022 SCC OnLine SC 1186, wherein the Hon’ble Supreme Court held that: - “44. Thus it is clear from the march of law that the Court has to go slow even while exercising jurisdiction under Section 482 Cr.PC or Article 226 of the Constitution in the matter of quashing of criminal proceedings on the basis of a settlement reached between the parties, when the offences are capable of having an impact not merely on the complainant and the accused but also on others. * * * 46. It is needless to point out that corruption by a public servant is an offence against the State and the Society at large. The Court cannot deal with cases involving abuse of official position and adoption of corrupt practices, like suits for specific performance, where the refund of the money paid may also satisfy the agreement holder. Therefore we hold that the High Court was completely in error in quashing the criminal complaint.” 19. The applicants are not public servants and, therefore, the law laid down by the Hon’ble Supreme Court in P. Dharamaraj that (Supra) that corruption by a public servant is an offence against the State and the Society at large and when the offences are capable of having an impact not merely on the complainant and the accused but also on others, the Court has to go slow even while exercising jurisdiction under Section 482 Cr.P.C. for quashing of the proceedings, is not applicable to the facts of the present case. 20. Had the offences been compoundable, there would be no bar against the same being compounded by the appellate court even after conviction of the applicants in view of the provision contained in Section 320 (5) of the Criminal Procedure Code. However, in the present case, the appellate Court cannot compound the offences only because the offences are non-compoundable. 21. Because of the compromise between the parties, the possibility of conviction being upheld in appeal is remote and bleak and continuation of the criminal proceedings would put the applicants to great oppression and prejudice despite full and complete settlement and compromise with the victim. 21. Because of the compromise between the parties, the possibility of conviction being upheld in appeal is remote and bleak and continuation of the criminal proceedings would put the applicants to great oppression and prejudice despite full and complete settlement and compromise with the victim. The Trial Court cannot compound non-compoundable offences, but this Court can quash proceedings of criminal case involving non-compoundable offences. Similarly, as the appellate Court could have compounded the offences even after conviction, had the offences been compoundable, applying the same analogy, this Court can quash the proceedings involving non-compoundable offences even after conviction by the trial Court, where the proceedings deserve to be quashed keeping in view the principles laid down by the Hon’ble Supreme Court in this regard. 22. When we examine the facts of the present case in the light of the above referred law laid down by the Hon’ble Supreme Court, what we find is that the offences involved in the present case arise out of complaints made by private persons alleging a wrongful deprivation of their corporate and commercial rights in the Company by certain acts of forgery etc. committed by the applicant no. 3 for the benefit of the applicants no. 1 and 2. The complainants have already entered into a comprehensive settlement with the applicants for maintaining peace and harmony and the terms of settlement record that all the disputes and differences between them in respect of Carlton Hotel stood settled and that none of the parties has any further or other dispute, difference, dues, claims, demands, proceedings under arbitration or any proceedings pending in any Court of law including complaints / applications made to statutory authority inter se the Parties of any nature whatsoever against the other or others of them in that regard and if there is any, the same shall be unconditionally withdrawn and would deem to have been terminated between the parties. The disputes appear to be inherently of a civil nature with an overwhelmingly and predominately civil flavour. The wrongs allege do not amount to commission of offence against the society at large. 23. The disputes appear to be inherently of a civil nature with an overwhelmingly and predominately civil flavour. The wrongs allege do not amount to commission of offence against the society at large. 23. Therefore, this Court is of the considered opinion that the conviction order and the entire proceedings against the applicants deserve to be quashed by this Court in exercise of its inherent powers under Section 482 of the Code, keeping in view the law laid down by the Hon’ble Supreme Court in the judgments referred to above. 24. In view of the aforesaid discussion, the application under Section 482 Cr.P.C. stands allowed. 25. The order of conviction dated 06.06.2019, passed by learned Special Judicial Magistrate, C.B.I. Lucknow in Case No.4603 of 2009, arising out of F.I.R. registered as RC No.01(S)/2006/CBI/SCB/LKO dated 12.01.2006, under Sections 120-B, 420, 466, 467, 468, 471, 477-A I.P.C. and all the subsequent proceedings from the aforesaid judgment are hereby quashed.