Crl.M.C.No. 6389/2006 Page 1 of 38 IN THE HIGH COURT OF DELHI AT NEW DELHI CRL.M.C. 1304/2004 DEVENDER SINGH ..... Petitioner Through: Mr. Kailash Vasudev, Sr. Advocate with Mr. Sanjay Shandilya, Advocate. versus STATE & ANR. ..... Respondents Through: Mr.Pawan Behl, APP. CRL.M.C. 6389/2006 & CRL.M.A. NO. 10788/2006 RAJESH TRIVEDI ..... Petitioner Through: Mr.R.N. Mittal, Sr. Advocate with Mr. Kawal Nain, Advocate. versus STATE & ANR. ..... Respondents Through: Mr.Pawan Behl, APP. CRL.M.C. 6600-04/2006 & CRL.M.A. No. 11138/2006 J.K.SINGH & ORS. ..... Petitioners Through: Mr. Rajiv Nayar, Sr. Advocate with Mr. Kawal Nain and Mr. Prem Chandan, Advocates. versus CBI & ANR. ..... Respondents Through: Mr. Ashish Kumar, Standing Counsel for CBI. Mr.Pawan Behl, APP. Date of decision : 23rd May, 2008 CORAM: HON'BLE DR. JUSTICE S. MURALIDHAR 1. Whether Reporters of local papers may be allowed to see the judgment? No 2. To be referred to the Reporter or not? Yes 3. Whether the judgment should be reported Crl.M.C.No. 6389/2006 Page 2 of 38 in Digest? Yes Dr. S. Muralidhar, J. Introduction 1.1 These three cases involve a common question of law concerning the scope of the powers of this Court under Section 482 of the Code of Criminal Procedure, 1973 ('CrPC') to quash the criminal proceedings where the offences involved include that of forgery and use of forged documents as defined under Sections 468 and 471 of the Indian Penal Code ('IPC'). In each of these petitions filed by the accused, the quashing of the proceedings is sought on the basis that their disputes with the complainants have been settled. This plea is opposed by the prosecution on the ground that there is evidence in each of the cases in the form of a report by the Forensic Science Laboratory („FSL‟) to prove the offences independent of the evidence of the complaint. It is urged that the powers of this Court under Section 482 CrPC should not be used to quash the proceedings involving such non- compoundable offences. 1.2 In Jugal Kishore Sharma v. State 2008 (1) JCC 754 where a similar question arose, this Court refused to quash the proceedings. The learned counsel for the Petitioners in these matters attempted to distinguish the said judgment by pointing out that it did not refer to certain decisions of the Supreme Court, this Court and other High Courts. Accordingly, these cases were heard at length over several days and are being disposed of by this common judgment. Before dealing with the contentions of the parties, the relevant facts in each of the cases require to be noticed. Crl.M.C.No. 6389/2006 Page 3 of 38 Background Facts Crl Misc Case No. 1304/2004(Devender Singh v. State) 2.1. The facts relevant for this petition are that an FIR No. 376 of 2000 was registered at Police Station Azad Nagar pursuant to a complaint dated 29th May, 2000 by one Mr. K.D. Tandon who was running the business in the name and style of Krishna Motors at Sanjay Gandhi Transport Nagar, Delhi. Mr. Tandon stated that he got introduced to the Petitioner Mr. Devender Singh @ Babboo during his visit to the Azadpur Mandi for work. The petitioner assured Mr. Tandon that if moneys were invested with him, the petitioner would pay interest well above the normal rate. He also assured Mr.Tandon of the safety of the money by representing that his father and he himself were in the business of financing transporters had their own trucks and enjoying a good reputation. Mr. Tandon was shown post dated cheques issued by certain transport companies as well as invoices and transport documents. On the basis of this assurance, Mr. Tandon and his relatives invested a large sum with the petitioner for which they were issued receipts by the petitioner. 2.2 After Rs. 16 lakhs invested by Mr. Tandon and his relatives was unable to be realized,they realized that they had been cheated. When Mr. Tandon went to the address given in the receipt purportedly issued by one of the transport companies, he found that no such company was in existence. It also transpired that the cheques issued in favour of the complainant by the transport companies were fake since no such companies were in existence. The petitioner had opened accounts in his own name, in the name of his Crl.M.C.No. 6389/2006 Page 4 of 38 friends, and in the names of the fictitious companies and deposited the moneys collected from the complainants and others. During the course of investigation, an FSL report was obtained which confirmed that the receipts and cheques issued were forged by the petitioner. A large number of investors were thus cheated and accordingly a charge sheet was filed. 2.3 During the pendency of the proceedings, the petitioner settled the disputes with each of the complainants and paid them the amounts pursuant thereto. Enclosed with the petition are the affidavits of each investor or complainant acknowledging receipt of the amount and stating that the complainant is not interested in pursuing the criminal proceedings. A copy of a letter dated 9th September, 2000 written by Mr. Tandon to the police seeking the dropping of the criminal proceedings in FIR No. 376 of 2000 against the petitioner has been produced. The petitioner has also filed an additional affidavit dated 9th October, 2006 giving the details of the settlements between him and the complainants. Crl Misc Case No. 6389 of 2006 (Rajesh Trivedi v. State) 3.1. The facts relevant for this petition are that a consultancy and advisory service agreement was entered into on 1st August, 1999 between Ashok Kumar Gautam, the complainant/Respondent No. 2 with M/s Darpan Engineering Services, a consultancy firm of the Petitioner/accused Rajesh Trivedi. Two post-dated cheques, No. 131122 in the sum of Rs. 6 lakhs and No. 131124 in the sum of Rs. 7 lakhs, both dated 15th February 2000, issued by the complainant in favour of the accused were given as advance payment pursuant to the agreement. Crl.M.C.No. 6389/2006 Page 5 of 38 3.2 Since M/s Darpan Engineering Services rendered no services, it was agreed between the parties that the post-dated cheques would not be encashed. Accordingly, stop payment instructions were given to the Bank of Maharashtra. Telephonically, Mr. Tandon was also informed that he should not present the cheques. It is alleged that Mr. Tandon forged the date on cheque No. 131122 by changing the date from “15.2.2000” to “15.12.2000”, by inserting the figure „1‟ before a figure „2‟ in the date of the cheque. It is stated that although the cheque was in the name of M/s Darpan Engineers Services and not in the name of M/s Darpan Engineering Services, Mr. Tandon, in connivance with the officials of ABN Amro Bank, Barakhamba Road, New Delhi, presented the said cheque No. 131122 and had the amount credited to the account No. 257608 in the name of M/s Darpan Engineering Services. The very next day Mr. Tandon withdrew the entire amount of Rs. 6 lakhs. 3.3 Mr. Gautam lodged a complaint on 13th March, 2001 which led to the registration of the FIR No. 132 of 2001. This led to the filing of a charge sheet after investigations were completed. The charge sheet indicates that the police seized the original account opening form bearing specimen signatures of the accused and the Cheque No. 131122 both of which were sent to the FSL, Malviya Nagar, New Delhi for expert opinion. The FSL report confirmed that the figure „1‟ was indeed inserted before the figure „2‟ to make it appear as it was of the date 15.12.2000. 3.4. During the pendency of the proceedings, Mr. Tandon repaid Mr. Crl.M.C.No. 6389/2006 Page 6 of 38 Gautam the sum of Rs. 6 lakhs. Mr. Gautam issued a receipt dated 24th March, 2001 to that effect. Mr. Gautam filed an affidavit dated 28th September, 2006 in support of the present petition stating that he has no objection to the quashing of the FIR. Mr. Gautam also appeared in this Court on 3rd October, 2006 and confirmed the above statement. Crl Misc Case No. 6600-4 of 2006 (J.K.Singh & Ors. v. State) 4.1 The facts in the third set of petitions are that Mideast Integrated Steels Ltd. („MISL‟) approached the Indus Ind Bank Ltd. (earlier Ashok Leyland Finance Ltd.) sometime in March 1996 for availing a lease finance facility to the extent of Rs. 2 crores. MISL was engaged in the construction of a steel plant at Orissa and was also carrying on other businesses as part of the Mesco Group of Companies. The Petitioner No. 1 Mr. Jitender Kumar Singh was its Managing Director and the Petitioners No. 2 and Mrs. Reeta Singh and Mrs. Natasha Singh Sinha were the Directors. Mr. Deepak Singh, the Petitioner No. 4 was the Financial Controller of Petitioner No. 5 MISL. 4.2. The case of the prosecution is that M/s Kesoram Refractories of which the proprietor was Ms/ Kesoram Industries Ltd., located at Kulti Distt. Burdwan, West Bengal had been supplying refractory materials to MISL for their steel plants in Orissa from 6th March 1995 through various invoices. One such invoice dated 12.9.95 was issued to M/s Mideast Steels Ltd., “to Costs of Refractories” for a value of Rs.2,84,97,092/- under the signatures of Mr. K.R. Haldia, a former Vice President of M/s Kesoram Refractories. A receipt dated 18th December 1995 was issued by Mr. M.P.V. Raghvan, Resident Executive of M/s Kesoram Refractories of Calcutta for sale of Crl.M.C.No. 6389/2006 Page 7 of 38 refractory materials to MISL in the course of normal business transactions. 4.3 It is stated that the Petitioners and one other co-accused in criminal conspiracy forged the aforementioned invoice and receipt “by applying white fluid” and replacing the words “To Costs of Refractories” with “Air Pre-heaters” and the figure “Rs.2,84,79,092” with “Rs. 1,80,79,092”. The receipt dated 18th December 1995 for Rs. 21,76,965 was also forged by applying white fluid; the date was forged to read as „Jan 31,1996‟, and the words “Refractory materials” were forged to read as “Air Preheaters”. It is stated that on the strength of aforementioned forged documents submitted by MISL to M/s Ashok Leyland Finance Ltd, the latter was induced into sanctioning a lease finance in the sum of Rs. 1,90,18,501/- after adjusting an amount of Rs. 21,76,954. It is stated that M/s Ashok Leyland Finance Ltd. were made to part with the sum of Rs. 1,68,41,547/- in the name of M/s Kesoram Refractories by Cheque No. 805479 dated 29th March 1996 drawn on Hongkong and Shanghai Banking Corporation Ltd., New Delhi. 4.4 It is stated that this cheque was delivered to an employee of the Mesco Group of Companies and encashed on 4th April 1996 by crediting it to a fake current account of „M/s Kesoram Refractories‟ at Vijaya Bank, Defence Colony, showing its proprietor as Mr. Deepak Singh, accused No. 4 and by giving the fictitious address. The account opening form was filled in by accused No. 5, introduced by accused No. 6, a former General Manager (Finance) of MISL who also had an account in the same Bank. Thereafter on various dates the amounts were withdrawn transferring almost Rs. 76-77 lakhs through cash and demand drafts to the account of MISL or its Group Companies. Crl.M.C.No. 6389/2006 Page 8 of 38 4.5 After the charge sheet was filed and the FSL report confirmed the aforementioned forgery, a settlement was purportedly arrived at between MISL and Indus Ind Bank Ltd. by entering into a Memorandum of Understanding („MOU‟) whereby the settled amount of Rs. 92,00,000/- was paid by MISL to Indus Ind Bank Ltd. The MOU dated 11th February, 2006 and the receipt for the aforementioned payment have been annexed to the petition. An affidavit has been sworn to by the Authorised Representative of the Indus Ind Bank Ltd. in this Court confirming the payment having been made and stating that the Respondent No. 2 will have no objection to the quashing of the FIR. 4.6 It is pointed out that the repayment took place pursuant to a scheme of arrangement arrived at in the Company Court of this Court. It is submitted that as far as the present case is concerned, there was no complaint as such, since these facts came to be unearthed when the CBI undertook a general investigation into the affairs of the Mesco Group of Companies. A statement was made by Mr. Deepak Kochhar, the General Manager of Indus Ind Bank Ltd. before this Court on 10th October 2006 confirming that Respondent No. 2 did not wish to pursue the criminal proceedings any further. An affidavit of Mr.Kochhar dated 19th October 2006 has been filed to this effect: “That I state that all disputes and claims have been settled between the parties, as stated in detail in the accompanying petition, which may be kindly read as a part of this affidavit as the contents thereof have not been reproduced herein for the sake of brevity. That I have arrived at the settlement with the Petitioners after Crl.M.C.No. 6389/2006 Page 9 of 38 due deliberations and without any pressure or force on anyone and it is a fair, free and voluntary settlement.” Submissions of counsel 5.1 On behalf of the Petitioners arguments were advanced by Mr. R.N. Mittal, Mr. Kailash Vasudev and Mr. Rajiv Nayyar, learned Senior Advocates and Mr. Kawal Nain, learned Advocate. Arguments on behalf of the Respondents were advanced by Mr. Pawan Behl, the learned APP for the State and Mr. Ashish Kumar, the learned standing counsel for the CBI. 5.2 On behalf of the Petitioners it was submitted that the power of this Court under Section 482 CrPC was wide and could be exercised “to secure the ends of justice.” The wording of the provision indicated that it was not controlled by any other provision in the CrPC. While the existence of the power was not in doubt, its exercise would depend on the facts and circumstances of each case. Section 482 CrPC is an enabling provision the width of which ought not to be curtailed, but should be exercised on a case by case basis in the larger public interest. It is submitted that factors such as the likelihood of there being a conviction, or the opposition to the prayer for quashing of the proceedings by the prosecution were not really relevant. Also, the mere existence of an FSL report did not mean that there was sufficient evidence other than that of the complainant to prove the guilt of a person accused of offences under Sections 468 and 471 IPC. An FSL report was only a corroborative piece of evidence that was rebuttable. Even where the offence is of forgery, if the complainant or the prosecution witness deposes before the trial court that no such forgery was committed by the Crl.M.C.No. 6389/2006 Page 10 of 38 accused, then the mere existence of an FSL report may not result in a conviction. According to counsel for the petitioners these were the factors that weighed with this Court in Jugal Kishore Sharma while declining to quash the proceedings in that case and therefore that decision required to be reconsidered. 5.3 Counsel for the petitioners have referred to a number of judgments of the High Courts and the Supreme Court which will be discussed hereafter. While in all these cases, proceedings involving non-compoundable offences have been quashed, they can be broadly categorized into cases where the offences under Sections 467, 468 and 471 IPC are involved and those that involve other types of non-compoundable offences. According to the counsel for the petitioners, there are categories of cases where in the larger interest of the society, in order to ensure peace and harmony, powers under Section 482 CrPC will have been exercised for the ends of justice notwithstanding the fact that offence itself may be non-compoundable. These include family disputes and commercial transactions between private persons not involving any loss to any public finance institutions like banks. Here the courts have suggested adopting a „common sense‟ approach. Persisting with the proceedings in such cases will result in wastage of precious judicial time. However, it is submitted that offences having adverse impact on society like murder, rape, peddling of drugs, counterfeiting of currency and offences generally against public policy ought not to be quashed. It is urged that in each of the present cases, the facts are such that the power should be exercised by this Court to quash the criminal proceedings. Crl.M.C.No. 6389/2006 Page 11 of 38 5.4 On behalf of the Respondents, it is submitted that the powers under Section 482 CrPC are not unlimited and have to be sparingly used. There is a statutory scheme of compoundable and non-compoundable offences. The High Court should not by the device of Section 482 CrPC bring about indirectly a result which would convert the non-compoundable offences into compoundable ones. The offences of forgery and use of the forged documents are serious and Parliament has despite numerous amendments to the IPC persisted with their classification as non-compoundable offences. In the instant cases, the complainant may have settled the dispute with the accused. However, in each of the cases there was scientific evidence in the form of an FSL report which was sufficient to prove the guilt of the accused. In the circumstances, the power under Section 482 CrPC ought not to be used to quash the proceedings. The counsel for the prosecution have also referred to judgments of this Court, other High Courts and the Supreme Court in support of their plea. These will also be discussed hereafter. The scope of the powers of this Court under Section 482 CrPC 6.1 The scope of the powers of the High Court under Section 482 CrPC have been explained in several judgments of the Supreme Court and the High Courts. What can or cannot be quashed in proceedings under Section 482 CrPC is well settled now. A few illustrative decisions may be referred to. 6.2 In R.P. Kapur v. State of Punjab AIR 1960 SC 866 while explaining the scope and ambit of Section 561 A of the Code of Criminal Procedure 1898 [in pari materia with Section 482 CrPC] the Court said (AIRp.869): Crl.M.C.No. 6389/2006 Page 12 of 38 “It is well-established that the inherent jurisdiction of the High Court can be exercised to quash proceedings in a proper case either to prevent the abuse of the process of any court or otherwise to secure the ends of justice. Ordinarily criminal proceedings instituted against an accused person must be tried under the provisions of the Code, and the High Court would be reluctant to interfere with the said proceedings at an interlocutory stage.” 6.3 Later in State of Haryana v. Bhajan Lal 1992 Supp (1) SCC 335 the Supreme Court reiterated the settled position and gave illustrative examples of when the power under Section 482 could be exercised. It however struck a note of caution in the following words (SCC, p.379) “We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whim or caprice.” 6.4. Again in State v. Navjot Sandhu (2003) 6 SCC 641, while examining if a non-appealable order could be interfered with in exercise of the powers under Section 482 CrPC, the Court sought to emphasise the need for circumspection (SCC, at p.657): “Section 482 of the Criminal Procedure Code starts with the words “Nothing in this Code”. Thus the inherent jurisdiction of the High Court under Section 482 of the Criminal Procedure Code can be exercised even when there is a bar under Section 397 or some other provisions of the Criminal Procedure Code. However as is set out in Satya Narayan Sharma case [(2001) 8 SCC 607] this power cannot be Crl.M.C.No. 6389/2006 Page 13 of 38 exercised if there is a statutory bar in some other enactment. If the order assailed is purely of an interlocutory character, which could be corrected in exercise of revisional powers or appellate powers the High Court must refuse to exercise its inherent power. The inherent power is to be used only in cases where there is an abuse of the process of the court or where interference is absolutely necessary for securing the ends of justice. The inherent power must be exercised very sparingly as cases which require interference would be few and far between. The most common case where inherent jurisdiction is generally exercised is where criminal proceedings are required to be quashed because they are initiated illegally, vexatiously or without jurisdiction. Most of the cases set out hereinabove fall in this category. It must be remembered that the inherent power is not to be resorted to if there is a specific provision in the Code or any other enactment for redress of the grievance of the aggrieved party. This power should not be exercised against an express bar of law engrafted in any other provision of the Criminal Procedure Code. This power cannot be exercised as against an express bar in some other enactment.”(emphasis supplied) 6.5 There can be no doubt therefore that the scope of the power of the High Court under Section 482 CrPC is wide enough to pass orders which would subserve the ends of justice. However, it has been repeatedly urged that this power must be exercised sparingly. The question in each case where such powers are invoked is whether on the facts and in the circumstances of the case, such power such be exercised to quash the criminal proceedings. Quashing of criminal cases involving non-compoundable offences 7.1 In the present cases the common thread of the submission by the accused is that the complainants do not wish to pursue the criminal proceedings since Crl.M.C.No. 6389/2006 Page 14 of 38 they have settled their disputes with the accused. Therefore, according to them, there is no purpose in continuing the proceedings. The presumption underlying this submission is that the dispute is essentially only between the accused and the complainant. This presumption is questionable since in the criminal justice system as presently ordered, in cases involving cognizable offences like that of forgery and use of forged documents (which is common to all three cases here), there are essentially two parties to the case: the State and the accused. The complainant or the victim figures only as a witness. It is possible to argue that in the context of plea bargaining, recently introduced in the CrPC for a certain category of offences, a limited role is assigned to the complainant. Otherwise the role of the complainant is in triggering the prosecution and later appearing as its witness. Later, in the event the accused is convicted, the complainant may be compensated in terms of Section 357 CrPC. The State as a party to the dispute has in the present cases expressed its opposition to the prayer for quashing. Therefore the mere fact that the accused and the complainant have settled their disputes may not by itself be justification to say that the „parties‟ to the case have settled their disputes and therefore the criminal proceedings involving cognizable offences should be dropped. 7.2 The criminal law statutes assign to the State the role of a prosecuting agency. It is an instance of a power coupled with a responsibility. There are checks on that power and it is not as if it is open to the State to close a criminal case involving a cognizable offence that has commenced with the registration of an FIR, on its own at any stage. Such a decision is subject to judicial review as is evident from Section 173. Even where a closure