P. DHARAMARAJ versus SHANMUGAM & ORS.
[2022] 9 S.C.R. 972, Supreme Court of India, 2022
Outcome: Appeal(s) allowed (Granted)
Segment: Ratio
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   [2022] 9 S.C.R. 972
972
P. DHARAMARAJ
v.
SHANMUGAM & ORS.
(Criminal Appeal No. 1514 of 2022)
SEPTEMBER 08, 2022
[S.ABDUL NAZEER AND V. RAMASUBRAMANIAN, JJ.]
Code of Criminal Procedure, 1973: ss.320, 482 –
Compounding of Offence – Inherent powers of High Court – Exercise
of, permissibility – As per s.320(9), no offence can be compounded
except as provided in the said section – Compounding of offences
not so covered is not permissible – Non-Compoundable offences
are well within the jurisdiction of the High Court u/s.482 of the
Code and Art. 226 of the Constitution and can be quashed on the
basis of settlement but the court has to go slow while exercising
such jurisdiction when the offence has impact not only on the parties
inter se but on others also.
Prevention of Corruption Act, 1988: 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 – Such corrupt practices by public servant undoubtedly
attract the relevant provisions of PC Act.
Public Employment: Corruption in Public Employment – Locus
Standi in criminal proceedings, discussed.
Allowing the appeals, the Court
HELD: 1. It is clear from the counter affidavit of the
Investigation Officer filed in a connected writ petition,
that
persons who claim to have paid money, but did not receive orders
of appointment, were not the only victims. Persons who were
more meritorious, but who did not get selected, on account of
being edged out by candidates who paid money and got selected,
are also victims of the alleged corrupt practices, if those allegations
are eventually proved. The fact that candidates, who are selected
and appointed to posts in the Government/public corporations
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by adopting corrupt practices, are eventually called upon to
render public service. The quality of public service rendered by
such persons will be inversely proportionate to the corrupt
practices adopted by them. Therefore, the public, who are
recipients of these services, also become victims, though
indirectly, because the consequences of such appointments get
reflected sooner or later in the work performed by the appointees.
Hence, to say that the appellants have no locus standi, is to deny
the existence of what is obvious. [Para 16, 18][985-G-H; 986-A,
D-F]
Janata Dal v. H.S Chowdhary and Others (1991) 3 SCC
756 : [1991] 3 SCR 752 – held inapplicable.
P.S.R. Sadhanantham v. Arunachalam and Another
(1980) 3 SCC 141 : [1980] 2 SCR 873; Lalita Kumari
v. Government of Uttar Pradeshand Others (2014) 2
SCC 1 : [2014] 4 SCR 562 – referred to.
2. It is clear that the final report implicated the accused for
offences under Sections 406, 409, 420 and 506(1) IPC. None of
these offences except the one under Section 506 IPC is
compoundable under sub-Section (1) of Section 320, Cr.P.C. The
offences under Sections 406 and 420 are compoundable under
sub-Section (2) of Section 320. Sub-section (9) of Section 320
makes it clear that no offence shall be compounded except as
provided by the Section. Therefore, there was no way the offence
under Section 409 IPC, included in the final report, could have
been compounded. As a matter of fact, the High Court has
recognised in
the penultimate paragraph of the impugned order
that the final report includes offences which are not compoundable.
[Para 31, 32][993-C-E]
Gian Singh v. State of Punjab and another (2012) 10
SCC 303 : [2012] 8 SCR 753; State of Maharashtra
through Central Bureau of Investigation v. Vikram
Anantrai Doshi and Others (2014) 15 SCC 29 : [2014]
10 SCR 506 – relied on.
3. 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
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the offences are capable of having an impact not merely on the
complainant and the accused but also on others. As seen from
the final report filed in the instant case and the counter affidavit
filed by the I.O., persons who have adopted corrupt practices to
secure employment in the Transport Corporation fall under two
categories namely, (i) those who paid money and got orders of
appointment; and (ii) those who paid money but failed to secure
employment. If persons belonging to the 2nd category are allowed
to settle their dispute by taking refund of money, the same would
affix a seal of approval on the appointment of persons belonging
to the 1st category. Therefore, the High Court ought not to have
quashed the criminal proceedings on the basis of the compromise.
[Para 42, 43][999-F-H; 1000-A-B]
4. 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 the High Court was completely in error in quashing
the criminal complaint. [Para 44][1000-B-C]
Madan Mohan Abbot v. State of Punjab (2008) 4 SCC
582 : [2008] 5 SCR 526 – distinguished.
B.S. Joshi and Others v. State of Haryana and another
(2003) 4 SCC 675 : [2003] 2 SCR 1104; Nikhil
Merchant v. Central Bureau of
Investigation and Anr.
(2008) 9 SCC 677 : [2008] 12 SCR 236; Manoj Sharma
v. State and Others (2008) 16 SCC 1 : [2008] 14 SCR
539; Narinder Singh and Others v. State of Punjab and
Another (2014) 6 SCC 466 : [2014] 4 SCR 1012;
Central Bureau of Investigation v. A. Ravishankar
Prasad and Others (2009) 6 SCC 351 : [2009] 9 SCR
1025; Parbatbhai Aahir @ Parbatbhai Bhimsinhbhai
Karmur and Ors. v. State of Gujarat (2017) 9 SCC 641
: [2017] 10 SCR 12; The State of Madhya Pradesh v.
Dhruv Gurjar and Another (2019) 2 MLJ Crl 10;
Sanjay Tiwari v. State of Uttar Pradesh & Another 2020
SCC Online SC 1027 – referred to.
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Case Law Reference
[2017] 10 SCR 12
referred to
Para 5(x)
[1991] 3 SCR 752
held inapplicable
Para 21
[1980] 2 SCR 873
referred to
Para 24
[2014] 4 SCR 562
referred to
Para 26
[2012] 8 SCR 753
relied on
Para 33
[2003] 2 SCR 1104
referred to
Para 33
[2008] 12 SCR 236
referred to
Para 33
[2008] 14 SCR 539
referred to
Para 33
[2014] 4 SCR 1012
referred to
Para 38
[2014] 10 SCR 506
relied on
Para 39
[2008] 5 SCR 526
distinguished
Para 39
[2009] 9 SCR 1025
referred to
Para 39
CRIMINAL APPELLATE JURISDICTION :  Criminal Appeal
No.1514 of 2022.
From the Judgment and Order dated 30.07.2021of the High Court
of Judicature at Madras in CRL. O.P. No.13374 of 2021 and CRL. M.P.
No.7355 of 2021.
With
Criminal Appeal Nos.1515-1516 of 2022.
Siddharth Bhatnagar, A. N. Venugopala Gowda, Rakesh Dwivedi,
Manan Kumar Mishra, A. Mariarputham, Mukul Rohtagi, Prabhakaran,
Gopal Shankaranarayanan,  C.A. Sundaram, Ms. S. Prabakaran,  Sr.
Advs,. Rakesh Sharma R., Siddhartha Iyer, Ms. Pracheta Kar, Nadeem
A., Prashant Bhushan, Pranav Sachdeva, Jatin Bhardwaj, Ms. Neha
Rathi, Ms. Garima Jain, Ms. Aakriti Priya, Dr. Ram Sankar, Ms. Anjul
Dwivedi, Ms. Usha Prabhakaran, Ms. Sujatha Bagadhi, Arya Tripathy,
Tarunvir Singh, Ms. Theepa M., Ms. Divya, N. B. Kumar, M. Naveen
for M/S. Ram Sankar & Co, Dr. Joseph Aristotle S., Ms. Nupur Sharma,
Shobhit Dwivedi, Sanjeev Kumar Mahara, L.A. Gowthman, Ms. T.
Archana, Mohit Singh, Ms. Jhanvi Dubey, Ms. Rohini Musa, Zaffar Inayat
Gani, Yusuf, Advs.
for the appearing parties.
P. DHARAMARAJ v. SHANMUGAM & ORS.
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The Judgment of the Court was delivered by
V. RAMASUBRAMANIAN, J.
Permission to file Special Leave Petition(s) is granted in
D.No.11748 of 2022.
2. Leave granted.
3. There are three Special Leave Petitions on hand, two of which
challenge an Order passed by the High Court of Judicature at Madras in
a Criminal Original Petition filed under Section 482 of the Code of Criminal
Procedure, 1973 (for short “Cr.P.C”), quashing a criminal complaint in
CC No.25 of 2021 pending on the file of the Additional Special Court for
trial of cases related to Members of Parliament and Members of
Legislative Assembly of Tamil Nadu, on the ground that all the victims
have compromised their claims with the accused. The third Special Leave
Petition arises out of an order of dismissal passed by the High Court in a
Criminal Miscellaneous Petition filed by a third party by name Anti
Corruption Movement, seeking the recall of the order dated 30.07.2021
in the quash petition.
4. We have heard the learned senior counsel appearing for the
parties, which include the de facto complainant, persons named as
accused as well as third parties who claim to be interested/ affected,
albeit indirectly.
Background Facts
5. The brief facts sufficient for the disposal of these special leave
petitions are as follows:-
(i) On a complaint lodged by one K. Arulmani, working in the
technical wing of the factory of the Metropolitan Transport Corporation
of Tamil Nadu,
a FIR in Crime No. 344 of 2018 was registered on
13.08.2018. To avoid any confusion, the contents of the said complaint
are extracted as follows:
“I have been working as a Worker in the Technical Wing of
the Factory of Metropolitan Transport Corporation (MTC),
at Perambur. In the year 2014, an announcement in regard to
vacancies existing for the posts of Conductor and Driver in
the Transport Department. When I went to our Head Office
in Pallavan Salai in connection with work, one Mr. Rajkumar
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got introduced to me. He told me that he hails from
Pambaipadayur near Kumbakonam and he had got close
contact with the then Transport Minister, Mr.Senthil Balaji
and his younger brother Asok Kumar, through one Mr.
Shanmugam, who was the Personal Assistant to Mr. Senthil
Baljai and on paying money, jobs would certainly be got. My
friends by name Ambedkar, Senthil, Vijayakanth, Muthiah and
a few others told to get them jobs in the Transport Corporation
and they are ready to pay money for the same.
I told that money was to be given to through one Mr.Rajkumar
and should there surface any problem, we should be ready to
face the same. They also, agreeing to the same, paid me money,
in several installments during the period from 25.12.2014 to
04.01.2015, amounting to Rs.40,00,000/-. conveyed those
details to Mr. Rajkumar. In the first week of January 2015,
he and myself went to the house of Thiru Senthil Balaji at
R.A. Puram. At that time, Mr. Shanmugam, P.A. to Thiru Senthil
Balaji came towards me and received the sum of Rs.40,00,000/
-. We insisted on Thiru Shanmugam to see Thiru Asok Kumar
and Thiru Senthil Balaji in person. Thiru Asok Kumar, who
came there, when we gave the amount, had assured that all
who have paid amounts would issued with appointment orders.
He took us then itself to Thiru Senthil Balaji. He told in an
assuring voice that there is no need to worry and all those
who gave money would be definitely given appointment orders.
In the list of
names released by the Transport Corporation,
the names of persons for whom I gave money, have not
appeared in list of appointments. Hence, persons who gave
money to me started pestering me to return the money. When I
asked about it to Thiru Rajkumar, he told that in the next list,
their names would definitely come. But in the next list also,
names of none came. When I informed this to Thiru Rajkumar,
he said that he would enquire about the same to Asok Kumar
and Shanmugam and then he would say. But each time when
I asked Rajkumar, giving me the very same reply, asked me to
wait for some time. Persons who gave me money, started
threatening me. On their insistence, I gave them my cheques
from my savings bank account with Canara Bank, Ambatur
Branch, as security.
P. DHARAMARAJ v. SHANMUGAM & ORS.
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In pursuance of that, when I asked Rajkumar on 12.10.2015
for returning the money, he gave me two cheques drawn on
City Union Bank, Mount Road Branch, filling each cheque
with a sum of Rs.15,00,000/- He told me to deposit the said
cheques for collection at the time when he instructs, on his
being paid repaid the amounts by Thiru Senthil Balaji, Asok
Kumar and Shanmugam and the balance sum of Rs.10,00,000/
- would be given by him later on. When I went to City Union
Bank, Mount Road Branch and checked whether there are
sufficient amounts in their accounts, the Bank Officer said
that there were no sufficient funds. When I met Raj Kumar,
Shanmugam and Asok Kumar several times and requested for
returning the money, they asked me to wait for some time.
Persons who gave me money started pestering me very much
demanding money. In October 2016, when I met Messrs Senthil
Balaji, his younger brother Asok Kumar, and P.A Shanmugam
and Rajkumar, and entreated them to return the money to me,
after explaining my pathetic position, each one of them said
that they cannot return the amount, nothing can be done
against them and if I give them trouble demanding money,
they would liquidate me along with my family. I am living daily
in consternation along with my two children. As Thiru Senthil
Balaji was a Minister then and subsequently a MLA in the
ruling party, the situation posing threat to my life in the event
of my lodging a complaint
against him, was in existence. I
came forward to give the complaint now, since he is not holding
any post. I therefore humbly request you to kindly initiate
appropriate legal action against Messrs Senthil Balaji, Asok
Kumar, Shanmugam and Raj Kumar for their acts of fraud,
deception and also the threats unleashed against me and get
me back the sum of Rs.40,00,000/- payable to me by all of
them.”
(ii) The FIR was for alleged offences under Sections 405, 420
and 506(1) of the Indian Penal Code (for short “IPC”). Four persons by
name Shri Senthil Balaji (the then Transport Minister), Shri Ashok Kumar
(the brother of the Minister), Shri Shanmugam (Personal Assistant to
the Minister) and Shri Raj Kumar were cited as the accused in the FIR.
(iii) After investigation, the police filed a final report dated
12.04.2019 under Section 173(2)(i) of Cr.P.C., against all the four accused
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named in the First Information Report. The final report indicted the persons
named as accused, for alleged offences under Sections 406, 409, 420,
506(1) read with Section 34 IPC. The Special Court for trial of cases
related to Members of Parliament and Members of Legislative Assembly
of Tamil Nadu took the final report on file in CC No.25 of 2021.
(iv) Shri Shanmugam, named as accused No.3 then filed a criminal
original petition in Criminal O.P. No.13374 of 2021 on the file of the
High Court of Judicature at Madras under Section 482 of the Cr.P.C.
praying for quashing the criminal complaint CC No.25 of 2021.
(v) Before the High Court, the de facto complainant Shri K.
Arulmani filed an affidavit supporting the accused and praying for
quashing of the final report, on the ground that what the victims had with
the accused was only a money dispute and that the same had been
settled out of Court and that due to political rivalry between two groups,
his complaint got converted into a more serious one, by including
unwarranted statements which were not made by him.
(vi) The victims who originally claimed to have paid money for
procuring employment, also filed individual affidavits supporting the
accused.
(vii) A joint compromise memo dated 28.7.2021 containing the
signatures of 13 victims (who had paid money) on the one hand and
accused No.3 on the other hand was also filed before the High Court.
(viii) When the quash petition came up for hearing, the learned
Government Advocate appearing for the State made a submission that
the occurrence took place in the year 2014 and that the matter was
compromised between the accused and the victims in the year 2019
after the filing of the final report.
(ix) Interestingly, all the 13 victims also appeared before the learned
Judge of the High Court of Madras through Video Conference and
claimed that the issues have been resolved between them and the
accused.
(x) In the light of what had transpired after the filing of the final
report, the High Court passed an order dated 30.07.2021 quashing the
criminal complaint on the ground that “by passage of time, the parties
have decided to bury their hatchet and that no useful purpose would
be achieved by keeping the criminal case pending”. After noticing
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that the offences are not compoundable in nature, the High Court recorded
in one sentence that it had taken note of the guidelines issued by this
Court in Parbatbhai Aahir @ Parbatbhai Bhimsinhbhai Karmur and
Ors. vs. State of Gujarat1 and The State of Madhya Pradesh vs.
Dhruv Gurjar and Another2 and concluded that the complaint could be
quashed.
(xi) Upon coming to know of the quashing of the complaint, a
person by name Shri P. Dharamaraj, who participated in the process of
selection for appointment to the post of drivers/conductors in the
Metropolitan Transport Corporation, but who did not get selected, has
come up with one special leave petition contending that what happened
was a cash-for-job scam and that he would have got selected if the
scam had not taken place. Since he was not a party to the quash
proceedings before the High Court, his special leave petition was
accompanied by an application for leave to file Special Leave Petition.
The said application was allowed by this Court on 11.02.2022.
(xii) In the meantime, an organisation by name Anti Corruption
Movement, moved a Miscellaneous Petition before the High Court
seeking recall of the order dated 30.07.2021 on the ground that the
complaint involved allegations of corruption and abuse of official position
and that therefore the charge-sheet could not have been quashed on the
basis of a compromise between the parties. This application for recall
was
rejected by the High Court by an Order dated 14.03.2022, primarily
on the ground that this Court has already entertained a special leave
petition against the order sought to be recalled.
(xiii) Therefore, challenging the original order dated 30.07.2011
and the order dated 14.03.2022, the said Association, namely, Anti
Corruption Movement has come up with two special leave petitions.
6. Before we proceed further, it is necessary to take note of the
fact that there are a few interlocutory applications whose details are as
follows:
 IA No.49555/2022 filed by Anti Corruption Movement seeking
intervention in SLP (Crl.) No.1354 of 2022 filed by Dharamaraj;
 IA No.59173/2022 filed by the appellant in SLP (Crl.) No.1354
of 2022, for impleading the four persons named as accused.
1 (2017) 9 SCC 641
2 (2019) 2 MLJ Crl 10
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 IA No.59176/2022 filed by the appellant in SLP (Crl.) No.1354
of 2022 seeking the appointment of a Senior Advocate as Special
Public Prosecutor to conduct the trial.
 IA Nos.126399 and 126400 of 2022 filed by one Y. Balaji, who
did not get selected for the post of conductor/driver, seeking
impleadment and the appointment of an impartial Special Public
Prosecutor.
IA No.108569/2022 filed by one Shri S. Prithvirajan, who claims
to be a victim due to non-selection, for impleading himself as party
to the special leave petition.
Rival Contentions
7. Assailing the order of the High Court, it is contended by Shri
Siddharth Bhatnagar & Shri Gopal Sankaranarayanan, learned senior
counsel, that it is shocking to see that a matter of this nature, where the
bribe-giver and bribe-taker have come together, has been allowed to be
closed on the basis of a compromise memo; that the original complainant
Shri Arulmani was himself an employee of the Metropolitan Transport
Corporation and consequently a public servant; that the allegations
revolved around payment of money to the then Transport Minister through
his Personal Assistant for procuring appointment in the Metropolitan
Transport Corporation; and that, therefore, the High court committed a
serious illegality in quashing the complaint on the basis of a compromise,
despite the fact that even the offences indicated in the charge-sheet are
not compoundable. The learned senior counsel drew our attention to the
counter
affidavit filed by the Investigation Officer before the High Court
of Judicature at Madras in a writ petition in WP No.9061 of 2021 to
highlight that the allegations are of serious nature warranting a prosecution
under the Prevention of Corruption Act, 1988 (for short “P.C. Act”) and
argued that the shocking manner in which the High Court had handled it,
deserves special attention, if not special treatment.
8. Shri Prashant Bhushan, learned counsel appearing for Anti
Corruption Movement, which is the appellant in 2 of the appeals, contended
that the prosecution itself was guilty of not including in the charge-sheet
the offences under the P.C Act and that even the opportunity now
available to the Court under Section 216 of the Cr.P.C. is nipped in the
bud by the High Court allowing a compromise and quashing the complaint.
P. DHARAMARAJ v. SHANMUGAM & ORS.
[V. RAMASUBRAMANIAN, J.]
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9. Shri Rakesh Dwivedi, learned senior counsel appearing for the
first respondent in these special leave petitions and who was the petitioner
before the High Court in the quash petition, supported the order of the
High Court contending inter alia that the statements of the victims did
not make out a case for prosecution of the accused under the P.C Act;
that this is why the final report filed by the police did not implicate the
accused for any offence under the P.C Act; that the prosecution was
constrained to include Section 409 IPC only because of a statement as
though respondent No.1 was a Personal Assistant to the then Minister
(A-1); that however no such order of appointment of respondent No.1
as the Personal Assistant to the Minister was ever brought on record;
that in the Additional Affidavit filed by respondent No.1, he categorically
denied any association with the Minister as his Personal Assistant; that
an attempt was made earlier, by two other individuals who made similar
allegations against the then Transport Minister (present A-1), by filing
petitions in Criminal O.P. (MD) No.14067 and 14967 of 2016, seeking a
direction to the police to register a complaint and investigate into the
same; that during the pendency of those petitions, a criminal complaint
came to be registered in Crime No.15 of 2016; that one of the accused
(the Managing Director of the Transport Corporation) immediately filed
a quash
petition in Crl. O.P. (MD) No. 16023 of 2016 in which the
Transport Minister also got impleaded; that all those 3 criminal original
petitions were heard together by the High Court; that by a final Order
dated 19.09.2016 the petitions seeking a direction for registering a
complaint were rejected but the petition for quashing the complaint was
allowed; that the common order so passed by the High Court on
19.09.2016 in Criminal O.P. (MD) Nos. 14067, 14967 and 16023 of 2016
was challenged before this Court by a third party, by way of special
leave petitions; that by an order dated 05.01.2017 this Court refused to
grant leave to the third party to file special leave petitions; that the first
attempt so made by 2 individuals way back in 2016 to somehow implicate
the Minister thus failed; and that, therefore, the High Court was right in
this case, in putting to rest, the repeated attempts made by rivals in
politics to nix the accused.
10. Shri Mukul Rohtagi, learned senior counsel appearing for Shri
Arulmani, on whose complaint the FIR in Crime No.344 of 2018 was
registered on 13.08.2018, also supported the impugned order of the High
Court by contending inter alia that the allegations made in the complaint
did not make out a case for prosecution under the P.C Act; that the
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affidavits filed by all the so called victims before the High Court made it
crystal clear that it was a simple money dispute; that the allegations
complained of against the accused do not constitute offences against
the State but revolved around a private dispute with regard to payment
of money; that even in cases arising out of a prosecution under the P.C
Act, this Court held in Sanjay Tiwari vs. State of Uttar Pradesh &
Another.3 that a third party, who is neither a victim nor an accused,
cannot poke his nose into the criminal proceedings; that therefore, the
appellants in the above appeals have no locus standi to question the
order of the High Court; and that in the light of the contents of the
affidavit filed by the de facto complainant-Shri Arulmani before the
High Court, no conclusion other than the one reached by the High Court
is possible.
11. Shri C.A. Sundaram, learned senior counsel appearing for A-
1 contended inter alia, that the appellants who have approached this
Court have no locus standi to interfere with the proceedings initiated at
the behest of individual complainants; that the appellants have taken
cudgels on behalf of the political rivals, to undo a compromise reached
between a few individual complainants and persons who received money
from them; that the parameters laid down by this Court for closing
criminal cases on the basis of the compromise reached between parties
even in the case of non-compoundable offences, have been
followed
properly by the High Court in this case; and that since allegations of
corruption are not made out in this case, there is no element of public
interest involved. According to the learned senior counsel for A-1, the
appellants are relying heavily upon other cases filed under the P.C Act,
to upset a compromise reached in a case which does not concern
allegations under the P.C Act.
12. Shri Manan Kumar Mishra, learned Senior Counsel appearing
for respondent No.1 contended that the attempt of the appellants herein
is only to harass the Minister. According to the learned senior counsel,
there are two other pending complaints where allegations under the P.C
Act are included. The appellants have already impleaded themselves as
parties to those criminal complaints. Therefore, it is contended by Shri
Manan Kumar Mishra that the whole exercise is unwarranted and nothing
but witch hunting. Insofar as persons who claim to be victims due to
their non-selection for appointment to the post of conductors/drivers are
3 2020 SCC Online SC 1027
P. DHARAMARAJ v. SHANMUGAM & ORS.
[V. RAMASUBRAMANIAN, J.]
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concerned, it is contended by Shri Manan Kumar Mishra that they have
already filed writ petitions challenging their non-selection and hence their
remedy does not lie in the present proceedings.
13. Shri S. Prabhakaran, learned Senior Counsel contended that
the Minister concerned was a member of the splinter group which revolted
against those in office during the previous regime and that therefore the
present criminal complaints came to be registered at the behest of his
political opponents and that the same group is now targeting him as he
had again become a Minister in the present regime. Therefore, the learned
Senior Counsel submitted that this Court should see through this game
before being swayed by legal nuances.
Discussion and Analysis
14. In a nutshell, the rival contentions revolve around three important
issues. They are: (i) the locus standi of the appellants; (ii) the effect of
the compromise entered into between the de facto complainant and 13
named victims on the one hand and the four accused on the other hand;
and (iii) the non-inclusion in the charge-sheet of the offences under the
P.C. Act.
Locus standi
15. The preliminary objection of the respondents to the locus
standi of the appellants, has to be rejected outright, for several reasons.
The first is that in the counter affidavit filed by the Assistant Commissioner
of Police, Central Crime Branch, Job Racket Wing, Chennai, to the writ
petition WP
No.9061 of 2021, he has narrated certain sequence of events
which are as follows:
(i) Pursuant to an order passed by the High Court on 09.06.2014
in Writ Appeal No.1027 of 2013, directing all appointments in all
Government departments to be made only after due notification
to the public in Newspapers besides sponsorship from the
Employment Exchange, the Secretary to Government,
Employment and Training Department sent a communication to
the Managing Directors of all State Transport Undertakings on
30.07.2014 to follow the directions of the High Court in the matter
of appointments;
(ii) All the representatives of all the State Transport undertakings
resolved in a meeting held on 06.10.2014 to conduct future
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recruitments only after inviting applications from the open market
through newspaper advertisements apart from getting a list of
candidates sponsored by the Employment Exchange;
(iii) Thereafter, Thiru Senthil Balaji, the then Transport Minister
(A-1 in the present case) instructed the officers to collect details
regarding the day-to-day progress of the recruitment in all 8
Transport Corporations of the State;
(iv) These communications were directed to be transmitted to the
Minister’s office via e-mail and the mail box was operated and
maintained by Shri B. Shanmugam and not by any of the other
Personal Assistants of the Minister;
(v) The advertisements for recruitment were issued in newspapers
on 02.11.2014. Simultaneously, the lists of eligible candidates were
also invited from the concerned Employment Exchanges;
(vi) A total of 22602 applications were issued to the aspirants
during the period from 03.11.2014 to 20.11.2014;
(vii) These 22,602 applications related to the posts of Reserved
Crew Driver, Reserved Crew Conductor, Junior Tradesman, Junior
Engineer and Assistant Engineer;
(viii) The total number of filled in applications received from the
candidates was 16081;
(ix) But 12765 candidates attended the interview;
(x) Orders of appointment were issued to 2209 candidates from
the list given by the Minister;
(xi) There were 5542 other eligible candidates;
(xii) Many of the note files have been created without any date;
(xiii) Appointment orders were
issued to candidates whose names
were contained in the list sent by the Transport Minister through
his associate Shanmugam.
16. From what is extracted above from the counter affidavit of
the Investigation Officer filed in a connected writ petition, it is clear that
even according to the Investigating Officer, persons who claim to have
paid money, but did not receive orders of appointment, were not the
only victims. Persons who were more meritorious, but who did not
P. DHARAMARAJ v. SHANMUGAM & ORS.
[V. RAMASUBRAMANIAN, J.]
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get selected, on account of being edged out by candidates who paid
money and got selected, are also victims of the alleged corrupt
practices, if those allegations are eventually proved. Shri P.
Dharamaraj, who is the appellant in one of these appeals, claims to be a
candidate who participated in the selection, but could not make it. There
is also an intervenor by name Shri Prithivirajan who was the petitioner in
WP No.9061 of 2021, in which the counter affidavit referred to in the
preceding paragraph was filed by the Investigation Officer. This candidate
was not selected and according to him, he would have got selected, had
there been no corrupt practices on the part of the concerned.
17. Even the learned senior counsel appearing on behalf of the
respondents could not contest the position that a victim is entitled to file
an appeal against the impugned order of the High Court. If persons
who participated in the selection process but who could not make it
to the final list of selected candidates on account of the alleged
corrupt practices adopted by those in power are not victims, we do
not know who else could be a victim.
18. We cannot shy away from the fact that candidates, who are
selected and appointed to posts in the Government/public corporations
by adopting corrupt practices, are eventually called upon to render public
service. It is needless to say that the quality of public service rendered
by such persons
will be inversely proportionate to the corrupt practices
adopted by them. Therefore, the public, who are recipients of these
services, also become victims, though indirectly, because the
consequences of such appointments get reflected sooner or later in the
work performed by the appointees. Hence, to say that the appellants
have no locus standi, is to deny the existence of what is obvious.
19. The decision in Sanjay Tiwari (supra), relied upon by Shri
Mukul Rohtagi, learned senior Counsel for the de facto complainant, is
of no application to the case on hand. The appeal in Sanjay Tiwari’s
case arose out of an application for expediting the trial of a criminal case
pending on the file of the Special Judge,Gorakhpur, for alleged offences
under Sections 420, 467, 468, 471, 477A, 120B IPC and Section
13(1)(c)(d) read with Section 13(2) of P.C. Act. The said application for
expediting the trial was moved by a person who was neither the victim
nor the accused. Therefore, this Court found out that a person who has
nothing to do with the pending trial, cannot seek to expedite the trial,
Paragraphs 11 to 15 of the said decision on which heavy reliance is
placed read as follows:-
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“11. It is well settled that criminal trial where offences involved
are under the Prevention of Corruption Act have to be conducted
and concluded at the earliest since the offences under Prevention
of Corruption Act are offences which affect not only the accused
but the entire society and administration. It is also well settled that
the High Court in appropriate cases can very well under Section
482 Cr.P.C. or in any other proceeding can always direct trial
court to expedite the criminal trial and issue such order as may be
necessary. But the present is a case where proceeding initiated
by respondent No. 2 does not appear to be a bona fide proceeding.
Respondent No. 2 is in no way connected with initiation of criminal
proceeding against the appellant. Respondent No. 2 in his
application under Section 482 Cr. P. C in paragraph 6 has described
him as social activist and an Advocate. An application by a person
who is in no way connected with the criminal proceeding or criminal
trial under Section 482 Cr.P.C. cannot ordinarily be entertained
by the High Court. A criminal trial of an accused is conducted in
accordance with procedure as prescribed by the Criminal
Procedure Code. It is the obligation of the State and the prosecution
to ensure that all criminal trials are conducted expeditiously so
that justice can be delivered to the accused if found guilty. The
present is not a case where prosecution or even the employer of
the accused have filed an application
either before the trial court
or in any other court seeking direction as prayed by respondent
No. 2 in his application under Section 482 Cr.P.C.
12. With regard to locus of a third party to challenge the criminal
proceedings or to seek relief in respect of criminal proceedings of
accused had been dealt with by this Court Janata Dal v. H.S.
Chowdhary,(1991) 3 SCC 756. In the above case the CBI had
registered FIR under the IPC as well as under the Prevention of
Corruption Act, 1947 against 14 accused. On an application filed
by the CBI the learned trial Judge allowing the application to the
extent that request to conduct necessary investigation and to collect
necessary evidence which can be collected in Switzerland passed
order on 05.02.1990 which is to the following effect:
“In the result, the application of the CBI is allowed to
the extent that a request to conduct the necessary investigation
and to collect necessary evidence which can be collected in
P. DHARAMARAJ v. SHANMUGAM & ORS.
[V. RAMASUBRAMANIAN, J.]
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Switzerland and to the extent directed in this order shall be
made to the Competent Judicial Authorities of the
Confederation of Switzerland through filing of the requisite/
proper undertaking required by the Swiss law and assurance
for reciprocity.”
13. A criminal miscellaneous application was filed by Shri H.S.
Chowdhary seeking various prayers before the Special Judge
which petition was dismissed by the Special Judge. A criminal
Revision under Sections 397/482 Cr. P.C. was filed by H.S.
Chowdhary in the High Court to quash the order of the Special
Judge, which Revision was also dismissed by the High Court.
The appeals were filed in this Court by different parties challenging
the said order including H.S. Chowdhary. This court while
dismissing the appeals filed by the H.S. Chowdhary and others
made the following observations:
“26. Even if there are million question of law to be deeply
gone into and examined in the criminal case of this nature
registered against specified accused persons, it is for them
and them alone to raise all such questions and challenge the
proceedings initiated against them at the appropriate time before
the proper forum and not for third parties under the garb of
public interest litigants.
“27. We, in the above background of the case, after
bestowing our anxious and painstaking consideration and careful
thought to all aspects of the case and deeply examining the
rival contentions of the
parties both collectively and individually
give our conclusions as follows:
1. Mr. H.S. Chowdhary has no locus standi (a) to file the
petition under Article 51A as a public interest litigant praying
that no letter rogatory/request be issued at the request of
the CBI and he be permitted to join the inquiry before the
Special Court which on 5.2.90 directed issuance of letter
rogatory/request to the Competent Judicial Authorities of
the Confederation of Switzerland; (b) to invoke the revisional
jurisdiction of the High Court under Section 397 read with
401 of the CrPC challenging the correctness, legality or
propriety of the order dated 18.8.90 of the Special Judge;
and (c) to invoke the extraordinary jurisdiction of the High
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Court under Section 482 of the CrPC for quashing the First
Information Report dated 22.1.90 and all other proceedings
arsing therefrom on the plea of preventing the abuse of the
process of the Court.
28. In the result, we agree with the first part of the Order
dated 19.12.90 of Mr. Justice M.K Chawla holding that Mr. H.S.
Chowdhary and other intervening parties have no locus standi.
We, however, set aside the second part of the impugned order
whereby he has taken suo moto cognizance and issued show cause
notice to the State and CBI and accordingly the show cause notice
issued by him is quashed.”
14. This Court in the above case laid down that it is for the parties
in the criminal case to raise all the questions and challenge the
proceedings initiate against them at appropriate time before the
proper forum and not for third parties under the grab of Public
Interest Litigants.
15.  We are fully satisfied that respondent No. 2 has no locus in
the present case to file application under Section 482 Cr.P.C. asking
the Court to expedite the hearing in criminal trial. We have already
observed that all criminal trials where offences involved under
the prevention of Corruption Act have to be concluded at an early
date and normally no exception can be taken to the order of the
High Court directing the trial court to expedite the criminal trial
but in the present case the fact is that proceedings have been
initiated by respondent No. 2 who was not concerned with the
proceedings is any manner and the respondent No. 2 has no locus
to file application which was not clearly maintainable, we are of
the view that the impugned judgment of the High Court dated
09.09.2020 cannot be sustained.”
20. All that this Court pointed out in paragraph 11 of the decision
in Sanjay Tiwari (supra) was that an application for expediting the trial,
filed by a person who is in no way connected with the criminal proceeding
or criminal trial cannot “ordinarily be entertained by the High Court.”
21. The decision in Janata Dal vs. H.S Chowdhary and Others4
cited in paragraphs 12 and 13 of Sanjay Tiwari also has no application
to the case on hand. In Janata Dal (supra), which arose out of Bofors
4 (1991) 3 SCC 756
P. DHARAMARAJ v. SHANMUGAM & ORS.
[V. RAMASUBRAMANIAN, J.]
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case, the Special Court allowed an application of CBI to conduct
necessary investigation and to collect necessary evidence, in Switzerland.
A letter rogatory was also issued. At that stage an Advocate by name
H.S. Chowdhary filed a petition in public interest before the Special
Judge, invoking Article 51A of the Constitution. He sought several reliefs
including a direction not to issue letter rogatory and to allow him to join
the enquiry before the Special Court in the capacity of a public interest
litigant. The Special Court dismissed the petition filed by H.S. Chowdhary,
but took up for consideration suo moto, the question as to whether any
action under Section 340 of the Cr.PC. should be initiated or not. The
order of the Special Judge was challenged by H.S. Chowdhary by way
of revision before the High Court. The High Court held that H.S.
Chowdhary did not have any locus standi to maintain the petition. It
was the said order that was challenged by H.S. Chowdhary before this
Court. The order of the Special Judge taking suo moto action was also
challenged by political parties.
22. While disposing of those appeals, this Court held that a third
party has no locus standi in a matter of this nature. It must be noted
that the attempt made by H.S. Chowdhary was to upset the move initiated
by CBI to have a letter rogatory issued. He also wanted the FIR to be
quashed. It is in that context that this Court answered the
question of
locus standi as aforesaid.
23. Today, we have travelled a long way from the position of law
as it stood then. By Act 5 of 2009, the definition of the word “victim”
was inserted in Section 2(wa) of the Cr.P.C. It reads thus:
“victim” means a person who has suffered any loss or injury
caused by reason of the act or omission for which the accused
person has been charged and the expression “victim” includes his
or her guardian or legal heir.”
Simultaneously, a proviso was also inserted under Section 372 of
the Code providing a right of appeal to the victims.
24. In fact, long before the aforesaid amendment, the question of
locus standi was considered by this Court in P.S.R. Sadhanantham
vs. Arunachalam and Another5. The said case arose under peculiar
circumstances. A person who was convicted by the Sessions Court for
an offence under Section 302 and whose conviction was set aside by
5 (1980) 3 SCC 141
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the High Court, was convicted by this Court in a criminal appeal, filed
not by the State, but by the brother of the victim, though he was neither
the complainant nor the first informant. Thereafter, the accused filed a
writ petition under Article 32 contending that this Court had no power to
grant special leave to the brother of the victim to file an appeal against
the judgment of the High Court. While rejecting the contention, Hon’ble
Justice V.R. Krishna Iyer (as he then was) said in his inimitable style:
“……the bogey of busybodies blackmailing adversaries
through frivolous invocation of Article136 is chimerical.
Access to Justice to every bona fide seeker is a democratic
dimension of remedial jurisprudence even as public interest
litigation, class action, pro bono proceedings, etc. We cannot
dwell in the home of processual obsolescence when our
Constitution highlights social justice as a goal.”
Therefore, the objection about the locus standi of the appellants
is without any merit. In any case, the appellant in one of these appeals,
is a victim, as he could not get selected on account of the alleged corrupt
practices. Therefore, the contention regarding the locus standi of the
appellants is to be rejected.
25. In fact, it is surprising that the de facto complainant Shri
Arulmani has raised the question of locus standi. It is seen from his
complaint dated 13.08.2018 that he is working in the Technical Wing of
the factory of the Metropolitan Transport
Corporation. Therefore, he
should not have, in the first instance, become a party to the transactions
narrated in his complaint. After having been a party to the collection of
money for illegitimate purposes, even while working in the Transport
Corporation, the de facto complainant Shri Arulmani has committed the
second mistake of filing an affidavit supporting the compromise and
claiming therein as though he never made allegations against the Minister.
26. The stand taken by Arulmani before the High Court is
deplorable for one more reason. It is seen from an entry in the FIR out
of which the present case arises, that Arulmani filed a criminal original
petition in Crl. O.P.No. 24029 of 2017 on the file of the High Court,
complaining that he lodged a complaint against these 4 accused way
back on 21.09.2017 and that no action was taken. On 16.11.2017, the
High Court passed an order directing the Police to act in accordance
with the law laid down by this Court in Lalita Kumari vs. Government
P. DHARAMARAJ v. SHANMUGAM & ORS.
[V. RAMASUBRAMANIAN, J.]
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of Uttar Pradeshand Others6. It is only thereafter that the Police
registered the FIR in Crime No. 344 of 2018 on 13.08.2018. Therefore,
we would have hardly expected Shri Arulmani to say that the allegations
against the Minister were added up later by the Police and that it was a
simple money dispute. His present stand supporting the accused and
questioning the locus standi of the appellants, is, to say the least, shocking
and warrants something more than mere condemnation. We leave it at
that in the hope that the employer and the State would take notice of his
conduct. Suffice it to say for our present purpose that the objection
relating to the locus standi of the appellants is liable to be rejected.
Accordingly, it is rejected.
The Effect of the compromise and the non-inclusion of the
offences under the P.C. Act
27. The second issue arising for consideration is about the effect
of the compromise entered into between the de facto complainant and
13 named victims on the one hand and the 4 accused on the other hand.
28. As we have pointed out earlier, the FIR was registered only
for offences under Sections 405, 420 & 506(1) of the IPC. This was
despite the fact that the allegations contained in the complaint very clearly
pointed to payment of money for procuring employment in the Public
Transport Corporation. We have already extracted the entire complaint
in paragraph 5(i) above. It was stated in the said complaint
that in the
year 2014, an announcement for filling up vacant posts of Conductor
and Driver in the Transport Corporation was issued and that the
complainant got introduced to one Mr. Rajkumar. In fact there is also an
averment in the complaint that in the first week of January 2015, the
complainant went along with the said Rajkumar to the residence of Thiru
Senthil Balaji at R.A. Puram and that the amount of Rs.40 lakhs was
paid therein to Shri Shanmugam, P.A. to the Minister. The complainant
had gone on to state that upon his insistence, he was allowed to meet the
Minister and his brother and that the Minister and his brother assured
him that all those who gave money would definitely be given appointment
orders.
29. It must be recalled that though the FIR came to be registered
only on 13.08.2018, it was actually in pursuance of an order passed by
the High Court on 16.11.2017 in Crl. O.P. No. 24029 of 2017. Therefore,
6 (2014) 2 SCC 1
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we are surprised that the FIR did not include the offences under the
P.C. Act, 1988.
30. While filing a final report, the Investigation Officer seems to
have been little more gracious by including Section 409 IPC, since Sh.
Shanmugam, the person who received the money from the complainant
and the victims was stated to be a Personal Assistant to the Minister.
Additionally, the money was said to have been paid at the residence of
the Minister with his knowledge and the Minister is stated (in the FIR) to
have acknowledged that those who paid money will be rewarded with
the appointment orders.
31. Thus it is clear that the final report implicated the accused for
offences under Sections 406, 409, 420 and 506(1) IPC. None of these
offences except the one under Section 506 IPC is compoundable under
sub-Section (1) of Section 320, Cr.P.C. The offences under Sections
406 and 420 are compoundable under sub-Section (2) of Section 320.
32. Sub-section (9) of Section 320 makes it clear that no offence
shall be compounded except as provided by the Section. Therefore, there
was no way the offence under Section 409 IPC, included in the final
report, could have been compounded. As a matter of fact, the High
Court has recognised in the penultimate paragraph of the impugned order
that the final report includes offences which are not compoundable.
However, the High Court proceeded to quash the final report, purportedly
on the basis of the guidelines issued by this Court in
Parbatbhai Aahir
@ Parbathbhai (supra) and The State of Madhya Pradesh (supra).
Therefore we may now proceed to examine whether the High Court
was right in doing so.
33. In Gian Singh vs. State of Punjab and another7, a three
Member Bench of this Court was concerned with a reference made by
a two Member Bench, which doubted the correctness of the decisions
in B.S. Joshi and Others vs. State of Haryana and another8, Nikhil
Merchant vs. Central Bureau of Investigation and Anr.9 and Manoj
Sharma vs. State and Others10.
34. B.S. Joshi (supra) was a case where the dispute was a family
dispute and the offences complained were under Sections 498A, 323
and 406. Therefore, this Court appears to have taken a lenient view.
7 (2012) 10 SCC 303
8 (2003) 4 SCC 675
9 (2008) 9 SCC 677
10 (2008) 16 SCC 1
P. DHARAMARAJ v. SHANMUGAM & ORS.
[V. RAMASUBRAMANIAN, J.]
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35. Nikhil Merchant (supra) is a case where a borrower
committed default in repayment of the loans taken from Andhra Bank.
Apart from filing a suit for recovery of money, the Bank also filed a
criminal complaint both against the officers of the company and against
the officers of the bank, not only for offences under the IPC but also for
offences under the PC Act. After the suit was compromised, the
Managing Director of the borrower Company sought to get discharged
from the complaint. The special Judge (CBI) rejected the application for
discharge. The High Court confirmed the same. But this Court reversed
the decision of the High Court, solely on the ground that the amount
payable to the Bank stood settled. However, it must be noticed that in
Nikhil Merchant, the operative portion of the order of this Court merely
stated that the criminal proceedings were quashed against the appellant
therein. There is no indication therein that the complaint against the
officers for offences under the P.C. Act were also quashed.
36. Manoj Sharma (supra) was a case where the offences
complained were under Sections 420, 468, 471, 34 read with Section
120B IPC. Though this Court quashed the criminal complaint in the said
case also, one of the learned Judges constituting the Bench (Markandey
Katju, J.) reserved the question regarding the power of the High Court
to quash non-compoundable cases under Section 482 Cr.P.C or Article
226 of
the Constitution, on the basis of the compromise reached between
the parties, to be decided by a larger bench at an appropriate time.
Paragraph 27 of the decision in Manoj Sharma which contains the
opinion of Markandey Katju, J., reads as follows:
“27. There can be no doubt that a case under Section 302 IPC or
other serious offences like those under Sections 395, 307 or 304-
B cannot be compounded and hence proceedings in those
provisions cannot be quashed by the High Court in exercise of its
power under Section 482 Cr.P.C. or in writ jurisdiction on the basis
of compromise. However, in some other cases, (like those akin to
a civil nature) the proceedings can be quashed by the High Court
if the parties have come to an amicable settlement even though
the provisions are not compoundable. Where a line is to be drawn
will have to be decided in some later decisions of this Court,
preferably by a larger bench (so as to make it more authoritative).
Some guidelines will have to be evolved in this connection and the
matter cannot be left at the sole unguided discretion of Judges,
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otherwise there may be conflicting decisions and judicial anarchy.
A judicial discretion has to be exercised on some objective guiding
principles and criteria, and not on the whims and fancies of
individual Judges. Discretion, after all, cannot be the Chancellor’s
foot.”
37. Therefore in Gian Singh (supra), the three Member Bench
of this Court took up for consideration the question regarding the
difference between the power of the court to quash a complaint/charge-
sheet and the power to compound an offence. After analysing the statutory
provisions and the various decisions of this Court, this Court summarised
the position, in paragraph 61 of its decision in Gian Singh, as follows:
“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 F.I.R may
be exercised where the offender and 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 serious impact on society. Similarly, any
compromise between the victim and offender in relation to the
offences under special statutes like 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 pre-dominatingly civil flavour
stand on a different footing for the purposes of quashing, particularly
the offences arising from commercial, financial, mercantile, civil,
P. DHARAMARAJ v. SHANMUGAM & ORS.
[V. RAMASUBRAMANIAN, J.]
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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. In this category of cases, the
High Court may quash criminal proceedings if in its view, because
of the compromise between the offender and 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 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 affirmative, the High Court shall be well within its
jurisdiction to quash the criminal proceeding.”
38. After Gian Singh, this Court was concerned in Narinder
Singh and Others vs. State of Punjab and Another11 with the perennial
problem of courts swinging from one extreme to the other in respect of
cases
involving offences under Section 307 IPC. A via media was struck
by this Court in the said decision, by holding that it would be open to the
High Court to go into the nature of the injury sustained, nature of the
weapons used etc. This was after holding that an offence under Section
307 would fall in the category of heinous and serious offence.
39. Then came the decision in State of Maharashtra through
Central Bureau of Investigation vs. Vikram Anantrai Doshi and
Others12, where this Court was concerned with an order of the High
Court of Bombay quashing the criminal proceedings for offences
punishable under Sections 406, 420, 467, 468 & 471 read with Section
120B IPC. It was a case involving credit facilities provided by the Banks
and the failure of the borrowers to repay the loan. After the debts due to
the bank were assigned in favour of an Asset Reconstruction Company,
a settlement was reached and the borrower took a “No Due Certificate”.
11 (2014) 6 SCC 466
12 (2014) 15 SCC 29
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Therefore, relying upon the decisions of this Court in Madan Mohan
Abbot vs. State of Punjab13 and Central Bureau of Investigation vs.
A. Ravishankar Prasad and Others14, the High Court of Bombay
quashed the proceedings on the ground that no useful purpose would be
served by allowing the matter to proceed for trial. It is interesting to note
that Madan Mohan (supra), as seen from the last paragraph of the
order, was passed in the peculiar facts of the case. But in so far as A.
Ravishankar Prasad (supra) is concerned, the High Court quashed
the proceedings on the basis of a settlement reached between the
borrowers and the Indian Bank. But the decision of the High Court was
over turned, by a two Judge Bench of this Court even after taking note
of B.S.Joshi and Nikhil Merchant. In paragraph 46 of its decision, this
Court said in A. Ravishankar Prasad :-
“46. Before parting with the case we would like to observe that
mere repayment of loan under a settlement cannot exempt the
accused from the criminal proceeding in the facts of this case.”
40. Therefore, in Vikram Anantrai Doshi (supra), this Court took
note of the aforesaid decisions and held in paragraph 26 as follows:-
“26. We are in respectful agreement with the aforesaid view. Be
it stated, that availing of money from a nationalised 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
charge-sheet 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 kinds of benefits it cannot
be regarded as a case having overwhelmingly and predominatingly
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,
13 (2008) 4 SCC 582
14 (2009) 6 SCC 351
P. DHARAMARAJ v. SHANMUGAM & ORS.
[V. RAMASUBRAMANIAN, J.]
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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 dues certificate” and enjoy the benefit of quashing
of the criminal proceeding 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 kinds 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 that 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 scrutinise
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 [Vikram Anantrai
Doshi v. State of Maharashtra, Criminal Application No. 2239
of 2009, order dated 22-4-2010 (Bom)] of the High Court is wholly
indefensible.
41. In Parbatbhai Aahir (supra), referred to by the High Court in
the impugned order, a 3 member Bench of this Court again summarised
the broad principles on this question in paragraph 16. Paragraph 16.6
and 16.8 to 16.10 of the decision read as follows:-
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“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.
16.8. 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. 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.”
42. 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.
43. As seen from the final report filed in this case and the counter
affidavit filed by the I.O., persons who have adopted corrupt practices
to secure employment in the Transport Corporation fall under two
categories namely, (i) those who paid money and got orders of
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appointment; and (ii) those who paid money but failed to secure
employment. If persons belonging to the 2nd category are allowed to
settle their dispute by taking refund of money, the same would affix a
seal of approval on the appointment of persons belonging to the 1st
category. Therefore, the High Court ought not to have quashed the criminal
proceedings on the basis of the compromise.
44. 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.
45. Coming to the next issue regarding the non-inclusion in the
final report, of the offences under the P.C. Act, the less said the better.
In the counter affidavit filed by the I.O. to the writ petition W.P.No.9061
of 2021, filed by the non-selected candidates, the modus operandi
adopted by the accused has been given in detail. We have provided a
gist of the contents of such counter affidavit elsewhere in this judgment.
We are constrained to say that even a novice in criminal law would not
have left the offences under the P.C. Act, out of the final report. The
attempt of the I.O. appears to be of one,
“willing to strike but afraid to
wound” (the opposite of what Alexander Pope wrote in “Epistle to
Dr.Arbuthnot”)15.
46. An argument was sought to be advanced as though the Minister
was not involved and that Shri Shanmugam who is allegedly involved,
was not the P.A. to the Minister. But this argument flies in the face of
the contents of paragraph 11 of the counter affidavit filed by the I.O. in
W.P. No.9061 of 2021 which reads as follows:-
“11. It is respectfully submitted that, after the Notification process
Tr.V.Senthil Balaji, then Minister for Transport instructed
Tr.Sarangan, Special Officer, Tr.K.T.Govindarajan, Senior Deputy
Manager, Administration, Tr. V.Venkadarajan, who were serving
in the Chairman office, to collect the details regarding the day-to-
day progress of the recruitment such as, sale of application, receipt
15 Damn with faint praise, assent with civil leer, And without sneering, teach the rest to
sneer,  Willing to wound and yet afraid to strike, just hint a fault, and hesitate
dislike.
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of filled application, interviews conducted, etc… Accordingly, they
have collected the details from all the eight Transport Corporations
through their email address ‘chotpt@gmail.com’ and on the same
day, they transmitted it to the Minister’s office email id
‘ministertransport@yahoo.com’. The e-mail communications made
between Chairman office and Transport Corporations on
03.11.2014, 04.11.2014 and 05.12.2014 from the office of the
Chairman, Transport Corporations, Chennai. Many a time, the
data had also been sent to Tr.M. Vetrichelvan, Public Relations
Officer (PRO) of MTC to his email address ‘vetri67@gmailcom’,
as he was very close to the then Transport Minister Tr.V. Senthil
Balaji. It is pertinent to mention here that the e-mail named
‘ministertransport@yahoo.com’ had been maintained only by
Tr.B.Shanmugam and not by any of the Personal Assistants of
the Minister Tr.V.Senthil Balaji.”
Therefore, the argument that there is nothing on record to show
that Shri Shanmugam was appointed as P.A. to the Minister, is to
be stated only to be rejected.
47. Yet another contention raised on behalf of the respondents is
that there are two other cases where allegations of corruption are made
and that CC No.25 of 2021 with which we are concerned now, did not
involve allegations of corruption. But the said contention is abhorring,
for the simple reason that all criminal complaints arose out of the very
same cash-for-job scam. We are informed that the proceedings in
respect
of those two cases have also been stayed by the High Court. We do not
know how the High Court could have stayed prosecution of persons
under the P.C. Act, especially in matters of this nature.
48. As a matter of fact, the State ought to have undertaken a
comprehensive investigation into the entire scam, without allowing the
accused to fish out one case as if it was a private money dispute.
49. The reliance placed by the respondents on an order passed by
the Madurai Bench of the Madras High Court on an earlier occasion in
Criminal O.P.(MD)Nos.14067, 140967, 16023 of 2016, will not have
bearing upon the present complaints. In fact, the SLP filed by a 3rd party
against the order passed in those petitions was dismissed by this Court
on 05.01.2017 even at the stage of permission to file SLP. Therefore the
respondents cannot rely upon the same as if it constitutes a precedent.
P. DHARAMARAJ v. SHANMUGAM & ORS.
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Conclusion
50. In the light of what is stated above, the impugned order of the
High Court is wholly unsustainable. Therefore the appeals are allowed
and the impugned order of the High Court is set aside. The criminal
complaint is restored to file. The I.O. shall now proceed under Section
173(8) of the Code to file a further report, based on the observations
made in the preceding paragraphs. Additionally/alternatively, the Special
Court before which the CC is pending, shall exercise power under Section
216 of the Cr.P.C., if there is any reluctance on the part of the State/I.O.
If two other cases where offences under the P.C. Act are included, are
under the orders of stay passed by the High Court, the State should take
appropriate steps to have the stay vacated. The Court dealing with those
two cases should also keep in mind the disastrous effect of putting on
hold the prosecution under the P.C. Act.
51. At present we are not passing any orders on the prayer made
by the intervenors either to constitute a Special Investigation Team or to
appoint Special Public Prosecutor, since we do hope that based on the
observations made above, the State itself may do the needful. We also
make it clear that at the time of trial, the Special Court may not be
swayed by the observations contained herein, but proceed on the merits
of the case and the law on the points.
The appeals are allowed. I.As stand closed.
Devika Gujral
Appeals
allowed.
(Assisted by : Mahendra Yadav, LCRA)