Courts Should Be Slow In Quashing Complaints Based On Settlement Between Parties When Offences Have Impact On Others– SC

The Bench of Justice S. Abdul Nazeer and Justice V. Ramasubramanian observed –

"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."

Three SLPs were preferred before the Supreme Court out of which two challenged an order passed by the Madras High Court quashing the criminal complaint under Section 482 CrPC related to the 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 SLP arose out of an order of dismissal passed by the High Court in a Miscellaneous Petition filed by a third party by the name Anti Corruption Movement, seeking recall of the order dated March 30, 2021, in the quash Petition.

In this case, a worker of the technical wing of the factory of the Metropolitan Transportation Corporation of Tamil Nadu had lodged an FIR against four persons namely e 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 for the offences under Sections 405, 420 and 506(1) IPC.

The Special Court for the trial of cases related to Members of Parliament and Members of the Legislative Assembly of Tamil Nadu took the final report.

Accused No. 3, then filed a Petition under Section 482 CrPC before the High Court for quashing of the criminal complaint.

Before the High Court, the de facto complainant filed an affidavit supporting the accused and praying for the 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.

The victims who originally claimed to have paid money for procuring employment also filed individual affidavits supporting the accused.

When the quash Petition came up for hearing, it was informed to the High Court 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.

Upon coming to know of the quashing of the complaint, a person who participated in the selection process for an appointment but did not get selected filed SLP before the Supreme Court contending that what happened was a cash­for­job scam and that he would have got selected if the scam had not taken place. The other two SLPs have been filed by the Anti-Corruption Movement.

Senior Counsels Siddharth Bhatnagar & Gopal Sankaranarayanan appeared for the Appellants while Counsel Prashant Bhushan Anti Corruption Movement, Senior Counsel Rakesh Dwivedi appeared for First Respondent, Senior Counsel C.A. Sundaram appeared for Accused 1 and Senior Counsel Mukul Rohatgi appeared for Shri Arulmani before the Apex Court.

• The three main issues dealt with by the Court were –

i) locus standi of the Appellants;

ii) the effect of compromise between the defacto complainant and 13 named victims on one hand and the four accused on the other; and

iii) non-inclusion in the charge sheet for offences under the Prevention of Corruption Act.

• Locus Standi

Dealing with the first issue, the Court held that the preliminary objection of the Respondents to the locus standi of the Appellants has to be rejected outright.

In this context, the Court asserted –

"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 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 Bench further observed, "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."

The Court thus held that the objection about the locus standi of the Appellants is without any merit as in any case, the Appellant in one of the appeals, is a victim, as he could not got selected on account of alleged corrupt practices. Therefore, the contention regarding the locus standi of the Appellants is to be rejected.

• The Effect of the compromise and the non­inclusion of the offences under the P.C. Act

The Court while referring to the relevant facts of the case and certain precedents noted that the Court has to go slow while exercising jurisdiction under Section 482 CrPC for quashing a criminal complaint on the basis of a settlement reached between the parties.

"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 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," the Bench noted.

The Court further also added 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.

In relation to the issue of non-inclusion of offence under the PC Act in the chargesheet, the Court observed that even a novice in criminal law would not have left the offences under the PC Act out of the final report.

The Court held that the attempt of the IO appears to be one "willing to strike but afraid to wound."

Thus, the Court held that the impugned order of the High Court is wholly unsustainable and therefore allowed the appeals and set aside the impugned order of the High Court.

The Court ordered the restoration of the Criminal Complaint and directed to the IO to proceed further in the case under Section 173(8) CrPC to file a further report.

Cause Title - P. Dharamaraj v. Shanmugam & Ors.

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