Rama Saraf And Anr. vs State And Ors.
2007 Latest Caselaw 577 Del

JUDGMENT

S. Ravindra Bhat, J.

1. The petitioners seek an appropriate order under Section 482. Though the claim is formulated in such a manner as to indicate that it is a review of the previous order dated 06.01.2005 in respect of FIR No. 174/98, made by this Court, yet counsel contends that the relief claimed is not review but something more fundamental as according to the petitioner the order quashing the FIR was obtained by misrepresentation and suppressing material facts.

2. The facts for deciding this case are briefly as follows. The respondents 3 to 5 were named in a first information report for commission of offences under Sections 406/420 IPC. The allegation was that they, along with the other accused had obtained amounts from Chaman Lal, after inducing him, with a representation that they would yield over 3% per month return. It was alleged in the FIR, that the informant/complainant had, on the basis of the said representation deposited Rs. 1 lakh and that later upon being asked, the amounts were not refunded.

3. The informant/complainant who initiated the FIR apparently entered into compromise and settled his disputes with the company in question, i.e. with M/s. Fintra Systems Limited which was also the accused in the proceedings; Sunil Shakt respondent No. 4 in these proceedings was a party to the said compromise deed. Based on the said document, the complainant Chaman Lal moved a proceeding under Section 482 being Crl. M.No. 2922/2004. In that petition the respondents No. 3 to 5, were imp leaded as respondents No. 2 to 4. The prayer was that since the parties had settled the dispute, the FIR and all further proceedings ought to be quashed.

4. Notice was issued in the said petition and thereafter on several dates the State was represented. However, on 16.12.2005 the State was unrepresented; the counsel for the complainant and the respodnents No. 2 to 4 (respondents No. 3 to 5 here) were present. The matter was re-notified on 06.01.2005. On the said date the following order was issued:

06.01.2005

Present : Mr. K.B. Andley, Sr. Advocate with Mr. M.L. Yadav for the petitioner.

Mr. R.K. Anand with Mr. S.B. Sharma for the Respondents 2 -4

Crl. M.C. 2922/2004

This is a petition under Section 482 of the Cr. P.C., 1973 for quashing of the FIR No. 174/98 registered under Section 406, 420 IPC at police station Greater Kailash, New Delhi and the proceedings emanating there from. It is stated by the counsel for the petitioner that the matter has been settled entirely and entire amount has been received by the complainant/petitioner. Mr. R.K. Anand, Sr. Advocate who appears for the accused 2 to 4 states the same.

In view of these statements nothing further is required to be done except that the said FIR and proceedings emanating there from be quashed. Ordered accordingly.

5. The present petitioner alleges that the court was kept in dark about the true facts i.e. the respondents No. 3 to 5 had induced not only the complainant Chaman Lal but several others, to part with huge sums of money aggregating to several crores of rupees. The petitioner claims to be one such investor who had paid Rs. 2.4 lakhs but was unable to get back the amounts. Learned Counsel submits that the order of the court dated 06.01.2005, cannot be construed as a blanket one and the FIR should be deemed to be alive in so far as the investigation into the incidents alleged by other investors are concerned.

6. Counsel relied on the principle that fraud unravels all including judicial orders and that those who are active participants in misrepresentation or suppression of facts cannot be allowed to benefit on account of their actions.

7. Learned Counsel relied upon the judgments of the Supreme Court reported as Union Public Service Commission v. S. Papaiah and Ors. and Hemant Dhasmana v. Central Bureau of Investigation and Anr. v. CBI, . In those cases the court had held that even after investigation if the agency or the police indicated closure, and the court was either inclined to accept the same or to proceed further under Section 173(8) it was obliged to issue notice to the informant, particularly wherever the criminal law was set into motion at the behest of the complainant. The court had relied upon Bhagwant Singh v. Commr. of Police . The Supreme Court in Hemant Dhasmana's case (supra), summarised the ratio in Bhagwant's case;

In Bhagwant Singh v. Commr. of Police a three- Judge Bench of this Court has said through in a slightly differnet context, that three options are open to the court on receipt of a report under Section 173(2) of the Code, when such report states that no offence has been committed by the persons accused in the complaint. They are : (SCC p. 542, para 4)

(1) The Court may accept the report and drop the proceedings; or

(2) The Court may disagree with the report and take cognizance of the offence and issue process if it takes the view that there is sufficient ground for proceedings further ; or

(3) The court may direct further investigation to the made by the police.

Counsel for the State supported the petition, and submitted that all the facts were not brought to notice of the court. He stated that on the crucial date, the State was unrepresented, despite the case being marked to a counsel. The matter was subsequently investigated, and the concerned counsel had been removed from the State's panel.

8. Counsel for the respondent Nos 3 to 5 resisted the proceeding and submitted that once invoked, powers under Section 482 cannot be used as for reviewing previous orders. He relied upon Section 362 of the Code of Criminal Procedure in support of the submission. Learned Counsel stated that the complainant Chaman Lal had settled his disputes and therefore the court upon being satisfied that no useful purpose would be served, exercised its inherent jurisdiction and quashed the proceedings. In these circumstances there was nothing reprehensible or palpably unjust, in the exercise of such power and that the order dated 06.01.2005 could not be reviewed, as no such power exists.

9. Counsel urged that this Court would not be justified in exercising jurisdiction, or even entertaining this petition. He submitted that having considered the merits of the previous petition, and chosen to quash the FIR, nothing survived, and the court could not have reviewed its order, as it were.

10. It was submitted that the complainant informant who set the criminal justice system into motion, was satisfied with the terms of the settlement, and had approached this Court, by filing the previous petition. The court had issued notice to the respondents, including the accused respondent No. 2, as well as the prosecution. Whatever was required to be disclosed by the parties, such as the particulars of the first information report, the details of the compromise arrived at, etc were revealed. The court, after taking into consideration all those, accepted the claim, and quashed the FIR. None of the parties could be faulted, as everything in their knowledge was notified to the court. If the state chose not to present some facts to the court, the informant and the respondent 3-5 could not be penalized for such omission.

11. Learned Counsel submitted, by placing reliance on the judgment of the Supreme Court reported as Vikramjit Singh v. State of M.P. 1992 Supp (3) SCC 62 and submitted that no bench of the High Court can comment on the functioning of a co-ordinate bench of the same court, much less sit in judgment as an appellate court over its decision.

12. The files of the disposed off Cr. MC No. 2922/2004 were called for. They show that the petitioner in those proceedings was one Chaman Lal; he alleged that he had settled his disputes with the accused amicably. He sought for quashing of the proceedings. The petition was accompanied only by a copy of the charge sheet, and a copy of the compromise deed dated 8th October, 2002. Interestingly, the charge sheet specifically mentioned names of other complainants, vis Upasana Gupta, Vimla Soni, Rama Saraf, SL Haldar and Asha Kapil, and statements under Section 161. Neither were those enclosures, viz complaints, nor the statements, produced in the previous case; they were also not disclosed in the body of the petition. The compromise agreement only dealt with the amount repaid to Chaman Lal, by the accused.

13. The certified copy of the orders of the trial court and the charge sheet, in the FIR, with enclosures, produced and taken on record during the hearing, disclose that order on charge had not been concluded, and some accused had been applying to go abroad. In the meanwhile, the previous Petition under Section 482, by the informant was filed; it was premised upon the compromise and settlement of disputes between him and the accused.

14. The above factual narrative shows that Chaman Lal had complained to the police, against the accused, alleging that they had duped him. During the investigation, it was revealed that others were allegedly cheated, like Chaman Lal. A charge sheet was filed in court; arguments were heard from time to time, on the order on charge. In the meanwhile, on the basis of a compromise entered into between Chaman Lal, and the accused, a petition under Section 482 Cr. PC was filed. That petition did not disclose that others, who had been allegedly cheated, or had grievances against the accused, had compromised. The state was issued with notice; it entered appearance. Unfortunately, on the date the matter was heard, the state was unrepresented. Counsel for Chaman Lal (who had no interest in the criminal proceeding) and for the accused, stated that the matter was compromsied; the court acted on the submission, and issued a quashing order, in respect of the FIR.

15. The main argument put forward to persuade this Court to refrain exercising power in this petition is that all materials necessary for deciding the matter were before the court; the court did quash the FIR, and that the principle of finality, which finds statutory shape in Section 362, ought to restrain this Court from acting on this petiton.

16. The order of the court dated 6-1-2005 was premised upon the agreement between Chaman Lal and the accused. The court, as is apparent from the order itself, went by the statements on behalf of the parties, that the disputes relating to offences under Sections 406 and 420 were settled, and the "entire amount" was received by the petitioner/ complainant, Chaman Lal. In one sense, that statement was correct; Chaman Lal's claim was satisfied. Yet, what was not brought to the notice of the court was that apart from Chaman Lal, there were others, who claimed to have been duped by the accused; their complaints and statements were part of the charge sheet.

17. In the decision reported as Janta Dal v. H.S. Chowdhary AIR 1993 SC 892, the Supreme Court, while noticing its previous decision regarding its powers to quash criminal proceedings, under Section 482, held that the jurisdiction cannot be invoked by anyone having no locus standi. The court cautioned that such power should be used:

ex debito justitiae to do real and substantial justice for the administration which alone the Courts exist. The powers possessed by the High Court under Section 482 of the Code are very wide and the very plenitude of the power requires great caution in its exercise. Courts must be careful to see that its decision in exercise of this power is based on sound principles.

18. In a similar view, it has been held, in the recent decision reported as Dinesh Dutt Joshi v. State of Rajasthan that:

6. Section 482 of the Code of Criminal Procedure confers upon the High Court inherent powers to make such orders as may be necessary to give effect to any order under the Code, or to prevent abuse of the process of any court or otherwise to secure the ends of justice. It is a well-established principle of law that every court has inherent power to act ex debito justitiae to do that real and substantial justice for the administration of which alone it exists or to prevent abuse of the process of the court. The principle embodied in the section is based upon the maxim: quando lex aliquid alicui concedit, concedere videtur et id sine quo res ipsae esse non potest i.e. when the law gives anything to anyone, it gives also all those things without which the thing itself would be unavailable. The section does not confer any new power, but only declares that the High Court possesses inherent powers for the purposes specified in the section. As lacunae are sometimes found in procedural law, the section has been embodied to cover such lacunae wherever they are discovered. The use of extraordinary powers conferred upon the High Court under this section are however required to be reserved, as far as possible, for extraordinary cases.

19. Again, in Popular Muthiah v. State , it was held that:

30. In respect of the incidental or supplemental power, evidently, the High Court can exercise its inherent jurisdiction irrespective of the nature of the proceedings. It is not trammelled by procedural restrictions in that:

(i) Power can be exercised suo motu in the interest of justice. If such a power is not conceded, it may even lead to injustice to an accused.

(ii) Such a power can be exercised concurrently with the appellate or revisional jurisdiction and no formal application is required to be filed therefore.

(iii) It is, however, beyond any doubt that the power under Section 482 of the Code of Criminal Procedure is not unlimited. It can inter alia be exercised where the Code is silent, where the power of the court is not treated as exhaustive, or there is a specific provision in the Code; or the statute does not fall within the purview of the Code because it involves application of a special law. It acts ex debito justitiae. It can, thus, do real and substantial justice for which alone it exists.

20. It is therefore apparent that one of the main reasons, the raison d'etre of the power to invoke inherent jurisdiction, and quash criminal proceeding, is interests of justice (ex debito justitiae ) and to prevent abuse of process of court. What then is the situation when the facts indicate that the court was persuaded to exercise its powers without full disclosure of all materials, and at the behest of a party who had no real grievance, in the continuance of the proceedings. In this context, it would be relevant to notice the settled position that the State, through the prosecutor alone has locus standi in criminal proceedings initiated upon information. If that were to be kept in mind, upon the compromise which ended the inter se disputes between Chaman Lal and the accused, in this case, there ceased to be a lis, and the latter could not have been considered a "person aggrieved" or a person interested in the continuance or otherwise of the criminal proceedings.

21. One of the salutory principles of the rule of law is that fraud or suppression of material facts, undermines a judicial order In V. Narasimha Raju v. V. Gurumurthy Raju the first respondent, who filed a criminal complaint in the Magistrate's court against the appellant and his other partners alleging of commission of offences under Sections 420, 465, 468 and 477 read with Sections 107, 120B of the Indian Penal Code entered into an agreement with the accused persons under which the dispute between the parties was to be referred to arbitration on the first respondent agreeing to withdraw his criminal complaint. Pursuant to that agreement the complaint was got dismissed, on the first respondent abstaining from adducing evidence. The arbitration proceedings, the consideration for which was the withdrawal of the complaint, culminated in an award and the first respondent applied to have the award made a rule of the court. The appellant turned around and challenged the award on the ground that the consideration for the arbitration agreement was itself unlawful as it was one not to prosecute a non-compoundable offence. This Court held that the arbitration agreement was void under Section 23 of the Indian Contract Act as its consideration was opposed to public policy. The award was held void. In Ouseph Poulo v. Catholic Union Bank Ltd. , it was held that:

With regard to non-compoundable offences however, the position is clear that no court of law can allow a private party to take the administration of law in its own hands and settle the question as to whether a particular offence has been committed or not for itself.

22. The above decisions were quoted with approval, and applied, in the Constitution Bench decision reported as Union Carbide Corporation v. Union of India . In Ramchandra Ganpat Shinde v. State of Maharashtra, , likewise, it was held as follows:

In Nagubai Ammal v. B. Shama Rao 1 this Court held that collusion in judicial proceedings is a secret arrangement between two persons that the one should institute a suit against the other in order to obtain the decision of a judicial tribunal for some sinister purpose. In such a proceeding, the claim put forward is fictitious, the contest over it is unreal, and the decree passed therein is a mere mask having the similitude of a judicial determination and worn by the parties with the object of confounding third parties. This was reiterated in Rup Chand Gupta v. Raghuvanshi Pvt. Ltd. 2 in which this Court held that the collusion is an improper act done by an improper refraining from doing an act, for a dishonest purpose. In these two cases this Court set aside the collusive decree obtained by the parties. Collusion, thus, is the foundation to put forward a format of judicial process and a pretext of contest which in effect is unreal and a farce and the decree or order obtained on its basis is a mere mask having similitude of judicial determination with the object of confounding third parties.

23. Speaking about the limitations of inherent powers under Section 482, and whether the court, in the absence of any material change in circumstances would be justified in exercising it, the Supreme Court held, in Simrikhia v. Dolley Mukherjee that:

If there had been change in the circumstances of the case, it would be in order for the High Court to exercise its inherent powers in the prevailing circumstances and pass appropriate orders to secure the ends of justice or to prevent the abuse of the process of the court.

24. It is apparent, therefore, that powers under Section 482 of the Code are to be used sparingly, ex debito justitae, and in exceptional circumstances. It is also to prevent abuse of process of court. The facts of this case, however, show that full and complete facts were not placed before the court; the prosecution, though issued with notice, was not represented, on the crucial date. The court was in the dark as to circumstances whereby other complainant's point of view could be presented. The other complainants were cited as witnesses, in the case; their complaints and statements were part of the records. A charge sheet had been filed.

25. Finality, the principle underlying Section 362, is one which attaches to every judicial proceeding; yet there exists another overarching, and overriding principle, namely that public justice, and prosecution into offences should not be thwarted, by recourse to those very provisions which are aimed at preventing abuse of process. Here, the question as to whether one bench took a view culminating in an order, and thus preventing a co-ordinate bench from taking another view, in my considered view, would not arise. The previous order dated 6-1-2005 was based on assumptions that were incomplete, and not accurate. That was an order under Section 482, not issued on a consideration of the merits, but upon the statements of the parties before the court. The court has now been shown materials which disclose that had all the facts been disclosed, the outcome too would have been materially different. In that sense, the fact, situation and circumstances are different than the one noticed in Vikramjit Singh. Here, it has been now shown that the order of court has resulted in prejudice to others, notably the petitioner, who had complained that the accused had duped her to an extent of over Rs. 2,00,000/- which was not returned.

26. "Actus curiae neminem gravabit" (an act of the court shall prejudice no man), is a Latin maxim, founded upon justice and good sense; it is an important facet of the administration of the law. If this, and the reason for exercising power under Section 482, i.e ex debito justitiae, are to be kept in mind, it would be clear that the inherent power can be invoked if circumstances are brought to the notice of the court, which would necessitate an order, in the interests of justice.

27. That brings me to the question of relief. The crucial terms in Section 482 are "Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary." Chaman Lal, the petitioner in the previous proceeding, is not a party in these proceedings. Apparently, he was satisfied with the amounts preferred to him; he "compromised" the matter. Interests of justice therefore, lie in issuing an order so as not to disturb the finality of the proceeding, so far as he is concerned. However, to the extent the order stifles all further proceedings in the FIR, as far as it relates to the allegations levelled by the present petitioner, and others, an appropriate order has to be made.

28. In the light of the above discussion, an order, clarifying that the previous order, quashing FIR No. 174/98, P.S.Greater Kailash, is limited, pertaining to the petitioner in that proceeding, Shri Chaman Lal is issued. Consequently, it is also clarified that the proceedings further to the said FIR 174/98, so far as they relate to complaints of other complainants, are deemed to continue. Parties are directed to appear before the trial court on 2nd April, 2007 for further proceedings/ directions.

29. The petitions are allowed in the above terms.