MAIN POINT
There will be no illegality in quashing of proceedings in matrimonial disputes or civil property disputes having criminal facets with no chances of conviction.

JUDGMENT : -

PRAFULLA C.PANT, J.

1. Leave granted.

2. The question before us in this appeal is whether the Division Bench of High Court has erred in law in setting aside the order of learned Single Judge quashing the First Information Report (for short, ‘FIR’) on the basis of the compromise and settlement between the complainant and the appellant.

3. Brief facts of the case are that the appellant is an International Numismatic Company which has operations in over sixty countries. It is pleaded that it conducts its business with necessary licence. The multi level marketing through direct selling of products is being adopted by the Company in the interest of the consumers by eliminating the middleman and rewarding the consumer by reducing the prices. The appellant-company has over sixteen thousand members/ consumers in and around the city of Chennai alone. A complaint was made in the year 2003 by Respondent No.7 against the appellant-company alleging non-compliance of issuance of numismatic gold coin on receipt of Rs.16,800/-from wife of Respondent No.7 as per the promise made by the appellant-company. Some other customers also had complaints on the basis of which Respondent No.4 registered a case under Section 420 of the Indian Penal Code read with Sections 4, 5 & 6 of the Prize Chits and Money Circulation (Banning) Act, 1978. The appellant-company filed a writ petition being W.P.No.26784 of 2003 before the High Court of Judicature at Madras praying therein that the FIR registered against it be quashed. Since all the claimants including the complainant settled the dispute with the appellant-company and entered into an agreement, learned Single Judge of the High Court by its order dated 19th April, 2005 quashed the FIR, and disposed of the aforesaid writ petition. However, the State-respondents challenged the said order dated 19th April, 2005 passed by the learned Single Judge whereby the FIR No.307 of 2003 was quashed, before the Division Bench of the High Court. The Division Bench allowed the writ appeal being W.A.No.1178 of 2005 filed by the State-respondents and directed Respondent No.4 to investigate the crime. Hence, this appeal.

4. We have heard learned counsel for the parties, and perused the papers on record.

5. The main ground on which the Division Bench appears to have interfered with the order of the learned Single Judge is that out of 172 claimants, there was no compromise from two persons. However, there was sufficient evidence on record to suggest that the whereabouts of those two persons were not known, nor have they ever challenged the order of learned Single Judge. The Division Bench while accepting the arguments of the State-Respondents have relied on a decision of this Court in Union of India vs. Bhajan Lal (AIR 1992 SC 604 : 1992 Supp. (1) SCC 335). The said judgment appears to have been discussed by this Court in B. S. Joshi & Ors. vs. State of Haryana & Anr. (2003) 4 SCC 675. Relevant paragraphs of B. S. Joshi’s case (supra) are reproduced below:

“ 2. The question that falls for determination in the instant case is about the ambit of the inherent powers of the High Courts under Section 482 of the Code of Criminal Procedure (the Code) read with Articles 226 and 227 of the Constitution of India to quash criminal proceedings. The scope and ambit of power under Section 482 has been examined by this Court in a catena of earlier decisions but in the present case that is required to be considered in relation to matrimonial disputes. The matrimonial disputes of the kind in the present case have been on considerable increase in recent times resulting in filing of complaints by the wife under Sections 498-A and 406 IPC not only against the husband but his other family members also. When such matters are resolved either by the wife agreeing to rejoin the matrimonial home or mutual separation of husband and wife and also mutual settlement of other pending disputes as a result whereof both sides approach the High Court