Back
2011 Supreme(Del) 652
THE HIGH COURT OF DELHI AT NEW DELHI
M.L. MEHTA
R.K. Gupta …… Petitioner
Versus
State …… Respondent
W. P (Crl.)No.488/2009 & Crl. MA 4142/2009 (stay) & 18208/2009
Decided on : 25.11.2011
Mr.Dharmish Thanai, Advocate
Mr. Dayan Krishnan, ASC with Mr. Nikhil A. Menon, Advocates
The court has the power to quash criminal proceedings under Section 482 Cr.PC, especially when there is a settlement between the parties and the continuation of the proceedings would amount to an abuse of the court's process.
Headnote:
FIR Quashing - Partnership Dispute - Arbitration and Conciliation Act, 1996 - Section 9, Section 320 and 482 Cr.PC
Fact of the Case:
The petitioner sought to quash an FIR filed by the respondent, who was a partner in a business with the petitioner. The respondent alleged that the petitioner obtained loans by forging his signatures. A settlement was reached before an arbitrator, where the respondent agreed to cooperate in quashing the FIR, but later attempted to resile from the compromise. After the respondent's death, his son sought to substitute in place of his deceased father.
Finding of the Court:
The court found that the FIR should be quashed as there was no evidence of the petitioner forging the signatures of the respondent. The court deemed the continuation of the FIR as an abuse of the court's process.
Issues: The main issue was whether the FIR could be quashed based on the settlement reached before the arbitrator and the subsequent behavior of the respondent and his son.
Ratio Decidendi: The court relied on the provisions of Section 320 and 482 Cr.PC, and the settlement reached before the arbitrator to quash the FIR. It also considered the behavior of the respondent and his son in attempting to resile from the compromise.
Final Decision: The petition to quash the FIR was allowed, and all consequential proceedings arising therefrom were quashed.
M.L. MEHTA, J.
1. This is a petition under Section 226 of the Constitution of India for quashing of FIR No.95/2008 under Sections 420/468/471 IPC registered at police station Pahar Ganj, New Delhi.
2. The aforesaid FIR was registered on the complaint of the respondent no.3 Mr. Davinder Paul Singh (Mr. Singh) who was partner of the petitioner in his business run in the name and style of M/s Kwality Caterers having its registered office at 1012, Mantola, Pahar Ganj, New Delhi. This firm came into existence in 1998 as a sole proprietary concern of Mr. Hemant Jajoria. The petitioner as well as the complainant Mr. Singh were inducted as its partners in the year 2001 and this firm comprised of three partners with 1/3rd share each in the firm. Due to some differences, allegedly because of Mr. Singh’s having started his business in competition with the business of the firm, the two partners namely the petitioner herein and Mr. Hemant Jajoria intended to dissolve the firm. Sensing this, the respondent Mr. Singh filed a petition under Section 9 of Arbitration and Conciliation Act, 1996 in this Court seeking interim relief that the firm shall not be dissolved. He also made a complaint on 29.11.2007 with the Police (Economic Offence Wing) alleging that the petitioner obtained certain loans from the banks and financial institutions in the name of the firm by forging his signatures. The stand taken by the petitioner in the said complaint made to the EOW was that no signatures of Mr. Singh was ever forged by him and that all the loans as mentioned by Mr. Singh in his complaint were taken by the firm with the knowledge of Mr. Singh. It was also stated that all the loans were utilized by the firm in giving license fee as well as security deposits to IRCTC and further that all those loans were reflected in the income tax returns of the firm. The complaint lodged with EOW was stated to be motivated. In the meanwhile, present FIR was also got registered by Mr. Singh against the petitioner on 26.3.2008 and it is this FIR which is sought to be quashed by the petitioner in the instant petition.
3. Before adverting to the submissions of the petitioner made in this petition for quashing the FIR, it may be noted that in his application under Section 9 of Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator, the Hon’ble Ms. Manju Goel (retired Judge of this Court) was appointed as sole Arbitrator to resolve the disputes. The said application was dismissed by the Arbitrator. In the meanwhile, the third partner Mr. Hemant Jajoria also initiated proceedings for dissolution of the partnership firm by issuing notice to Mr. Singh. Mr. Singh moved an application before the Arbitrator seeking stay of dissolution of the firm. This application was dismissed on 30.5.2008. Against this order, Mr. Singh preferred an appeal which came to be dismissed by this Court on 6.6.2008. In this appeal proceedings, Mr. Singh made a statement that he has settled all his disputes with the petitioner and was willing to retire from the said partnership firm, but the same may not be dissolved. Subsequently vide a joint application dated 10.4.2008 filed by three partners under Order XXXIII Rule 3 CPC before the Arbitrator, they settled all their disputes. It is noteworthy that one of the conditions of the said application was that FIR No.95 of 2008 registered at Police Station Pahar Ganj at the behest of Mr. Singh shall be quashed and he shall cooperate in getting the same so done. The Arbitrator allowed that application vide her award dated 28.7.2008. The operative part of that order passed by learned Arbitrator reads as under: “On 10.7.2008, the partners filed a joint application seeking disposal of the arbitration proceedings in terms of the settlement arrived at. The said application is duly supported by affidavits of Mr. Davinder Paul Singh, Mr. Rakesh Kumar Gupta and Mr. Hemant Kumar Jajoria. The terms of the settlement are fair and reasonable
