2008 Supreme(Mad) 838

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE ELIPE DHARMA RAO & THE HONOURABLE MR. JUSTICE S.R. SINGHARAVELU
The State of Tamil Nadu, rep. by its Secretary to Government & Others
Versus
Gold Quest International Pvt.Ltd. & Others
Writ Appeal No.1178 of 2005 and WAMP.No.2155 of 2005
Decided on : 07-03-2008

Ratios:
a. For compounding any offence strict adherence to Section 320 Cr.P.C is required.
b. Any power including the inherent power is to be exercised by the Courts only in the interest of justice.
c. Though power of the High Court to quash the lower court proceedings is wide, the same has to be exercised sparingly and cautiously.
d. While exercising the powers of quashing the lower court proceedings, the High Court does not function as a court of appeal or revision and the authority of the Court exists for advancement of justice and to prevent abuse.
e. In a proceeding for quashing, the Court would not embark upon to decide as to whether the evidence in question is reliable or not or whether on a reasonable appreciation of it, accusation would not be sustained.
f. The High court should normally refrain from giving a prima facie decision in a case where facts are incomplete and hazy and the issues involved, whether factual or legal, are of magnitude and cannot be seen in their true perspective without sufficient material.
g. In a complaint for cheating, on the repayment of the money involved the element of criminality attached to the acts perpetrated by the accused on the date of the complaint is not erased.

Headnote:(A)Constitution of India-Art.226-Quashing-FIR-First Information Report-Compounding-Non-Compoundable offence-Cheating-A company had collected money from the public with promise to give gold coins but failed-Victims lodged FIR and investigation commenced-Company filed writ petition to quash FIR-Single judge quashed FIR with condition that the amount due to all the victims be settled within a date fixed-Decision was challenged by the State which contended that only in exceptional circumstances FIR could be quashed and when there was a large scale cheating, quashing is not to be done and mere compounding by payment would not be a ground for quashing-Held, FIR can be quashed only under certain circumstances-When large number of persons are cheated, it is not desirable to quash FIR merely because of settlement of amount-Serving of justice would only be the ground for quashing FIR and not payment-Compounding by payment is not a ground for quashing-Appeal by State was allowed.

        (B)Constitution of India-Art.226-Inherent power-Exercise-Compounding-Non-Compoundable offence- For compounding any offence strict adherence to Section 320 Cr.P.C is required-Any power including the inherent power is to be exercised by the Courts only in the interest of justice.

        Per S.R.Singharavelu, J:-However, in a grave nature of offence against the public, where hundreds of families are deprived of their deposits and when the first respondent/writ petitioner had flouted their own promises, thereby committing the offence of not only cheating but also offence under the Prize Chits and Money Circulation (Banning) Act, 1978, burying the case by preventing further investigation in a matter where public interest is greatly involved and that too under the guise of compounding which could not be made lawfully for the reasons mentioned supra, we are not inclined to record the settlement. Compounding is also a process to be done only in accordance with law, especially in criminal cases, and strict adherence to Section 320 Cr.PC is required. Any power including the inherent power is to be exercised only in the interest of justice and flouting the process under Section 320 Cr.PC against the interest of justice may not be desirable even in exercise of inherent power. Para 12

        (C)Constitution of India-Art.226-High Court-Power-Quashing-Exercise-Though power of the High Court to quash the lower court proceedings is wide, the same has to be exercised sparingly and cautiously-While exercising the powers of quashing the lower court proceedings, the High Court does not function as a court of appeal or revision and the authority of the Court exists for advancement of justice and to prevent abuse.

        Per Elipe Dharma Rao, J.:-The law on this point is well settled by the Honourable Apex Court and time and again it has been held by the Honourable Apex Court that though power of the High Court to quash the lower court proceedings is wide, the same has to be exercised sparingly and cautiously. The judicial pronouncements further reveal that while exercising the powers of quashing the lower court proceedings, the High Court does not function as a court of appeal or revision and the authority of the court exists for advancement of justice and if any attempt is made to abuse that authority so as to produce injustice, the court has the power to prevent abuse. Para 5

        (D)Constitution of India-Art.226-Quashing-FIR-First Information Report-High Court-Power-Duty-In a proceeding for quashing, the Court would not embark upon to decide as to whether the evidence in question is reliable or not or whether on a reasonable appreciation of it, accusation would not be sustained- The High court should normally refrain from giving a prima facie decision in a case where facts are incomplete and hazy and the issues involved, whether factual or legal, are of magnitude and cannot be seen in their true perspective without sufficient material.

        Per Elipe Dharma Rao, J.:-The power of the High Court in matters of quashing the criminal complaints would not ordinarily embark upon an enquiry whether the evidence in question is reliable or not or whether on a reasonable appreciation of it, accusation would not be sustained, which is the function of the trial Court and judicial process should not be an instrument of oppression or needless harassment. ........ The High court being the highest court of a State should normally refrain from giving a prima facie decision in a case where facts are incomplete and hazy, more so when evidence has not been collected and produced before the court and the issues involved, whether factual or legal, are of magnitude and cannot be seen in their true perspective without sufficient material. Para 6

        (E)Constitution of India-Art.226-Cheating-Repayment-Effect- In a complaint for cheating, on the repayment of the money involved the element of criminality attached to the acts perpetrated by the accused on the date of the complaint is not erased.

        Per Elipe Dharma Rao, J.:-In the case on hand, though it is stated that the accused has settled the claims of several complainants and most of them have given necessary letters withdrawing the complaints given as against him, the element of criminality attached to the acts perpetrated by the accused on the date of complaints is not erased. ..... .... Thus, when serious allegations of cheating general public of their hard-earned moneys, by giving false hopes and making use of such amounts collected from the public for self and gained at the public expense, are made against the accused, the learned single Judge is not right in quashing the FIR, merely on the ground that some of the complainants have withdrawn their complaints, forgetting the fact that the criminality attributed to the accused is not erased. Para 7