Courts should be Slow to Exercise their Jurisdiction to Quash Criminal Proceedings on the basis of Settlement: Supreme Court

Courts should be Slow to Exercise their Jurisdiction to Quash Criminal Proceedings on the basis of Settlement: Supreme Court

The Supreme Court ruled that the Courts should be slow in exercising their jurisdiction to quash criminal proceedings on the basis of settlement.


There are three Special Leave Petitions on hand, two of which challenge an Order passed by the High Court of Judicature at Madras in a Criminal Original Petition filed under Section 482 of the Code of Criminal Procedure, 1973, quashing a criminal complaint pending on the file of the Additional Special Court for trial of cases related to 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 Special Leave Petition arises out of an order of dismissal passed by the High Court in a Criminal Miscellaneous Petition filed by a third party by name Anti Corruption Movement, seeking the recall of the order in the quash petition.


Advocate Siddharth Bhatnagar and Gopal Sankaranarayanan, contended that it is shocking to see that a matter of the nature, where the bribe giver and bribe taker have come together, has been allowed to be closed on the basis of a compromise memo.

They submitted that the original complainant Arulmani was himself an employee of the Metropolitan Transport Corporation and consequently a public servant.

The councles further added that the High court committed a serious illegality in quashing the complaint on the basis of a compromise, despite the fact that even the offences indicated in the chargesheet are not compoundable.

Advocate Rakesh Dwivedi, appearing for the first respondent, contended that the statements of the victims did not make out a case for prosecution of the accused under the P.C Act.

He submitted that the prosecution was constrained to include Section 409 IPC only because of a statement as though the respondent was a Personal Assistant to the then Minister.

Mukul Rohtagi, learned senior counsel appearing for

Advocate Arulmani, appearing for Arulmani, contended that the allegations made in the complaint did not make out a case for prosecution under the P.C Act.

He submitted that the affidavits filed by all the so-called victims before the High Court made it crystal clear that it was a simple money dispute.


The division bench of Justice S.Abdul Nazeer and Justice V. Ramasubramanian observed that the preliminary objection of the respondents to the locus standi of the appellants, has to be rejected outright. 

The court said 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.

The bench further stated that the 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.

“We cannot shy away from the fact that candidates, who are selected and appointed to posts in the Government/public corporations by adopting corrupt practices, are eventually called upon to render public service” the court said.

It was observed by the court that  the public, who are recipients of the services, also become victims, though indirectly, because the consequences of such appointments get reflected sooner or later in the work performed by the appointees. Hence, to say that the appellants have no locus standi, is to deny the existence of what is obvious.

The court said that 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.

The court stated that persons who have adopted corrupt practices to secure employment in the Transport Corporation fall under two categories; those who paid money and got orders of appointment and those who paid money but failed to secure employment.

“If persons belonging to the 2nd category are allowed to settle their dispute by taking a 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 court stated.

The court held that it 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 the High Court was completely in error in quashing the criminal complaint.

Case title: P. Dharamaraj v/s Shanmugam & Ors.

Citation: CRIMINAL APPEAL NO. 1514 OF 2022

Click here to read the Order/Judgment 

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