Judicial restraint needed to permit compounding of offences: SC

"We are of the considered opinion that encroaching into the right of the other organ of the government would tantamount clear violation of the rule of law," an SC bench observed.

New Delhi: Judicial restraint should be observed by the courts while permitting settlement between parties on criminal offences which are barred under the Code of Criminal Procedure (CrPC), the Supreme Court has said.

"We are of the considered opinion that encroaching into the right of the other organ of the government would tantamount clear violation of the rule of law which is one of the basic structures of the Constitution," a bench of Justices P C Ghose and Amitava Roy said.

The observation came in the context of whether the courts, including high courts and the apex court, can allow parties to settle criminal cases relating to those offences which have been kept in the CrPC list of crimes and those which cannot be compounded by the litigants themselves.

The apex court dismissed an appeal by the CBI against a judgement of the Punjab and Haryana High Court quashing criminal proceedings in an alleged cheating and forgery case lodged by a PSU bank against a firm and others.

The bank, which had lodged the case under various penal provisions, later settled the dispute with the accused persons who in turn moved the court for closure of the criminal case.

The trial court had dismissed the application on the ground that offences under section 471 read with 468 (forgery for the purpose of cheating) of the IPC were non-compoundable.

The accused had challenged the order in high court which had in June 2011 quashed the criminal proceedings on the basis of settlement of dispute between the parties.

CBI had lodged an FIR against the Bhatinda-based firm and others for allegedly entering into a conspiracy in 1995 and 1996 and causing loss to State Bank of Patiala of about Rs 28.49 crore through false stock statements, forged bank guarantee and dishonest misuse of funds generated.

The agency had filed a charge sheet against the accused under various sections of IPC, including 420 (cheating) and 471 (using as genuine a forged document).