The Supreme Court of India has ruled that a violation of the terms of a compromise cannot be a basis for recalling a final order quashing an FIR under Section 482 of the Code of Criminal Procedure (Cr.P.C.). The Court emphasized that once a judgment is signed, it becomes final and cannot be altered or reviewed except to correct clerical or arithmetic errors as provided under Section 362 Cr.P.C.
The decision was delivered in Raghunath Sharma & Ors. v. State of Haryana & Anr., in Criminal Appeals arising out of SLP (Crl.) Nos. 8101–8102 of 2019, and connected matters. The Bench comprising Justice Pankaj Mithal and Justice Sanjay Karol allowed the appeals and set aside the orders passed by the Punjab and Haryana High Court, which had recalled its earlier judgment quashing FIR No. 432 of 2014 under Sections 406 and 420 IPC.
Background of the Case
The dispute arose out of a series of agreements to sell immovable property executed between the parties in 2013 and 2014. A fresh agreement dated April 15, 2015, was subsequently entered into, superseding earlier contracts, and fixing the sale consideration at ₹2.25 crore. A compromise deed dated July 14, 2015, was executed to amicably settle all pending disputes. Based on this compromise, the High Court quashed the FIR on March 21, 2016 under Section 482 Cr.P.C.
However, the complainant, Krishan Kumar Gandhi, later moved for restoration of the FIR on grounds of non-compliance with the compromise. Although his initial request was dismissed, a subsequent application led the High Court to recall its earlier quashing order on October 8, 2018, a decision that was upheld on review on April 29, 2019.
Arguments and Legal Issue
The central issue before the Supreme Court was whether the High Court could invoke its inherent powers under Section 482 Cr.P.C. to recall a final order of quashing an FIR, solely on the ground that one party had violated the terms of a compromise.
The appellants contended that such recall was impermissible under Section 362 Cr.P.C., which prohibits any review or alteration of a final judgment except to correct clerical or arithmetic errors. They further argued that breach of a compromise deed, even if established, could only be remedied through independent legal proceedings.
Supreme Court’s Analysis
The Court extensively examined the legal framework under Sections 362 and 482 Cr.P.C. and reiterated that the High Court becomes functus officio after passing a final order. It relied on precedents including Sankatha Singh v. State of U.P. [(1962) Supp 2 SCR 817], Sooraj Devi v. Pyare Lal [(1981) 1 SCC 500], and State of M.P. v. Man Singh [(2019) 10 SCC 161], to hold that Section 362 places an “almost absolute” bar on review of final judgments.
Quoting from Sooraj Devi, the Court reaffirmed:
“The inherent power of the court cannot be exercised for doing that which is specifically prohibited by the Code.”
The Bench observed that a breach of compromise terms is “a ground entirely foreign to law” for recalling a quashing order under Section 482. It noted that remedies for such a breach must be sought under appropriate civil or criminal legal proceedings, but not by reviving quashed proceedings.
Conclusion and Directions
The Supreme Court allowed the appeals, quashed the impugned orders of the High Court dated October 8, 2018, and April 29, 2019, and restored the order dated March 21, 2016, which had quashed the FIR.
Summarizing its findings, the Court held:
- “The bar under Section 362 Cr.P.C. is almost absolute.”
- “Inherent powers under Section 482 cannot be used to circumvent an express statutory bar.”
- “Violation of compromise terms cannot justify revival of quashed proceedings.”
The judgment concluded with a direction to circulate the decision to all High Courts for necessary dissemination. The Court expressed concern that the High Court had acted contrary to settled law and emphasized the need for judicial discipline in exercising inherent powers.
