Introduction 

• This is a landmark judgment where the Supreme Court laid down when the proceedings can be quashed under Section 482 of the Criminal Procedure Code, 1973 (CrPC) if the parties have reached a settlement.   
• The Judgment was delivered by a 3- judge Bench consisting of Justice RM Lodha, Justice Anil R Dave and Justice Sudhanshu Jyoti Mukhopadhaya. 

Facts   

• Gian Singh was convicted under Sections 420 (cheating) and 120B (criminal conspiracy) of the Indian Penal Code, 1860 (IPC) by a Magistrate. 
• While his appeal was pending before the Sessions Judge, Gian Singh filed an application for compounding the offence, which was directed to be considered along with the main appeal. 
• Gian Singh filed a petition under Section 482 of the Criminal Procedure Code, 1973 (CrPC)  for quashing the FIR on grounds of compounding the offence. 
• The High Court dismissed this petition, leading to Gian Singh filing a special leave petition before the Supreme Court. 
• The two-Judge Bench (Justices Markandey Katju and Gyan Sudha Misra) hearing the special leave petition doubted the correctness of three previous Supreme Court decisions that had indirectly permitted compounding of non-compoundable offences. 
• The Bench noted that while Section 420 IPC (cheating) is compoundable with permission of the Court, Section 120B IPC (criminal conspiracy) is non-compoundable. 
• The Bench expressed the view that something which cannot be done directly cannot be done indirectly, and non-compoundable offences should not be permitted to be compounded by the Court. 
• The matter was referred to a larger Bench to reconsider the correctness of the three previous decisions: B.S. Joshi v. State of Haryana, Nikhil Merchant v. Central Bureau of Investigation, and Manoj Sharma v. State. 
• The case involved consideration of the relationship between Section 320 of the Code (which provides for compounding of certain offences) and Section 482 (which saves the inherent power of the High Court). 
• The larger Bench was tasked with determining whether the High Court could use its inherent powers under Section 482 to quash criminal proceedings involving non-compoundable offences when parties have reached a settlement.

Issues Involved 

• Whether the High Court could use its inherent powers under Section 482 of CrPC to quash criminal proceedings involving non compoundable offences when parties have reached a settlement? 

Observations 

• The Court affirmed that the High Court's power to quash criminal proceedings under its inherent jurisdiction (Section 482) is distinct from the power of compounding offences under Section 320 of the Criminal Procedure Code. 
• The Court held that inherent power, while broad in scope with no statutory limitation, must be exercised in accordance with two guidelines: to secure the ends of justice or to prevent abuse of court process. 
• The Court emphasized that the decision to quash criminal proceedings based on settlement between parties must depend on the specific facts and circumstances of each case. 
• The Court ruled that heinous and serious offences such as murder, rape, and dacoity cannot be quashed even if the victim and offender have settled their dispute, as these crimes have serious societal impact. 
• Similarly, the Court held that offences under special statutes like the Prevention of Corruption Act or offences committed by public servants cannot be quashed based on compromise. 
• The Court distinguished that criminal cases with "overwhelmingly and pre-dominatingly civil flavor" may be treated differently for quashing purposes. 
• The Court specified that offences arising from commercial, financial, matrimonial, or family disputes where the wrong is primarily private in nature may be quashed if parties have fully resolved their dispute. 
• The Court stated that in such cases, the High Court may quash proceedings if it determines that the possibility of conviction is remote and continuing the case would cause extreme injustice to the accused. 
• The Court concluded that the previous decisions in B.S. Joshi, Nikhil Merchant, and Manoj Sharma were correctly decided and did not require reconsideration. 
• The Court directed that the matters be listed before the concerned Benches for further proceedings in light of this clarification.

Conclusion

• The Supreme Court in Gian Singh v. State of Punjab established a balanced approach by holding that while heinous crimes cannot be quashed despite settlement, criminal cases with predominantly civil flavor may be quashed under Section 482 CrPC to secure the ends of justice. 
• This landmark judgment brought clarity to the scope of High Court's inherent powers in quashing criminal proceedings based on compromise between parties.