📖 B.S. Joshi v. State of Haryana, (2003) 4 SCC 675

Facts: A criminal proceeding arising out of a matrimonial dispute was sought to be quashed on the footing that the parties had settled their differences. It was contended that since the offences alleged were non-compoundable, the bar on compounding prevented the High Court from bringing the proceeding to an end.

Held: The Supreme Court held that the limitation on compounding does not limit the inherent power of the High Court, because the two operate in entirely different fields. The Court held that in exercising the inherent jurisdiction the High Court is not compounding the offence: it is asking whether continuing the proceeding would serve the ends of justice, and where it plainly would not, it may quash. The Court held that where a matrimonial dispute has been genuinely settled and the parties wish to live in peace, insisting that the prosecution continue would serve no purpose whatever — the possibility of conviction being remote and the continuance causing oppression and prejudice to the accused. It emphasised that the object of the criminal law in such a case is largely spent once the parties have resolved their differences, and that the High Court has ample power to secure the ends of justice by bringing the matter to an end.

Ratio: The limitation on compounding does not limit the inherent power of the High Court, the two operating in different fields. In quashing on a settlement the Court is not compounding the offence but asking whether continuing the proceeding would serve the ends of justice.

📖 Parbatbhai Aahir @ Parbatbhai Bhimsinhbhai Karmur v. State of Gujarat, (2017) 9 SCC 641

Facts: A proceeding alleging serious offences was sought to be quashed on the basis of a settlement, and the Supreme Court restated, in a series of propositions, the principles governing the exercise of the inherent power in such cases.

Held: The Supreme Court restated the position in a set of propositions. The power to quash is distinct from the power to compound, and is not governed by the statutory limits on compounding. But it is to be exercised with caution, and the decisive consideration is whether the offence is private in character or has a serious impact on society. Offences arising from commercial, financial, mercantile, partnership or matrimonial relationships, and those essentially civil in flavour, may properly be quashed where the parties have settled. Heinous and serious offences — murder, rape, dacoity — may not, since they are not private and their prosecution answers a public interest which the parties cannot compromise away. Nor may offences under special statutes such as those dealing with corruption, nor those committed by a public servant acting in that capacity. The Court held that economic offences involving the financial and economic wellbeing of the State stand on a distinct footing, since they have an impact beyond the immediate parties.

Ratio: The power to quash is distinct from the power to compound and is not governed by its statutory limits. The decisive consideration is whether the offence is private in character or has a serious impact on society, economic offences standing on a distinct footing.

⚠ The question that decides it

Is the offence one the State has an independent interest in prosecuting? Where it is, the settlement is irrelevant to the continuance of the proceeding — though it may still bear on sentence.

Quashing is never a matter of right upon settlement. The Court must examine the nature and gravity of the act, the antecedents of the accused, and the genuineness of the compromise — and must record its reasons.

The settlement must be voluntary. One obtained by the very pressure or intimidation complained of is no settlement at all, and a Court should be alert to that where the parties are unequally placed.

And the timing matters. Where the settlement is reached early — at the investigation stage or soon after — the Court may act more readily. Once the trial is concluded or a conviction recorded, the discretion is far narrower, a full adjudication having already taken place.

The position stated shortly

1. Section 359(9): no offence shall be compounded except as provided by this section. The Table is exhaustive.

2. But the High Court quashing on a settlement is not compounding the offence — it is exercising a different power for a different purpose.

3. The limitation on compounding does not limit the inherent power, the two operating in entirely different fields: B.S. Joshi.

4. Compounding has the effect of an acquittal; quashing ends the proceeding without any adjudication.

5. Compounding is available before the court in which the case is pending; quashing only in the High Court.

6. The decisive consideration on quashing is whether the offence is private in character or has a serious impact on society: Parbatbhai Aahir.

7. Offences civil in flavour — commercial, financial, mercantile, partnership, matrimonial — may properly be quashed on a genuine settlement.

8. Heinous and serious offences, offences under special statutes such as those on corruption, and offences by a public servant acting as such, may not.

9. Economic offences affecting the financial and economic wellbeing of the State stand on a distinct footing, having an impact beyond the immediate parties.

10. And quashing is never a matter of right: the Court must examine the gravity, the antecedents and the genuineness of the settlement, and record its reasons.