Supreme Court: High Court Cannot Recall FIR Quashing Order on Ground of Compromise Breach – “Violation of Terms of Compromise Is Foreign to Law and Cannot Justify Review Under Section 482 CrPC Where Bar Under Section 362 CrPC Is Absolute”

Court’s Decision

The Supreme Court held that the High Court had no jurisdiction to recall its earlier order quashing an FIR based on a compromise between the parties. The invocation of Section 482 CrPC to restore the FIR amounted to a prohibited review under Section 362 CrPC. The Court emphasized that “once the criminal cases had been quashed… violation of terms thereof is a ground entirely foreign to law” for invoking inherent powers.

The appeals were allowed, and the Supreme Court quashed the High Court’s orders that had recalled its earlier quashing of FIR No. 432 of 2014. The Court further directed that a copy of the judgment be circulated to all High Courts for clarity and compliance.

Facts

• A series of agreements to sell were entered into between the parties starting from May 2013, culminating in a final agreement dated 15 April 2015, which superseded all previous agreements.
• The sale consideration was fixed at ₹2.25 crores, out of which ₹35 lakhs was paid by various means and ₹1.90 crores was to be paid at the time of registry, with 1% monthly interest.
• A compromise deed dated 14 July 2015 was executed to settle all pending disputes and litigations.
• On 21 March 2016, the High Court, noting the compromise and voluntariness of the parties, quashed FIR No. 432 of 2014 registered under Sections 406 and 420 IPC.
• However, the complainant later filed applications (first rejected in 2016, then revived in 2018) to restore the FIR, which the High Court allowed on 8 October 2018. A review petition against this restoration was also dismissed on 29 April 2019.

Issues

1. Whether the High Court could invoke Section 482 CrPC to recall its own final order quashing an FIR based on compromise.
2. Whether Section 362 CrPC prohibits such a recall.
3. Under what circumstances, if any, inherent powers can be exercised to alter or review a final judgment.

Petitioner’s Arguments

• The High Court became functus officio once it quashed the FIR and could not review or alter that judgment under the garb of Section 482 CrPC.
• The only exceptions to Section 362 CrPC are clerical or arithmetic errors; the recall here was beyond jurisdiction.
• The violation of compromise terms may give rise to other remedies but not to revival of the quashed criminal proceedings.

Respondent’s Arguments

• The respondents argued for revival of the FIR on the ground that there was a violation of the compromise.
• They claimed that invoking Section 482 CrPC was justified to prevent injustice and abuse of process due to non-compliance with the compromise deed.

Analysis of the Law

• Section 482 CrPC: Permits exercise of inherent powers only in three scenarios — to give effect to any order under the Code, to prevent abuse of the process of the court, or to secure the ends of justice.
• Section 362 CrPC: Bars the court from altering or reviewing any judgment or final order once signed, except to correct clerical or arithmetic errors.
• The Supreme Court reaffirmed that the bar under Section 362 is “almost absolute” and that inherent powers under Section 482 cannot be used to do what is expressly barred.
• The Court emphasized that remedies for violation of compromise terms lie elsewhere in law and not in criminal revival.

Precedent Analysis

The Court relied on several earlier decisions:

• State of Karnataka v. M. Devendrappa: Explained the scope of Section 482 CrPC.
• Sankatha Singh v. State of U.P. and Sooraj Devi v. Pyare Lal: Clarified that Section 362 prohibits alteration or review of a judgment once signed, and Section 482 cannot override this bar.
• Davinder Pal Singh Bhullar case: Stated the limited exceptions to Section 362 — violation of natural justice or fraud/abuse of process that nullifies jurisdiction.
• New India Assurance v. Krishna Kumar Pandey: Held that none of those exceptional situations applied unless specifically pleaded and established.

Court’s Reasoning

• The Court held that the High Court’s power to recall a quashing order did not arise merely because the terms of compromise were violated. The remedy for breach lies in civil proceedings or execution, not in revival of a quashed FIR.
• It held that the High Court’s order was a de facto review of its earlier decision, which is expressly barred.
• The decision to recall the quashing order was not supported by any statutory provision and went against established legal precedent.

Conclusion

The Supreme Court allowed the appeals and set aside the High Court’s orders recalling the quashing of the FIR. It declared:

“Violations of a term of a compromise have their own avenues of law from which they can be enforced.”

The High Court’s course of action was criticized for not being aligned with the settled legal position.

Implications

• This judgment reinforces the bar under Section 362 CrPC against the review of final judgments and limits the scope of Section 482 CrPC.
• Courts are reminded not to use inherent powers to override express statutory prohibitions.
• It provides clarity to all High Courts regarding the boundaries of their jurisdiction in recalling or modifying final criminal orders.
• The judgment protects the finality of compromise-based quashments and prevents endless litigation due to post-settlement disputes.

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