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2015 (6) TMI 1134 - HC - Indian LawsSettlement arrived at between the petitioners and the complainant bank - compounding of offence - Held that - The complainant have compromised and compounded the alleged offences, and that the complainant bank has exonerated the petitioners from all claims, grievance or complaint of any nature whatsoever. By consent the parties have settled all disputes in the recovery suit, the consent decree of DRT stood to be disposed off as duly satisfied. There is hence no force in the submission of respondents that the complainant bank has not exonerated the petitioners, first being the Civil Procedure Code, and the second being the OTS Scheme of the Reserve Bank of India, which the petitioners have extensively referred to in the original petition. The provisions of OTS Scheme prevent the complainant bank from entering into any compromise or settlement under the said OTS Scheme in the cases of willful default, fraud and malfeasance. The complainant bank in choosing to enter into such consent terms under the provisions of OTS Scheme has not only exonerated the petitioners, but for all intents and purposes given up the perusal of the complaint and having no grievance against them in any other proceeding whether civil or criminal on the same set of issues. There is no doubt that the trial has been proceeding for offences for the last about 20 years ago. The dispute between the petitioner and complainant Bank 33 years old. A long time has in fact been elapsed since the alleged commission of offences. Still the trial continues. The present petition is maintainable as the same has been filed also on additional grounds and circumstances. No useful purpose would be served if such oppressive trial may continue for many more years. Thus, ends of justice are served by quashing such a proceeding, as the parties cannot be allowed to go through the rigmarole of criminal prosecution for long numbers of years in a matter, it is doubtful in the mind of the Court in whose favour it would be decided.
Issues Involved:
1. Quashing of proceedings under Section 482 Cr.P.C. 2. Allegations of fraud and cheating against the petitioners. 3. Settlement between the petitioners and the complainant bank. 4. Applicability of Supreme Court judgments on quashing criminal proceedings. Detailed Analysis: 1. Quashing of Proceedings under Section 482 Cr.P.C.: The petitioners filed a petition under Section 482 Cr.P.C. to quash proceedings based on a settlement with the complainant bank. The High Court acknowledged the inherent power under Section 482 Cr.P.C. to quash proceedings to secure the ends of justice or prevent abuse of the court's process. The court emphasized that such power should be exercised considering the nature and gravity of the crime, especially in cases with predominantly civil flavor, as in commercial or financial disputes. 2. Allegations of Fraud and Cheating Against the Petitioners: The prosecution alleged that the petitioners, in connivance with bank officers, defrauded Vijaya Bank by not disclosing existing credit facilities with another bank and obtaining unauthorized credit limits. The charge sheet included offenses under Section 120-B IPC read with Section 420 IPC and provisions of the Prevention of Corruption Act. The petitioners were accused of opening fictitious accounts and using bogus invoices to cheat the bank. 3. Settlement Between the Petitioners and the Complainant Bank: During the trial, a settlement was reached where the petitioners paid Rs. 1.30 crores to the bank, leading to a 'No-Due Certificate' and disposal of the recovery suit. The High Court highlighted that the settlement was under the Reserve Bank of India's One Time Settlement (OTS) Scheme, which excludes cases of willful default, fraud, and corruption. The court noted the bank's acknowledgment of no further claims against the petitioners, indicating exoneration from criminal liability. 4. Applicability of Supreme Court Judgments on Quashing Criminal Proceedings: The petitioners relied on Supreme Court judgments in CBI vs. Narender Lal Jain, Nikhil Merchant vs. CBI, and Gian Singh vs. State of Punjab, which allowed quashing of proceedings in similar circumstances. The court distinguished the present case from others where the settlement was not part of a court decree. It emphasized that the settlement in this case was part of a consent decree by the Debt Recovery Tribunal, aligning with the principles laid down in the cited judgments. Conclusion: The High Court quashed the proceedings against the petitioners, recognizing the settlement under the OTS Scheme and the bank's acknowledgment of no dues. The court imposed a cost of Rs. 5 lakhs on the petitioners to be deposited with the Prime Minister's National Relief Fund, acknowledging the prolonged use of state machinery and the petitioners' conduct in obtaining credit facilities. The decision underscores the court's discretion to quash proceedings in cases with a civil-commercial nature, especially when a settlement has been judicially recognized.
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