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2015 (6) TMI 1134 - HC - Indian Laws


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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