2009 (4) TMI 999 - SC - Indian Laws

Conspiracy in defrauding the bank - falsification of accounts and forgery of records - Commission of offences u/s 120-B/ 420/467/468 and 471 of the IPC - officers of the Bank had also been prosecuted u/s 13(2) r/w Section 13(1)(d) of the Prevention and Corruption Act 1988 - Application of the provisions of Section 320 of the Code - Debt recovery Tribunal appellant and the Bank had entered into a settlement for recovery of loan - C.B.I. had returned the title deeds in respect of the property which were kept as security for obtaining the loan from the bank - Appellant filed an application u/s 239 of the Code for discharge - Before HC it was argued that further continuation of the criminal proceeding despite repayment of the amount of loan by the appellant would amount to an abuse of the process of Court and the same should therefore be quashed - CBI contended that the criminal case against the appellant was started not only for obtaining loan but also on the ground of criminal conspiracy with the bank officials - HC dismissed the revision application by the appellant. HELD THAT - It is now a well settled principle of law that in a given case a civil proceeding and a criminal proceeding can proceed simultaneously. Bank is entitled to recover the amount of loan given to the debtor. If in connection with obtaining the said loan criminal offences have been committed by the persons accused thereof including the officers of the bank criminal proceedings would also indisputably be maintainable. When a settlement is arrived at by and between the creditor and the debtor the offence committed as such does not come to an end. The judgment in the civil proceedings will be admissibile in evidence only for a limited purpose. It is not a case where the parties have entered into a compromise in relation to the criminal charges. In fact the offence alleged against the accused being an offence against the society and the allegations contained in the FIR having been investigated by the CBI the bank could not have entered into any settlement at all. The CBI has not filed any application for withdrawal of the case. Not only a charge sheet has been filed charges have also been framed. At the stage of framing charge the appellant filed an application for discharge. One of the main accused is the husband of the appellant. The complicity of the accused persons was thus required to be taken into consideration for the purpose of determining the application for discharge upon taking a realistic view of the matter. While considering an application for discharge filed in terms of Section 239 of the Code it was for the learned Judge to go into the details of the allegations made against each of the accused persons so as to form an opinion as to whether any case at all has been made out or not as a strong suspicion in regard thereto shall subserve the requirements of law. The jurisdiction of the Court under Article 142 of the Constitution of India is not in dispute. Exercise of such power would however depend on the facts and circumstance of each case. The High Court in exercise of its jurisdiction u/s 482 of the Code of Criminal procedure and this Court in terms of Article 142 of the Constitution of India would not direct quashing of a case involving crime against the society particularly when both the learned Special Judge as also the High Court have found that a prima facie case has been made out against the appellant herein for framing charge. Therefore we find no merit in the appeal. It is dismissed accordingly.

Issues Involved:
1. Application of Section 320 of the Code of Criminal Procedure.
2. Discharge under Section 239 of the Code of Criminal Procedure.
3. Civil nature of the dispute versus criminal charges.
4. Settlement between the appellant and the bank.
5. Prima facie case and framing of charges.

Issue-wise Detailed Analysis:

1. Application of Section 320 of the Code of Criminal Procedure:
The primary issue was whether the provisions of Section 320 of the Code of Criminal Procedure, which deals with the compounding of offences, applied to the appellant's case. The appellant argued that the settlement with the bank and the repayment of the loan should lead to the quashing of the criminal proceedings. However, it was contended by the CBI that the settlement only pertained to the civil aspect and did not exonerate the appellant from criminal liability. The court held that the offences alleged, including conspiracy and forgery, were serious and not merely private disputes but crimes against society, thus not compoundable under Section 320.

2. Discharge under Section 239 of the Code of Criminal Procedure:
The appellant filed an application under Section 239 seeking discharge on the grounds of the settlement with the bank and the repayment of the loan. The Special Court and subsequently the High Court dismissed the application, emphasizing that repayment did not negate the criminal conspiracy and forgery charges. The courts maintained that a prima facie case was established, and the mere settlement of the civil dispute did not warrant discharge from criminal proceedings.

3. Civil Nature of the Dispute Versus Criminal Charges:
The appellant contended that the dispute was purely civil, involving no criminal intent or fabrication of documents. The CBI countered that the criminal case was based on allegations of conspiracy and forgery, which went beyond a mere civil dispute. The courts upheld the CBI's stance, noting that the criminal proceedings were justified given the nature of the allegations and the evidence collected during the investigation.

4. Settlement Between the Appellant and the Bank:
The appellant argued that the settlement with the bank, which included the repayment of Rs. 25.51 lacs, should lead to the quashing of the criminal proceedings. However, the courts noted that the settlement was related to the civil recovery of the loan and did not address the criminal charges. The CBI had not sought withdrawal of the criminal case, and the settlement did not impact the criminal liability of the appellant.

5. Prima Facie Case and Framing of Charges:
The courts found that a prima facie case was established against the appellant, warranting the framing of charges. The Special Court and the High Court both emphasized that the repayment of the loan did not exonerate the appellant from the criminal charges. The courts highlighted that the allegations of conspiracy and forgery required a trial to determine the criminal intent and involvement of the appellant.

Conclusion:
The Supreme Court upheld the decisions of the Special Court and the High Court, dismissing the appeal. The court reiterated that the settlement of the civil dispute did not negate the criminal charges, and a prima facie case was established against the appellant. The continuation of the criminal proceedings was deemed necessary to address the serious allegations of conspiracy and forgery. The appeal was dismissed, affirming the lower courts' decisions to proceed with the trial.

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