2023 (7) TMI 1367 - SC - Indian Laws

Initiation of mala fide criminal proceedings against financial institutions/lenders and their officers representatives and managers to somehow restrain them from pursuing recovery proceedings of their enforceable debts and/or to compel them to make settlement of their dues - HELD THAT - It is not deemed appropriate to permit the petitioners to approach the respective jurisdictional High Courts to challenge all four FIRs and the ECIR within two weeks from today with a request to the respective High Courts to consider and decide the petitions expeditiously not later than six months of their presentation. All the petitions including contempt petition and pending applications stand disposed of.

Summary

Issues involved: Trend of initiating mala fide criminal proceedings against financial institutions/lenders and their officers, abuse of criminal process to scuttle recovery proceedings, quashing of criminal proceedings in civil financial disputes, challenge to FIRs and ECIR.

Summary:
The Supreme Court addressed the issue of a trend where mala fide criminal proceedings were being initiated against financial institutions/lenders and their officers to impede recovery proceedings or force settlements of debts, circumventing statutory remedies like SARFAESI. Referring to past judgments, the Court emphasized the detrimental impact of such actions on the economic health of the nation. In a specific case, criminal proceedings in multiple FIRs were stayed, and a new FIR and ECIR were challenged. The Court allowed the petitioners to approach the respective High Courts within two weeks to challenge all FIRs and the ECIR, with a directive for expedited decisions within six months. The DGPs of respective States were directed to examine the contentions of the petitioners and take appropriate measures within one month. The interim order staying proceedings in certain FIRs was to continue until final disposal. For the new FIR and ECIR, no coercive steps were to be taken against the petitioner financial institution and its officers pending the High Court's decision, with the option to seek a stay of proceedings. The Court kept all legal contentions open for the parties to raise before the High Court, emphasizing that decisions should be made on their own merits and in accordance with the law. Consequently, all petitions, including contempt petitions and pending applications, were disposed of.