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2022 (6) TMI 630 - HC - Indian LawsEnhancement of credit limit - Criminal Conspiracy - framing of charges against the Company - maintainability of prosecution proceedings against the company being a juristic person - Section 482 read with Section 397 of the Code of Criminal Procedure, 1973 - Section 227 of the Cr.P.C - HELD THAT - The allegations are against the two officers, i.e. Accused No. 6, K. Ramakrishna and Accused No. 1, V.K. Maheshwari, who have already been discharged by the Coordinate Bench of this Court vide judgment and order dated 16th April, 2012 and 24th February, 2016, respectively. It is also an admitted fact that the allegation of the criminal conspiracy is between the petitioner company and the Accused No. 1, V.K. Maheshwari, who has been discharged by the Coordinate Bench of this Court. It is also an admitted fact that the petitioner company was charged for offence punishable under Section 120B/109/409 of the IPC read with Section 13(l)(d) and 13(2) of the PC Act. Therefore, one person all alone cannot commit an offence of conspiracy and be convicted for offence punishable under Section 120B of the IPC. Further, the offence punishable under Section 409 of the IPC could not survive anymore in view of the fact that Accused No. 1, V.K. Maheshwari, has already been discharged by the Coordinate Bench of this Court. This Court is of the considered opinion that if the trial is allowed to go, it will amount to gross miscarriage of the justice, since, the petitioner Company cannot be punished/sentenced after being held guilty of committing an offence being a juristic person. Therefore, there would be no purpose to proceed with the trial against the petitioner. In such an eventuality, jurisdiction of this Court under Section 482 of the Cr.P.C. comes to rescue. Petition allowed.
Issues Involved:
1. Quashing of criminal proceedings against the petitioner company. 2. Validity of charges framed under Sections 120-B, 109 r/w 409 IPC, and 109 IPC r/w 13(1)(d) r/w 13(2) of the Prevention of Corruption Act, 1988. 3. Impact of the settlement between the petitioner company and the bank. 4. Applicability of the legal principle that a company cannot be sentenced to imprisonment. Detailed Analysis: 1. Quashing of Criminal Proceedings Against the Petitioner Company: The petitioner sought quashing of the criminal proceedings on the grounds that the company had settled its dues with the bank, and all other accused, except one who was declared a proclaimed offender, had been discharged. The court noted that the petitioner company had already settled the claim of the bank by paying Rs. 8 crores as full and final payment, and the bank had issued a no-dues certificate. The court emphasized that there was no useful purpose in continuing the trial against the petitioner company alone, especially since it could not be sentenced to imprisonment. 2. Validity of Charges Framed: The charges against the petitioner company included Sections 120-B, 109 r/w 409 IPC, and 109 IPC r/w 13(1)(d) r/w 13(2) of the Prevention of Corruption Act, 1988. The court observed that the essential ingredients of criminal conspiracy require the involvement of at least two persons. Since all other accused had been discharged, the charge of conspiracy could not stand against the petitioner company alone. The court also noted that the offence under Section 409 IPC could not survive as the main accused, V.K. Maheshwari, had been discharged. 3. Impact of the Settlement: The court highlighted that the bank had settled all its claims with the petitioner company, and the recovery proceedings had been withdrawn. The court referred to Section 357 of the Cr.P.C., which allows for the imposition of a fine to compensate for pecuniary loss. Since the bank had already received full and final payment, further prosecution would not result in any additional punishment for the petitioner company. 4. Applicability of Legal Principle: The court relied on the precedent set by the Supreme Court in Standard Chartered Bank vs. Directorate of Enforcement, which held that a company cannot be sentenced to imprisonment, and only a fine can be imposed. The court concluded that continuing the trial would be an abuse of the process of the court and would not serve the ends of justice. Conclusion: The court allowed the petition, quashing the order dated 29th November 2012, and consequently, the criminal proceedings in Criminal Case No. 51/11 and RC. No. 5(E)/01 under Sections 120-B/409 of the IPC and Sections 13(1)(d) and 13(2) of the Prevention of Corruption Act, 1988, against the petitioner company. The court emphasized that no useful purpose would be served by continuing the trial, as the petitioner company, being a juristic person, could not be sentenced to imprisonment and had already settled its liabilities with the bank.
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