“Matter Compromised Between Borrowers And Bank”: Supreme Court Quashes Criminal Cases Against Accused
The Supreme Court quashed criminal proceedings against persons accused in a cheating case noticing that the matter has been compromised between the borrower and the bank.
The Court quashed the criminal proceedings against the appellant under Sections 120-B, 420, 468 and 471 of the IPC The Court noted that after the receipt of the amount under One Time Settlement (OTS), the Allahabad Bank (Bank) had also decided to close the loan account.
A Bench of Justice B.R. Gavai and Justice K.V. Viswanathan observed, “The facts in the present case are not in dispute. It is not disputed that the matter has been compromised between the borrowers and the Bank. It has also not been in dispute that, upon payment of the amount under the OTS, the loan account of the borrower has been closed.”
Senior Advocates Dama Seshadri Naidu represented the appellant, while ASG Vikramjeet Banerjee appeared for the respondents.
The FIR alleged that a loan application was submitted by the Directors of Indo Global Projects Ltd. (IGPL) to secure funds to purchase new cars. However, when the post-dated cheques were sent for clearing, they bounced.
As a result, the Central Bureau of Investigation – Economic Offence Wing (CBI) registered an FIR against the accused under Sections 120B, 420, 468 and 471 of the IPC along with charges under Sections 13(2) read with 13(1)(d) of the Prevention of Corruption Act.
In the proceedings before the Debt Recovery Tribunal (DRT), IGPL reached a One-Time-Settlement (OTS) with the Bank, which was accepted, and the loan account was declared closed. Therefore, the appellant sought quashing of the proceedings under Section 482 of the CrPC.
In a separate judgment of the even date with similar facts in K. Bharthi Devi v. State Of Telangana, the Apex Court held that when the matter was compromised between the borrower and Bank, the continuation of the criminal proceedings would not be justifiable.
“In the matters arising out of commercial, financial, mercantile, civil, partnership or such like transactions or the offences arising out of matrimony relating to dowry, etc. or family disputes where the wrong is basically private or personal in nature and the parties have resolved their entire dispute, the High Court should exercise its powers under Section 482 CrPC for giving an end to the criminal proceedings,” the Court observed.
The Court clarified that the possibility of conviction in cases of civil nature was “remote and bleak” and therefore, the continuation of the criminal proceedings would put the accused to “great oppression and prejudice.”
Consequently, the Court set aside the order of the High Court and quashed the criminal proceedings.
Accordingly, the Supreme Court allowed the appeal.
Cause Title: Tarina Sen v. Union of India & Anr. (Neutral Citation: 2024 INSC 752)
Appearance:
Appellant: Senior Advocate Dama Seshadri Naidu; AOR Rajiv Yadav; Advocates Vivek Singh, Megha Singh and Shivali Chaudhary
Respondents: ASG Vikramjeet Banerjee