Criminal Cases With Overwhelming & Predominant Civil Character Should Be Quashed When Parties Have Resolved Entire Disputes Among Themselves: SC
The Supreme Court reiterated that criminal cases having overwhelmingly and predominantly civil character should be quashed when the parties have resolved their entire disputes among themselves.
The Court quashed the criminal proceedings against two women arraigned as wives of the accused involving allegations of using forged and fabricated documents to secure credit facilities amounting to crores of rupees. The Court noted that after the receipt of the amount under One Time Settlement (OTS), the Indian Bank (Bank) had also decided to close the loan account.
A Bench of Justice B.R. Gavai and Justice K.V. Viswanathan observed, “It could thus be seen that this Court reiterates the position that the criminal cases having overwhelmingly and predominantly civil character, particularly those arising out of commercial transactions or arising out of matrimonial relationship or family disputes should be quashed when the parties have resolved their entire disputes among themselves.”
Senior Advocates Dama Seshadri Naidu and Gaurav Agarwal represented the appellants, while ASG Vikramjeet Banerjee appeared for the respondents.
The prosecution alleged that a compnay owned by the accused had failed to repay credit facilities granted by the Bank. After the loans were declared Non-Performing Assets (NPA), the Bank pursued legal recovery through the Debts Recovery Tribunal (DRT). During the proceedings, it was noticed that the title documents submitted for mortgage were forged.
As a result, the Central Bureau of Investigation – Economic Offence Wing (CBI) registered an FIR against the accused under Sections 120-B read with 420, 409, 467, 468 and 471 of the IPC along with charges under the Prevention of Corruption Act.
However, the bank accepted a settlement offer of Rs. 3.8 crores from the accused in 2015, following which it issued a 'No Dues Certificate,' closing the loan account. Inspite of the same, the criminal proceedings were not quashed. Therefore, the accused sought quashing of the charge-sheet under Section 482 of the CrPC.
The Telangana High Court had refused to exercise its jurisdiction under Section 482 of the CrPC to quash the proceedings noting that a serious offence under Section 307 of the IPC was involved.
The Supreme Court referred to its decision in B.S. Joshi v. State of Haryana (2003), wherein the Apex Court found that in view of a compromise arrived at between the Company and the Bank, it was a fit case where a technicality should not be allowed to stand in the way of quashing of the criminal proceedings. The Court found that in view of the settlement arrived at between the parties, the continuance of the same would be an exercise in futility.
The Court observed, “Undisputedly, the FIR and the chargesheet are pertaining to the dispute concerning the loan transaction availed by the accused persons on one hand and the Bank on the other hand. Admittedly, the Bank and the accused persons have settled the matter…The dispute involved predominantly had overtures of a civil dispute.”
The Court pointed out that there were certain offences “overwhelmingly and predominantly” bearing a civil flavour having arisen out of civil, mercantile, commercial, financial, partnership, where the wrong was basically to the victim, and the offender and the victim having settled all disputes between them amicably, the High Court would be “justified in quashing the criminal proceedings, even if the offences have not been made compoundable.”
“Apart from that, it is further to be noted that in view of the settlement between the parties in the proceedings before the DRT, the possibility of conviction is remote and bleak. In our view, continuation of the criminal proceedings would put the accused to great oppression and prejudice,” the Court stated.
Consequently, the Court set aside the order of the High Court and quashed the charge-sheet.
Accordingly, the Supreme Court allowed the appeal.
Cause Title: K. Bharthi Devi & Anr v. State Of Telangana & Anr. (Neutral Citation: 2024 INSC 750)
Appearance:
Appellants: Senior Advocates Dama Seshadri Naidu and Gaurav Agarwal; Advocates Nishant Bhatia, Vivek Singh, Shivali Chaudhary, R Chandrachud, Ramesh Allanki, Aruna Gupta, Syed Ahmed Naqvi, Rupinder Kaur, Vansh Verma, R. Chandrachud, Syed Ahmad Naqvi and Yash Gupt; AOR Rajiv Yadav, Siddhant Buxy and Rabin Majumder
Respondents: ASG Vikramjeet Banerjee; AOR Mukesh Kumar Maroria, Devina Sehgal, Brijesh Kumar Tamber and Himanshu Munshi; Advocates Bani Dikshit, Priyanka Das, B K Satija, Ayush Anand, Vimla Sinha, Vineet George, Vinay Singh Bist, Prateek Kushwaha, Arani Mukherjee, Yashu Rustagi, Sahas Bhasin, Anitesh Choudhary and Siddhant Munshi
