Summary
Two women accused, partners of a borrowing firm, sought quashing of a CBI prosecution for cheating, forgery and Prevention of Corruption Act offences over a bank car loan. Because the borrowers had settled the dues with the bank through a one-time settlement accepted before the Debt Recovery Tribunal, the Supreme Court held that continuing the criminal case was unjustified and quashed it.
Issues
- Whether criminal proceedings against the appellants should continue after the borrowers had settled the loan with the bank under a one-time settlement and the loan account was closed.
- Whether the High Court was right to relegate the appellants to raise their pleas before the trial Court instead of deciding the petition under Section 482 CrPC.
Provisions considered
- Section 482, Code of Criminal Procedure, 1973The inherent power to prevent abuse of process and secure the ends of justice was held to be the power the High Court should have used to end the proceedings where a commercial or financial dispute of an essentially private nature had been fully resolved between borrower and bank. (¶¶ 2, 3.10, 15)
- Sections 120B, 420, 468 and 471, Indian Penal Code, 1860These were the offences of conspiracy, cheating and forgery charged by the CBI; the Court quashed the proceedings on them as against the appellants in view of the settlement. (¶¶ 3.1, 3.7, 17)
- Section 13(2) read with Section 13(1)(d), Prevention of Corruption Act, 1988Charged against all accused, including the bank manager; the proceedings against the two appellants under these provisions were also quashed. (¶¶ 3.1, 3.7, 17)
Held
- It was undisputed that the borrowers had compromised with the bank, paid the one-time settlement amount and had the loan account closed, so the only question was whether continuing the criminal case against the appellants was justified. (¶¶ 11, 12)
- Following its separate judgment of the same date on similar facts, the Court held that once the borrower and the bank have compromised, continuing the criminal proceedings is not justifiable. (¶ 14)
- Where offences arise from commercial, financial, mercantile, civil, partnership or similar transactions, or from matrimonial and family disputes, and the wrong is basically private and the parties have settled the whole dispute, the High Court should exercise its Section 482 CrPC power to end the proceedings, since conviction is remote and continuing the case would oppress and prejudice the accused. (¶¶ 15, 16)
- The Court confined itself to the cases of the two appellants, both women related to the second accused, noting that the second and third accused had died. (¶ 13)
Result
Appeals allowed; the High Court's orders of 4 July 2023 set aside and the criminal proceedings against the appellants in T.R. No. 28 of 2002 before the Special Judge (CBI), Bhubaneswar quashed.