Civil remedy does not bar criminal prosecution where bank-fraud allegations disclose cognizable offences and misuse of process is unshown

Criminal proceedings based on alleged bank fraud were not liable to be quashed under Section 482 CrPC merely because the dispute also had civil or recovery remedies. Where the allegations, taken at face value, disclosed a fraudulent scheme involving cheque presentation, credit against insufficient funds and immediate withdrawal causing loss to the bank, criminal liability could still arise. The omission to array the company did not, on these facts, justify quashing against the accused directors. Section 482 must be used sparingly, only to prevent abuse of process or secure the ends of justice; those limits were not met, so continuation of the trial was warranted.

---

---

Issues: Whether the High Court was justified in quashing the criminal proceedings under Section 482 of the Code of Criminal Procedure, 1973 on the grounds that the dispute was civil in nature, one of the entities involved was not arraigned as an accused, and alternative recovery remedies were available.

Analysis: The allegations, if accepted in entirety, disclosed a fraudulent scheme in which cheques were presented and credited against insufficient balances and the amounts were immediately withdrawn, causing substantial loss to the bank. The existence of a possible civil remedy or recovery proceedings did not by itself negate criminal liability where the factual allegations disclosed cognizable offences. The omission to array the company did not, on these facts, justify quashing of proceedings against the accused directors. The power under Section 482 of the Code of Criminal Procedure, 1973 is to be exercised sparingly and only to prevent abuse of process or to secure the ends of justice, and the case did not fall within those limits.

Conclusion: The order quashing the criminal proceedings was unsustainable and was set aside; continuation of the criminal trial was warranted.

Final Conclusion: Criminal proceedings arising out of the alleged bank fraud were permitted to proceed, and the trial court was directed to conclude the trial expeditiously in accordance with law.

Ratio Decidendi: A criminal prosecution cannot be quashed merely because the underlying transaction also gives rise to a civil remedy or recovery proceedings, where the allegations, taken at face value, disclose the ingredients of a criminal offence and no abuse of process is shown.

---