Criminal liability does not transfer on bank amalgamation absent express provision; proceedings against the transferee bank were quashed.

Criminal liability for offences allegedly committed by a transferor bank before amalgamation did not pass to the transferee bank merely because assets and liabilities were transferred under the scheme. The Court held that criminal liability is personal to the actual wrongdoer, and the amalgamation scheme preserved liability only in respect of directors, secretaries, managers, officers and employees of the transferor bank. As no independent criminal act by the transferee bank was made out in the charge sheet, the criminal proceedings and summoning order could not continue against it and were liable to be quashed.

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Issues: Whether a transferee bank can be fastened with corporate criminal liability for alleged offences committed by the transferor bank before amalgamation, and whether the criminal proceedings and summoning order could continue against the transferee bank after the scheme of amalgamation.

Analysis: The scheme of amalgamation under the Banking Regulation Act preserved pending proceedings in a limited sense, but the proviso to the relevant clause specifically continued criminal liability against directors, secretaries, managers, officers and employees of the transferor bank. The Court held that criminal liability is ordinarily personal to the actual wrongdoer and cannot be transferred ipso facto to another juristic entity merely because of amalgamation. Reading the scheme as a whole and in the light of the object of bank amalgamation, the Court concluded that the transfer of assets and liabilities did not carry forward the transferor bank's criminal liability to the transferee bank. The material in the charge sheet showed alleged acts of officials of the erstwhile bank, and no independent criminal act of the transferee bank was made out.

Conclusion: The transferee bank could not be prosecuted for the alleged offences of the transferor bank, and the criminal proceedings, to the extent they implicated the transferee bank, were liable to be quashed.

Final Conclusion: The impugned order was set aside, the challenge by the transferee bank succeeded, and the complainant's challenge failed.

Ratio Decidendi: In the absence of an express statutory or scheme-based provision creating such liability, criminal liability for offences committed by a transferor company or bank does not pass to the transferee upon amalgamation, though proceedings may continue against the actual individuals alleged to have committed the offence.

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