TaxTMI 
TaxTMI 
2025 (11) TMI 2028
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....]. By the impugned judgment, the High Court allowed the petition under Section 482 of the Code of Criminal Procedure, 1973, [Hereinafter, referred to as "CrPC"] [Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS)] filed by respondent No. 1-M/s. Sarvodaya Highways Ltd. [Hereinafter, referred to as "respondent No.1-Company or defaulter company"] and its Directors i.e., respondent No. 2-Gurinder Kumar Garg, respondent No.3-Aruna Garg, respondent No.4-Aashutosh Garg and respondent No.5-Aayush Garg, and thereby quashed the entire proceedings arising out of the FIR RC No. BD1/2015/E/0002/CBI/BS&FS/DLI registered by the appellant-CBI for the offences punishable under Section 120B read with Sections 406, 420, 467, 468 and 471 of the Indian Penal Code, 1860 [Hereinafter, referred to as "IPC"] and Sections 13(2) read with 13(1)(d) of the Prevention of Corruption of Act, 1988 [Hereinafter, referred to as "PC Act"]. Consequently, the proceedings arising out of the chargesheet No. RC.BD/2015/E/2002 dated 30th November, 2016 filed pursuant to investigation in the aforesaid FIR also came to be quashed. BRIEF FACTS 4. The FIR mentioned supra came to be lodged on 3rd February,....
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....ted, as the companies to whom these work orders were allegedly issued expressly stated that they had not issued any such orders to respondent No.1-Company. The remaining 7 work orders were, as a matter of fact, issued to the associate companies of the defaulter, one of whose Directors was a common Director in all these 7 companies. Based on the evidence collected, the investigating agency drew the following conclusions in the chargesheet :- "It was therefore, further revealed in the investigation by the Petitioner Department that the said Respondents knowingly and dishonestly submitted false and forged work orders purportedly issued by the aforesaid companies to induce the Respondent Bank to sanction credit facilities to the Respondent No.1/A-1. In addition to the aforesaid, the investigation further confirmed that marking of hens on 3 properties, which were offered by the Respondent No. 1/Accused Company, as collateral securities to the Respondent Bank were also forged. The aforesaid facts constitute the commission of offences against M/s Sarvodaya Highways Ltd. (A-1) through its Directors (A-2) to (A-5), Sh. Gurinder Kumar Garg (A-2), Smt. Aruna Garg (A- 3), Sh.....
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....eclared to be NPA and proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 were also initiated. Ultimately, realizing that it would not be possible to recover the entire outstanding amount along with interest, the Bank opted for a safer course of settling the account by accepting a substantially lesser amount than what would have been recovered had the terms of the cash credit account been adhered to by respondent No. 1-Company. Thus, significant loss was suffered by the Bank which has a direct and adverse bearing on the public exchequer. 12. The learned Additional Solicitor General placed reliance on the following observations made by this Court in the case of Gian Singh v. State of Punjab [(2012) 10 SCC 303], to urge that merely because a settlement has been arrived at in respect of the loan account, the same cannot, by itself, furnish a valid ground for quashing the criminal proceedings: "57. Quashing of offence or criminal proceedings on the ground of settlement between an offender and victim is not the same thing as compounding of offence. They are different and not interchangeable. Strictly spea....
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....ing, particularly the offences arising from commercial, financial, mercantile, civil, partnership or such like transactions or the offences arising out of matrimony relating to dowry, etc. or the family disputes where the wrong is basically private or personal in nature and the parties have resolved their entire dispute. In this category of cases, the High Court may quash the criminal proceedings if in its view, because of the compromise between the offender and the victim, the possibility of conviction is remote and bleak and continuation of the criminal case would put the accused to great oppression and prejudice and extreme injustice would be caused to him by not quashing the criminal case despite full and complete settlement and compromise with the victim. In other words, the High Court must consider whether it would be unfair or contrary to the interest of justice to continue with the criminal proceeding or continuation of the criminal proceeding would tantamount to abuse of process of law despite settlement and compromise between the victim and the wrongdoer and whether to secure the ends of justice, it is appropriate that the criminal case is put to an end and if the answer ....
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....epayment or settlement cannot justify quashing criminal proceedings. This Court in Paragraph 26 observed as follows :- "26. We are in respectful agreement with the aforesaid view. Be it stated, that availing of money from a nationalised bank in the manner, as alleged by the investigating agency, vividly exposits fiscal impurity and, in a way, financial fraud. The modus operandi as narrated in the charge-sheet cannot be put in the compartment of an individual or personal wrong. It is a social wrong and it has immense societal impact. It is an accepted principle of handling of finance that whenever there is manipulation and cleverly conceived contrivance to avail of these kinds of benefits it cannot be regarded as a case having overwhelmingly and predominatingly civil character. The ultimate victim is the collective. It creates a hazard in the financial interest of the society. The gravity of the offence creates a dent in the economic spine of the nation. The cleverness which has been skillfully contrived, if the allegations are true, has a serious consequence. A crime of this nature, in our view, would definitely fall in the category of offences which travel far ahead of pe....
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....lined to quash criminal proceedings on the ground that a settlement had been arrived at between the parties, observing that, as the case involved a special statute i.e., PC Act, and that quashing the proceedings would have grave and far-reaching consequences on the society at large. This Court in paragraphs 17 and 18 observed as follows: - "17. A profitable reference in this regard can be made to the judgment in State v. R Vasanthi Stanley9 wherein this Court declined to quash the proceedings in a case involving alleged abuse of the financial system. It was observed as under: "15. ........ A grave criminal offence or serious economic offence or for that matter the offence that has the potentiality to create a dent in the financial health of the institutions is not to be quashed on the ground that there is delay in trial or the principle that when the matter has been settled it should be quashed to avoid the head on the system. That can never be an acceptable principle or parameter, for that would amount to destroying stem cells of law and order in many a realm and further strengthen the marrow of unscrupulous litigations. Such a situation should never be conceived....
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....ellant CBI wants to pursue in this matter. ANALYSIS 21. We have given our thoughtful consideration to the submissions advanced at bar and have gone through the impugned order and also the material placed on record. 22. The High Court, while quashing the proceedings, assigned the following reasons: - "After hearing learned counsel for the parties, I find merit in the present writ petition, for the following reasons :- (a) It is admitted case that cash credit facility was availed in the year 2012 and on account of account being declared NPA, some proceedings were initiated before DRT, where the petitioners had paid back the amount as per settlement arrived at between the petitioners and the bank. (b) It is also admitted case of the bank that at no point of time, the petitioners tried to sell off or siphon off of the loan amount to any third party and it is a simple case where the loan was not repaid in time, for which it was declared NPA and once the recovery proceedings were initiated before DRT, the petitioners repaid the entire amount along with interest to the respondent Bank in installments and similarly, in the same manner, the respondent- Ba....
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....t large is also impacted. 26. It can be said without a shadow of doubt that the one-time settlement would not fetch the entire amount to which the Bank was otherwise entitled, had the cash credit account been maintained regularly. The settlement was made at around Rs.41 crores whereas, admittedly, the liability was of Rs. 52 crores approximately. One-time settlements are, as a rule, effected under circumstances where the Bank under duress is compelled to accept lesser amount in order to secure the maximum possible recovery against the defaulting account. 27. In this background, we feel that the High Court committed error apparent in the eyes of law by quashing the proceedings. 28. In the case of Jaswant Singh (supra), the dispute involved was inter se between private parties and the prosecution had been initiated only for the offences punishable under Sections 406 and 420 of the IPC. This Court thought it fit to quash the proceedings considering the fact that the accused and the complainant had settled all their disputes amicably and no useful purpose would be served by allowing the prosecution to continue. 29. In the case of B.B. Aggarwal (supra), this Court upheld the....