TMI Blog2015 (6) TMI 1134X X X X Extracts X X X X X X X X Extracts X X X X ..... intents and purposes given up the perusal of the complaint and having no grievance against them in any other proceeding whether civil or criminal on the same set of issues. There is no doubt that the trial has been proceeding for offences for the last about 20 years ago. The dispute between the petitioner and complainant Bank 33 years old. A long time has in fact been elapsed since the alleged commission of offences. Still the trial continues. The present petition is maintainable as the same has been filed also on additional grounds and circumstances. No useful purpose would be served if such oppressive trial may continue for many more years. Thus, ends of justice are served by quashing such a proceeding, as the parties cannot be allowed to go through the rigmarole of criminal prosecution for long numbers of years in a matter, it is doubtful in the mind of the Court in whose favour it would be decided. - Crl.M.C. No. 5798/2014 & Crl. M.A. No. 19744/2014 - - - Dated:- 29-6-2015 - Manmohan Singh, J. For the Petitioners : K. T. S. Tulsi, Sr.Adv. with Suman Kapoor, Raj Kamal K. Shrivastava, Advs. For the Respondent : Narender Mann, Spl. PP, CBI with Manoj Pant, Adv. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities from Indian Overseas Bank. In furtherance of the criminal conspiracy, accused No.1 positively recommended the proposal of the petitioners and before the same was approved by the competent authority, he unauthorizedly and fraudulently released ad- hoc credit facilities to the tune of ₹ 65 lakhs and thereby exposed the bank without securing its financial interest. In view of these facts, the contention of the petitioners cannot be accepted. 3.3 The petitioner No.1 in his capacity as proprietor of M/s Indian Herbs, 21, Okhla Industrial Area, Phase II, Scheme III, New Delhi- 110020, opened a current account bearing No.338 in M/s UCO Bank, Delhi High Court Branch, New Delhi on 23rd March, 1989 and that the firm M/s Indian Herbs was fictitious and non-existent business concern, as the address shown in the said bank account application form was a shed of DSIDC, Okhla, Industrial Area, New Delhi, which was not owned/allotted to M/s Indian Herbs and as per the investigation, this shed was allotted to Sh. Deepak Bhandari (one of the Directors of accused company (A-5), and brother of petitioner No.1, for manufacturing of Homeopathic Medicines and ultimately this shed was then s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... left with no claim, grievance or complaint of any nature whatsoever against either of the respondents. 7. On the basis of the aforesaid settlement/compromise arrived at between the bank and the borrower company, the High Court, by order dated 6th October, 2004 allowed the application of co-accused Shri N.Bhojraj Shetty, Ex-Branch Manager of the complainant bank in his writ petition and directed the bank to release his post-retirement benefits, which the bank had withheld due to the pendency of the departmental enquiry against him, relating to the transactions in question. 8. After the release of aforesaid post-retirement benefits, the bank also withdrew the disciplinary proceedings against the co-accused N. Bhojraj Shetty, leading to the final disposal of his writ petition, vide order dated 18th March, 2005. 9. The trial court, vide order dated 23rd November, 2006 refused to quash the present proceedings against the petitioners on the ground that the power to quash the proceedings on the ground of compromise between the parties are only with the High Court under Section 482 Cr.P.C. and ordered framing of charges against the petitioners. 10. After completion of investig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the matter with Vijaya Bank and paid the entire amount in terms of settlement. He also submits that a 'No Dues certificate' has been issued by the Bank. Relying upon judgment in CBI vs. Narender Lal Jain, Crl. Appeal No.517/2014 arising out of SLP (Crl.) No.6138/2006 decided on 28.02.2014, learned senior counsel for the petitioners contends that the proceedings are liable to be quashed. Notice. Mr.Narender Mann, Special PP accepts notice on behalf of CBI and seeks time to file reply. Let the same be filed before the next date of hearing. Renotify on 18.02.2015 before the Roster Bench. Till the next date of hearing, the trial court will adjourn the matter to any convenient date after 18.02.2015. 15. It is contended by the petitioners that the disputes were mainly of civil nature, in which settlement has been arrived between the parties and a consent decree to that effect has been passed under the Civil Procedure Code by the Debt Recovery Tribunal, Delhi, whereunder the complainant bank had exonerated the petitioners herein of any claims of any nature whatsoever. Further the said settlement was made under Reserve Bank of India's OTS Scheme, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Supreme Court in the case of Gopakumar B. Nair v. CBI Anr., (2014) 5 SCC 800 is not attracted in the present case. Per contra, Gopakumar's judgment reaffirms the legal position laid down in Nikhil Merchant (supra) and N L Jain (supra) that the passage of a consent decree in disputes of such nature makes a fit rationale for quashing of proceedings under Section 482 Cr.P.C., as the continuance of such proceedings serve no useful purpose. 20. The prayer is opposed by Mr.Narender Mann, learned counsel for the respondent who states that firstly the petition is not maintainable under Section 482 Cr.P.C. as the allegations made in the charge sheet prima facie discloses the commission of cognizable offences by the petitioners/accused, under Section 120-B IPC read with Section 420, 467, 468, 471 IPC, read with Section 5(1) (d) and Section 5(2) of the P.C. Act, 1947 and Section 13(2) read with 13(l)(d)(ii) of PC Act, 1988 and substantive offences thereof. 21. Secondly, he says that there is no fresh ground available to the petitioner to approach this Court as the similar plea of the petitioner was rejected by this Court. As one of the ground taken by the petitioner before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not private in nature. The charge of conspiracy is to commit offences under the Prevention of Corruption Act. They have also been charged for commission of the substantive offences under Section 467, 468 and 471 IPC. As such the ratio of the cases viz. Narender Lal Jain and Nikhil Merchant (supra) do not apply to the instant case. The facts of the instant case are more closure to the facts of Gopakumar B. Nair case (supra) decided by the Supreme Court on 19th September, 2014. 25. Let me now consider the submissions of rival parties. It is admitted position that the three-Judge Bench of the Supreme Court in the case of Gian Singh (supra) who dealt with the issue of quashing of a criminal proceeding on the ground of settlement between an offender and the victim and in this context, it ruled thus as under:- 61. Inherent power is of wide plenitude with no statutory limitation but it has to be exercised in accord with the guideline engrafted in such power viz.: (i) to secure the ends of justice, or (ii) to prevent abuse of the process of any court. In what cases power to quash the criminal proceeding or complaint or FIR may be exercised where the offender and the victim hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepting the settlement and quashing the proceedings or refusing to accept the settlement. Some of the guidelines which are relevant for the present purpose are reproduced herein below :- (II) When the parties have reached the settlement and on that basis petition for quashing the criminal proceedings is filed, the guiding factor in such cases would be to secure: (i) ends of justice, or (ii) to prevent abuse of the process of any Court. While exercising the power the High Court is to form an opinion on either of the aforesaid two objectives. (III) Such a power is not be exercised in those prosecutions which involve heinous and serious offences of mental depravity or offences like murder, rape, dacoity, etc. Such offences are not private in nature and have a serious impact on society. Similarly, for offences alleged to have been committed under special statute like the Prevention of Corruption Act or the offences committed by Public Servants while working in that capacity are not to be quashed merely on the basis of compromise between the victim and the offender. (IV) On the other, those criminal cases having overwhelmingly and pre-dominantly civil charact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary to revert or refer to the settled position in law with regard to the contours of the power available under Section 482 CR.P.C. it must be remembered that continuance of a criminal proceeding which is likely to become oppressive or may partake the character of a lame prosecution would be good ground to invoke the extraordinary power under Section 482 Cr.P.C. 28. In the case of Vikram Anantrai Doshi (supra), the Supreme Court distinguished the decision in Narendra Lal Jain (supra) by observing that the accused persons were facing charges under Section 120-B read with Section 13(2) read with 13 (1) (d) of the PC Act 1988 and Section 420/471 of IPC and the facts were not similar to the facts in Narendra Lal Jain (supra) wherein the accused was charged under Section 120-B read with Section 420 IPC. The Supreme Court observed as follows:- ....Though the amount due have been paid the same is under a private settlement between the parties unlike in Nikhil Merchant (supra) and Narendra Lal Jain (supra) where the compromise was a part of the decree of the Court. There is no acknowledgement on the part of the bank of the exoneration of the criminal liability of the accused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is not legally permissible. 30. I am clear in my mind that if the facts and circumstances in the present case are similar to the case of Vikram Anantrai Doshi (supra) then the proceedings are not liable to be quashed. But if the same are similar to the cases of Narender Lal Jain (supra) and Nikhil Merchant (supra) and the circumstances are distinct, the Court may exercise its discretion. 31. The facts in the case of Vikram Anantrai Doshi (supra) are that amount of loan sought was sanctioned on 24th January, 2003 by one Mr.K.K.Aggarwal, General Manager and communicated to the branch. As per the terms and conditions of the said Term Loan, the primary security for the same was the first charge to be created on the fixed assets of the company ranking pari passu with the existing Term Lending Institutions. The primary charge for the cash credit and working capital demand loan was the hypothecation of current assets such as stocks, stocks in trade, raw materials and book debts, and, that apart, one of the important terms and conditions was that the CC, WCDL and Term Loan amounts were to be directly paid to the company's account with the UTI Bank and Federal Bank so as to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the real facts are that Late Dr. Rajinder Kumar Bhandari (A-3) was a highly renowned doctor of homeopathy in the city of Delhi. In pursuance to A-3's name and recognition of being the leading practitioner of homeopathy, and to meet the growing demand of homeopathic medicines, sometime during the late 1970s he started a business concern by the name R.K. Bhandari (Homeopath) Pvt. Ltd. to manufacture and sell homeopathic medicines. The said homeopathy unit was located at E- 47/II, Okhla Industrial Area, Phase II, New Delhi. Later i.e. in the year 1985 the said company added an herbal unit to its business by setting up a manufacturing unit in Parwanoo (Himachal Pradesh). Later on, the same company came to be known as RKB Herbals Pvt. Ltd.(A-5), with two business units, namely, the Homeopath Unit located in Okhla Industrial Area, Delhi and Herbal Unit located in Parwanoo, Himachal Pradesh. 33. The relationship of the accused company with the complainant bank dated back to year 1982 with the opening of current account. In the year 1987, the accused company (A-5) made a loan application of about ₹ 2 Crores for its homeopathy as well as Herbal Unit. The bank for three diffe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tune of ₹ 204 Lacs for both its unites i.e. Homeopathic Division at New Delhi and Herbal unit at Parwanoo and disclosed the fact of its already availing credit limit from I.O. Bank for its Homeopathic Division. iv) 26.02.1987 First Loan proposal was deferred by the complainant bank, primarily on the ground that at that time there was credit squeeze in the bank. v) 24.10.1987 Second loan application dated 24.10.1987 was submitted to the complainant bank, wherein, the loan requirement for the herbal unit was reduced to less then half i.e. only ₹ 100 Lacs (one crore) and in this loan application, the loan was applied only for Herbal unit at Parwanoo, which was not availing credit limit from any bank. However, this fact that the Homeopathic Division at New Delhi was already enjoying credit facility from I.O. Bank was known to senior officer of the bank, as the same was very much within the knowledge of the bank and was disclosed to them earlier on many occasions. Since in this second loan application, the request for loan was only for Herbal Unit, therefore, the fact that the company was enjoying cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andum for board of directors of the bank was prepared in which it is clearly mentioned that (i) the bills which were discounted were returned unpaid due to defect in the medicine/product, (ii) irregularities in the accounts arose due to non- salability of goods/return of goods sold and diversion of funds (for payment of outside creditors, advertisement and publicity charges etc.) (iii) market survey indicated that the existing as well as the proposed products of the unit are acceptable and (iv) concerned branch of the bank was permitted to rebook the consignments covered under the unpaid DBP's so as to enable the party to reprocess sale of the same and approved the enhancement of credit limit to over 2 crores, vide its proposed resolution dated 06.04.1990. for fourteen months, the proposal for revival of the unit was kept pending with the bank and thereafter, suddenly, bank refused to participate in rehabilitation of the unit and for this reason, the company became sick and could not repay its loan in time, leading the bank to file suit for recovery of loan against the company in June, 1993 and then after about a year of filing of the suit, the present criminal case being R.C. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods (Lorry Receipts) In the entire FIR there is absolutely no mention of floating of any company by the name of M/s Indian Herbs by Shri Sanjay Bhandari and his wife Smt. Sonia Bhandari. It is not the case of the bank in its FIR that Shri Sanjay Bhandari and his wife Smt. Sonia Bhandari started a fictitious business concern styled of M/s Indian Herbs for realizing payments from Vijaya Bank against bogus hundies (drawee bills) drawn on M/s R.K.B Herbals Pvt. Ltd. Inspite of the fact that the FIR is completely silent about Smt. Sonia Bhandari and M/s Indian Herbs, yet Smt. Sonia Bhandari was charge sheeted as one of the accused. 36. Let me now examine the case in hand as per the facts and circumstances available on record. The petitioners and complainant bank reached the aforesaid settlement in accordance with the guidelines of the Reserve Bank of India (RBI) under the One Time Settlement Scheme (OTS Scheme), as stated in paragraph 2 of the Joint Application for settlement filed before the DRT. The RBI, in consultation with the Government of India, notified the said OTS Scheme (DBOD.BP.BC.65/21.04.117/2002-2003) on 29th Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruary, 2004. 39. The settlement arrived at between the parties was a part of the decree of the Civil Court (it being the Debt Recovery Tribunal) who is the Forum empowered to adjudicate matters involving debt owed to financial institutions. The consent decree was passed as duly satisfied as recorded. 40. In the case decided by the Supreme Court in CBI vs. Duncuns Agro reported in 1996 (5) SCC 591 it was held that once a compromise has been made, and the complainant bank received its outstanding sums in full and final settlement, no purpose would be served by the prosecution, and the continuing of the prosecution will be an abuse of the process of law and hence powers under Section 482 Cr.P.C. will have to be exercised and, the accused ought to be discharged. 41. In his individual capacity, petitioner No.1 herein, namely Shri Sanjay Bhandari has been charged under Sections 420 and 471 IPC. In her individual capacity, petitioner No.2, namely Smt. Sonia Bhandari has been charged under Sections 420, 467, 468 and 471 IPC. The accused bank employee (public servant) being accused No.1 in the trial, together with the petitioners who are accused No. 2 and 4, have been together char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced below: 6. That with the said payment, all disputes, differences, claims, suits, complaints etc. of the applicant bank stands fully settled, adjusted/compounded and the applicant bank is left with no claim grievance or complaint of any nature whatsoever against either of the respondents. The relevant portion of the 'No Due Certificate' is as under: We hereby state that we have no claims of any kinds whatsoever against M/s RKB Herbals Private Limited and its directors namely Mr.Sanjay Bhandari, Mr.Deepak Bhandari Mrs.Nirmala Bhandari. The relevant extract from the consent decree of the DRT is as under: Accordingly, in view of the aforesaid the instant OA stands disposed off as having been duly satisfied in terms of the compromise and the aforesaid lA shall remain part of these proceedings. [Emphasis Supplied) 45. It is submitted by Mr.Tulsi that as per complainant only A-1 has been made accused in the said criminal complaint, even though trial evidence would show that the said accused 1 was not the eventual approval authority and instructions for the approval, continuance and further increase in the said credit facilities were coming from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d) of PC Act to sustain. There is no credible evidence to prove such pecuniary advantage. 48. The petitioners state that they are private persons, and not public servants. The petitioners are seeking to quash the FIR in respect of them. The reliance has been placed by Mr.Tulsi upon the judgment of this Court in the case of K. Chandra v. State, reported in 1993 Crl. L.J. 1237 the offences punishable under Sections 11 to 13 of the PC Act, 1988 with which the petitioner is charged related to the criminal misconduct by public servant. (11) The reading of these provisions quoted above would show that these apply only to a public servant and not to a private person. Hence no case on the face of the allegations can be registered against the petitioner under Sections 11,12,13 of the P.C. Act. 49. It is stated that uncontroverted evidence has come to light from the trial stage that these uncharged senior bank employees not only approved and continued the credit facilities themselves, but also on many occasions gave oral instructions to the said A-1 to continue and enhance the said credit facilities in favour of the accused applicants. During cross-examination, prosecution and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra). Therefore as per the mandate of Supreme Court, the non-compoundable offence can be compounded by the High Court while exercising its discretion under Section 482 Cr. P.C. 54. The other submission of the respondent is that the petition is not maintainable as the petitioners earlier sought the same prayer which was rejected. No doubt the said revision application was filed in this Court to challenge the order on charge of the trial court and it was under the provisions of Section 397/401 Cr.P.C. In their original petition, the petitioners had disclosed in Para 20 of the said petition, the fact that they had filed a revision application in this Court, and appealed in the Supreme Court, both of which had been unsuccessful. 55. It is immaterial whether if one of the pleas taken by the petitioners in revision application is similar to the plea taken in the present petition for quashing. Even if the eventual prayer of both the petitions are same or similar, each are to be determined on the grounds individual to them within the framework of law under which it is being presented to this Court. The question of fresh grounds is to be assessed in juxtaposition of both facts and la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase for interference. In view of the forgoing discussion, the application is allowed and the retiral benefits of the petitioners be released by the respondents. The application stands disposed of accordingly. [Emphasis Supplied] The complainant bank did not challenge the said order of this High Court. 59. DRT Consent Decree (arising out of the settlement between the parties) was passed in February, 2004 and relying upon which, this Court released the retirement benefits of the said A1 in October 2004. In compliance of the said order of this Court, the complainant bank, not only released the entire retirement benefits, by way of its letter dated 15th February, 2005, but went many steps further and withdrew the entire charge sheet that had initiated the departmental proceedings against the said A1. 60. By releasing the retirement benefits, read together with the complainant's bank abandonment of departmental proceedings against the said A1, is to be further read in juxtaposition with the judgment of the Supreme Court in the case of P S Raja vs. State of Bihar reported in (1997) Supreme Court Cr.R. 137:- The standard of proof required to establish t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld well be within its powers to quash the proceeding on the basis of a settlement/compromise between parties. 63. The claim of the respondent that the settlement arrived at between the complainant bank is merely a private settlement under these circumstances has no force as decree was passed by the Debt Recovery Tribunal, with the suit disposed off as duly satisfied. The said DRT's consent decree together with the joint compromise application, are on records. 64. Gian Singh (supra) case came to a larger bench (comprising of three judges) by way of a reference made to it by a two-judge bench. The three-judge bench to answer that reference was asked not only to opine on the Gian Singh (supra) case itself but also determine the correctness of that court's decision in B S Joshi vs. State of Haryana (2003) SCC 675. In Nikhil Merchant vs. CBI (supra) the three-judge bench of Supreme Court, after long deliberations on the subject of quashing and compounding of non-compoundable offences, concluded :- 62. In view of the above, it cannot be said that B S Joshi, Nikhil Merchant and Manoj Sharma were not correctly decided. We answer the reference accordingly. 65. The ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quash the said proceedings depending upon the facts of the case. 68. The Supreme Court, answering the reference of Nikhil Merchant, in Gian Singh was mindful of the factum of offences that were alleged in the case of Nikhil Merchant. Substantive offences were alleged under Section 420, 467, 468 and 471 of IPC, and offences were alleged under 120-B IPC read with PC Act, 1988. In this respect, Para 1of the Nikhil Merchant judgment is relevant to be reproduced below: The Central Bureau of Investigation (hereinafter referred to as CBI ) filed a charge sheet against five accused persons under Section 120-B read with Sections 420, 467, 468, 471 of the Penal Code, 1860 read with Sections 5(2) read with Section 13(l)(d) of the Prevention of Corruption Act, 1988. In the said charge sheet, the appellant herein was made Accused 3 and the company, in respect of which he was the former Managing Director, M/s Neemuch Emballage Ltd., Mumbai, was made Accused 4. The other three accused are official of Andhra Bank. While confirming the judgment of Nikhil Merchant, the Hon'ble Bench in Gian Singh (supra) sounded a word of caution: 61. ... Similarly, any compromise between the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the trial has been proceeding for offences for the last about 20 years ago. The dispute between the petitioner and complainant Bank 33 years old. A long time has in fact been elapsed since the alleged commission of offences. Still the trial continues. The present petition is maintainable as the same has been filed also on additional grounds and circumstances. No useful purpose would be served if such oppressive trial may continue for many more years. Thus, ends of justice are served by quashing such a proceeding, as the parties cannot be allowed to go through the rigmarole of criminal prosecution for long numbers of years in a matter, it is doubtful in the mind of the Court in whose favour it would be decided. 71. In view of abovementioned reasons, this Court is inclined to quash the proceedings pending against the petitioners, arising out of R.C. No.4A/94/SIU(X) dated 23rd May, 1994, titled 'CBI vs. N.Bhojraj Shetty Ors.', being C.C. No.65/11, pending in the Court of Spl. Judge (CBI), Tis Hazari Courts, Delhi. 72. As the State Machinery has been used where the matter is kept pending for the last more than two decades coupled with the fact that the conduct of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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