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Synopsis

The Supreme Court on October 3, 2024 emphasised that in the matters arising out of a commercial, financial, mercantile, civil, partnership or such like transactions or the offences arising out of matrimony relating to dowry, etc or family disputes where the wrong is basically private or personal in nature and the parties have resolved their entire dispute, the high court should exercise its powers under Section 482 CrPC for giving an end to the criminal proceedings.

A bench of Justices B R Gavai and K V Vishwanathan also pointed out that the possibility of conviction in such cases is remote and bleak and as such, the continuation of the criminal proceedings would put the accused to great oppression and prejudice. 

The court allowed petitions filed by one Tarina Sen and another against the Orissa High Court's orders of July 4, 2023, declining their plea for quashing the criminal proceedings arising out of their default in bank loan transactions.

The CBI lodged the case against the appellants in 2000 alleging offences punishable under Sections 120-B, 420, 468 and 471 of Indian Penal Code and Sections 13(2) read with 13(1)(d) of the Prevention of Corruption Act 1988. 

The FIR named five persons Ajay Kumar Behera, Surjit Sen, Kaushik Nath Ojha, Tarini Sen, and Shaileshree Sen.

Behera, while being posted as the Branch Manager in Allahabad Bank, Temple Marg Branch, Bhubaneswar during the year 1998-1999 entered into a criminal conspiracy with the other accused persons. At that time, Surjit Sen and Kaushik Nath Ojha were the Directors of M/s Indo Global Projects Ltd Bhubaneswar and the appellants herein were Partners in M/s Clarion Travels, Bhubaneswar.

It was alleged that Behera sanctioned a loan of Rs 8,40,000 to Clarion Travels without keeping any security or post-dated cheques. No repayment was ever made, and Behera did not pursue the matter.

On August 22, 1998, a similar loan application was submitted on behalf of IGPL for the same purpose of securing funds to purchase new cars at a cost of Rs 11,84,600. Behera again sanctioned the loan but this time, he obtained post-dated cheques which were subsequently bounced.

Both the companies that obtained the loan for purchasing cars had the same address.

However, in separate proceedings before the Debt Recovery Tribunal, both the companies reached to a one time settlement and paid the agreed amount to the bank in 2011.

An amount of Rs 7,50,000 was deposited with the bank as a full and final settlement of the dues.

The appellants contended that in light of the settlement, the continuance of the proceedings against the appellants would be an exercise in futility.

The bank's counsel confirmed the facts regarding the settlement entered into between the Bank and the borrowers.

The CBI, however, submitted that merely because the matter was settled between the bank and the borrowers, it did not absolve the accused persons of their criminal liability. It also submitted that the high court had rightly, upon consideration of the legal position, dismissed the petition under Section 482 of the CrPC.  

"The facts in the present case are not in dispute. It is not disputed that the matter has been compromised between the borrowers and the Bank. It has also not been in dispute that, upon payment of the amount under the OTS, the loan account of the borrower has been closed," the bench said.

The top court noted the case was related to only two women as the original accused had since died. 

"When the matter has been compromised between the borrower and bank, the continuation of the criminal proceedings would not be justifiable," the bench said, quashing the criminal proceedings.

Case Title: Tarina Sen & Ors Vs Union of India & Anr