Important Point—Cases of huge financial frauds having deep ramifications cannot be quashed by High Court.

Judgment

Dipak Misra, J.

The centripodal issue that strikingly emerges, commanding the judicial conscience to ponder and cogitate with reasonable yard-stick of precision, for consideration how far a superior court should proceed to analyse the factual score in exercise of its inherent jurisdiction bestowed upon it under Section 482 of the Code of Criminal Procedure or under Article 226 of the Constitution of India, to quash the criminal proceeding solely on the ground that the parties have entered into a settlement and, therefore, the continuance of the criminal proceeding would be an exercise in futility, or the substantial cause of justice warrants such quashment to make the parties free from unnecessary litigation with the assumed motto of not loading the system with unfruitful prosecution, of course with certain riders, one of which, as regards the cases pertaining to commercial litigations, appreciation of predominant nature of civil propensity involved in the lis or social impact in the backdrop of the facts of the case. The primary question that we have posed has a substantial supplementary issue; i.e. should the courts totally remain oblivious to the prism of fiscal purity and wholly brush aside the modus operandi maladroitly adopted, as alleged by the prosecution, on the part of industrial entrepreneurs or the borrowers on the foundation that money has been paid back to the public financial institutions. We think not, especially regard being had to the obtaining factual matrix in the case at hand.

2. Presently to the factual exposition. On the basis of a written complaint of chief vigilance officer, Bank of Baroda a case was registered against the respondents on 6.1.2006 and after completion of investigation a report was filed before the Special Court, CBI cases, Mumbai with a prayer to forward the chargesheet to the learned Magistrate who was competent to take cognizance of the offences as the involvement of R.C. Sharma, the concerned Bank Officer, a public servant, in the crime in question, could not be prima facie found during the investigation. As the facts would undrape, on 3.2.2006 upon perusal of the chargesheet the learned Special Judge, CBI cases directed to place the chargesheet before the appropriate court and accordingly a fresh chargesheet was filed before the ACMM, 19th Court, Esplanade, Mumbai vide criminal case no. 82/CPW/2006 for commission of offences punishable under Section 120-B, Section 406, 20, 467, 468 and 471 IPC against the accused persons.

3. On a perusal of the charge sheet, it is evincible that there are allegations to the effect that Vikram Doshi, A 1, Vineet Doshi, A 2, and Sanjay J. Shah, A 3, made number of applications to the Bank of Baroda for sanction of various credit facilities, stating that they wanted to induct the said bank as a new consortium member to replace the existing members, namely, the UTI Bank and the Federal Bank. They requested the said Bank to sanction 15% of the total Working Capital facility sanctioned by the consortium of Banks, so that, that much amount could be transferred to the UTI bank and Federal Bank to take over the existing liabilities with the said two banks. It was revealed during investigation that the account of the company, with the consortium of banks as well as the finance institutions, was highly irregular and in the said condition the accused persons approached the Bank for sanction of loan. In the application to the Bank, the accused persons concealed the fact relating to the dues outstanding against them. Thereafter, when asked for the outstanding position with the existing consortium members, the accused persons willfully and with the criminal intent to mislead the Bank of Baroda, furnished wrong statements about the outstanding position by giving considerably lesser amount as outstanding than the actual.

4. As further alleged, the amount of loan sought was sanctioned on 24.01.2003 by one Mr. K.K. Aggarwal, General Manager and communicated to the