The main legal point established is that the power under Section 482 of the Cr.P.C. should not be exercised to quash criminal cases involving grave offenses that could impact the financial health of institutions.

ORDER :

Leave granted.

2. The appellant has questioned the correctness of the order dated 22.7.2010 passed in Criminal O.P. No. 6128/2009 by the High Court of judicature at Madras in exercise of its power under Section 482 of the Criminal Procedure Code, 1973 (hereinafter referred to as the 'Cr.P.C.') for quashing the proceedings against the respondents in CC No.3186/2007 on the file of the learned Additional Chief Metropolitan Magistrate, Egmore, Chennai.

3. The brief facts of the case are that the respondents are facing prosecution for the offences under Section 120-B read with Sections 420 and 471 of the Indian Penal Code (hereinafter referred to as 'IPC'). The same has arisen as a result of a loan transaction between the first respondent and the Indian Overseas Bank (hereinafter called 'the Bank'). On the non-clearance of the loan amount/dues, a complaint was preferred by the Bank on having reason to suspect the commission of the offences referred to supra. An FIR was registered in R.C. No. 5E of 2006. After investigation, the report under Section 173 of the Cr.P.C. was filed informing commission of offence under the aforesaid sections. It is the case of the appellant that the dispute between the Bank and A-1 borrower company (respondent No.1 herein) has been brought to an end on the payment of a sum of Rs.68,00,000/- (rupees sixty eight lakhs only ). On receipt of such sum, the Bank vide letter dated 18.3.2009 had informed the appellants that they would withdraw the case filed in the Court.

4. After concluding that no case under the Prevention of Corruption Act is involved, the High Court also ascertained from the Public Prosecutor (CBI cases) that the dues payable to the bank by the first respondent Company stood duly paid, the High Court placed reliance upon the judgment of this Court in the case of Nikhil Merchants v. Central Bureau of Investigation, 2008 (9) SCC 677, wherein this Court had observed at paragraph No. 3 that the dispute involved between the parties had overtones of a civil dispute with certain criminal facets and further observed that the question required to be answered was whether the power which independently lies with the Apex Court to quash the criminal proceedings pursuant to the compromise arrived at between the parties should at all be exercised. Thereafter extracting paragraph 24 from the said judgment and after referring to clause 11 of the consent terms in the compromise petition filed in the suit compromise arrived between the first respondent Company and the Bank in the said case, the High Court felt that this is a fit case where mere technicality should not be allowed to stand in the way of quashing the criminal proceedings. The High Court was of the view that the continuance of the same after the compromise arrived at between the parties would be a futile exercise. Following the rationale of the decision of this Court in the case of Nikhil Merchants (supra) the Madras High Court exercised its power under Section 482 of the Cr.P.C. and quashed the proceeding in C.C. No. 3186 of 2007 on the file of the Additional Chief Metropolitan Magistrate, Egmore, Chennai.

5. The correctness of the same has been questioned on certain tenable grounds. The learned Additional Solicitor General Mr. Maninder Singh has submitted that the view taken by Division Benches of this Court in Nikhil Merchant (supra) and State of Maharashtra v. Vikram Anantrai Doshi, (2014) 15 SCC 29, and a three Judge Bench of this Court in the case of Gian Singh v. State of Punjab, (2012) 10 SCC 303 is required to be examined with regard to the power of the High Court as regards the quashing of the criminal proceedings on the basis of the compromise arrived at between the parties in relation to the debt due to the Bank. After adverting to the judgment of this Court in Narinder Singh v. State of Punjab, Dimpey Gujral v. UT Chandigarh and State of Rajasthan v. Shambhu Kewat and thereafter the ratio in CBI v. Narendra Lal Jain, 2014 5 SCC 36