Economic offences cannot be quashed based on settlement due to their serious implications for public interest.

JUDGMENT :

PRASANNA B. VARALE, J.

1. Leave granted.

2. In these appeals filed under Article 136 of Constitution of India, the appellant is seeking setting aside of the common order dated 26.07.2023 passed by the High Court of Bombay in Criminal Writ Petition No. 2546 of 2022 and Criminal writ Petition no. 1960 of 2022, wherein the High Court dismissed the petitions filed by the appellants herein, under Section 482 of Code of Criminal Procedure, 1973¹[In short, “Cr.P.C.”] seeking quashing of the FIR bearing No. RC/026/2020/A-0010 dated 24/07/2020, for offences punishable under Sections 409, 420 and 120B of the Indian Penal Code, 1860²[In short, “IPC”] along with Section 13(2) r/w 13(1)(d) of the Prevention of Corruption Act, 1988³[In short, “PC Act”] and the consequent chargesheet.

3. The appellants in the Appeal arising from SLP(Crl.) No.10078 of 2023 are the Directors of M/s Sun Infrastructure Pvt. Ltd. ⁴[In short, “the Company”]; and appellants in the Appeal arising from SLP (Crl.) No.12776 of 2023 are the employees of respondent no.3 Bank. The appellants in both the appeals are the named accused in the above- mentioned FIR.

4. In the year of 2013, appellant nos. 1 and 2, being Directors of the Company, had obtained sanction for a building permit and commencement certificate for plot bearing Survey Nos. 145/1, 145/3,141/1,149/2, 151, 152 and 155/2⁵[In short, “subject property”]. On 15.02.2014, the respondent no. 3- State Bank of India had sanctioned a loan of Rs. 50 crores to the Company. On 30.10.2014, the Company opened a collateral security and mortgaged the commercial land. The appellant had made timely payments till 2017, while on 28/11/2017 the bank declared the loan account of the Company as Non- Performing Asset with an outstanding amount of Rs. 23.86 crores. The bank also started a recovery process and filed an application before the Debt Recovery Tribunal⁶[In short, “DRT”]. On 18.12.2019, the Company and respondent no. 3 filed consent terms before the DRT amounting to Rs. 15 Crore. According to the consent terms, the Company paid Rs. 20 lacs on 16.06.2020. Remaining amount of Rs. 14.88 crore was subsequently paid by the Company with interest and the loan account was closed as per the one-time settlement. Accordingly, the application before the DRT came to be disposed of.

5. Respondent no. 3 lodged a complaint with respondent no. 2-Central Bureau of Investigation, against the appellants for diverging the funds from the loan account of respondent no. 2, SICOM Ltd. from whom they had allegedly availed a loan of Rs.25 Crores in 2013; and against the Company for changing the building plans of the project which resulted in the reduced value of the collateral security, without the consent of the Bank. On 24.07.2022, On the basis filed by respondent no.3, an FIR came to be registered against the appellant by Central Bureau of Investigation, Anti-Corruption Bureau, Mumbai. Charge sheet dated 31.12.2021 was filed by respondent no.2 in the above-mentioned FIR.

6. The appellant preferred a Writ Petition before the High Court bearing WP No. 2546 of 2022 under Section 482 of Cr.P.C seeking quashing of the aforementioned FIR and chargesheet.

7. Vide order dated 26.07.2023, High Court rejected the said Writ Petition observing that the appellant has a substantive alternative remedy under the provisions of the Code of Criminal Procedure before the High Court.

8. Learned Counsel for the appellant has made the following submissions:

8.1. It is submitted that the appellants have already arrived at a compromise and the DRT after considering the settlement had disposed of the application filed by the respondent no. 3. The allegation that the bank suffered a loss of Rs. 11 crores is false and bogus since the bank received an amount of Rs. 47 crores as against a total disbursed amount of Rs. 33.5 crores. It was argued that there was a delay in registration of the present FIR insofar as the complaint was lodged by the respondent no. 2 bank on 30th Oc