IMPORTANT POINT
Exercise of inherent jurisdiction – Stage and timing of settlement play a crucial role in determination as to whether to exercise power under Section 482 of Cr.P.C. 1973 or not.

JUDGMENT :

(AUGUSTINE GEORGE MASIH, J.)

1. The Appellants have challenged the Order dated 05.05.2017 passed by the learned Single Judge of the High Court of Gujarat in Special Criminal Application (Quashing) No.5629 of 2015, whereby a writ petition under Article 226 of the Constitution was preferred by the Appellants seeking quashing of FIR being RC No.13(E)/2008-CBI dated 08.12.2008 at Police Station, CBI, BS & FC, Mumbai as well as the charge sheet dated 26.05.2010 was dismissed.

2. The bare necessary facts in the present case are that between 1998-2005 Bank of Maharashtra sanctioned multiple credit facilities to the Appellants due to their strong financial standing. Beginning June 2005 onwards, the Appellant companies faced a financial crunch due to adverse market conditions, including the 2004 Surat floods, leading to the bank classifying their loans/credit facilities as Non-Performing Assets (hereinafter referred to as “NPA”). Bank of Maharashtra proceeded to file applications for recovery of the debt before the Debt Recovery Tribunal, Ahmedabad (hereinafter referred to as “DRT”).

3. During the pendency of these proceedings, Central Bureau of Investigation (hereinafter referred to as “CBI”) on the basis of reliable information proceeded to register the above-referred FIR against the Appellants, proforma Respondents 3 and 4 as well as the Branch Manager of the Bank of Maharashtra for offences punishable under Section 420, 467, 468 and 471 read with 120B of the Indian Penal Code (hereinafter referred to as “IPC”) and under Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 (hereinafter referred to as “PC Act”).

4. One Time Settlement proposal as a compromise was put forth during the proceedings before the DRT which was accepted by the Bank. A communication to this effect was addressed to the Appellants on 27.12.2008. A revised/extended compromise proposal was finally submitted and accepted by the parties leading to the finalisation of the terms on 12.04.2010. On receipt of the amount due, proceedings before the DRT concluded and a No Dues Certificate was issued to the Appellants on 11.04.2011. The Bank further intimated that the names of the appellants did not now appear in the CIBIL/RBI Defaulters List and the process of removal of names from the RBI Defaulters list has also been initiated.

5. CBI, meanwhile, filed a chargesheet on 27.05.2010 under Section 120B read with Sections 419, 420, 467, 468 and 471 IPC. What is apparent and patently visible from the chargesheet was that no evidence was found against the Branch Manager of the Bank, leading to he being dropped as an accused owing to insufficient material and consequently charges under the PC Act being omitted.

6. The Appellants in the light of the settlement of the dispute with the Bank and with “No Dues Certificate” having been received, preferred an application for discharge under Section 239 of the Code of Criminal Procedure, 1973 before the Additional Chief Judicial Magistrate, CBI Court No.2, Ahmedabad (Rural), Mirzapur. The said application was accepted, and the Appellants were discharged vide Order dated 15.11.2011. The said order was challenged by CBI by way of a revision petition before the learned Sessions Judge, Ahmedabad, who vide Order dated 09.07.2015 accepted the revision petition and set aside the order impugned. The Appellants then challenged this Order before Gujarat High Court with a further prayer seeking quashing of the FIR and consequential chargesheet. This petition was dismissed by the High Court vide order dated 05.05.2017 leading to the filing of the present appeal before this Court.

7. The ground for challenge of the order before this Court is based upon the contention that the dispute was essentially of a civil/commercial nature as initiated by the Bank by way of applications before the DRT, which dispute stood settled with the dues having been paid by the Appellants. With the discharge of the civil liability, cri