Settlement of civil liability does not automatically lead to the quashing of criminal proceedings.

JUDGMENT :

Suresh Kumar Kait, J.

Vide the present petition, the petitioner seeks quashing of FIR No. RCBD1/2016/E/0012, registered at Police Station CBI, BS & FC for the offences punishable under sections 120-B/420/467/468/471 IPC along with the consequential proceedings emanating therefrom.

2. The gist of the allegation in the FIR registered is that M/S Daya Sugar a unit of M/s Daya Engineering Works (sleeper) Ltd., through its Directors, in conspiracy with unknown accused bank officials and private persons cheated the consortium of banks to the tune of Rs.5261.63 Lacs.

3. M/S Daya Engineering Works (Sleeper) Ltd. for its sugar unit M/s Daya Sugar applied for various credit facilities and also availed the same from Indian Overseas Bank, Chakrata Road Branch, Punjab National Bank SME Branch and Oriental Bank of Commerce, Ambala Road branch, all located at Saharanpur.

4. The present FIR has been registered on 20.12.2016 on the complaint of Shri S. Chakrapani, Chief Regional Manager, Indian Overseas Bank, Regional Office, Meerut, UP who is respondent no.2 in the present petition. The Consortium of banks including the Punjab National Bank and Oriental Bank of Commerce led by Indian Overseas Bank initiated recovery proceedings under SARFAESI Act, 2002 and also instituted a recovery suit bearing O.A. No. 125 of 2014 before the Debt Recovery Tribunal, Lucknow for the outstanding amounts in various accounts with consortium banks totalling up to Rs. 5261.63 Lacs. On 10.11.2016, Indian Overseas Bank accorded sanction for acceptance of Rs. 4053.60 Lacs as OCS sanction and the same was duly accepted and honoured by the petitioner. Vide its letter dated 22.11.2017, the Indian Overseas Bank released the original title deeds of the petitioner after realization of the full and final recovery amount along with charges, dues and interest on the delayed period, which marks the end of the controversy and therefore, now there remains no dispute between the parties.

5. Mr.Sudhir Nandrajog, learned senior counsel appearing on behalf of the petitioner submits that vide order dated 10.01.2018, the Debt Recovery Tribunal, Lucknow was pleased to dispose of the O.A. No. 125 of 2014 with the following direction:

"Ld. Counsel for the defendants submits that defendants have paid the entire dues of the applicant- Bank. Applicant-Bank has also issued a letter to this effect on 22.11.2017. The said letter is enclosed at Exhibit No. D/2 along with application dated 30.11.2017. He also submits that dues of the applicant-bank have been paid by the defendants after taking loan from M/s. B.K. Investment Services Pvt. Ltd. Heard learned Counsels for both the parties. Since there is no cause of action, hence, O.A. stands disposed of."

6. He further submits that petitioner and the complainant bank have arrived at a compromise coupled with the fact that the complainant bank now has nothing to recover from the petitioner. Moreover, learned DRT in O.A. No. 125 of 2014 vide its order dated 10.01.2018 has recorded the settlement between the parties. Further, the complainant bank has also issued a letter dated 22.11.2017, wherein original title deeds of the company have been released as a result of the payment of full and final dues of the Respondent No.2. Thus, the present petition deserves to be allowed.

7. To strengthen his arguments, learned senior counsel has relied upon the case of Nikhil Merchant versus Central Bureau of Investigation and Ors., (2009) AIR SC 428, wherein it was held as under:

"21. The basic intention of the accused in this case appears to have been to misrepresent the financial status of the company, M/s Neemuch Emballage Limited, Mumbai, In order to avail of credit facilities to an extent to which the company was not entitled. In other words, the main intention of the company and its officers was to cheat the Bank and induce it to part with additional a