Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2023 Supreme(Del) 3916

IN THE HIGH COURT OF DELHI AT NEW DELHI
Jasmeet Singh, J.
Devender Goyal & Ors. – Appellants
Versus
Central Bureau of Investigation & Anr. – Respondents
W.P.(Crl.) 762 of 2021, Crl.M.A. 5510 of 2021, Crl.M.A. 13820 of 2021 & Crl.M.A. 1348 of 2022
Decided On : 11-08-2023

Advocates appeared:
Mr Arun Khatri and Mr Sahil Khurana, Advocates, for the Petitioner.
Mr Mridul Jain, SPP, for CBI with Ms Ruby Sharma and Ms Vedika Rattan, Advocates, for the Respondent.

The settlement of commercial disputes between the parties, especially when the bank has received the amount it considered just and appropriate, should be respected, and continuing the investigation would be an abuse of the criminal justice system.

Headnote:
Quashing - Second FIR - 120B/409/420 IPC - Summary
Fact of the Case:

The petitioners sought to quash the second FIR filed by the CBI, which pertained to the same transaction as the first FIR. The petitioners had settled their disputes with the respondent bank, and the bank had withdrawn all actions for recovery of monies. The allegations involved diversion of funds and manipulation of financial accounts.
Finding of the Court:

The court found that the settlement between the petitioners and the bank had resolved the commercial disputes, and the bank had received the amount it considered just and appropriate. Continuing the investigation would be an abuse of the criminal justice system, as the matter had been pending for almost four years without conclusion.
Issues: The main issue was whether the second FIR should be quashed in light of the settlement between the petitioners and the bank, and the duration of the pending investigation.
Ratio Decidendi: The court considered the nature of the dispute, the terms of the settlement, and the futility of continuing the criminal proceedings. It emphasized that the bank's commercial decision to settle the dispute should be respected, and continuing the investigation would be an abuse of the criminal justice system.
Final Decision: The court quashed the second FIR registered by the CBI.

JUDGMENT

Jasmeet Singh, J. The writ petition as filed initially, sought quashing of FIR No. RC-DAI-2019-A-0037 dated 06.11.2019 u/s 120B/409/420 IPC registered by the CBI (Respondent No.1) being the second FIR pertaining to the offences related to the same transaction for which investigation is already under way in FIR no. RC-DAI-2018-A-0035 dated 15.11.2018 u/s 120B/420/406/467/468/471 IPC.

2. As per the order sheet, on 21.10.2021, the learned counsel for the petitioner had stated that the petitioner has paid the entire amount to the respondent no.2 i.e., Bank Of India (hereinafter called `Bank') and, therefore, nothing survived in the matter and the FIR be quashed. He also sought some time to amend the pleadings. The amended writ petition was filed and on 21.01.2022, notice was issued.

3. The prayers in the amended writ petition is as under:

a. Call for records and issue, direction order or writ in the nature of certiorari or any other similar writ thereby, Quashing the FIR no.RC-DAI-2019-A-0037 dated 06.11.2019 u/s 120B/409/420 IPC registered by Respondent no. 1/CBI being the "second FIR" pertaining to the offences related to the same transaction forwhich investigation is already under way in FIR no. RC-DAI-2018-A-0035 dated 15.11.2018 u/s 120B/420/406/467/468/471 IPC;

b. Quash and set-aside the FIR in view of the settlement arrived between the Petitioners and the Respondent Bank vide OTS dated 13.04.2021.

c.....

4. On 13.10.2022, Mr. Khatri, learned counsel for the petitioner stated that he is only pressing prayer `b' which is that the FIR should be quashed since the respondent no.2 bank has settled its disputes with the petitioner.

The facts of the case are:

5. Petitioner no. 1 and 2 are the promoter directors of Petitioner no. 3 (M/s Century Global Logistics Pvt. Ltd.) and M/s Careway Agro Procurement Pvt. Ltd./CAPPL. Both these companies are group companies and loans were obtained from Respondent no. 2Bank. Petitioners herein, including the Petitioner no. 3 company stood as guarantors to the loan pertaining to CAPPL.

6. On 03.09.2018, Respondent No.2 Bank filed a complaint before the Respondent No.1, CBI seeking registration of FIR against CAPPL, Petitioner No.1,2, Nirmala Goyal and Pooja Goyal. On the basis of the said complaint, the first FIR was registered.

7. The allegations in brief in the First FIR are that CAPPL along with Petitioner no. 1 and 2 approached the Respondent no. 2/Bank for credit facilities in the year 2012. These credit facilities were sanctioned by the Respondent no. 2/Bank and secured by various securities including equitable mortgage of immovable properties and joint and several personal guaranties of Petitioner no. 1 and 2 along with other family members.

8. In early 2015, the account of the Petitioners became erratic and despite the continuous follow ups by the respondent no.2 bank, Petitioners were not able to service the loans. At this stage, apprehending irregularities and to find out the root cause of deterioration of the account. Respondent no. 2/Bank appointed M/s PVRN and Company for forensic audit on 01.03.2017.

9. It is the further alleged that Petitioners no. 1 and 2 diverted the funds and manipulated the financial account of CAPPL in violation of the accounting standards. The petitioners misrepresented and misguided the respondent no.2 bank with sole motive of getting finances based on manipulated/"cooked" data.

10. Respondent No.2 Bank filed another complaint allegedly on 27.11.2018 before the Respondent No.1 CBI seeking registration of FIR against Petitioner No.1,2,3, Nirmala Goyal and Pooja Goyal. Pursuant to the complaint, on 06.11.2019, second FIR being FIR no.RC-DAI-2019-A-0037 dated 06.11.2019 u/s 120B/409/420 IPC was registered. The allegations in brief in Second FIR are that Petitioner no. 3company along with Petitioner no. 1 and 2 approached the Respondent no. 2/Bank for credit facilities in the year 2011. These credit facilities were sanctioned by the Respondent no. 2/