The settlement of a dispute between the victim and offender does not automatically justify quashing criminal proceedings, especially in cases involving heinous and serious offences with a societal impact.

This Criminal Original Petition is filed under Section 482 of the Criminal Procedure Code, to quash the criminal proceedings in CC.No.3 of 2011 pending on the file of the Special Court, II Additional District Judge (CBI) Cases, Coimbatore.

2. The brief facts of the case are as follows :-

During 2005, the 1st petitioner was enjoying credit limits aggregating to Rs.1.60lakh with Karur Vysya Bank, for the equitable mortgage create on (i) vacant land measuring 1.80acres owned by the Company Located at Velampalayam Village, Tirupur Taluk valued for Rs. 85 lakhs (ii) vacant land worth about Rs.70lakhs and (iii) deposit of Rs.1.21 crores. On 01.12.2005, the 2nd petitioner approached the 2nd respondent bank with the proposal to take over the above credit facilities from Karur Vysya Bank with the enhancement for Rs.3crores. After verifying the records, the enhancement was sanctioned and credit limit was also enhanced to Rs.4crores on 09.05.2007. Due to financial crisis, the loan amount was not repaid and the loan account was declared as NPA on 30.08.2008. In the meanwhile, the Bank has initiated recovery proceedings before the DRT, Coimbatore in OA.Nos.30 of 2009 and 61 of 2010. The bank has also filed a report stating that the borrowers prepared two different set of balance sheets for the year 2005-2006 and submitted one before the Registrar of Companies and another one to the Bank for availing the credit facilities. On the basis of fabricated balance sheet with the connivance of the then bank officials the petitioners made wrongful loss to the bank.

3. Based on the complaint given by the bank officials, FIR in RC. 10(S)/2009/CBI/SCB/ Chn was registered by the Superintendent of Police, CBI/SCB, Chennai on 24.11.2009 for the offences under Section 120(B) r/w.420 IPC and 13(2) r/w.13(1) (d) of Prevention of Corruption Act, 1988. After completion of investigation charge sheet was filed on the file of the Special Court, II Additional District Judge, CBI Cases, Coimbatore and the same was taken cognizance and numbered as CC.No.3 of 2011.

4. Subsequently, the petitioners received summons dated 28.02.2014 from the Lok Adalat, Coimbatore with regard to OA.Nos.30 of 2009 and 61 of 2010. The petitioners and the Bank arrived into a settlement and the compromise decree was passed on 15.03.2014 incorporating the terms of the compromise entered into between the parties. Based on the compromise decree the petitioners have paid a sum of Rs.275lakhs towards full and final settlement and on such settlement the applicant bank had to take up the matter with the Reserve Bank of India and other agencies for deletion of the account of the petitioners from fraud list. Out of Rs.275 lakhs a sum of Rs.200lakhs along with accrued interest available in the fixed deposit with the bank in the name of the Registrar, DRT, Coimbatore, the appropriated amount was deposited by the petitioners. The balance of Rs.54lakhs was also paid by the petitioners and the same was admitted by the Bank in the counter statement filed by them in MA.No.563 of 2014.

5. In continuation to the compromise arrived at between the petitioners and the Bank, the petitioners have come forward with the present petition before this Court, to quash the proceedings pending in CC.No.3 of 2011 on the file of the Special Court, II Additional District Judge, CBI Cases, Coimbatore.

6. The learned Senior counsel appearing for the petitioners would submit that the above transaction is only a loan transaction and the case is purely civil in nature and the matter is also amicably settled between the petitioners and the defacto complainant/Bank. The petitioners have paid the entire loan amount as per the award passed by the Lok Adalat and no loss has been created to the Government of India and there is no necessity to give criminal colour once again to the settled issue before the Lok Adalat.

7. The learned senior counsel appearing for the petitioners in support of his contention relied on the following decis