Settlement of monetary disputes does not automatically justify the quashing of criminal proceedings in cases involving serious allegations of criminality.

JUDGMENT

(Prayer: Criminal Original Petition is filed under Section 482 of the Code of Criminal Procedure, to call for the records pertaining to C.C.No.11 of 2008 pending on the file of the XI Additional Special Court for CBI Cases at Chennai and quash the same by allowing the present Criminal Original Petition.)

1. This petition is filed to call for the records pertaining to C.C.No.11 of 2008 pending on the file of XI Additional Special Court for CBI Cases, Chennai and quash the same.

2. Final report was filed in this case on the basis of the complaint by Deputy General Manager, Canara Bank and FIR registered in Crime No.RC MA 1 2005-A-0042 dated 25.08.2005 for the offences under Section 120-B r/w 420 IPC and Section 13(2) r/w 13(1)(d) of Prevention of Corruption Act, 1998.

3. The complaint allegations are that, M/s.Sriram Trading Company, a proprietorship firm with Shri.N.S.Krishna kumar as proprietor, opened a Current Account No.3778 on 23.10.2002 at Canara Bank, Kellys Branch, Chennai. From 18.12.2002, the firm started discounting bills. Until 14.01.2003, a total number of 59 bills have been discounted to the tune of Rs.37.85 lakhs. The branch sanctioned SDB Limit of Rs.30 lakhs for a period of three months. Most of the bills have not been realised and as many as 40 bills were returned by various banks, for the reason “non payment by consignee”. The limit is not backed by any collateral security as no EMT was put through. The liability in the account as on date is Rs.28.58 lakhs with unapplied interest up to 28.02.2005. Bank filed a suit before Debts Recovery Tribunal, Chennai for claiming Rs.32.66 lakhs. The investigation by the bank revealed that Sri.K.N.Subramanian, the then Chief Manager, in collusion with N.S.Krishnakumar, proprietor of M/s.Sriram Trading Company had fraudulently and by abusing his official position, sanctioned the SDB Limit of Rs.30 lakhs to M/s.Sriram Trading Company and indiscriminately discounted the bills presented by M/s.Sriram Trading Company thereby, caused a wrongful loss to the Canara Bank of Rs.28.58 lakhs plus interest up to 28.02.2005 and a corresponding gain to M/s.Sriram Trading Company.

3(i). On the basis of investigation, the first respondent filed a final report against the petitioner and other accused for the offences under Sections 120-B r/w 420 IPC and Section 13(2) r/w 13(1)(d) of Prevention of Corruption Act, 1988. The specifics of the final report are that the accused entered into criminal conspiracy during 2002 and 2003 at Chennai and other places to cheat Canara Bank. In pursuance of the criminal conspiracy, first accused was abusing his official position as Chief Manager, purchased Secured Demand Bills by reducing the initial margin of 25% on 18.12.2002 and 19.12.2002 and later, further reduced it to 10% by exceeding his limit of purchase. Approver Sri.S.Narasimha Ragavan prepared ante-dated office note on the basis of papers submitted by M/s.Sriram Trading Company represented by N.S.Krishnakumar-A2 requesting for SDB Limit for Rs.30 lakhs for the period of one year. First accused-K.N.Subramanian, approved it on the same day, knowing fully well that there was no collateral securities for the bills already purchased. Third accused-N.S.Gnaneshwaran dishonestly and fraudulently arranged for guarantor T.R.Krishnamoorthy (since deceased) with a property worth Rs.1 lakh as a collateral security. Sixth accused D.V.Balasubramanian, who is a private valuer, fraudulently inflated the value of the said property to Rs.13.50 lakhs. Third accused along with second accused fraudulently made arrangements to fill up cheques through fifth accused-A.R.Madan Rao and Kasturi Roa. Also obtained signature from A.R.Madan Roa/A5, B.K.Senthil, H.S. Kannan, V.S.Kannan on the reverse side of the cheque and encashed at Canara Bank, Kellys Branch, Chennai. Third accused, dishonestly and fraudulently filled and signed on the cheques in the name of B.V.K.Kumar etc., in the name of non existing persons and w