The High Court may quash criminal proceedings in cases with predominantly civil character and settlements, but must consider the stage of the trial and the nature of the offences.

ORDER :

M.NIRMAL KUMAR, J.

All these Criminal Original Petitions have been filed by the petitioners/A4, A5, A2 & A3 to quash the proceedings in C.C.No.66 of 2016 pending on the file of the Principal Sessions Court, Chennai.

2. Originally the charge sheet was filed before the learned Additional Chief Metropolitan Magistrate, Egmore, taken on file as C.C.No.15214 of 2008 and later transferred to the file of the Principal Sessions Judge, Chennai and renumbered as C.C.No.66 of 2016 since the Enforcement Directorate, Chennai filed a complaint against A4 herein, Proprietor of M/s.Gain-N-Nature Food Products.

3. Since all these petitions arise out of C.C.No.66 of 2016, the same are taken up for consideration and disposed by way of common order. For convenience and clarity, the petitioners are referred to as accused, as per their rank, in the charge sheet.

4. The case of the prosecution is as follows:

(i) A1/Palanichamy is the father of A3 & A4 and husband of A2. A5 is M/s.Galaxy Amaze Kingdom Limited, Ambattur Chennai represented by A1 to A3 (In short “GALAXY”) and A6 is one P.G.Selvaraj.

(ii) A1 was managing GALAXY, in which, his wife/A2 and daughter/A3 are Directors. His son/A4 was Proprietor of M/s.Gain-N- Nature Food Products (In short “GAIN”). During the month of May 2004, GAIN approached United Bank of India, Regional Office, Chennai for various credit facilities such as Term Loan of Rs.1.30 Crore, Cash Credit of Rs.2 Crore, Bills Discounting of Rs.0.50 Crore and Inland LC of Rs.0.50 Crores and the same were sanctioned by the United Bank of India, Regional Office, Chennai.

(iii) A current account in the name of GALAXY was opened as the company stood as Guarantor to the borrower firm GAIN. A1 and A2 offered their properties as collateral securities along with required documents for creation of equitable mortgage. The investigation revealed that GAIN is a Proprietorship firm of A4 running factory at No.33, Balaji Nagar Estate, Ambattur, Chennai and they were manufacturing Nutritional Food Supplement under the brand name of “Nutrivate”. The entire marketing was done by GALAXY.

(iv) A1 to A6 entered into criminal conspiracy at Chennai and other places to cheat the United Bank of India by creating forged and fake documents in the name of fictitious firms, fraudulently and dishonestly, availed credit facilities in the name of GAIN. Further, false invoices, delivery challan etc., purported to have been given by M/s.K.K.Tools, M/s.Srinivasa & Company, M/s.As Pee Jay Enterprises non-existing firm for which A6 claimed himself as Proprietor. The bank facility amount was deposited in the firm's account subsequently withdrawn by A6 in pursuance of criminal conspiracy without any genuine business. Further, by submitting false invoices, delivery challan in the name of M/s.Premier Machine Tools, for which, A6 was Proprietor, the amounts were diverted. By March, 2006, the accounts turned Bad. But the one time bill discounting limit of Rs.197.63 lakhs was availed in the name of GALAXY for discounting 66 supply bills worth of Rs.263.50 lakhs drawn on M/s.Srinivasa & Company, Chennai and M/s.Ratna Enterprises, Bangalore.

(v)GALAXY got these false bills discounted under Bill Discounting Limit with United Bank of India, T.Nagar, Chennai. The proceeds out of the false discounted bills were utilized for the adjustment of overdue outstanding of the principal borrower GAIN. On the due date, all 66 discounted bills were returned unpaid due to its false nature. Thus, both the accounts of GAIN and GALAXY declared NPA. Thereafter, the Bank conducted internal investigation, unearthed fraud and forgery committed by the accused and lodged a complaint to the respondent. The respondent registered FIR on 27.12.2007, filed charge sheet on 29.08.2008 against A1 to A6 for offence under Sections 120-B r/w 420, 467, 468, 471 IPC. So far 33 witnesses examined and 409 exhibits marked. In this case, the prime accused A1/Palanichamy, Managing Director of GALAXY passed way on 19.10.