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2024 Supreme(Online)(MAD) 40681
HIGH COURT OF MADRAS
K.K.RAMAKRISHNAN, J
N.S.Gnaneshwaran – Appellant
Versus
The Inspector of Police – Respondent
Crl.O.P(MD).Nos.586 and 595 of 2024
Mr.Ragavachari, Mr.M.Saravanan, Mr.V.P.Sengottuvel, Mr.N.C.Ashok Kumar, Mr.M.Karunanithi, Mr.S.Chandrasekar
Criminal liability under the Prevention of Corruption Act persists despite OTS settlements, especially for non-compoundable offences, and quashing proceedings at an advanced trial stage is impermissible.
Headnote:(A) Prevention of Corruption Act, 1988 - Sections 13(2) and 13(1)(d) - Indian Penal Code, 1860 - Sections 120B, 420, 468, and 471 - Quashing of criminal proceedings - Petitioners sought to quash proceedings based on OTS settlement; however, the court held that criminal liability persists despite settlement, especially for non-compoundable offences. The court emphasized that the OTS does not exonerate criminal liability and that the trial was at an advanced stage with specific charges framed against the petitioners. (Paras 6, 8, 10, 12)
Facts of the case:
The petitioners were accused of colluding with bank officials to fraudulently obtain credit, resulting in significant financial loss to the bank. The prosecution alleged conspiracy and fraud.
Findings of Court:
The court found that the charges were properly framed and that the OTS settlement did not negate the criminal proceedings.
Issues: The main issue was whether the OTS settlement could quash ongoing criminal proceedings.
Ratio Decidendi: The court ruled that the existence of serious charges under the Prevention of Corruption Act and the advanced stage of trial precluded quashing the proceedings based on the OTS.
Result: Criminal original petitions dismissed.
COMMON ORDER
The petitioners are Accused Nos.3, 6 and 8 have filed these petitions to quash the proceedings in C.C.No.16 of 2006 on the file of the II Additional District Court for CBI Cases, Madurai, in respect of the petitioners.
2.The case of the prosecution is that in the year 2002, the petitioners along with other accused colluded with the branch managers of the second respondent bank namely L.Jesuraja(A1) and S.Vishwanathan(A2) by opening a current account in the name of M/S.Vinayaga Corporation, Sivakasi, and obtained credit limit to the tune of Rs.10,00,000/- against hypothecation of stock. It is further alleged that A4 and A5 are said to have issued various cheques in favour of the petitioner/A3 in Crl.O.P.(MD).No.586 of 2024 and the petitioners/A6 and A8 in Crl.O.P.(MD).No.595 of 2024 and other accused to their business entities for fraudulently encashing the credit facilities. The petitioners had caused wrongful loss to the second respondent's bank to the tune of Rs.25.89 lakhs as on 27.04.2005 by conspiring with the other accused. Hence, the second respondent gave a complaint. On the basis of the complaint given by the second respondent, the first respondent Police registered a case in Crime No.RC MA1 2005 A 0020 for the offences under Sections 120B r/w 420, 468 r/w 471 of IPC and Section 13(2) r/w 13(1)(d) of Prevention of Corruption Act, 1988 . After completion of the investigation, the first respondent filed a final report under Section 173 of Cr.P.C., and the same was taken on file in C.C.No.16 of 2006 by the learned II Additional District Court for CBI Cases, Madurai, dated 18.12.2006. To quash the same, this quash petition has been filed before this Court.
3.The learned Senior counsel made the following submission:-
3.1.The CBI registered the case against the petitioners and other accused.
After registration of the FIR, they filed three final reports. On the basis of the three final reports, the learned Special Judge took cognizance in C.C.Nos.13 and 16 of 2006 and 151 of 2010. They filed a quash petition and the same was allowed. In the above quash petition, it is specifically pleaded that the bank accepted the OTS proposal made by the main borrower's namely A4 and A5. Once the entire payment was made accepting OTS proposal, the continuation of the criminal proceedings is abuse of process of law. More particularly, in the backdrop of charges in C.C.Nos.13 and 16 of 2006 and 151 of 2010, having been quashed by this Court against co-accused on the ground that OTS proposal was made. He would further submit that on the basis of the Hon'ble Supreme Court judgement in a case reported in 2022 SCC online SC 2078, the quash petition can be even entertained, after completion of questioning under Section 313 of Cr.P.C.,. They also relied the following judgment of the Hon'ble Supreme Court and seek quashing of the case :-
| Sl.No. | Documents |
| 1 | Nikhil Merchant Vs CBI (2008) 9 SCC 677 at page 684 |
| 2 | B.S. Jothi Vs State of Haryana, (2003) 4 SCC 675 : at Page 682 |
| 3 | Gian Singh Vs State of Punja (2012) 10 SCC 303 at Page 342 |
| 4 | Kothari Polymers Ltd., and others Vs SIU (X) /SPE/CBI 2002 SCC online SC 2078 |
| 5 | CBI Vs Narendra Lal Jain (2014) 5 SCC 364 at Page 368 |
| 6 | CBI Vs B.B. Agrawal (2019) 15 SCC 522 at Page 524 |
3.2.The learned Senior Counsel further elaborated that they are not party to the loan transaction allegedly made with the bank officer by producing the forged document. They only received the cheques from the borrower for discharging his liability. Hence, without any adequate material to continue the proceedings for the proof of the criminal conspiracy, they prayed quashing of the FIR.
4.The learned Special Public Prosecutor submitted that the judgement of the Hon'ble Supreme Court relied by the Senior Counsel is not applicable to the facts of the present case. In this case, there is a specific allegation against the petitioners that they are party to the fraudulent transaction and charge also was framed and all the prosecution witnesses were
