ASHOK SADARANGANI & ANR. versus UNION OF !NOIA & ORS.

Citation: [2012] 3 S.C.R. 826 · Decided: 14-03-2012 · Supreme Court of India · Bench: ALTAMAS KABIR · Disposal: Dismissed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
[2012] 3 S.C.R. 826 
ASHOK SADARANGANI & ANR. 
v. 
UNION OF !NOIA & ORS. 
(Writ Petition (Crl.) No. 26 of 2011) 
MARCH 14, 2012 
. [ALTAMAS KABIR AND J. CHELAMESWAR, JJ.] 
CONSTITUTION OF IND/A, 1950: Article 142 - Extra-
ordinary powers of the Supreme Court to quash the criminal 
C proceedings - Dispute between banks and petitioners over 
non-payment of dues -
Compromise -
Continuance! 
Quashing of criminal proceeding after compromise -
Permissibility - Held: Ordinarily, continuance of a criminal 
proceeding after a compromise has been arrived at between 
o the complainant and the accused, would amount to abuse of 
the process of court and an exercise in futility - In such 
situation, inherent powers of the courts can be invoked -
However, exercise of inherent powers would depend entirely 
on the facts and circumstances of each case - In the instant 
E case, special case was registered alleging that the petitioners 
had secured credit facilities from Bank by submitting forged 
property documents as collaterals and utilized such facilities 
in a dishonest and fraudulent manner - The actual owner of 
the property had also filed a criminal complaint against the 
F petitioners - The emphasis was, thus, more on the criminal 
intent of the petitioners than on the civil aspect involving the 
dues of the Bank in respect of which a compromise was 
worked out, therefore, writ petitioners were not entitled to 
quashing of criminal proceedings. 
G 
The writ petitioner no.1 opened a Current Account in 
the name of his proprietary concern with the Bank of 
Maharashtra and various credit facilities were sanctioned 
to it. The Bank sought additional collateral security of 
Rs.56 lacs from petitioner no.1, who, submitted a Lease 
H 
826 
ASHOK SADARANGANI & ANR. v. UNION OF INDIA 827 
& ORS. 
Deed in respect of an immovable property leased by 'HS' 
A 
and his family members, through their Constituted 
Attorney, 'KM'. The petitioners were Directors of the said 
company. 
Subsequently, six irrevocable Import Letters of Credit 
8 
for a total sum of Rs.188.01 lacs were opened by the Bank 
of Maharashtra on behalf of proprietary concern of 
petitioner no.1 for import of houseware items. The 
documents relating to the said Letters of Credit, including 
Bills of Lading, Invoice and Bills of Exchange, were 
accepted and collected by petitioner no.1 on behalf of the 
C 
firm from the Bank and he undertook to make payment 
on the due date. However, the petitioners defaulted in 
payment of their liability of about 188 lacs towards the 
Bank. Criminal case was registered at the behest of the 
Bank of Maharashtra. On the complaint of the Union 
D 
Bank of India another case was registered by the Central 
Bureau of Investigation against the petitioners alleging 
that they had secured the credit facilities by submitting 
forged property documents as collaterals and utilized 
such facilities in a dishonest and fraudulent manner by 
E 
opening Letters of Credit in respect of foreign supplies 
of goods, without actually bringing any goods but 
inducing the Bank to negotiate the Letters of Credit in 
favour of foreign suppliers and also by misusing the 
Cash Credit facility. Charge-sheet was filed in the said 
F 
Special Case. At about the same time, a criminal case was 
registered against 'KM' and others under Section 120-B, 
r/w 465, 467, 468 and 471, IPC. The said case was 
registered primarily on th~ accusation that 'KM' in 
connivance with petitioner No.1, had sought to sell or G 
dispose of the property belonging to 'HS' and that the 
Powers of Attorney which had been used by 'KM' in the 
transactions, were not genuine. In 2000, a civil suit was 
filed by 'HS' against 'KM' for cancellation of the Powers 
of Attorney. 
H 
828 
SUPREME COURT REPORTS 
[2012] 3 S.C.R. 
A 
While the criminal case against the petitioners was 
pending, the Union Bank of India wrote to petitioner no.1 
offering a One-Time Settlement of the disputes relating to 
the transactions in question. Subsequently, a 
compromise proposal relating to the transaction between 
B the petitioners and the Bank was also mooted by the 
Asset Recovery Branch of the Bank of Maharashtra and 
a communication was addressed to petitioner no.1, 
which, however, made it clear that such compromise 
should not be construed as settlement of criminal 
c complaints/investigations/ proceedings pending in the 
court against the borrowers/guarantors. Pursuant to such 
offer of One-Time Settlement,

Excerpt shown. Read the full judgment & AI analysis in Lexace.