LexTAMIL NADU MERCANTILE BANK LTD. versus STATE THROUH DEPUTY SUPERINTENDENT OF POLICE AND ANR.
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[2013] 12 S.C.R. 411 TAMIL NADU MERCANTILE BANK LTD. v. STATE THROUH DEPUTY SUPERINTENDENT OF POLICE AND ANR. (Criminal Appeal No 1958 of 2013 etc.) NOVEMBER 20, 2013 [R.M. LODHA AND SHIVA KIRTI SINGH, JJ.] CODE OF CRIMINAL PROCEDURE, 1973: s.482 - Quashing of criminal proceedings - Respondents- accused defrauding the Bank in collusion with Bank officials - Charge-sheet against respondents-accused and Bank officials for offences punishable u/ss 406, 409, 420 and 120- A B c B /PC filed - High Court quashing criminal proceedings 0 against non-bank officials-accused respondents - Held: High Court erred in interfering with criminal proceedings on the ground that bank could recover the loss caused by fraud through orders of Debt Recovery Tribunal or through the proceedings under the Negotiable Instruments Act or civil E proceedings -- Even if the accused voluntarily at a later stage settles the monetary claim, that cannot be made a ground to quash the criminal proceedings unless the well established principles for exercise of power u/s 482 are made out -- Criminal proceedings can continue even if the a/legation discloses a civil dispute also - It is only when the dispute is F purely civil in nature but still the party chooses to initiate criminal proceedings, criminal proceedings may be quashed - In the instant proceedings, it is not a case requiring interference in exercise of power u/s 482 - The proceedings cannot be termed as an abuse of the process of court G because the a/legations if accepted in entirety are most likely to make out criminal offence alleged against accused- respondents -- The interest of justice is also not attracted in the instant case to warrant interference with the criminal 411 H 412 SUPREME COURT REPORTS [2013] 12 S.C.R. A proceedings - Judgment of High Court set aside - Penal Code, 1860 - ss. 406, 409, 420 and 120-B. An FIR was registered against 10 accused persons for offences punishable u/ss 406, 409, 420 and 120B IPC. 8 Accused' nos. 1 to 5 were Managing Diree:tor/Managing Partner/Director/Proprietor of different private limited companies and partnership firms etc. and accused nos. 6 to 10 were Managers and officials of the appellant Bank. The allegations against the accused were that they C defrauded the appellant Bank of Rs. 2.51 Crores. The modus operandi of the accused as alleged was that accused nos. 1 to 5 would present cheques drawn in their favour to the appellant Bank knowing well that the drawers of the said cheques did not have sufficient funds in their accounts. Thereafter the accused Branch Manager D and other officials, in the garb of arrangement known as 'Local Bill Discounting' would credit the cheque amounts to the current accounts of the drawees who would immediately withdraw the amounts. The charge-sheet was filed against all the 10 accused. Accused nos. 1 to 5 E filed petitions u/s 482 Cr P C and the High Court quashed the criminal proceedings against them holding, inter alia, that the dispute was of a civil nature, and the Bank could recover the loss through Debt Recovery Tribunal or through proceedings under Negotiable Instruments Act. F Allowing the appeals, the Court HELD: 1.1 In A. Ravishanker Prasad & Ors., this Court reiterated the settled propositions of law which permit exercise of inherent power u/s 482 Cr.P.C. (i) to G give effect to an order under the Code; (ii) to prevent abuse of process of the court and (iii) to otherwise secure the ends of justice. It was reiterated that such extraordinary power should be exercised sparingly and with great care and caution. [para BJ [418-B-D] H TAMIL NADU MERCANTILE BANK LTD. v. STATE THR. DEP. 413 SUPERINTENDENT OF POLICE CBI vs. A Ravishanker Prasad & Ors. 2009(6) SCC 351 A • relied on. 1.2 Criminal proceedings can continue even if the allegation discloses a civil dispute also. It is only when the dispute is purely civil in nature but still the party 8 chooses to initiate criminal proceedings, the criminal proceeding may be quashed. For such purpose also the court, save and accept in very exceptional circumstances, would not look to any document relied upon by the defence. In the instant case, the High Court C erred in interfering with criminal proceedings on the ground that the bank could recover the loss caused by fraud through orders of Debt Recovery Tribunal or through the proceedings under the Negotiable Instruments Act
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