Supreme Court allows CBI plea in cheating case

New Delhi: Mere re-payment of loan under a settlement scheme cannot exempt the accused who had allegedly cheated the bank from criminal proceedings, the Supreme Court has held.

A Bench of Justice Dalveer Bhandari and Justice H.S. Bedi gave this ruling while allowing an appeal from the Central Bureau of Investigation against a judgment of the Madras High Court quashing the entire criminal proceedings against the respondents A. Ravishankar Prasad and A. Manohar Prasad on the ground that they had settled their dues with the Indian Bank to the tune of Rs. 157 crore.

According to the prosecuting agency, CBI, the respondents had committed serious offences, such as forgery, fabrication of documents and using the said documents as genuine.

The Debt Recovery Tribunal, Chennai dismissed the complaint as settled out of court. On a petition from respondents, the High Court quashed the criminal proceedings since a settlement had been reached and the amount had been repaid. The appeal by the CBI is directed against this judgment.

Allowing the appeal, the Supreme Court Bench said the object of the inherent powers of the High Court under Section 482 Cr.P.C. was to prevent abuse of the process of the court or to secure the ends of justice.

The Bench said “When we apply the settled legal position to the facts of this case, it is not possible to conclude that the complaint and charge sheet prima facie do not constitute any offence against the respondents. It is also not possible to conclude that material on record taken at face value make out no case under section 120-B read with section 420 IPC against the respondents. Prima facie, we are of the opinion that this is one case where adequate material is available on record to proceed against the respondents.”

Writing the judgment, Justice Bhandari said: “It was extremely unfortunate that the High Court in the impugned judgment has erroneously invoked inherent power of the court under section 482 of the Cr.P.C. Quashing the charges against the respondents would also have very serious repercussions on the pending cases against the other bank officials. In four cases, 92 witnesses have already been examined. The trial of the case was at the advanced stage. At this stage, the High Court has seriously erred in quashing the charges against these respondents.

“Quashing the proceedings at that stage was clearly an abuse of the process of the court. The court neither considered the entire material nor appreciated the legal position in proper perspective. The impugned judgment is wholly unsustainable in law and is accordingly set aside.” The Bench directed the trial court to conduct the hearing on a day-to-day basis.