Case Note & Summary
The Supreme Court allowed appeals by Tarina Sen and Shaileshree Sen, accused in a bank loan fraud case, quashing criminal proceedings against them. The case arose from an FIR registered in 2000 alleging conspiracy between a bank branch manager and others to sanction loans without security. The appellants were partners in Clarion Travels, which obtained a loan of Rs. 8,40,000. The bank filed recovery proceedings before the Debt Recovery Tribunal, which were settled through a one-time settlement in 2011, and the loan account was closed. The appellants then filed petitions under Section 482 CrPC seeking quashing of the criminal proceedings, but the High Court disposed of them permitting the appellants to raise pleas before the trial court. The Supreme Court noted that the matter had been compromised between the borrowers and the bank, and the main accused had died. Relying on precedents, the Court held that in commercial transactions where the wrong is private and the parties have resolved their dispute, continuation of criminal proceedings is unjustifiable as the possibility of conviction is remote. The Court quashed the criminal proceedings against the appellants.
Headnote
A) Criminal Procedure - Quashing of Proceedings - Section 482 CrPC - Compromise - Where the matter has been compromised between the borrower and the bank, continuation of criminal proceedings is not justifiable, especially when the accused are women with no active role and the main accused have died. (Paras 11-16)
B) Criminal Law - Commercial Transactions - Private Wrongs - Section 482 CrPC - In matters arising out of commercial, financial, mercantile, civil, partnership or such like transactions where the wrong is basically private or personal in nature and the parties have resolved their entire dispute, the High Court should exercise its powers under Section 482 CrPC to give an end to criminal proceedings. (Para 15)
C) Criminal Procedure - Quashing - Possibility of Conviction - Section 482 CrPC - Where the possibility of conviction is remote and bleak, continuation of criminal proceedings would put the accused to great oppression and prejudice. (Para 15)
Issue of Consideration
Whether continuation of criminal proceedings against the appellants is justified after the borrowers and the bank have entered into a one-time settlement and the loan account has been closed.
Final Decision
Appeals allowed; impugned High Court orders quashed; criminal proceedings against appellants in T.R. No. 28 of 2002 quashed and set aside.
Law Points
- Compromise between borrower and bank
- quashing of criminal proceedings under Section 482 CrPC
- commercial transactions
- private wrongs
- remote possibility of conviction
Case Details
2024 LawText (SC) (10) 33
Criminal Appeal No. ________of 2024 (Arising out of SLP (Crl.) No. 1415/2024) and Criminal Appeal No. ________of 2024 (Arising out of SLP (Crl.) No. 1416/2024)
B.R. Gavai, K.V. Viswanathan
Shri Dama Seshadri Naidu (for appellants), Shri Vikramjeet Banerjee (ASG for Union of India), Mr. Brijesh Kumar Tamber (for respondent No.2)
Tarina Sen and Shaileshree Sen
Union of India and Another
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Nature of Litigation
Criminal appeals against High Court order refusing to quash criminal proceedings under Section 482 CrPC.
Remedy Sought
Appellants sought quashing of criminal proceedings in T.R. No. 28 of 2002 pending before Special Judge (CBI), Bhubaneswar.
Filing Reason
Appellants were accused in a bank loan fraud case; they contended that after settlement with the bank, continuation of proceedings was unjustified.
Previous Decisions
High Court of Orissa disposed of the quashing petitions permitting appellants to raise pleas before trial court.
Issues
Whether continuation of criminal proceedings is justified after compromise between borrower and bank.
Whether High Court should have exercised power under Section 482 CrPC to quash proceedings in commercial disputes where parties have settled.
Submissions/Arguments
Appellants argued they had no active role, were women related to main accused, and the matter was settled with bank via OTS.
CBI argued that settlement does not absolve criminal liability.
Ratio Decidendi
In commercial transactions where the wrong is private and parties have resolved their dispute, continuation of criminal proceedings is unjustifiable as possibility of conviction is remote and bleak; High Court should exercise Section 482 CrPC to quash such proceedings.
Judgment Excerpts
When the matter has been compromised between the borrower and Bank, the continuation of the criminal proceedings would not be justifiable.
In matters arising out of commercial, financial, mercantile, civil, partnership or such like transactions or the offences arising out of matrimony relating to dowry, etc. or family disputes where the wrong is basically private or personal in nature and the parties have resolved their entire dispute, the High Court should exercise its powers under Section 482 CrPC for giving an end to the criminal proceedings.
The possibility of conviction in such cases is remote and bleak and as such, the continuation of the criminal proceedings would put the accused to great oppression and prejudice.
Procedural History
FIR registered on 14.10.2000; charge-sheet filed on 27.08.2002; trial court took cognizance on 02.09.2002; bank filed recovery applications before DRT in 2004; OTS reached and loan closed on 31.01.2011; DRT disposed of recovery proceedings on 03.05.2011; appellants filed Section 482 petitions before High Court; High Court disposed of petitions on 04.07.2023; present appeals filed in Supreme Court.
Acts & Sections
- Code of Criminal Procedure, 1973: Section 154, Section 482
- Indian Penal Code, 1860: Section 120-B, Section 420, Section 468, Section 471
- Prevention of Corruption Act, 1988: Section 13(2), Section 13(1)(d)
