Case Note & Summary
The Supreme Court allowed the appeal filed by K. Bharthi Devi and another (Accused Nos. 3 and 4) against the judgment of the High Court of Judicature at Hyderabad, which had dismissed their petition under Section 482 of the Code of Criminal Procedure, 1973 (CrPC) seeking quashing of the charge-sheet in C.C. No. 16 of 2014. The case arose from a complaint by Indian Bank, Osmanganj Branch, Hyderabad, alleging that the borrowers, including the appellants as guarantors, had created equitable mortgage using fake and forged title documents. The CBI filed a charge-sheet for offences under Sections 120-B read with 420, 409, 467, 468, 471 of the Indian Penal Code, 1860 (IPC) and Section 13(1)(d) read with 13(2) of the Prevention of Corruption Act, 1988. During the pendency of the proceedings before the Debts Recovery Tribunal (DRT), the borrowers and the bank entered into a One Time Settlement (OTS) of Rs. 3.8 crores, which was accepted, and the bank issued a No Dues Certificate. The DRT disposed of the Original Application as settled. The High Court dismissed the quashing petition, holding that the settlement was private and the charges involved grave crimes against society. The Supreme Court, however, noted that the appellants were wives of the main accused (Accused Nos. 1 and 2) and no specific role was attributed to them in the charge-sheet except being part of a criminal conspiracy. Relying on precedents including Duncans Agro Industries Ltd. and Nikhil Merchant, the Court held that the dispute was essentially civil in nature and had been settled. The Court observed that the offence of cheating is compoundable and the settlement of the civil suit amounted to compounding. The Court also considered that the appellants were women with no active role and that continuing the proceedings would be an abuse of process. Accordingly, the Supreme Court set aside the High Court's order and quashed the criminal proceedings against the appellants.
Headnote
A) Criminal Procedure - Quashing of Proceedings - Section 482 CrPC - Settlement of Civil Dispute - Where the dispute is essentially civil in nature and has been settled between the parties, criminal proceedings may be quashed to prevent abuse of process, especially when the accused had no active role. (Paras 13-18) B) Criminal Law - Cheating and Forgery - Compoundable Offences - Settlement of civil suit amounts to compounding of offence of cheating, and continuation of criminal proceedings is not warranted. (Paras 15-16) C) Criminal Procedure - Role of Accused - Wives of Main Accused - Where the charge-sheet attributes no specific role to the accused except being part of conspiracy, and they are women with no active participation, quashing is justified. (Paras 13-14)
Issue of Consideration
Whether continuation of criminal proceedings against the appellants (Accused Nos. 3 and 4) is justified after the settlement of the civil dispute with the bank and in the absence of any specific role attributed to them.
Final Decision
The Supreme Court allowed the appeal, set aside the impugned judgment of the High Court, and quashed the criminal proceedings against the appellants (Accused Nos. 3 and 4) in C.C. No. 16 of 2014.
Law Points
- Settlement of civil dues
- lack of active role
- quashing of criminal proceedings
- Section 482 CrPC
- compoundable offences
- abuse of process
