Delhi High Court

Sangeeta Arora vs Cbi & Another on 17 February, 2011

Author: Ajit Bharihoke

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                             Judgment delivered on: February 17,2011

+      CRL.M.C. 754/2009 & CRL.M.A.2801/2009

       SANGEETA ARORA                          ....PETITIONER
              Through: Mr. Vikas Arora, Advocate

                       Versus

       C.B.I & ANR.                               ....RESPONDENTS
                 Through:    Mr. Anindya Malhotra, Advocate with Ms.
                             Deepti Gulati, Advocate.



        CORAM:
        HON'BLE MR. JUSTICE AJIT BHARIHOKE

1.     Whether Reporters of local papers
       may be allowed to see the judgment?

2.     To be referred to the Reporter or not ?
3.     Whether the judgment should be
       reported in Digest ?

AJIT BHARIHOKE, J.(ORAL)



1.     This is a petition under Section 482 Cr.P.C. seeking quashing of

case R.C.No. 1/2001-SIU-VIII, under Sections 420/468/471 IPC and

the subsequent proceedings pending in the court of Special Judge,

CBI under Sections 420/468/471/120B IPC on the ground that since

the registration of the case, the petitioner has already settled the

loan account with the bank        concerned and paid off the entire

amount.



Crl.M.C. 754/2009                                              Page 1 of 9
 2.     It is submitted by Sh. Vikas Arora, Advocate for the petitioner

that the petitioner Sangeeta Arora is a divorcee, mother of two

children and medically unfit.    He states that though the petitioner

Sangeeta Arora has been charged for criminal conspiracy for

committing offence punishable under Sections 420/468/471 IPC, she

has no role to play in the conspiracy. In fact, she is an innocent

business lady, who was in need of loan and she was told by the

other co-accused persons that they would look after the loan

application and get the loan sanctioned. She told them that she had

no security to furnish for the loan and whatever documentation was

done, it was done by the other co-accused persons in connivance

with the Bank Manager.          Learned counsel submits that since

Sangeeta Arora has arrived at a settlement with the bank and paid

off the loan along with interest, no purpose shall be served by

prosecuting her, as such, he requests for quashing of FIR and the

proceedings qua her. In support of his contention, learned counsel

has relied upon the judgment of Supreme Court in the matter of

Nikhil Merchant Vs. CBI and Anr., (2008) 9 SCC 67.


3.     Learned Sh. Anindya Malhotra, Advocate for CBI, on the

contrary, has opposed the prayer. He submits that this is a case in

which the petitioner, in furtherance of a criminal conspiracy with the

co-accused persons including the Bank Manager, obtained sanction

of loan worth ` 35 lakhs on the basis of the security of forged title

Crl.M.C. 754/2009                                             Page 2 of 9
 deeds.      Learned counsel for the CBI submits that although the

charge under Section 13(2) read with Section 13(1)(d), P.C. Act has

been framed against the bank official only, the petitioner is also a

party to the aforesaid offence, being the conspirator.      He further

submits that as per the evidence collected during investigation, the

petitioner not only signed the loan application, she accompanied the

guarantor, who was an imposter and introduced him as her relative.

Learned counsel further submitted that the petitioner is the main

beneficiary of entire fraud as such her request for quashing of FIR

against her is not justified.


4.     I have considered the rival contentions and perused the

material on record. On perusal of the record, it transpires that on

the basis of the charge sheet filed by the CBI, learned Special Judge

has charged the petitioner for offences punishable under Sections

420, 468 & 471 read with Section 120B IPC and her co-accused Sh.

G.R.Meena, Bank Manager has been charged for the offence

punishable under Section 13(2) read with Section 13(1) (d) of the

Prevention of Corruption Act. On bare reading of the charge sheet,

it is apparent that the petitioner actively indulged in falsification of

documents and impersonation by the guarantor and on the basis of

those forged documents, in connivance with Sh. G.R.Meena,

Manager, Nehru Place Branch of State Bank of Bikaner & Jaipur,



Crl.M.C. 754/2009                                               Page 3 of 9
 obtained sanction of loan worth ` 35 lakhs and against that loan, `

29,56,164/- was withdrawn.


5.     The short point which arises for consideration in this matter is

whether the petitioner is entitled to quashing of FIR merely for the

reason that she has entered into a settlement with the bank and

cleared the loan account?


6.     On reading of the judgment in Nikhil Merchant (supra), it is

evident that the aforesaid judgment proceeds on the basis of an

agreement entered into between the financial institution and the

appellant in that case of which Clause 11 of the consent term reads

as under:


       "Clause 11: Agreed that save as aforesaid neither party has any
       claim against the other and parties do hereby withdraw all the
       allegations and counter allegations made against each other."



7.     The     relevant   observations   made   in   aforesaid   case     are

reproduced thus:

       "30. In the instant case, the disputes between the Company and
       the Bank have been set at rest on the basis of the compromise
       arrived at by them whereunder the dues of the Bank have been
       cleared and the Bank does not appear to have any further claim
       against the Company. What, however, remains is the fact that
       certain documents were alleged to have been created by the
       appellant herein in order to avail of credit facilities beyond the
       limit to which the Company was entitled. The dispute involved
       herein has overtones of a civil dispute with certain criminal
       facets. The question which is required to be answered in this
       case is whether the power which independently lies with this
       Court to quash the criminal proceedings pursuant to the
       compromise arrived at, should at all be exercised?


Crl.M.C. 754/2009                                                   Page 4 of 9
        31. On an overall view of the facts as indicated hereinabove and
       keeping in mind the decision of this Court in B.S. Joshi case2
       and the compromise arrived at between the Company and the
       Bank as also Clause 11 of the consent terms filed in the suit filed
       by the Bank, we are satisfied that this is a fit case where
       technicality should not be allowed to stand in the way in the
       quashing of the criminal proceedings, since, in our view, the
       continuance of the same after the compromise arrived at
       between the parties would be a futile exercise."



8.     On perusal of the aforesaid observations, it is apparent that in

Nikhil Merchant's case, criminal proceedings were quashed as

parties had settled the matter in dispute in the light of Clause 11 of

the consent terms.


9.     The facts of this case are however different.               In the instant

case, the loan account was settled in terms of the compromise offer,

which is reproduced thus:

         "COMPROMISE OFFER
        (WITHOUT PREJUDICE TO THE CASE PENDING WITH CBI)

       With reference to our letter dated 13.8.04, we certify that you
       have deposited Rs. 250414/- (which includes principle of Rs.
       227500.00 and interest of Rs. 22914.00), the amount agreed
       under One Time Settlement (OTS), leaving no dues towards
       Bank in the account in terms of OTS.

       Please note that no security will be released till finalisation of
       the case with the CBI".




10.    On reading of the aforesaid compromise offer, it is evident that

the offer starts with a reservation that settlement offer is without

prejudice to the criminal case pending with CBI. Thus, it is clear that

the complainant bank had never consented to compromise the


Crl.M.C. 754/2009                                                           Page 5 of 9
 criminal proceedings or help the petitioner in getting the FIR

quashed.


11.    Otherwise also, the judgment of the Supreme Court in Nikhil

Merchant's case was considered and discussed by the Supreme

Court in the case of Rumi Dhar Vs. State of West Bengal., JT

2009 (5) SC 321, wherein in the peculiar facts of that case, it was

observed thus:


       17. Appellant is said to have taken part in conspiracy in
       defrauding the bank. Serious charges of falsification of accounts
       and forgery of records have also been alleged. Although no
       charge against the appellant under the Prevention of Corruption
       Act has been framed, indisputably, the officers of the bank are
       facing the said charges.

       18. It is now a well settled principle of law that in a given case, a
       civil proceeding and a criminal proceeding can proceed
       simultaneously. Bank is entitled to recover the amount of loan
       given to the debtor. If in connection with obtaining the said loan,
       criminal offences have been committed by the persons accused
       thereof including the officers of the bank, criminal proceedings
       would also indisputably be maintainable. When a settlement is
       arrived at by and between the creditor and the debtor, the
       offence committed as such does not come to an end. The
       judgment of a tribunal in a civil proceeding and that too when it
       is rendered on the basis of settlement entered into by and
       between the parties, would not be of much relevance in a
       criminal proceeding having regard to the provisions contained in
       Section 43 of the Indian Evidence Act.

       ...............

...................

22. .....Our attention has also been drawn to a recent decision of this Court in Nikhil Merchant v. Central Bureau of Investigation and Anr., (2008) 9 SCC 677 , wherein this Court refused to refer the matter to a larger Bench, stating:

30. In the instant case, the disputes between the Company and the Bank have been set at rest on the basis of the compromise arrived at by them whereunder the dues of the Bank have been cleared and the Bank does not appear to have any further claim against the Company. What, however, remains is the fact that certain documents were alleged to have been created by the appellant herein in order to avail of credit facilities beyond the limit to which the Company was entitled. The dispute involved herein has overtones of a civil dispute with certain criminal facets. The question which is required to be answered in this case is whether the power which independently lies with this Court to quash the criminal proceedings pursuant to the compromise arrived at, should at all be exercised?

31. On an overall view of the facts as indicated hereinabove and keeping in mind the decision of this Court in B.S. Joshi's case (supra) and the compromise arrived at between the Company and the Bank as also Clause 11 of the consent terms filed in the suit filed by the Bank, we are satisfied that this is a fit case where technicality should not be allowed to stand in the way in the quashing of the criminal proceedings, since, in our view, the continuance of the same after the compromise arrived at between the parties would be a futile exercise.

12. In the matter of Central Bureau of Investigation Vs. A.

Ravishankar Prasad & Others, (2009) 2 SCC (Cri) 1063, Supreme

Court, inter alia, observed thus:

36. In a recently delivered judgment of this Court in Rumi Dhar v. State of W.B. this Court approved the observations of the Special Judge. The observations of the Special Judge are set out as under:

"19. The learned Special Judge in his order dated 16-12-2006 rejected the contention raised on behalf of the appellant herein, stating:

„I have gone through the record citation and considered the circumstances. It is true that the accused has put a good gesture by paying off the dues of the Bank but I am at one with the learned Public Prosecutor that this payment cannot exonerate the accused from a prima facie charge. If I allow this, then I may have to swallow in a case of bribery that the accused has paid back the amount to the sufferer the amount received as bribe.

It is a question of trial whether there was any criminal intention on the part of this lady accused in this crime. The criminal intention is to be inferred from the evidence to be adduced by the prosecution. Simply because the money has been returned, I cannot shut the mouth of the prosecution from adducing evidence against this accused. Thus, I do not like to pass any order in favour of the accused. The prayer for discharge of Accused 7, Rumi Dhar stands rejected. Let the case proceed. Fix 7-2-2007 for consideration of charge. The sureties must produce all the accused persons on that date.‟ "

...........

............

46. Before parting with the case we would like to observe that mere repayment of loan under a settlement cannot exempt the accused from the criminal proceeding in the facts of this case."

13. In the instant case, there is, prima facie, evidence on record

that the petitioner was a party to conspiracy to cheat the bank in

connivance with the bank Manager and she obtained sanction for

loan of `35 lakhs on the strength of forged and false title deeds

produced as security and that she introduced an imposter who stood

guarantee for loan, as her relative. Prima facie, she is the main

person who has benefited from the sanction of loan. Therefore,

merely because she has settled the loan amount and repaid the

money, she cannot be absolved of her criminal act without

prosecution by quashing the FIR. It may be noted that if the

fraudsters and forgers are allowed to go scot free by quashing of FIR

only because of settlement with the complainant, it would send a