Madras High Court
Block Ii vs Deputy Superintendent Of Police on 3 January, 2025
Author: N.Seshasayee
Bench: N.Seshasayee
Crl.O.P.No.16754 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on : 15.10.2024
Pronounced on : 03.01.2025
CORAM : JUSTICE N.SESHASAYEE
Crl.O.P.No.16754 of 2024
and Crl.M.P.Nos.10107 & 10108 of 2024
1.M/s.Springfield Shelters Pvt. Ltd.,
Coimbatore, Rep. by its Director
C.Raja John
Regd. Office : No.101, Renga Vilas
New Dhamu Nagar
Coimbatore - 641 037.
2.Chairman Dorai Raja John
S/o.Late K.Chairman Durai
Director
M/s.Springfield Shelters (P) Ltd.,
No.18, Thasami Park Residency
GVK Nagar, Singanallur
Coimbatore - 641 005.
3.Chillara Venkateswara Rao
S/o.Sathyanarayana Murthy
Director
M/s.Springfield Shelters (P) Ltd.,
No.F-1, Rampriya Residency
Lakshmi Nagar, Mogal Rajapuram
Vijayawada, Krishna District - 520 008.
4.Rajeswari Dinakaran
W/o.R.Dinakaran
Director
M/s.Springfield Shelters (P) Ltd.,
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Crl.O.P.No.16754 of 2024
Block II, I Floor,
FK Jains Abhishekh Apartments
Velacherry Main Road
Selaiyur - 600 073. ... Petitioners / A1 to A4
Vs
1.Deputy Superintendent of Police
CBI, ACB, Chennai
(Charge Sheet No.08/2022 &
FIR No.RC MA1 2021 A006) ...1st Respondent / Complainant
2.L.N.Suresh
S/o.R.Lakshmi Narasimhan
Regional Head / Dy. General Manager
Central Bank of India
Regional Office, Coimbatore. ...2nd Respondent /
Defacto Complainant
Prayer : Criminal Original Petition filed under Section 482 Cr.P.C.,
(Sec.528 of BNS) praying to call for the records and quash the
C.C.No.52/2023 pending on the file of Chief Judicial Magistrate,
Coimbatore.
For Petitioners : Mr.R.Rajarathinam, Senior Counsel
Assisted by Mr.K.Shanker &
Mr.R.Vignesh
For Respondents : Mr.K.Srinivasan
Special Public Prosecutor (CBI) for R1
Mr.T.S.Vijayakumar for R2
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Crl.O.P.No.16754 of 2024
ORDER
The petitioners herein are a registered company and its Directors, and they
have alleged to have defrauded the Central Bank of India, Coimbatore. A
case has been duly registered and investigated by the first respondent for
offences U/s.120(B) r/w 420 and 420 I.P.C.
2. The final report of the C.B.I. has been filed and the accused persons have
now approached this Court with the present petition for quashing final
report on the ground that the entire loan dues have been settled in OTS and
NOC too has been issued by the 2nd respondent.
3.1 The CBI has filed its counter, but not the 2nd respondent. The allegation
of the prosecution is that the first petitioner is a developer of villas, and that
it had obtained a loan of Rs.5.0 crores for purchase of construction
materials necessary for the construction of 26 houses/villas inter alia on the
security of an equitable mortgage created over its immovable property.
This amount was not utilised fully as only 3 or 4 incomplete villas alone are
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available, and that substantial loan amount was diverted for other purposes.
On 12.04.2018, the loan itself was declared NPA and on 03.11.2018, the
loan account was declared fraud. And the second respondent bank had
suffered a wrongful loss of about Rs.6.07 crores. A FIR came to be
registered against the petitioners and two others plus an unknown public
servant (presumably a bank official) for offences under Sec.120B r/w
Sec.420 IPC and Sec.13(2) r/w Sec.13(1)(d) PCA
3.2 After completing the investigation, a final report has been laid in which
the CBI had dropped the name of the 6th accused in the FIR and also the
'unknown' public servant, for offences under Sec.120B r/w 420 IPC.
4. Be that as it may, M/s Shriram City Union Finances, a financial creditor
of the petitioner-company, had instituted a CIRP before the NCLT,
Chennai, and a Resolution Professional was appointed by the Committee
Creditors. The first petitioner being a MSME, it participated in the
resolution process and offered an OTS with a view to revive the company.
While this application was rejected by NCLT, the petitioner moved
NCLAT, and it allowed the offer fo OTS. This Order of NCLAT was
challenged by the Resolution Professional before the Hon'ble Supreme
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Court and it directed that the resolution offer of the first petitioner be
considered but within a period of two months.
5. As part of the scheme, the second respondent bank was offered
Rs.3,36,89,685/- about 50% of the loan liability when the loan account of
the first petitioner was declared NPA and fraud. On 25.03.2024, this
amount was paid too.
6. It is in this backdrop, the second respondent had addressed a
communication dated 22.05.2024 to the CBI about the closure of loan
account of the first petitioner following the OTS approved by it. On
04.06.2024, the Regional Office of the second respondent bank addressed a
communication to CBI for release of documents which were produced as
securities by the first petitioner, but it underscored that “the criminal
proceedings shall continue and the criminal complaint will not be
withdrawn.”
7. Heard both sides. The loan dues which the petitioners owed to the
second respondent, as stated above, was settled at around 50% of the total
amount due, and the fact remained that the remaining 50% represented the
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public money, and that would mean that the public had eventually lost the
money. It is in this scenario, the petitioners seek to quash the final report
laid by the CBI. Admittedly, since the first petitioner is a MSME and
some of its promoters and Directors continued to be in the management of
the affairs of MSME, they will not be entitled to a relief against prosecution
under Sec.32A of IBC., Now the issue is, dehors Sec.32A of IBC, are the
petitioners entitled to have the final report quashed merely because they
have paid the second respondent the loan dues through OTS?
8. The arguments essentially revolve around an understanding of the
judgements of the Hon'ble Supreme Court in CBI Vs Jagjit Singh
[(2013)10 SCC 686], State of Maharashtra through CBI Vs Vikram
Anantrai Doshi and Others [(2014) 15 SCC 29] and Kothari Polymers
Ltd., and Others Vs CBI [(2022) SCC OnLine SC 2078].
9.1 Both in Jagjit Singh case and Vikram Anantrai Doshi case, the
Hon'ble Supreme Court has held that merely repayment of money which
was fraudulently obtained from the bank will not relieve the person accused
of committing an offence of his or her criminal liability. And even in
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Kothari Polymers case, the Hon'ble Supreme Court has arrived at a similar
conclusion but eventually relieved the appellants before it of the criminal
liability by directing them to pay a sum of Rs.20.0 lakhs in the Court,
which was required to be bifurcated and appropriated at a certain ratio for
those specific purposes it has indicated.
9.2 Now so far as the ratio in Kothari Polymers case is concerned, the ratio
as such is one against the petitioners, yet the relief is granted by the
Supreme Court to the accused. After all, the Hon'ble Supreme Court has
powers under Article 142 of the Constitution which powers this Court does
not have. Therefore, this Court is bound by the dominant view of the
Supreme Court that an offence vis-a-vis the accusation of bank fraud
cannot be compounded as it is an offence against the society. This apart
in its communication dated 04.06.2024, the Regional Office of the second
respondent-bank had clearly indicated its intent not to compound the
offence.
10. For an offence to be compounded with a leave of the Court, first atleast
the parties must compound the offence and leave of the Court comes later.
Here, the bank is seen in no mood to lend its consent to compound the
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offence. Therefore, this Court cannot force the decision on the banker
when the criminal procedure is not against the choice which the banker has
under Sec.320 Cr.P.C.
11. In conclusion, this criminal petition is dismissed. Consequently,
connected miscellaneous petitions are closed.
.01.2025
Index : Yes / No
Speaking order / Non-speaking order
Neutral Citation : Yes / No
kas/ds
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To:
1. The Chief Judicial Magistrate
Coimbatore.
2.The Public Prosecutor
High Court, Madras.
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N.SESHASAYEE.J.,
ds
Pre-delivery Judgment in
.01.2025
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