Telangana High Court

Sri. Nadimpally Venkata Subba Raju ... vs The State Of Telangana on 19 September, 2025

            THE HON'BLE SMT. JUSTICE TIRUMALA DEVI EADA

                 CRIMINAL PETITION No.11426 of 2025

ORDER:

This criminal petition is filed seeking to quash the

proceedings in CC No.12 of 2021 against the petitioners-

accused Nos.2 & 3 on the file of I-Additional Special Judge for

CBI Cases, Hyderabad at Nampally, for the offences under

Sections 120B read with 420, 409, 468 and 471 IPC and Section

13(2) read with 13 (1) (c) and (d) of the Prevention of Corruption

Act, 1988.

2. Heard Mr.T. Raghava Charyulu, learned counsel for

the petitioners and Mr. T. Srujan Kumar Reddy, learned Standing

Counsel for CBI for respondent No.1.

3. Learned counsel for the petitioners submitted that

the Bank has come forward for One Time Settlement (OTS) and

once OTS is accepted, the criminal proceedings cannot be

initiated in view of the judgment of the Hon'be Apex Court in

Tarina Sen v. Union of India 1.

(2024) 10 SCR 417 2 ETD,J

4. Learned Standing Counsel for CBI has submitted

that accused Nos.2 and 3 in the Tarina Sen's case, who were

conspirators, passed away, then the Hon'ble Supreme Court has

considered the case of the wives of the conspirators, accused

therein. That the facts of the present case differ from the above

mentioned case and hence, the submission of the learned Senior

Counsel for the petitioners does not fall for consideration. He

further submitted that the petitioners herein are alleged to have

misappropriated an amount of Rs.192.98 Crores and the

allegations do disclose that they entertain malafide intention from

the inception of the crime and they have deposited false

valuation reports and obtained loans and subsequently, the said

properties under the loan accounts were declared to be NPA.

Thus, the accused herein have resorted to swiping of the public

money by creating factious documents and obtaining loans and

diverting to their own accounts.

5. The learned Standing Counsel further submitted that

in Central Bureau of Investigation v. Maninder Singh 2, the

High Court had quashed the proceedings against the accused

therein but, the said orders were set aside by the Hon'ble Apex

(2016) 1 SCC 389 3 ETD,J

Court. Learned Standing Counsel further relied upon the

decision of the Hon'ble Apex Court in Parbatbhai Aahir @

Parbatbhai Bhimsnhbhai Karmur and others v. State of

Gujarat and another 3. He further submitted that entering into

OTS absolves the civil liability, but not the criminal liability and he

therefore, prayed to dismiss the petition.

6. Perused the record.

7. The petitioners herein are alleged to have forged the

documents by showing false existence of fish tanks (Pisciculture)

and obtained loans, and after obtaining loans, they diverted the

amounts to their own accounts. The allegations do point out a

serious economic offence. The Investigating Agency has

collected necessary material during the course of investigation,

which needs to be tested during the course of trial.

8. In Tanira Sen's case (1 supra), the matter was

compromised between the borrowers and the bank upon

payment under the OTS. The loan of the borrower has been

closed. Therefore, the only question was whether to continue the

criminal proceeding or not. When the matter has reached the

(2017) 9 SCC 641 4 ETD,J

Apex Court, the actual accused i.e. conspirators were expired.

The case was only against two women i.e. accused Nos.4 and 5,

accused No.4 was the wife of accused No.2 and accused No.5

was the wife of the brother of accused No.2. Therefore,

continuation of the proceedings against the appellants therein i.e.

accused Nos.4 and 5 was held to be abuse of process of law and

hence, the same was quashed.

9. In Parbatbhai Aahir's case (3 supra), a Three

Judge Bench of the Hon'ble Apex Curt has held that:

"Economic offences involving the financial and economic well-being of the state have implications which lie beyond the domain of a mere dispute between private disputants. The High Court would be justified in declining to quash where the offender is involved in an activity akin to a financial or economic fraud or misdemeanour. The consequences of the act complained of upon the financial or economic system will weigh in the balance."

10. In Central Bureau of Investigation v. Maninder

Singh's case (2 supra), the Hon'ble Apex Court held that:

"The allegation against the respondent is 'forgery' for the purpose of cheating and use of forged documents as genuine in order to embezzle the public money. After facing such serious charges of forgery, the respondent wants the proceedings to be quashed on account of settlement with the bank. The development in means of 5 ETD,J

communication, science & technology etc. have led to an enormous increase in economic crimes viz. phishing, ATM frauds etc. which are being committed by intelligent but devious individuals involving huge sums of public or government money. These are actually public wrongs or crimes committed against society and the gravity and magnitude attached to these offences is concentrated at public at large."

11. In Central Bureau of Investigation v. Hari Singh

Ranka and Others 4, the Hon'ble Apex Court held that:

"In the aforesaid backdrop of facts, we take into consideration the effect of OTS. It is apparent that a large number of documents were filed by the CBI along with the Charge sheet. There are serious allegations in the instant case leveled against the accused persons of using fabricated documents whereas there was no supply or no such transactions took place. The letter head of M/s. Modern Denim Ltd.- Accused 13 had also been used. It passes comprehension how the trial court has given a clean chit that offence falls short of constituting the conspiracy under Section 120 B IPC. The trial court has not cared to refer to the aforesaid various materials which have been alleged to be fabricated /forged and as to how the misuse of bank funds was made. In our considered opinion, in the facts of the instant case, the manner in which the trial court has discharged the accused persons, in spite of the overwhelming materials on record, could not be said to be legally justified order at all. The OTS merely deals with the civil liability that too by making of payment of Rs.25 crores

(2019) 16 SCC 687 6 ETD,J

whereas outstanding liability was Rs.44 crores though it was submitted loss caused was approx. 13 crores. Be that as it may, we are not on the civil liability. Ultimately, the amount which has been settled in OTS Scheme cannot be legally sufficient to wipe out the criminal liability of the accused persons. The OTS could wipe off only the civil liability, of the accused not the criminal one. However, this may not be taken to be the ultimate conclusion on merits of the case, it would be open to the trial court to record any finding after the trial of the case."

12. The above cited decisions squarely apply to the

present case. The petitioners herein are alleged to have forged

certain documents showing false existence of fish tanks,

obtained loans and diverted the amounts to their accounts and

the alleged misappropriation is to an extent of Rs.192.98 crores.

Thus, even if OTS is arrived at, it would not wipe out the criminal

liability of the accused persons, as per the principle laid down in

CBI v. Hari Singh's case (4 supra).

13. In the light of the above said decisions Parbatbhai

Aahir's case (3 supra), C.B.I. v. Maninder Singh's case (2

supra) and C.B.I v. Hari Singh Ranka's case (4 supra) and in

view of the foregoing discussion, the criminal petition lacks merit