The High Court
Case Details
THE HIGH COURT OF ORISSA AT CUTTACK CRLMC No.2091 of 2022 (In the matter of an application under Section 482 of the Code of Criminal Procedure, 1973) M/s. ARSS Damoh-Hirapur Tolls Private Limited and others ……. -Versus- Petitioners Republic of India (CBI) & others ……. Opposite Parties For the Petitioners : Mr. Gaurav Khana, Advocate For the Opp. Parties : Mr. Sarthak Nayak, Advocate for CBI Ms. Pratyusha Naidu, Advocate for O.P. No.3 CORAM: THE HONOURABLE SHRI JUSTICE SIBO SANKAR MISHRA Date of Hearing: 26.11.2024 :: Date of Judgment: 13.02.2025 S.S. Mishra, J. The petitioners by way of the present petition have invoked the inherent jurisdiction of this Court seeking quashing of proceeding emanating from the F.I.R. in connection with CBI/BS & FC No. RCBSK2018E0003 dated 09.04.2018 registered at Head of Branch, CBI, BS & FC, Kolkata, and the consequent Charge Sheet No. 2/2020, dated 28.12.2020, under section 120-B r/w 420 of the Indian Penal Code and section 13(2) r/w 13(1)(d) of the Prevention of Corruption Act, 1988 before the Court of the Special Judge, CBI, Bhubaneswar, Odisha along with the cognizance order dated 25.02.2021 passed by the learned Special Judge (CBI-I), Bhubaneswar in T.R. No.04 of 2021, and the supplementary Charge Sheet No.1/2022, dated 27.06.2022. 2. Heard Mr. Gaurav Khana, learned counsel for the petitioners, Mr. Sarthak Nayak, learned counsel for the CBI and Ms. Pratyusha Naidu, learned counsel for the Opposite Party No.3. 3. The prosecution has filed the charge sheet against seven persons and two Companies, the petitioner no.1 is M/s. ARSS Damoh- Hirapur
Legal Reasoning
social wrong and it has immense societal impact. It is an accepted principle of handling of finance that whenever there is manipulation and cleverly conceived contrivance to avail of these kind of benefits it cannot be regarded as a case having overwhelmingly and predominantingly of civil character. The ultimate victim is the collective. It creates a hazard in the financial interest of the society. The gravity of the offence creates a dent in the economic spine of the nation. The cleverness which has been skillfully contrived, the allegations are true, has a serious consequence. A crime of this nature, in our view, would definitely fall in the category of offences which travel far ahead of personal or private wrong. It has the potentiality to usher in economic crisis. Its implications have its own seriousness, for it creates a concavity in the solemnity that is expected in financial transactions. It is not such a case where one can pay the amount and obtain a “no due certificate” and enjoy the benefit of quashing of the criminal proceeding on the hypostasis that nothing more remains to be done. The collective interest of which the Court is the guardian cannot be a silent or a mute spectator to allow the proceedings to be withdrawn, or for that matter yield to the ingenuous dexterity of the accused persons to invoke the jurisdiction under Article 226 of the Constitution or under Section 482 of the Code and quash the proceeding. It is not legally permissible. The Court is expected to be on guard to these kinds of adroit moves. The High Court, we humbly remind, should have dealt with the matter keeping in mind that in these kind of litigations the accused when perceives a tiny gleam of success, readily invokes the inherent jurisdiction for quashing of the criminal proceeding. The court’s principal duty, at that juncture, should be to scan the entire facts to find out the thrust of allegations and the crux of the settlement. It is the experience of the Judge that comes to his aid and the said experience should be used with care, caution, circumspection and courageous prudence. As we find in the case at hand the learned Single Judge has not taken pains to scrutinize the entire conspectus of facts in proper perspective and quashed Page 10 of 25 the criminal proceeding. The said quashment neither helps to secure the ends of justice nor does it prevent the abuse of the process of the Court nor can it be also said that as there is a settlement no evidence will come on record and there will be remote chance of conviction. Such a finding in our view would be difficult to record. Be that as it may, the fact remains that the social interest would be on peril and the prosecuting agency, in these circumstances, cannot be treated as an alien to the whole case. Ergo, we have no other option but to hold that the order of the High Court is wholly indefensible.” He has also relied upon many other judgments of different High Courts and submitted that the defrauding of the bank by the petitioners is an offence that affects to the society at large. Quashing of the proceeding on the ground that the money has been paid back to the bank is of no consequence as the crime has already been committed an offence under the Prevention of Corruption Act has been initiated against the petitioners. Economic offences involving financial and economic wellbeing of the State have implications which lies beyond the domain of a mere dispute between private disputants. Therefore, this Court should decline to interfere with this matter at this stage. He has further argued that the cases involving Prevention of Corruption Act should not be quashed. He has also pointed out that the Directorate of Enforcement, Bhubaneswar Zonal Office vide order dated 31.01.2023 has already Page 11 of 25 passed a provisional attachment order against the petitioners. That apart, the Enforcement Directorate has also instituted a complaint on 03.08.2023 under Section 45 read with Section 44 of the Prevention of Money Laundering Act, 2002 (PMLA Act). Hence, interference by this Court at this stage would have direct implication on the parallel proceedings initiated against the petitioners under various other statutes. 13. Ms. Naidu, learned counsel for the opposite party No.3 (bank) has highlighted the terms of OTS and drawn attention of this Court to the letter dated 28.03.2019, whereby the OTS proposal of the petitioners were accepted. It would be relevant to reproduce the contents of the said letter:- “BM/JABHUB/2018-19/538 Director M/s. ARRS Damoh-Hirapur Tolls Pvt. Ltd Plot No.38, Sector-A, Zone-D Mancheswar Industrial Estate Bhubaneswar. Reg:- Your OTS proposal dated 07/03/2019. Ref:- Your 07/03/2019. On the subject maker, please take the reference of your above letter. We are pleased to inform you that our higher authorities have accepted your OTS offer of Rs.40.00 crore and approved the proposal on the condition mentioned hereunder:- letter ARSS/CBI/2018-19/1209 dated Page 12 of 25 1.Upfront amount of Rs.4.00 crore deposited by you, which is presently kept under “no lien”, will be accounted for immediately towards your dues. 2. You have to pay Rs.6.00 crore by 31/03/2019. 3. Remaining amount of Rs.30.00 crore to be paid in three quarterly equal instalment of Rs. (10.00) crore each by 30th June 2019, 30th September 2019 & 31st December 2019 respectively and interest @ 10% simple on reducing balance is to be recovered. 4. The said OTS has been approved with the stipulation that entire dues of the group concern M/s Anil Contractor Pvt. Ltd must be paid by 31/03/2019. 5. Criminal action will continue. 6. All litigation filed by you against the bank should be withdrawn. 7. You will enter consent decree with the usual default clause. 8. In case you fail to pay the compromise amount within stipulated period entire concessions will stand withdrawn and it will be treated as if there was no compromise settlement in the account and in that case all recovery proceeding will continue further. Please positively.” acknowledge compliance ensure and Relying upon the Clause-(5) of the aforementioned OTS, Ms. Naidu, submits that the criminal action already initiated should continue, as agreed upon by the bank and the petitioners. 14. Heard learned counsel for the parties and after perusing the records, the issue for consideration by this court falls in a very narrow compass as to whether subjecting the petitioners, who have repaid their Page 13 of 25 loan liability to the satisfaction of the bank under the OTS, would serve the ends of justice or would constitute an abuse of process of law? 15. For the purpose of deciding the issue in lis, it is essential to note the admitted fact of the case that the loan was properly sanctioned by the bank and there is no dispute that any forged document has been used in order to get the loan sanctioned by the petitioners. Further, it is nobody’s case that any forged document is used to create any collateral against the sanctioned loan rather, there was no collateral taken by bank for the purpose of sanctioning the loan. It is further admitted fact on record that the repayment of the loan was to be started after two years from the Commercial Operation Date (COD). However, during this period, the interest on the disbursed amount was to be paid by the petitioners. It is further undisputed fact that the petitioners during the period between 14.12.2011 to 28.12.2013 have paid Rs. 10.21 crores to the bank towards the interest. However, the prosecution has disputed that the said amount on the ground that between 13.12.2012 to 02.05.2013, the bank has disbursed Rs.6,03,91,961/- to the petitioner no.1, therefore, only an Page 14 of 25 amount of Rs.4,14,74,608/- has been realized by bank as interest. This is pure and simple banking reconciliation accounting. 16. The factum of repayment of Rs.40 Crores towards full and final settlement of the loan amount under OTS is undisputed. After the OTS amount was paid to the bank, the opposite party No.3 (bank) moved an application before the learned Debts Recovery Tribunal to withdraw its Original Application, in view of the fact that the petitioners had deposited the settlement amount to the full and final satisfaction of bank. The learned Tribunal vide its order dated 27.11.2020 dismissed the Original Application of the opposite party No.3, the bank as withdrawn, observing as follows:- “it has been stated that during the pendency of the above O.A. the defendants had entered into a compromise settlement with the Bank and had deposited the entire compromise amount amounting to Rs.40.00 Crores with the bank towards full and final satisfaction of the Bank’s dues. In view of the above payment the loan account has been closed, no cause of action exists to proceed with the original application and the original application has become infructuous. A prayer has been made to withdraw the Original Application. In view of the payment made under compromise in full and final settlement of the dues of the bank and closure of the loan account, the interest of justice warrants that the case be closed.” Page 15 of 25 (emphasis supplied) 17. In this backdrop, the rival contention of the prosecution as well as the petitioners is to be weighed. 18. The Hon’ble Supreme Court in the case of Nikhil Merchant (supra) has held that in criminal cases having overtones of civil dispute with criminal facets, the High Courts can exercise their inherent powers and jurisdiction to quash the criminal proceedings, since in view of the settlement between the parties, continuance of the criminal proceeding would be a futile exercise. The relevant paragraphs of the said judgment are extracted herein below :- “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? Page 16 of 25 31. On an overall view of the facts as indicated hereinabove and keeping in mind the decision of this Court in B. S. Joshi case [(2003) 4 SCC 675: 2003 SCC (Cri) 848] 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.” (emphasis supplied) 19. Similarly, in the case of B B Aggarwal (supra) wherein the facts are almost identical to the facts of the present case, the Hon’ble Apex Court has held that, when the parties have settled their dispute and consent decree from the DRT has been obtained after repaying the settlement amount, no live issue survives and therefore, it would be an abuse of process of law to continue the criminal trial against the accused person. The relevant paragraphs of the said judgment are extracted herein below : “12. The High Court was of the view that on resettlement of accounts, the parties obtained the consent decree from DRT and paid the entire sum, therefore, there is no live issue, which now survives. The High Court then examined the question as to whether the issue of criminality is involved so as to allow the trial court to continue on its merits. After to charges and issue with reference examining this Page 17 of 25 the criminal case against documents, the High Court held that no criminality issue is found involved notwithstanding the settlement of the case between the parties. 13. We are also of the view that there arises no occasion to prosecute the respondents as was rightly held by the High Court while quashing the respondents. 14. The learned counsel for the appellant, placing reliance on the decision of this Court in Rumi Dhar v. State of W.B. [Rumi Dhar v. State of W.B., (2209) 6 SCC 364: (2009) 2 SCC (Crl. 1074] contended that notwithstanding settlement of the civil suits by the parties, the criminal case out of which these appeals arises has to be brought to its logical end one way or the other on merits and the High Court was, therefore, not right in quashing the charge-sheet at its threshold under Section 482 CrPC. 15. We find no merit in her submission. When we take into account the entire undisputed controversy mentioned above, we also find that there is no criminality issue surviving qua those accused, who are alive so as to allow the prosecuting agency to continue with the criminal trial on merits. Indeed, it would be an abuse of process, as was rightly held by the High Court to which we concur.” (emphasis supplied) While delving upon the judgment of the Hon’ble Supreme Court in the case of B.B. Agarwal (supra), it is appropriate to deal with the submission of Mr. Nayak. It was specifically urged by Ms. Naidu, learned counsel for the opposite party No.3 supported by Mr. Nayak that the OTS letter dated 28.03.2019 mentioned at Clause-(5) that “Criminal action will continue”. Based on the same, it was argued before this Page 18 of 25 Court that despite the full and final settlement under the OTS, the criminal proceedings should not be quashed. It is relevant to mention that the bank officials have no authority to scuttle the criminal proceeding by mentioning it in OTS. Once criminal law set into motion, the Court of Law assumes its jurisdiction and the same can only be terminated in accordance with law. By way of a contract, the parties cannot terminate a criminal proceeding. Therefore, it was beyond the realm of the bank authorities to touch the criminal proceeding at the time of OTS. It is only the High Courts while exercising their inherent powers or the Hon’ble Supreme Court, which can direct quashing or closure of the criminal proceedings in the OTS. In fact, a similar condition was contained in the OTS in the case of B.B. Agarwal (supra), and the same is reproduced in the detailed judgment of the Delhi High Court in CRLMC No.5722-30 of 2006 passed on 18.04.2009 which had travelled to the Supreme Court. Relevant would be to reproduce the said order:- “14. Pursuant to the notice issued to it, PNB has filed an affidavit of reply dated 6th April 2009 in which it is inter alia stated as under:- **** ***** **** Page 19 of 25 “8. I say that during the year 2005 after initiation of SARFAESI action, Mr. Sunil Patel claiming to be director of applicant No.7 had given the One Time Settlement proposal. I say that after negotiations with said Mr. Sunil Patel, the Respondent No.5 accepted the offer for Rs.1220.00 Lakhs on various terms and conditions settled by the respondent No.5. The acceptance along with the terms and conditions was informed to the concern parties wherein it was clearly mentioned that on payment of the entire compromise amount the parties shall be released of their liabilities and bank charge shall be released. Further, it was also mentioned that as regards ongoing criminal proceedings in a charge sheet filed by CBI, bank shall not interfere with these matter except informing to CBI that notwithstanding the criminal breach of trust and criminal conspiracy, parties have settled their civil liabilities with the bank. **** **** **** 10. I say that in the aforesaid circumstances the respondent No.5 have discharge (sic discharged) the applicant No.6 and 7 from their civil liabilities towards respondent No.5. I further say that the acceptance of compromise by the respondent No.5 is commercial decision taken by them without prejudice to the ongoing investigation or outcome of the criminal proceedings pending in the Hon’ble Court.” 20. Similarly, the High Court of Chhattisgarh in the case of Smt. Suman Devi Kela vrs. CBI in WPCR No.678 of 2019 was also dealing with the case of quashing, where the accused persons had entered into an OTS, wherein one of the conditions was that the bank will not withdraw Page 20 of 25 the criminal proceedings being prosecuted by the CBI. The OTS conditions are recorded of the said judgement, which reads as under:- “(C) Bank will not withdraw any criminal proceedings filed against the company and/or its promoters/guarantor, however, settlement of the account under OTS would be informed to CBI and RBI.” 21. The High Court also noted that such a condition is mentioned because a bank employee is not empowered to compound the offence in an OTS letter and thereafter, relying upon the decisions of the Hon’ble Supreme Court in Nikhil Merchand (supra) and Gian Singh vrs. State of Punjab reported in (2012) 10 SCC 303, whereas the Hon’ble Supreme Court quashed the criminal proceedings against the accused persons on the ground of OTS:- “16…….. In the settlement order of DRT dated 31.01.2018, this was recorded that the Bank will not withdraw any criminal proceedings filed against the company or its representatives, but the settlement of the account under the OTS would be informed to the CBI & RBI. The said action of the bank would demonstrate the intention of the bank and it can be logically inferred that the Bank was not empowered to compound the offence despite the dues of the bank are totally liquidated, however, the obligation to informant CBI & RBI about the OTS was recorded.” Page 21 of 25 22. On the similar line, the Hon’ble Supreme Court in the case of Alpic Finance Ltd. vs. Sadasivan and Anr. (2001) 3 SCC 513 has held that the failure to repay the debt itself will not amount to commissioning the offence of cheating punishable under Section 420 of the Indian Penal Code (I.P.C.). To bring the charges under Section 420 of the I.P.C., it is essential that the accused, at the time of taking loan, had intention to defraud the lender and, for that purpose, the borrower had deceived the lender to believe things which are false to be true. The relevant paragraphs of the said judgment are extracted herein below:- “10. The facts in the present case have to be appreciated in the light of the various decisions of this Court. When somebody suffers injury to his person, property or reputation, he may have remedies both under civil and criminal law. The injury alleged may form the basis of civil claim and may also constitute the ingredients of some crime punishable under criminal law. When there is dispute between the parties arising out of a transaction involving passing of valuable properties between them, the aggrieved person may have a right to sue for damages or compensation and at the same time, law permits the victim to proceed against the wrongdoer for having committed an offence of criminal breach of trust or cheating. Here the main offence alleged by the appellant is that the respondents committed the offence under Section 420 IPC and the case of the appellant is that the respondents have cheated him Page 22 of 25 that is no allegation and thereby dishonestly induced him to deliver property. To deceive is to induce a man to believe that a thing is true which is false and which the person practising the deceit knows or believes to be false. It must also be shown that there existed a fraudulent and dishonest intention at the time of commission of the offence. There the respondents made any wilful misrepresentation. Even according to the appellant, the parties entered into a valid lease agreement and the grievance of the appellant is that the respondents failed to discharge their contractual obligations. In the complaint, there is no allegation that there was fraud or dishonest inducement on the part of the respondents and thereby the respondents parted with the property. It is trite law and common sense that an honest man entering into a contract is deemed to represent that he has the present intention of carrying it out but if, having accepted the pecuniary advantage involved in the transaction, he fails to pay his debt, he does not necessarily evade the debt by deception.” 23. In the facts of the present case, it is very much clear that the genesis of the dispute lies in commercial activities and transactions. The bank has sanctioned the loan and in the process of sanctioning, no forged documents have been used. In our Country, delay in execution of infrastructure projects leading to derailment of infrastructural projects like construction of Highway and Bridges is not a new phenomenon. Therefore, finding criminality in non-completion of the projects would Page 23 of 25 be farfetched. The facts of the present case shows that the loan was taken for the purpose of construction of the Highway project and interest of the bank was secured by creating first lien over the revenue of the toll, which was to be generated after commencement of the project. The criminal proceedings cannot go into the real cause of disruption of the highway project or, for that matter, whether the petitioners have deliberately stalled the Highway project to cause loss to the bank, particularly in view of the fact that the petitioners have repaid Rs.40 Crores to the bank under the OTS to the full and final settlement of the loan amount. 24. The contention of the prosecution that the OTS agreement contains stipulation to the effect that the criminal proceedings to be continued even after the settlement of the loan amount would prohibit this Court from exercising its inherent power cannot be sustained for a simple reason that a private agreement cannot take away the inherent jurisdiction of this court under Section 482 Cr. P.C. Moreover, in the light of aforesaid discussion, this court is of the considered opinion that, Page 24 of 25 no fruitful purpose would be served in keeping the criminal proceeding pending and subjecting the petitioners to the rigors of protracted trial. 25. Accordingly, in the light of and following the judgments of the Hon’ble Supreme Court in the cases of B B Aggarwal (supra.) & Nikhil Merchant (supra.), the F.I.R. No. RCBSK2018E0003 dated 09.04.2018 registered at Head of Branch, CBI, BS & FC, Kolkata, the consequent Charge Sheet No. 2/2020,dated 28.12.2020, under Section 120-B r/w 420 of the Indian Penal Code and Section 13(2) r/w 13(1)(d) of the Prevention of Corruption Act, 1988, along with the cognizance order dated 25.02.2021 passed by the learned Special Judge (CBI), Bhubaneswar in T.R. No. 04 of 2021, and supplementary Charge Sheet No. 1/2022, dated 27.06.2022 and the proceedings consequent thereto are hereby stand quashed qua the petitioners. 26. The petition stands allowed, and the pending applications stand
Arguments
Tolls Pvt. Ltd. (Accused no.4), petitioner no.2 is Sri Sunil Kumar Agarwal (Accused no.1), petitioner no.3 is Sri Sumendra Keshari Pattanaik (Accused no.2), petitioner no.4 is Sri Shiv Kumar Singla (Accused no.3) and petitioner no.5 is Sri Subash Agarwal (Accused no.5). Page 2 of 25 4. The contention of the petitioners in nutshell is that, the petitioner no.1 through rest of the petitioners (functionaries of petitioner no.1) has been awarded concession agreement to construct the highway between Damoh and Hirapur in the State of Madhya Pradesh by M/s. Madhya Pradesh Road Development Cooperation Limited (MPRDCL). The said project was to be executed on Build Operate Transfer (BOT) basis. As such, the petitioner no.1 was to construct the patch of highway running for 96 Kms and thereafter, it had the right to operate the same and collect revenue in the form of toll collection from the said project. 5. The petitioner nos.2 to 5 approached the Central Bank of India, Janpath Branch, 95 Janpath, Unit-III, Bhubaneswar and sought term loan for the purpose of construction of the Highway under the concession agreement. The bank, after long discussion and deliberation, sanctioned a loan of Rs. 87 crores. It is to be noted, for the purpose of sanctioning the loan, the bank has not taken any collateral, however, the bank had the first lien over the revenue to be generated from the collection of tolls after the construction of the Highway project. Pursuant to that, the loan agreement dated 24.10.2011 was executed between the bank and the Page 3 of 25 accused persons. Between 27.10.2011 to 26.03.2012 in six tranches a total sum of Rs.56,29,06,708/- was disbursed by the bank and between 31.12.2012 to 02.05.2013, another Rs.6,03,91,961/- was disbursed to the petitioner no.1. As per the terms of the loan agreement, the repayment of the loan amount was to be started after 2 years from the Commercial Operation Date (COD), however, during this period, the petitioners had to service the interest component over that principal amount. 6. It is the contention of the petitioners that, during the period between 14.12.2011 to 28.12.2013, the petitioner no.1 i.e. M/s. ARRS Damoh Hirapur Tolls Private Limited (ADHTPL) paid interest to the tune of Rs. 10.21 crores. It has been further contended by the petitioners that, due to the default attributable to M/s. MPRDCL, the project could not be executed in timely fashion and ultimately, the dispute between M/s. ADHTPL and M/s. MPRDCL arose leading to cancelation of the concession agreement. The petitioner no.1 (M/s. ADHTPL) purportedly initiated arbitration proceedings against M/s. MPRDCL, which is still pending. Page 4 of 25 7. The petitioner no.1 fell in default in repayment of interest as well as the principal loan amount. A complaint was made to the investigating agency i.e. CBI alleging that, the petitioners herein, in connivance with the senior bank officials of the Central Bank of India, Janpath Branch hatched a conspiracy to dishonestly take loan on the basis of the concession agreement for the road project and thereafter diverted the loan amount before defaulting in the repayment of causing wrongful loss to the bank. On the basis of such complaint, the CBI initiated the investigation and finally submitted the charge sheet no.2/2020 dated 28.12.2020 under section 120-B r/w 420 of the Indian Penal Code and Section 13(2)/13(1)(d) of the Prevention of Corruption Act against as many as 9 accused persons including the petitioners in the present petition. The two other accused persons other than the petitioners herein are Sudarsan Raj (accused no.7), Chief Manager and Branch Head, Central Bank of India, Janpath Branch, Bhubaneswar and Udaya Nath Giri (accused no.8), Assistant General Manager and Branch Head, Central Bank of India, Janpath Branch, Bhubaneswar, against whom the allegations are that, they have misused their government official position Page 5 of 25 to assist the accused persons in taking bogus loan and thereby caused loss to the bank. 8. It has been argued on behalf of the petitioners that, nothing is due against the bank, as the petitioners have repaid the loan to the satisfaction of the bank under One Time Settlement (OTS) Offer, whereby the petitioners were to pay a total sum of Rs. 40 crores towards full and final settlement of the loan amount. It has been further submitted on behalf of the petitioners that, in lieu of the repayment of the loan under the OTS, the Debt Recovery Tribunal (DRT), Cuttack, vide its order dated 27.11.2020, has closed the recovery proceedings initiated by the bank against the petitioners. 9. As per the case setup by the prosecution in the charge sheet filed before the learned trial Court, the main allegation against the petitioners is that, the disbursal of the loan was not as per the sanctioned plan and in terms of the loan agreement. It has been alleged by the prosecution that disbursal of the loan amount to the tune of Rs.56,29,06,708/- was not as per the sanctioned plan and instead of the said amount, the maximum that could have been disbursed was Rs.13.05 crores. Further, it is alleged Page 6 of 25 that the said huge amount has been disbursed by the accused bank official in connivance with the petitioners without adhering to the terms and conditions of loan agreement. 10. The petitioners have strenuously argued that after the settlement and repayment of loan amount to the satisfaction of the bank under the OTS, there will not be any loss to the bank and therefore, no fruitful purpose will be served by subjecting the petitioners to suffer a protracted criminal trial. In order to buttress their argument, the petitioners have heavily relied upon the judgment of Hon’ble Apex Court in the case of CBI vs. B B Aggarwal and Ors. (2019) 15 SCC 522 and Nikhil Merchant vs. CBI and Anr. (2008) 9 SCC 677. 11. Per contra, Mr. Sarthak Naik, learned counsel for the CBI, vehemently opposed the petition submitting that settlement of civil liabilities does not per-se exonerate the petitioners from the criminal liability for which the petitioners must face the trial. Mr. Naik has further argued that, the petitioners, in connivance with the bank officials, have caused huge loss to a national bank. It has been argued on behalf of the prosecution the fact that the disbursement of Rs. 56,29,06,708/- in only Page 7 of 25 six tranches of the term loan within period from 27.10.2011 to 26.03.2012 was not in conformity with the terms of the loan agreement, which shows that the petitioners have hatched conspiracy with the accused bank officials and got the loan amount disbursed and thereafter, committed default and caused loss to the bank. 12. Mr. Nayak, further submits that it was a conditional One Time Settlement (OTS). As per the agreed condition between the bank and the petitioners, the criminal case is agreed to be proceeded with. Therefore, the petitioners are forbidden to take recourse to the present petition seeking quashing of the criminal cases initiated against them despite having agreed to the terms. He has also submitted that the cases of the present nature where serious economic offence are complained of, the same cannot be quashed by invoking the inherent jurisdiction of this Court under Section 482 Cr.P.C. To substantiate the said submission, he has relied upon the judgment of the Hon’ble Supreme Court in the case of State of Maharashtra Through Central Bureau of Investigation vrs. Vikram Anantrai Doshi and others, reported in (2014) 15 SCC 29. He Page 8 of 25 has emphasized paragraphs-14 & 26 of the said judgment, which read as under:- “14. To appreciate the complete picture in proper perspective we think it seemly to refer to the relevant decisions in the field. In Rumi Dhar vrs. State of W.B.5 while dealing with an order declining to discharge the accused under Section 239 of the Code by the learned Special Judge which has been affirmed by the High Court, a two-Judge Bench referred to the decision in CBI v Duncans Agro Industries Ltd.6 and Nikhil Merchant v. CBI came to hold as follows: 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 loan, criminal offences have been said committed by thereof the persons accused including the officers of the bank, criminal indisputably be proceedings would also maintainable.” In the said case, the Court took note of the fact the compromise entered into between Oriental Bank of Commerce and the accused pertaining to repayment of loan could not form the foundation of discharge of the accused. The two- Judge Bench appreciated the stand of CBI before the High Court that the criminal case against the accused had started not only for obtaining loan but also on the ground of criminal conspiracy with the bank officers and accordingly upheld the order passed by the High Court. 26. We are in respectful agreement with the aforesaid view. Be it stated, that availing of money from a nationalized bank in the manner, as alleged by the investigating agency, vividly exposits fiscal impurity and, in a way, financial fraud. The modus operandi as narrated in the chargesheet cannot be put in the compartment of an individual or personal wrong. It is a Page 9 of 25 if
Decision
disposed of. …………………. (S.S. Mishra) Judge Signature Not Verified Digitally Signed Signed by: SWARNAPRAVA DASH Reason: Authentication Location: High Court of Orissa Date: 01-Mar-2025 14:44:43 The High Court of Orissa, Cuttack Dated the 13th of February, 2025/Swarna Page 25 of 25