Satish Kumar Gupta and Another v. Central Bureau of Investigation and Others

Heard Mr. S.K. Mandal, learned counsel for t he applicant s and Mr. Piyush Garg, learned counsel for t he Cent ral Bureau of I nvest igat ion. Perused t he records.

3. The case originat es from a large- scale banking fraud wherein t he applicant s, in collusion wit h bank officials, fraudulent ly availed credit facilit ies from t he Cent ral Bank of I ndia by subm it t ing forged and fabricat ed docum ent s. The invest igat ion revealed t hat t he 2 m isappropriat ed funds were divert ed t hrough m ult iple fake account s, leading t o subst ant ial financial losses t o t he public exchequer. The CBI conduct ed a t horough forensic audit , uncovering financial irregularit ies, unaut horised loan approvals, and deliberat e diversions.

4. The applicant furt her subm it s t hat t he CBI has no locus t o obj ect t o t he set t lem ent bet ween t he accused t he com plainant bank. I t is argued t hat t he cont inuat ion of t he crim inal t rial would serve no purpose, as t he bank it self is no longer int erest ed in prosecut ing t he m at t er. The applicant relies on Nikhil Merchant v. CBI , wherein t he Hon’ble Suprem e Court held t hat crim inal proceedings could be quashed if t he disput e is purely civil and has been set t led am icably.

5. The learned counsel t he CBI st rongly opposes t he bail applicat ion, arguing t hat t he offences com m it t ed by t he applicant are not m erely civil but involve serious financial fraud, forgery, and corrupt ion. I t is subm it t ed t hat t he applicant , in connivance wit h bank officials, fraudulent ly availed of a loan by subm it t ing forged and fabricat ed docum ent s, causing a wrongful loss t o t he bank.

6. The CBI furt her subm it s t hat while t he OTS schem e allowed t he applicant t o clear his dues, it does not absolve him of t he crim inal liabilit y arising from t he 3 fraudulent act s com m it t ed t o obt ain t he loan in t he first place. The m ere set t lem ent of financial liabilit y cannot be grounds for quashing crim inal proceedings, as such an approach would encourage financial fraud and render ant i- corrupt ion laws m eaningless.

7. Addit ionally, it is point ed out t hat m ult iple bank account s were used t o divert t he fraudulent ly obt ained funds, and forensic audit s have revealed discrepancies in financial t ransact ions, indicat ing deliberat e m isappropriat ion. The invest igat ion has also uncovered unaut horised approvals, m anipulat ion of account records, and involvem ent of fict it ious ent it ies, st rengt hening t he case against t he applicant .

8. Upon perusal of t he records and argum ent s advanced by bot h sides, t his Court t hat t he allegat ions against t he applicant s pert ain t o syst em ic financial fraud involving collusion wit h bank officials. The CBI ’s charge- sheet est ablishes a prim a facie case against t he applicant s, support ed by docum ent ary evidence, wit ness st at em ent s, and forensic audit findings. The m ere set t lem ent of financial dues cannot erase t he fraudulent m eans adopt ed t o obt ain t he loans. The CBI invest igat ion has revealed t hat t he applicant , connivance wit h bank officials, m anipulat ed docum ent s, subm it t ed forged records, and divert ed funds for purposes ot her t han t hose originally sanct ioned. 4

9. The OTS set t lem ent , while relevant t o civil recovery, does not negat e t he underlying crim inalit y. The Suprem e Court has repeat edly held t hat crim inal proceedings cannot be quashed m erely because financial dues have been repaid, especially in cases involving cheat ing, forgery, and corrupt ion.

10. The allegat ions in t he present case pert ain t o large- scale financial fraud and forgery, which have severe ram ificat ions on t he econom y and banking syst em . The fraudulent pract ices em ployed by t he applicant s, in connivance wit h bank officials, result ed in a wrongful loss t o t he public exchequer and eroded t rust in financial inst it ut ions. While t he applicant s argue t hat t hey have set t led t heir financial liabilit ies under t he One- Tim e Set t lem ent ( OTS) schem e, is set t led t hat repaym ent of dues does not absolve t he accused from crim inal liabilit y. The court s have repeat edly held t hat econom ic offences should be t reat ed wit h st ringent scrut iny due t o t heir im pact on public t rust and financial discipline.

11. The evidence present ed, including forged docum ent s, financial report s, and wit ness t est im onies, est ablishes a st rong prim a facie case against t he applicant s, negat ing any j ust ificat ion for quashing t he proceedings at t his st age. 5

12. Thus, allowing for t he quashing of proceedings would set a dangerous precedent , encouraging fraudulent act ors t o m isuse banking channels wit hout fear of prosecut ion.

13. Given t he seriousness of t he allegat ions, t he st age of t he proceedings, and t he weight of evidence against t he applicant s, t his Court finds no m erit in t he present applicat ion.

14. Accordingly, t he Crim inal Miscellaneous Applicat ion st ands dism issed. (Ashish Naithani, J.) 04.03.2025