A) ABSTRACT / HEADNOTE

This case concerns the exercise of the inherent powers of the High Court under Section 482 of the Criminal Procedure Code, 1973 (CrPC) for quashing criminal proceedings when disputes are resolved between the parties. The appellants, who were implicated in financial irregularities involving sanctioned loans, contended that the disputes had been settled with the lender bank under a One-Time Settlement (OTS). The Supreme Court deliberated on whether continuation of criminal proceedings against the appellants would be justified, given the settlement.

The Court emphasized the principle that in commercial, financial, or personal disputes where chances of conviction are negligible, continued prosecution causes undue prejudice to the accused. The proceedings were ultimately quashed in light of the settlement, following the judicial precedents that support resolution of disputes via compromise, provided the public interest is not adversely affected.

Keywords: Quashing of Criminal Proceedings, Compromise, Section 482 CrPC, Loan Settlement, Prevention of Corruption Act.

B) CASE DETAILS

i) Judgement Cause Title:
Tarina Sen v. Union of India & Anr.

ii) Case Number:
Criminal Appeal No. 4114 of 2024

iii) Judgement Date:
October 3, 2024

iv) Court:
Supreme Court of India

v) Quorum:
Justice B.R. Gavai and Justice K.V. Viswanathan

vi) Author:
Justice B.R. Gavai

vii) Citation:
[2024] 10 S.C.R. 417, 2024 INSC 752

viii) Legal Provisions Involved:

• Section 482, CrPC
• Sections 120-B, 420, 468, 471, Indian Penal Code (IPC), 1860
• Section 13(2) read with Section 13(1)(d), Prevention of Corruption Act, 1988

ix) Judgments Overruled by the Case:
None explicitly overruled.

x) Case is Related to Which Law Subjects:
Criminal Law, Financial Law, Administrative Law.

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The case originated from allegations of fraudulent loan transactions facilitated through a conspiracy involving the appellants and others. Loans were disbursed without due security or diligence, leading to defaults. Following the settlement of debts under OTS, the appellants sought quashing of criminal proceedings under Section 482, CrPC. The High Court dismissed their plea, prompting the present appeal before the Supreme Court.

D) FACTS OF THE CASE

1. Accusation and Parties Involved:

   • Accused individuals included bank officials and business partners.
   • The appellants (Accused Nos. 4 and 5) were partners in M/s Clarion Travels.

2. Loan Sanction and Alleged Fraud:

   • Two loans were sanctioned by the bank in 1998 for purchasing vehicles.
   • No securities or post-dated cheques were obtained as safeguards.

3. Alleged Conspiracy:

   • Loans were granted based on fabricated documents and conspiracy.
   • Offices and business units linked to the transactions shared addresses.

4. Criminal Proceedings:

   • A CBI investigation ensued, leading to charges under IPC and the Prevention of Corruption Act.
   • Summons were issued following cognizance by the trial court.

5. OTS Agreement:

   • A settlement under OTS was reached in 2011, closing the loan accounts.
   • Recovery proceedings before the Debt Recovery Tribunal (DRT) were terminated.

E) LEGAL ISSUES RAISED

• Whether the continuation of criminal proceedings is justified when disputes have been resolved and loans repaid under OTS.

F) PETITIONER/APPELLANT’S ARGUMENTS

1. Settlement as a Basis for Quashing:

   • Appellants argued that loan disputes were settled amicably under OTS.
   • Continuation of prosecution serves no purpose in light of the compromise.

2. Limited Role in Alleged Offenses:

   • Appellants contended they were implicated due to familial connections with principal accused.
   • No substantive role in the alleged fraud was attributed to them.

3. Precedents Supporting Quashing:

   • Reliance placed on rulings such as Nikhil Merchant v. CBI [(2008) 9 SCC 677] and Gian Singh v. State of Punjab [(2012) 10 SCC 303].

G) RESPONDENT’S ARGUMENTS

1. Criminal Liability Independent of Settlement:

   • Prosecution maintained that compromise does not negate criminal liability.
   • Criminal acts such as forgery and cheating impact public interest.

2. Seriousness of Allegations:

   • The allegations involved conspiracy and misuse of official position.
   • Dismissing the case could set a precedent for evasion of justice.

H) JUDGEMENT

a. Ratio Decidendi:
The Court held that criminal proceedings involving private wrongs, particularly in commercial or financial disputes, may be quashed if parties resolve their disputes amicably and continuation of prosecution is unwarranted. The decision aligns with judicial precedents emphasizing pragmatic justice and avoiding unnecessary prejudice to accused persons.

b. Obiter Dicta:
The Court noted that quashing such cases is acceptable when the dispute is primarily private, the resolution is genuine, and no compelling public interest is compromised.

c. Guidelines:

• High Courts should evaluate the nature of disputes and the likelihood of conviction.
• Settlements in financial disputes can justify quashing if public interest is not adversely impacted.

I) CONCLUSION & COMMENTS

The judgment underscores the importance of balancing the scales of justice. It recognizes the pragmatic approach of resolving disputes through compromise, especially in commercial matters, while cautioning against misuse of such precedents in cases affecting public interest.

J) REFERENCES

a. Important Cases Referred:

1. Nikhil Merchant v. Central Bureau of Investigation [(2008) 9 SCC 677]
2. Gian Singh v. State of Punjab [(2012) 10 SCC 303]
3. Narinder Singh v. State of Punjab [(2014) 6 SCC 466]
4. Central Bureau of Investigation v. Sadhu Ram Singla [(2017) 5 SCC 350]

b. Important Statutes Referred:

1. Code of Criminal Procedure, 1973 (Section 482)
2. Indian Penal Code, 1860 (Sections 120-B, 420, 468, 471)
3. Prevention of Corruption Act, 1988 (Sections 13(2) read with 13(1)(d))