Allahabad High Court
Apresh Garg And Another vs Union Of India And 3 Others on 7 July, 2025
Author: Sanjay Kumar Singh
Bench: Sanjay Kumar Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD Neutral Citation No. - 2025:AHC:105494 Reserved on 02.06.2025 Delivered on 07.07.2025 Court No. - 67 Case :- APPLICATION U/S 528 BNSS No. - 3245 of 2025 Applicant :- Apresh Garg And Another Opposite Party :- Union Of India And 3 Others Counsel for Applicant :- Ishan Deo Giri,Sarvesh Pandey,Shad Khan,Shishir Prakash,Sr. Advocate Counsel for Opposite Party :- A.S.G.I.,Ashish Agrawal,G.A.,Manu Vardhana,Sanjay Kumar Yadav Hon'ble Sanjay Kumar Singh,J.
1-Heard Mr. G.S. Chaturvedi, learned Senior Advocate assisted by Mr. Ishan Deo Giri and Mr. Shad Khan, learned counsel for the applicants, Mr. Rahul Srivastava, learned counsel appearing on behalf of opposite party nos. 1 and 3, Mr. Rabindra Kumar Singh, learned Additional Government Advocate for the State of U.P./opposite party no. 2 and Mr. Ashish Agarwal, learned counsel appearing on behalf of complainant/opposite party no. 4.
2- The instant application U/s 528 of Bharatiya Nagarik Suraksha Sanhita, 2023 has been preferred by the applicant-Apresh Garg with a prayer to quash the charge-sheet no. 3 of 2024 dated 31.01.2024, cognizance / summoning order dated 19.11.2024 under Section 120-B read with 420 I.P.C. and consequential criminal proceedings of Misc. Criminal Case No. 5 of 2024 arising out of F.I.R. No. RC 0072020A007 dated 18.11.2020 under Sections 120B r/w 420, 467,468 and 471 I.P.C. and Section 13(2) r/w 13(1)(d) of Prevention of Corruption Act registered at Police Station C.B.I., A.C.B., Dehradun pending in the court of learned Additional Special Judge, C.B.I., Court No. 1, Ghaziabad, U.P. Factual Matrix of the Case 3-Brief facts of the case, which are required to be stated are that on the written complaint dated 02.10.2020 of Mr. Saroj Kumar Dash, Regional Head, Union Bank of India, Regional Office, Ghaziabad, an F.I.R. was registered by C.B.I. on 18.11.2020 against M/s Govinda International, Keshav Joshi, Pawan Kumar Sharma, M/s Agson Global Pvt. Limited, M/s ASM Traxim Pvt. Limited, M/s R. M. & Associates, M/s Global Valuers & Associates, unknown public servants and other unknown persons u/s 120-B, 420, 467, 468 & 471 of IPC, 1860 and 13(2) r/w 13 (1) (d) of PC Act, 1988.
3.1-The allegations, as levelled in the FIR, are as under:
a. That M/s. Govinda International, a proprietorship firm of Keshav Joshi, availed CC limit of Rs. 15 crores against hypothecation of stocks and Book debts on 31.03.2017 and further availed ad-hoc limit of Rs. 3.75 crores on 01.11.2017 from Union Bank of India, Mid Corporate Branch, Kaushambi, Ghaziabad, on the basis of submission of forged financial documents to the bank. The borrowers closed down their business by selling out all the hypothecated stocks without depositing the sale proceeds in the loan account.
b. That the Borrower firm in collusion with the Valuers firms namely M/s RM & Associates and M/s Global Valuers & Associates got done inflated valuation of the property offered as collateral security and thereby fraudulently induced the bank to sanction loan and thus caused huge wrongful financial loss to the Bank to the tune of about Rs. 19.59 crores as on 31.10.2019.
c. That sale and purchase transactions were made with the same group of companies namely M/s. Agson Global Pvt. Ltd. and M/s, ASM Traxim Pvt. Ltd. for creating fake/suspicious transaction in the account to show/create turnover through sale.
4-Filtering out unnecessary details, relevant facts, which have come out during investigation as per case of C.B.I. are as under:-
4.1- M/s Govinda International is proprietorship concern of Keshav Joshi, which was actually being managed and controlled indirectly by Pawan Kumar Sharma, who is real maternal uncle of Keshav Joshi.
4.2- M/s Kajuwalla is proprietorship concern of Jatin Sharma S/o Pawan Kumar Sharma. M/s Jagannatlı Traders is partnership firm under partnership of Jatin Sharma and Pawan Kumar Sharma. M/s Kajuwalla and M/s Jagannath Traders have also availed CC limits of Rs. 20 Crores each from UBI, Mid Corporate Branch, Ghaziabad.
4.3-Keshav Joshi submitted Loan Application Form dated 10.03.2017 to Chief Manager, UBI, MCB, Ghaziabad, for sanction of Cash Credit Limit of Rs. 20 Crores against hypothecation of stocks and book debt, to meet out the working capital requirement of M/s Govinda International.
4.4- On 24.03.17 recommendation was made to sanction CC Limit of Rs. 20 Crores to M/s. Govinda International but subsequently on the basis of their assessment, the CC limit was reduced from Rs. 20 Crores to Rs. 15 Crores and recommendation for sanction of Rs. 15 Crores was made to M/s Govinda International, which was approved by Credit Approval Committee (CAC), ZLCC, Lucknow held on 31.03.2017.
4.5- Initially, amount of Rs. 10 Crores was released to M/s Govinda International (borrower).
4.6- In order to achieved sales of M/s Govinda International to the tune of Rs. 40 Crores, Keshav Joshi and Pawan Kumar Sharma entered into criminal conspiracy with Sharad Gupta of M/s SAR Enterprises and M/s Vivek Trading Company, M/s Agson Global Pvt. Limited and its Director Apresh Garg and M/s ASM Traxim Pvt. Limited and its Directors Vipul Agarwal and Himanshu Garg and in furtherance of the said criminal conspiracy, Keshav Joshi and Pawan Kumar Sharma reflected fake and bogus purchases in its books of accounts to the tune of Rs. 43.22 Crores (Approximately) from M/s SAR Enterprises, M/s Vivek Trading Company and M/s Agson Global Pvt. Limited and thereafter the goods so purchased from the said three firms/companies were falsely shown to have been sold at the cost of Rs. 43.74 Crores (Approximately). The large part of goods was falsely shown to have been sold to M/s ASM Traxim Pvt. Limited. In this way, Keshav Joshi and Pawan Kumar Sharma falsely shown to have achieved sales of Rs. 40 Crores in books of accounts. Sh. Sharad Gupta, Vipul Agarwal, Himanshu Garg, Apresh Garg, M/s Agson Global Pvt. Limited and M/s ASM Traxim Pvt. Limited, all with the dishonest and fraudulent intention, facilitated Keshav Joshi and Pawan Kumar Sharma by making accommodative false entries in their respective books of accounts.
4.7-Ms. Shefali Sharma, Chief Manager succeeded Anil Kumar Rawat and joined UBI, MCB, Ghaziabad on 22.05.17 as Branch Head. Keshav Joshi again submitted a letter dated 02.08.17 to the UBI, MCB, Ghaziabad to release remaining amount of CC limit of Rs. 5 Crores. Ms. Shefali Sharma, the then Branch Head approved the same and allowed release of additional amount of Rs. 5 Crores M/s Govinda International on 03.08.2017.
4.8- Thereafter Smt. Shefali Sharma, the then Branch Head, UBI, MCB, Ghaziabad again recommended for sanction of ad-hoc limit of Rs. 3.75 Crores to M/s. Govinda International, which was sanctioned on 01.11.17 and the same was released on 02.11.2017.
4.9-There were only few transactions in the CC Account of M/s Govinda International during 01.12.2017 to 31.03.2018. The interest amount was not paid during December, January and February, hence the account was declared as Non Performing Asset (NPA) on 31.03.2018.
4.10- The funds received from CC Limit of Rs. 15 Crores and Ad-hoc limit of Rs. 3.75 Crores have been diverted to different firms adopting different modus operandi.
4.11-Pawan Kumar Sharma and Keshav Joshi submitted false Stock Statements with false and inflated financial figures of Sale/Purchase/Debtors/Creditors in order to avail and justify drawing power and they in criminal conspiracy with M/s. Agson Global Pvt. Ltd. and its Director Apresh Garg, M/s ASM Traxim Pvt. Limited and its Directors, Himanshu Garg and Vipul Agarwal and Sharad Gupta, with dishonest and fraudulent intention, created fake and bogus sale and purchase in books of accounts in order to show turnover in the account and thus to justify drawing power. Anil Kumar Rawat did not verify or cross check the genuineness of the stock statements and thus dishonestly and fraudulently facilitated Keshav Joshi and Pawan Kumar Sharma in justifying the Drawing Power and released the limit.
4.12-Thus, in view of facts and circumstances detailed as above paras, Keshav Joshi and Pawan Kumar Sharma in conspiracy with Anil Kumar Rawat, the then Chief Manager and Branch Head and Agam Mohan Kulshreshtha, the then Regional Head got sanctioned credit facilities on the basis of forged and fabricated documents and thereafter in conspiracy with other accused persons utilized the loan amount for purposes other than for which the loan was sanctioned and thus caused wrongful loss of 28.77 Crores as on 31.12.2023 (including principal outstanding of Rs. 15.72 Crores) to Union Bank of India and corresponding wrongful gain to themselves and other accused person as noted above.
4.13-After culmination of investigation, C.B.I. submitted charge-sheet no. 3 of 2024 dated 31.01.2024 against following persons and entities:-
1. Anil Kumar Rawat u/s 120-B, 420, 468, 471 IPC and section 13(2) r/w 13(1)(d) of PC Act, 1988 and substantive offences U/s 13(2) r/w 13(1)(d) of PC Act, 1988.
2. Agam Mohan Kulshrestha u/s 120-B r/w 420 IPC and section 13(2) r/w 13(1)(d) of PC Act, 1988 and substantive offences U/s 13(2) r/w 13(1)(d) of PC Act, 1988.
3. Keshav Joshi u/s 120-B r/w 420, 468 and 471 of IPC and section 13(2) r/w 13(1)(d) of PC Act, 1988 and substantive offences u/s 420, 468 and 471 of IPC.
4. Pawan Kumar Sharma u/s 120-B r/w 420, 468 and 471 of IPC and section 13(2) r/w 13(1)(d) of PC Act, 1988 and substantive offences u/s 420, 468 and 471 of IPC.
5. M/s Agson Global Pvt. Limited u/s 120-B r/w 420 of IPC.
6. M/s ASM Traxim Private Limited u/s 120-B r/w 420 of IPC.
7. Nanak Chand Gupta u/s 120-B r/w 420 of IPC.
8. Apresh Garg u/s 120-B r/w 420 of IPC.
9. Himanshu Garg u/s 120-B r/w 420 of IPC.
10. Vipul Agarwal, Director u/s 120-B r/w 420 of IPC.
11. Sharad Gupta u/s 120-B r/w 420 of IPC.
12. Yogender Mohan Rustagi u/s 120-B r/w 420 of IPC.
13. M/s AKG Exim Limited u/s 120-B r/w 420 of IPC.
14. Rajeev Goel u/s 120-B r/w 420 of IPC.
15. Manav Arora u/s 120-B r/w 420 of IPC.
16. Smt. Anu Arora u/s 120-B r/w 420 of IPC.
4.14- In the investigation, procedural lapses have been found on part of bank officers namely (1) M. N. K. Chaitanya, the then Chief Manager (Credit), UBI, Regional Office, Meerut. (2) Smt. Shefali Sharma, the then Chief Manager and Branch Head, UBI, Mid Corporate Branch, Ghaziabad. (3) Ankit Tomar, the then Manager, UBI, Mid Corporate Branch, Ghaziabad and (4) Smt. Asha Sinha, the then Manager (Credit), UBI, Regional Office, Meerut.
4.15- On the aforesaid charge-sheet dated 31.01.2024, Special Judge, Anti-Corruption C.B.I, Court No. 1, Ghaziabad registered the case as Misc. Case No. 05 of 2024 and took cognizance of the offence and summoned the accused persons vide order dated 19.11.2024, which is the subject matter of challenge in the present case.
5-It is argued by learned counsel for the applicant that the applicant-Apresh Garg, who was erstwhile directors of M/s. Agson Global Pvt. Ltd. came in contact of Keshav Joshi, who was a business man dealing in dry fruits through his firm M/s Govinda International. The applicant started business relationship with his firm M/s Govinda International and over the years, they entered into several transactions for both sales as well as purchase. The applicant was completely unknown that M/s Govinda International had availed loan credit facilities from Union Bank and on default, account of M/s Govinda International was declared as NPA. The gist of the allegation against the applicant that sale and purchase transactions made between the firm of applicants and M/s Govinda International was bogus transaction with a view to show / create big turn over of M/s Govinda International. The said allegations are completely false and frivolous. Much emphasis has been given by contending that all transactions are fully genuine and on the said transaction, GST/VAT amounting Rs. 2,19,04,493/- has also been paid on all the transactions made between M/s. Agson Global Pvt. Ltd. and M/s Govinda International. The relevant documents in this regard are also in existence which proves the genuineness of the said transactions / business relationship between them. It is also pointed out that M/s Govinda International, the original borrower which has availed the loan facilities has entered into one time settlement with the bank and the liabilities of the bank has already been paid. It is not a case of cheating or fraud with the bank on the part of the applicants. Maximum it might be a case of breach of condition on the part of borrower. The hypothecation of goods is not entrustment but it is a charge on the goods. The relationship between borrower and banker is not an entrustment. On the strength of aforesaid facts, it is also argued that in fact, main allegation in the present case relates to a borrower and lender, hence, primarily it is a civil dispute which has already been settled between the borrower and the bank. Hence, criminal proceeding against the applicants is liable to be quashed in the light of law laid down by the Apex Court in the following cases:-
(i) K.Bharthi Devi and Another vs. State of Telangana, (2024) 10 SCC 384.
(ii) Tarina Sen vs. Union of India and Another, 2024 SCC OnLine SC 2696.
(iii) N.S.Gnaneshwaran Etc. vs. The Inspector of Police & Another, 2025 SCC OnLine SC 1257.
6- On the other hand, Mr. Rahul Srivastava, learned counsel appearing on behalf of C.B.I. reiterating the prosecution case and facts discovered during investigation as mentioned in charge-sheet submitted that it is a case of triangular transaction. Since fake transactions have been shown by the applicant with a view to enhance the turn over of M/s Govinda International on paper, therefore, even after one time settlement of borrower (M/s Govinda International) with the bank and payment of all dues to the concerned bank by the borrower, the criminal proceeding against the applicant is not liable to be quashed in the light of judgment of the Apex Court in the case of Anil Bhavarlal Jain & Another vs. The State of Maharashtra & Others, 2024 SCC OnLine SC 3823. He further submits that in the case of K. Bharthi Devi and Another vs. State of Telangana (Supra) and in the case of Anil Bhavarlal Jain & Another vs. The State of Maharashtra & Others (Supra) contrary view has been expressed by the Apex Court, therefore, in the light of principles laid down by the Full Bench judgment of Kerala High Court in the case of Raman Gopi & Another vs. Kunju Raman Uthaman, 2011 SCC OnLine Ker 4028, this application is liable to be dismissed considering the principles laid down by the Apex Court in the case of Anil Bhavarlal Jain (Supra).
7-Mr. Ashish Agarwal, learned counsel appearing on behalf of the complainant /respondent no. 4 submits that during the pendency of criminal proceedings against the accused persons, a one time settlement has been entered between the bank and the borrowers (Proprietor/partner and Guarantor of M/s Jagannath Traders, M/s Kajuwalla and M/s Govinda International). The settlement amount was fixed at Rs. 43 crores as well as legal expenses and interest, which was additionally payable over and above OTS amount. The said amount of Rs. 43 crores was deposited by the borrowers in different steps and finally, they have paid the entire settlement amount of Rs. 43 crores, which have been accepted by the bank. Now only legal expenses and interest, which was additionally payable over and above OTS scheme are to be paid. It is also pointed out that the Chief Manager/Branch Head, Union of India, SAM Branch Lucknow, after depositing One Time Settlement amount of Rs. 43 crores, by the borrowers also wrote a letter on 29.03.2025 to the Deputy Superintendent of Police, C.BI., Special Crime Branch, Hazratganj, Lucknow mentioning therein to release of mortgaged properties and original property papers seized by C.B.I. 8- Now the moot question involved in the matter for consideration before this Court is "whether after one time settlement of loan (CC Limit) between borrowers and guarantors with bank, the criminal proceeding against the accused-applicant, who is neither borrower nor guarantor but was having business relation with borrower is liable to be quashed or not."
9- Here it would be apposite to discuss the legal position that emerges from judgments of the Hon'ble Apex Court relied upon by the parities concerned.
9.1- Brief facts in the case of K. Bharthi Devi (Supra) are as under :-
(i) In the above case, the Sole Proprietor of M/s Sirish Traders was granted various credit facilities in the group loan account by Indian Bank, which were secured by collateral security executed by the accused persons. Since the borrowers/mortgagors failed to service the interest and re-pay the dues, the group loan account was declared a Non-Performing Asset. To realize the outstanding amount, Bank approached Debts Recovery Tribunal. During the pendency of the proceedings before the DRT, Bank came to know that some of the title documents executed by the accused persons by virtue of which equitable mortgage was created were not original documents, rather the same were fake, forged and fabricated. Thereafter, on the complaint of Bank, C.B.I. registered an F.I.R. and after investigation prima-facie it was found that offences punishable under Sections 120-B read with 420, 409, 467, 468 and 471 of I.P.C. and Section 13(1)(d) and 13(2) of the Prevention of Corruption Act have been committed. Accordingly, CBI filed charge-sheet against the accused persons. During the pendency of the proceedings before DRT, One Time Settlement ("OTS" for short) has been done between the borrower and the bank. The OTS amount was paid, and the Bank issued a No Dues Certificate to the borrowers/guarantors. Thereafter, matter before DRT has been disposed in the light of OTS.
(ii) The accused persons preferred a criminal petition U/s 482 Cr.P.C. before the High Court seeing quashing of the charge sheet but the same was dismissed vide order dated 01.09.2017 by the High Court holding that settlement arrived at was only a private settlement and was not a part of any decree given by any court. The charges include the use of fraudulent, fake and forged documents that were used to embezzle public money and if these are proved, they would be grave crimes against the society as a whole and hence, merely due to a private settlement between the Bank and the accused, it cannot be said that the prosecution of the accused persons would amount to abuse of process of the court.
(iii) The said judgment of the High Court was challenged by two accused persons before the Hon'ble Apex Court, wherein, the Hon'ble Apex Court has framed the issue by mentioning that "the only question would be, as to whether the continuation of the criminal proceedings against the present appellants would be justified or not".
(iv) The Hon'ble Apex Court after wholesome treatment, discussing and considering previous judgments, has made following observations:
"44.The facts in the present case are similar to the facts in the case of Sadhu Ram Singla and Others (Supra) wherein a dispute between the borrower and the Bank was settled. In the present case also, undisputedly, the FIR and the chargesheet are pertaining to the dispute concerning the loan transaction availed by the accused persons on one hand and the Bank on the other hand. Admittedly, the Bank and the accused persons have settled the matter. Apart from the earlier payment received by the Bank either through Equated Monthly Instalments (EMIs) or sale of the mortgaged properties, the borrowers have paid an amount of Rs.3,80,00,000/- under OTS. After receipt of the amount under OTS, the Bank had also decided to close the loan account. The dispute involved predominantly had overtures of a civil dispute.
45. Apart from that, it is further to be noted that in view of the settlement between the parties in the proceedings before the DRT, the possibility of conviction is remote and bleak. In our view, continuation of the criminal proceedings would put the accused to great oppression and prejudice.
46. ............
47. In the result, we find that this was a fit case wherein the High Court ought to have exercised its jurisdiction under Section 482 CrPC and quash the criminal proceedings.
48. We are therefore inclined to allow the present appeal.
49. We accordingly pass the following order:
(i) The appeal is allowed.
(ii) The impugned judgment and order dated 1st September 2017 passed by the High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh in Criminal Petition No. 5778 of 2016 is quashed and aside.
(iii) The criminal proceedings against the appellants in C.C. No. 16 of 2014 on the file of Principal Special Judge for CBI Cases, Nampally, Hyderabad is also quashed and set aside."
9.2-Brief facts in the case of Tarina Sen vs. Union of India and Another (Supra) are as under :-
(i) In the above case fact was that on the basis of information received from a reliable source, the C.B.I. has registered an F.I.R. against the accused persons for the offences punishable under Sections 120-B, 420, 468 and 471 of Indian Penal Code & Sections 13(2) read with 13(1)(d) of the Prevention of Corruption Act. As per the allegation, the Branch Manager of the concerned bank entered into a criminal conspiracy with other accused persons. At that time, Surjit Sen and Kaushik Nath Ojha were the Directors of M/s Indo Global Projects Ltd., Bhubaneswar and the appellants who have filed SLP before the Hon'ble Apex Court were Partners in M/s Clarion Travels, Bhubaneswar. A loan application was submitted on behalf of Clarion Travels for the purpose of securing funds to purchase new cars. Against the said loan application, Branch Manager Ajay Kumar Behera sanctioned a loan of Rs. 8,40,000/- without keeping any security or post-dated cheques. No repayment was ever made, and Ajay Kumar Behera did not pursue the same. A similar loan application was submitted on behalf of IGPL for the same purpose of securing funds to purchase new cars at a cost of Rs. 11,84,600/-. Against the said loan application, Ajay Kumar Behera sanctioned the loan for the said amount. The money was received by the Directors of IGPL. In furtherance of the loan application after depositing 36 post-dated cheques, which when they were sent for clearance, at a later stage, by the successor of Ajay Kumar Behera bounced. The office address disclosed by both IGPL and Clarion Travels was one and the same.
(ii) The Central Bureau of Investigation after culmination of investigation, filed the charge-sheet against the accused persons, on which trial court took cognizance and issued summons to the accused persons.
(iii) Bank also filed two Original Applications before the Debt Recovery Tribunal for recovery of dues in respect of the loans advanced to IGPL and Clarion Travels. During the pendency of said proceedings, IGPL and Clarion Travels reached a One-Time-Settlement with the Bank, which was accepted, and the loan account was declared as being closed. In view of the OTS, the recovery proceedings pending before the DRT were disposed of.
(iv) Having settled the matter thus, the accused persons filed separate applications under Section 482 of Cr.P.C. before the High Court seeking quashing of all the proceedings pending before the trial Court. The High Court disposed of the applications under Section 482 of Cr.P.C. by permitting them to urge all the pleas raised in their application before the trial Court at the appropriate stage.
(v) Being aggrieved thereby, the accused Tarina Sen approached the Hon'ble Apex Court, wherein, the Hon'ble Apex Court has framed the issue by mentioning that "the only question would be, as to whether the continuation of the criminal proceedings against the present appellants would be justified or not".
(vi) The Hon'ble Apex Court considering the previous judgments as well as judgment passed in Criminal Appeal arising out of Special Leave Petition (Criminal) No. 4353 of 2018 has made following observations:
"14. By a separate judgment of the even date in Criminal Appeal arising out of Special Leave Petition (Criminal) No.4353 of 2018 wherein similar facts arose for consideration, we have held that when the matter has been compromised between the borrower and Bank, the continuation of the criminal proceedings would not be justifiable.
15. Relying on the earlier judgments of this Court, we have held that in the matters arising out of commercial, financial, mercantile, civil, partnership or such like transactions or the offences arising out of matrimony relating to dowry, etc. or family disputes where the wrong is basically private or personal in nature and the parties have resolved their entire dispute, the High Court should exercise its powers under Section 482 CrPC for giving an end to the criminal proceedings. We have held that the possibility of conviction in such cases is remote and bleak and as such, the continuation of the criminal proceedings would put the accused to great oppression and prejudice.
16. We find that for the aforesaid reasons the present appeals also deserve to be allowed.
17. In the result, we pass the following order.
(i) Criminal Appeal arising out of Special Leave Petition (Criminal) No.1415 of 2024 is allowed.
(ii) The impugned order dated 4th July 2023 passed by the High Court of Orissa at Cuttack in CRLMC No.34 of 2022 is quashed and set aside.
(iii) Criminal Appeal arising out of Special Leave Petition (Criminal) No.1416 of 2024 is allowed.
(iv) The impugned order dated 4 th July 2023 passed by the High Court of Orissa at Cuttack in CRLMC No.33 of 2022 is quashed and set aside
(v) The criminal proceedings against the appellants in T.R. No. 28 of 2002 pending in the Court of Special Judge (CBI) Bhubaneswar is also quashed and set aside."
9.3-Brief facts in the case of N.S. Gnaneshwaran Etc. vs. The Inspector of Police & Another, (Supra) are as under:
In the said case, allegations against accused-applicant was that he was instrumental in orchestrating the fraudulent diversion of funds sanctioned to M/s Vinayaka Corporation as he facilitated the encashment of multiple cheques drawn from fraudulent obtained credit limit using a network of relatives, employees and fictitious identities. Another co-accused is alleged to have assisted in the scheme by operating a bank account in the name of Bharathi Traders along with his wife through which cheques were deposited and funds were withdrawn. Parallel to criminal proceedings, the bank initiated recovery proceedings before DRT. Subsequently bank floated a one time settlement (OTS) scheme and upon full payment of the dues, recovery proceedings were dismissed as settled but the High Court dismissed the petition under Section 482 Cr.P.C. on the ground that the stage of trial was advanced and held that the criminal proceedings could not be quashed merely on the basis of OTS when a prima-facie case was made out. But the Hon'ble Apex Court taking note of the fact that dispute between the parties have already been resolved through full and final settlement, quashed the criminal proceedings against the accused. The operative part of the said judgment has mentioned in paragraph nos. 9 and 10, which are being quoted as under:-
9. In our view, allowing the present criminal proceedings to continue would serve no meaningful purpose, particularly when the dispute between the parties has already been resolved through a full and final settlement. The settlement between the parties having taken place after the alleged commission of the offence, and there being no continuing public interest we see no justification for allowing the matter to proceed further.
10. In view of the above discussion, we find it appropriate to quash the proceedings pending in C.C. No. 16 of 2006 against the appellants herein. Consequently, the appeals are allowed.
9.4-Brief facts in the case of Anil Bhavarlal Jain & Another vs. The State of Maharashtra, 2024 SCC OnLine SC 3823 are as under:
(i) In the year of 2013, appellants who were Directors of the Company, had obtained sanction for a building permit and commencement certificate for plot in question. On 15.02.2014, State Bank of India had sanctioned a loan of Rs. 50 crores to the Company. On 30.10.2014, the Company opened a collateral security and mortgaged the commercial land. The appellant had made timely payments till 2017, while on 28/11/2017 the bank declared the loan account of the Company as Non-Performing Asset with an outstanding amount of Rs. 23.86 crores.
(ii) The bank also started a recovery process and filed an application before the Debt Recovery Tribunal. The Company and the Bank filed consent terms before the DRT amounting to Rs. 15 Crore. According to the consent terms, the Company paid Rs. 20 lacs on 16.06.2020. Remaining amount of Rs. 14.88 crore was subsequently paid by the Company with interest and the loan account was closed as per the one-time settlement. Accordingly, the application before the DRT came to be disposed of.
(iii) The Bank filed a complaint with Central Bureau of Investigation, against the appellants for diverging the funds from the loan account of SICOM Ltd. from whom they had allegedly availed a loan of Rs. 25 Crores in 2013 and against the Company for changing the building plans of the project which resulted in the reduced value of the collateral security, without the consent of the Bank. On 24.07.2022, an FIR came to be registered against the appellants by Central Bureau of Investigation, Anti-Corruption Bureau, Mumbai. After investigation, charge sheet dated 31.12.2021 was filed by the C.B.I.
(iv) The appellants preferred a Writ Petition before the High Court under Section 482 of Cr.P.C. seeking quashing of the FIR and chargesheet.
(v) Vide order dated 26.07.2023, High Court rejected the said Writ Petition observing that the appellants have a substantive alternative remedy under the provisions of the Code of Criminal Procedure before the High Court.
(vi) The appellants who were the Directors of M/s Sun Infrastructure Pvt. Ltd. filed an appeal being SLP(Crl.) No. 10078 of 2023 and appellants who were the employees of Bank filed an appeal being SLP (Crl.) No. 12776 of 2023.
(vii) The Hon'ble Apex Court has framed the issue by mentioning that "the moot question which arises for our consideration in the present case is whether the criminal proceedings can be quashed based upon a settlement arrived at between the parties as per the consent terms drawn and submitted before the DRT."
(viii) The Hon'ble Apex Court considering the facts of the case as well as previous judgments Gian Singh vs. State of Punjab, (2012) 10 SCC 303, State vs. R Vasanthi Stanley, 2015 SCC OnLine SC 815 and Parbatbhai Aahir vs. State of Gujrat and Another, 2017 SCC OnLine SC 1189 has made following observations:
"16. Another reference can be made to the judgment of this Court in Parbatbhai Aahir v. State of Gujrat wherein it was observed that, economic offenses involving financial and economic well-being of the state have implications which lie beyond the domain of a mere dispute between the 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. Thus, it can be concluded that economic offences by their very nature stand on a different footing than other offences and have wider ramifications. They constitute a class apart. Economic offences affect the economy of the country as a whole and pose a serious threat to the financial health of the country. If such offences are viewed lightly, the confidence and trust of the public will be shaken.
17. A profitable reference in this regard can be made to the judgment in State v. R Vasanthi Stanley wherein this Court declined to quash the proceedings in a case involving alleged abuse of the financial system. It was observed as under:
"15. ........ A grave criminal offence or serious economic offence or for that matter the offence that has the potentiality to create a dent in the financial health of the institutions is not to be quashed on the ground that there is delay in trial or the principle that when the matter has been settled it should be quashed to avoid the head on the system. That can never be an acceptable principle or parameter, for that would amount to destroying stem cells of law and order in many a realm and further strengthen the marrow of unscrupulous litigations. Such a situation should never be conceived of.
18. In the instant case, it is on record that consent terms were submitted by the parties before the DRT. It is admitted that the bank had suffered losses to the tune of Rs. 6.13 Crores approximately. Hence, a substantial injury was caused to the public exchequer and consequently it can be said that public interest has been hampered. Keeping in view the fact that in the present case a special statute i.e. PC Act has been invoked, we are of the view that quashing of offences under the said Act would have a grave and substantial impact not just on the parties involved, but also on the society at large. As such the High Court committed no error in declining to exercise its inherent powers in the present case, thereby refusing to quash the criminal proceedings.
19. For the reasons stated above, we are of the view that the High Court was justified in not exercising its jurisdiction under Section 482 of CrPC. The appeals are accordingly dismissed."
9.5- Here it is also relevant to mention the Full Bench judgment of Kerala High Court in the case of Raman Gopi and Another vs. Kunju Raman Uthaman (Supra) wherein following question was referred before the Full Bench for its opinion.
"Where the judgments of the Supreme Court rendered by coequal benches express conflicting principles of law, which cannot stand together and, thus, present a serious problem to the High Courts and subordinate Courts, what are the principles to be followed in choosing one or other of the conflicting judgments by the High Court when in a case the applicability of the conflicting decisions rendered by the apex court has decisive impact in its disposal."
The Full Bench after wholesome treatment has held as under:
77.The legal position, which therefore emerges on a discussion and analysis of the principles stated in various decisions of the Apex Court and other High Courts including this Court, so as to act as guidance to the High Courts and Subordinate Courts, when faced with a conflicting decisions, are summarised below:--
(i) In case of conflicting views taken in the decisions of two Benches of equal strength of the Apex Court, the decision later in point of time, will prevail over the earlier one;
(ii) What is binding is the ratio decidendi. A decision is only an authority for what it actually decides.
(iii) A decision which is not expressed and is not found on reasons nor proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Art. 141 of the Constitution. Similarly, any declaration made or conclusion arrived at without application of mind or preceded without a reason, cannot be a declaration of law, or authority as a binding precedent;
(iv) It is well settled that what is the essence of a decision is the ratio and not every observation, nor what logically follows from various observations made in it.
(v) The enunciation of the reason or principle on which a question before a court has been decided is alone binding as a precedent. The concrete decision alone is binding between the parties to it, but it is the abstract ratio decidendi, ascertained on a consideration of the judgment in relation to the subject-matter of the decision, which alone has the force of law and which, when it is clear what it was, is binding. It is only the principle laid down in the judgment that is binding law under Article 141 of the Constitution.
(vi) A decision passes sub-silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the court or present to its mind.
(vii) A Division Bench, in case of conflict between the decision of a Division Bench of two Judges and the decision of a larger Bench and in particular, a Constitution Bench, would be bound by the latter decision.
(viii) Per incuriam means a decision rendered by ignorance of a previous binding decision such as a decision of its own or of a court of coordinate or higher jurisdiction or in ignorance of the terms of a statute or of a rule having the force of law. A ruling making a specific reference to an earlier binding precedent may or may not be correct, but cannotbe said to be per incuriam.
78.Therefore, when confronted with a like situation wherein the decisions of coequal benches are of conflicting nature on a legal issue, the law laid down by the Full Bench in Joseph's case, 2001 (1) KLT 958 will have to be followed. The later decision will prevail. A decision of the Apex Court on a declaration of law is binding on all High Courts and subordinate courts, in the light of Article 141 of the Constitution, of course, what is relevant is the ratio decidendi. The judgments of the Apex Court which have followed the binding decisions of the Constitution Bench or other Benches will thus be binding on oilier courts. The only exception pointed out is wherein a Bench of smaller strength did not follow an earlier binding decision, in a situation wherein the binding decisions of the earlier benches of the Apex Court are not brought to its notice. It is apparent that in such cases the decision of the Bench of smaller strength will be without the colour of a binding precedent under Article 141 of the Constitution. It may not be proper for the High Courts or subordinate courts to criticise and characterise a decision of the Apex Court which has laid down a point of law as per incuriam. Such is not the function of the High Court or subordinate courts. In the light of the decision of the Supreme Court in Bengal Immuntty Co. Ltd.'s, AIR 1955 SC 661 the law declared by the Supreme Court is binding in all courts in India except the Supreme Court. The decisions of the Apex Court in Raghubir Singh's case, (1989) 2 SCC 754 and Central Board of Dawoodi Bohra Community's case, (2005) 2 SCC 673 have laid down the circumstances wherein the decisions of larger Benches will have to be followed by Benches of lesser strength. Therefore, those guidelines will act as a pointer for the High Courts and subordinate courts while examining the binding nature decision of the Apex Court, under Article 141 of the Constitution whenever there are conflicting decisions. The caution expressed by the Apex Court in various cases mentioned above, that the High Court cannot refuse to follow a binding decision of the Apex Court, is Important in this context. The application of the rule of subsilentio and that of per incuriam should be guarded and the courts cannot criticise the decisions of the Apex Court merely on the assumption that an earlier binding decision of the Apex Court was not brought to the notice of a later Bench. We, therefore, answer the reference accordingly. The matter will be placed before the appropriate Bench for hearing of the Civil Revision Petition.
10- After going through the aforesaid judgments relied upon by the learned counsel for the parties, I find that the judgments of the Apex Court dated 03.10.2024 in the case of K.Bharthi Devi (Supra), Tarina Sen (Supra) and N.S. Gnaneshwaran (Supra) are more closure to the facts of the present case. I also find that the aforesaid judgments in the case of K.Bharthi Devi (Supra) and Tarina Sen (Supra) have not been considered in the subsequent judgment dated 20.12.2024 of the Hon'ble Apex Court in the case of Anil Bhavarlal Jain (Supra), which is also distinguishable on the facts of the case in hand. In the case of Anil Bhavarlal Jain (Supra), the Hon'ble Apex Court was of the view that since a special statute i.e. PC Act has been invoked, hence quashing of offences under the said Act would have a grave and substantial impact not just on the parties involved, but also on the society at large. As such the judgment in the case of Anil Bhavarlal Jain (Supra) is not helpful to the prosecution/C.B.I. This Court is of the view that every case turns on its own facts. Even one additional or different fact may make a big difference between the conclusion in two cases, because even a single significant detail may alter the entire aspect. Apart from this, it is also relevant to mention that the judgment in the case of N.S. Gnaneshwaran (Supra) is a later and recent judgment dated May 28, 2025, which is in consonance with the judgment of the Apex Court in the case of K.Bharthi Devi (Supra) and Tarina Sen (Supra) also.
11- Having heard the learned counsel for the parties and going through the record of the case, I find that it is not in dispute that applicant is neither borrower nor guarantor. The dispute regarding non payment of loan (CC Limit) between the borrower and bank involved predominantly had overtures of a civil dispute, which has been settled under One Time Settlement (OTS). Now after one time settlement, the concerned bank has no grievance. In view of the settlement between the borrower and bank, the possibility of conviction is remote and bleak. The case of the applicant is distinguishable from borrower and stands on better footing than that of borrower. Hence after settlement as noted above, continuation of the criminal proceedings would put the applicant to grate oppression and prejudice.
12- Considering the facts and circumstances of the case in the light of dictum and guidelines laid down by the Apex Court in cases of K.Bharthi Devi (Supra), Tarina Sen (Supra) and N.S. Gnaneshwaran (Supra), this Court feels that this is a fit case, where this Court can exercise its inherent power to secure the ends of justice.
13- As a fallout and consequence of the above discussion, impugned charge sheet dated 31.01.2024, cognizance / summoning order dated 19.11.2024 and criminal proceedings of aforesaid Case No. 05 of 2024 (C.B.I. vs. Anil Kumar Rawat and Others) against the applicant Apresh Garg under Sections 120-B read with 420 I.P.C. are hereby quashed.
14- This application under Section 528 of Bharatiya Nagarik Suraksha Sanhita, 2023 is allowed in view of one time settlement of borrower and bank as mentioned above.
Order Date :- 7.7.2025 Saurabh