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The criminal case which has been sought to be projected and proceeded with against the appellants has an overwhelming and pre-dominant civil character arising out of pure commercial transaction where the parties have resolved their entire dispute amongst themselves, Court said.
The Supreme Court has allowed an appeal against a Gujarat High Court order refusing to quash the proceedings in respect of a 2008 CBI FIR against a man and others including Bank of Maharashtra officers over sanctioning of Rs 14.20 Cr. loan, settled after paying the bank Rs 19.67 Cr., holding that continuation of criminal proceedings would put the appellants to great oppression and prejudice.
A bench of Justices Abhay S Oka and Augustine George Masih while allowing the appeal, said, "In the light of the fact that the allegations against the Bank Manager relating to his involvement in the commission of offences, which has been alleged against the Appellants, having not been substantiated, the possibility of conviction of the appellants is remote and bleak. Continuation of these criminal proceedings would put the Appellants to great oppression and prejudice and extreme injustice would be caused to them by not quashing the criminal proceedings."
Brief Background
The Appellants had challenged the order dated 05.05.2017 passed by the Gujarat High Court whereby a writ petition seeking quashing of FIR as well as the chargesheet, was dismissed.
Facts leading to the present case are such that, between 1998-2005 Bank of Maharashtra sanctioned multiple credit facilities to the Appellants due to their strong financial standing. In June, 2005, the appellant companies started facing financial crunch due to adverse market conditions, including Surat floods leading bank to be classified as NPA.
Subsequently proceedings were filed before the DRT and while the proceedings were pending FIR was lodged against the appellants for offences under Ss. 420, 467, 468 and 471 of the Penal Code, 1860 as well as Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988.
Noticeably, upon a compromise deed was signed between the parties a no dues certificate was thereupon issued to the appellant on 11.04.2011.
The ground for challenge before the Top Court was when the proceedings that were essentially of civil/commercial nature, before the DRT stood settled, there was no point of initiating criminal proceedings as such and that such continuation was nothing but “oppressive and would partake character of lame prosecution”
Case Title: Suresh C Singal v. State of Gujarat
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