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Maninder Singh Petitioner v. C.B.I
Factual and Procedural Background
This petition seeks the quashing of criminal proceedings arising from RC No. 3/1987 registered by the Central Bureau of Investigation (CBI) on 28th August 1987, based on a complaint by the Chief Vigilance Officer of the New Bank of India (now Punjab National Bank). The Petitioner, proprietor of M/s. Rooney Exports, along with co-accused, was alleged to have obtained advances totaling Rs. 5.31 lakhs from the bank on the basis of forged bills and unauthorized cash incentive advances. The accused were charged with criminal conspiracy and offences under Sections 420, 467, 468, 471 read with 120B IPC, involving cheating the bank to the tune of Rs. 10.62 lakhs.
Following investigation, a charge sheet was filed with the Petitioner named as an accused. The Forensic Science Laboratory report supported the prosecution's case. The Petitioner sought quashing of the proceedings on the ground that a settlement had been reached and the amounts repaid, but the offences could not be compounded due to statutory bars.
Procedurally, the Court recorded submissions regarding the repayment and delay in trial progress, with the CBI indicating the number of witnesses it intended to examine. The trial court records were to be examined, and subsequent hearings noted CBI's willingness to complete evidence recording within a specified timeframe. The Petitioner requested adjournment pending a judgment in related cases concerning quashing on repayment grounds.
Legal Issues Presented
- Whether the criminal proceedings under Sections 420, 467, 468, 471 read with 120B IPC can be quashed on the ground that the Petitioner has repaid the amounts due to the Bank and a settlement has been arrived at between the parties.
- Whether the statutory bar against compounding offences precludes quashing of such criminal proceedings despite repayment.
- The impact of precedent judgments, including Supreme Court rulings, on the power of the Court to quash criminal proceedings in such circumstances.
Arguments of the Parties
Petitioner's Arguments
- The Petitioner contended that since the sum allegedly defaulted had been repaid to the complainant, the criminal proceedings should be quashed.
- The Petitioner relied on numerous High Court and Supreme Court judgments supporting quashing on the basis of repayment.
- It was argued that after charges were framed, the Petitioner did not contribute to any delay in trial progress, which was slow and unlikely to conclude soon.
- The Petitioner sought to await the outcome of related judgments before proceeding further.
CBI's Arguments
- The CBI opposed quashing on the basis of the Petitioner’s conduct, including seeking multiple adjournments.
- The CBI indicated the intention to examine a limited number of witnesses and was amenable to time-bound directions to complete trial proceedings.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Devender Singh v. State, 2008 (106) DRJ 139 | Criminal proceedings involving forgery should not be quashed merely due to settlement if FSL report supports prosecution. | The Court referenced this to highlight the general principle against quashing despite settlements in forgery cases. |
| Nikhil Merchant v. CBI, 2008 [4] JCC 2311 | Criminal cases involving repayment of dues to banks can be quashed despite charges under IPC and Prevention of Corruption Act. | The Court relied on this Supreme Court ruling to justify quashing the proceedings against the Petitioner due to repayment and settlement. |
| CBI v. Duncans Agro Industries Ltd., (1996) 5 SCC 591 | Principles regarding quashing of criminal proceedings where repayment or settlement is involved. | Used by the Supreme Court in Nikhil Merchant to support quashing; indirectly applied by this Court. |
| B.S Joshi v. State of Haryana, (2003) 4 SCC 675 | Guidelines on quashing criminal proceedings under certain circumstances. | Referenced in Supreme Court precedent supporting quashing on repayment grounds. |
| State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 | Landmark guidelines on quashing of criminal prosecutions. | Referenced as foundational authority in the Supreme Court's decision relied upon by this Court. |
Court's Reasoning and Analysis
The Court acknowledged that while the Forensic Science Laboratory report supported the prosecution's case of forgery, the subsequent Supreme Court ruling in Nikhil Merchant v. CBI had established that criminal proceedings could be quashed where the bank admits repayment of dues, despite statutory bars on compounding. The Court noted that the Petitioner had adjusted his loan account with Punjab National Bank by repaying the debts, aligning the facts with those in Nikhil Merchant.
The Court also considered the CBI’s position, including the limited number of witnesses remaining and its willingness to conclude evidence recording within a set timeframe. Despite the CBI's opposition citing the Petitioner’s conduct in seeking adjournments, the Court held that the repayment and settlement admitted by the Bank outweighed these concerns.
Accordingly, the Court applied the principle that repayment and settlement, when acknowledged by the complainant bank, justify quashing the criminal proceedings against the Petitioner, while clarifying that proceedings against other accused would continue unaffected.
Holding and Implications
DISPOSED OF
The Court quashed the criminal proceedings in RC No. 3/1987 under Sections 420, 467, 468, 471 read with 120B IPC and all consequent proceedings only insofar as they relate to the Petitioner, based on the admitted repayment of dues to the Bank. The order explicitly does not affect the continuation of the case against other accused persons. No costs were ordered, and the petition was disposed of accordingly. This decision directly impacts the parties by terminating the criminal liability of the Petitioner in this matter without setting a broader precedent beyond the application of established Supreme Court rulings.
S. Muralidhar, J.
Crl. M.C 2083 of 2006 and Crl. M.A No. 3348/2006 (stay)
2. This petition seeks the quashing of the criminal proceedings emanating from RC No. 3/1987 under Sections 420, 467, 468, 471, read with 120B IPC including the charge sheet and all proceedings consequent thereto.
3. The aforementioned criminal case was got registered by the Central Bureau of Investigation (“CBI”) on 28th August 1987 on the written complaint of the Chief Vigilance Officer of the New Bank of India (presently ‘Punjab National Bank?). The allegation was that the Petitioner as proprietor of M/s. Rooney Exports, Agar Nagar, Ludhiana along with certain other co-accused obtained advances from the IBD cell of the New Bank of India in Ludhiana in November and December 1986 to the extent of Rs. 5.31 lakhs. It is stated that the advances were realized on the strength of certain bills which later on turned out to be forged. Cash incentive advance, which was usually allowed after the shipments were made, was allowed at the first instance though the borrowers including the Petitioner were not entitled for such advance. The Petitioner and the other co-accused were charged with entering into a criminal conspiracy to cheat the New Bank of India to the tune of Rs. 10.62 lakhs.
4. On the conclusion of the investigation, a charge sheet was filed in the trial court showing the Petitioner's name as an accused being sent up for trial. The report of the Forensic Science Laboratory (“FSL”) supported the case of the prosecution for the offence under Section 420, 467, 468, 471 IPC. Quashing of the criminal proceedings is sought on the ground that a settlement has been arrived at between the parties and amounts repaid to the Bank but the offences could not be compounded in view of the statutory bar.
5. The order dated 4 March 2008 passed by this Court records the submission of learned counsel for the Petitioner as follows:
“1. There are two main submissions urged by Mr. Manan, learned counsel for the Petitioner. The first is that in view of the payment of the sum alleged to have been defaulted having been made by the Petitioner to the complainant, the criminal proceedings should be quashed. He has relied upon a large number of judgments of the High Courts and the Supreme Court in support of this proposition. The second is that the charges were framed in this case on 15 September, 2005 and after that day the Petitioner has not contributed to even a single days's delay in the progress of the trial. He states that out of the 128 witnesses listed only 39 have been examined so far by the prosecution and that at this rate there is no possibility of the conclusion of trial even in next ten years.
2. Mr. Gulati learned counsel for the CBI pointed out that in the reply filed on 22nd August 2006, CBI has in para 4 indicated that it wishes to examine only 25 more witnesses after which it will close its evidence.
3. In order to ascertain what progress has been made in the trial since the CBI filed its reply on 22 August 2006, the trial court record would require to be examined. Mr. Gulati also states that in the meanwhile he will obtain instructions on how many more witnesses the prosecution wishes to examine.
4. List on 31st March, 2008. The trial court record be requisitioned immediately.”
6. At the subsequent hearing on 3rd April 2008 the following order was passed by this Court:
“Mr. D.S Yadav, Inspector with Banking Fraud Cell of the CBI is present in Court. On his instructions, Mr. Gulati, learned Senior Standing counsel for CBI informs the Court that CBI proposes to examine only 15 more witnesses in this case and that the CBI is amenable to any time bound directions for completion of the recording of the evidence by the end of this year. Mr. Manan, learned counsel for the Petitioner states notwithstanding the above statement he would nevertheless wish to await the judgment of this Court in a batch of cases where the first submission concerning the prayer for quashing on the ground that the moneys have been repaid is being considered. He accordingly requests for an adjournment till that judgment is delivered.
List on 9 May, 2008.
The trial court record be sent back immediately.”
7. In Devender Singh v. State 2008 (106) DRJ 139 this Court took the view that where there is an FSL report supporting the case of the prosecution for the offences of forgery, the criminal proceedings ought not to be quashed only because of a settlement arrived at between the parties. However subsequent to the said judgment the Supreme Court has in Nikhil Merchant v. CBI 2008 [4] JCC 2311 quashed a criminal case involving the offences under Section 120 B read with Sections 420, 468 and 471 IPC read with the provisions of the Prevention of Corruption Act, 1988. That case involved moneys owing to the Bank being repaid to it during the pendency of the criminal case. The Supreme Court quashed the criminal proceedings relying on the earlier judgments in CBI v. Duncans Agro Industries Ltd. (1996) 5 SCC 591, B.S Joshi v. State of Haryana (2003) 4 SCC 675 and State of Haryana v. Bhajan Lal 1992 Supp (1) SCC 335.
8. In the instant case by an order dated 13 September 2007 the Punjab National Bank (‘PNB’) was impleaded as a party Respondent No. 2. On 4 February 2009 an affidavit has been filed stating that the Petitioner had indeed adjusted his loan account with the PNB after paying the debts owing to the bank. The facts of the present case are therefore not different from the facts in Nikhil Merchant.
9. The prayer for quashing of the proceedings has been opposed by learned counsel for the CBI citing the conduct of the Petitioner in the present case in seeking several adjournments before the trial court on the ground that the quashing of the proceedings has been sought by filing the present petition in this Court. In the considered view of this Court in the light of the judgment of the Supreme Court in Nikhil Merchant, when the Bank admits that the Petitioner has settled its dues, the prayer of the Petitioner for quashing of the criminal proceedings, insofar as he is concerned, cannot be rejected.
10. Accordingly, it is directed that the criminal proceedings in RC No. 3/1987 under Sections 420, 467, 468, 471, read with 120B IPC and all proceedings consequent thereto including the charge sheet will stand quashed in so far as the Petitioner is concerned. It is clarified that this order will not affect the continuation of the said criminal case against the other accused.
11. The petition is accordingly disposed of with no order as to costs. The application is disposed of.
12. Dasti to the parties.
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