STATE OF MAHARASHTRA THROUGH CBIversusVIKRAM ANANTRAI DOSHI AND OTHERS

                      [2014] 10 S.C.R. 506


A          STATE OF MAHARASHTRA THROUGH CBI
                                v.
           VIKRAM ANANTRAI DOSHI AND OTHERS
              (Criminal Appeal No. 2048 of 2014)
                     SEPTEMBER 19, 2014
B
          [DIPAK MISRA AND VIKRAMAJIT SEN, JJ.]

        Code of Criminal Procedure, 1973: s.482 - Quashing of
  proceedings - Letter of credits issued by the banks in favour
C of fictitious companies propped up by the accused and use
  of said LCs to siphon the funds from these banks -
  Chargesheet for offence ulss.420, 406 /PC - Settlement of
  dispute by payment of debts - High Court quashed the
  proceedings - Held: The alleged offence was social wrong
D having immense societal impact - The court's principal duty
  should be to scan the entire facts to find out the thrust of
  a/legations and the crux of the settlement - Quashment would
  neither help to secure the ends of justice nor prevent abuse
  of process of court nor can it be also said that as there is
E settlement no evidence would come on record and there would
  be remote chance of conviction - High Court's order is wholly
  indefensible - Penal Code, 1860 - ss.420, 406.

       Allowing the appeal, the Court

F      HELD: The availing of money from a nationalized
  bank in the manner, as alleged by the investigating
  agency, vividly exposits fiscal impurity and, in a way,
  financial fraud. The modus operandi as narrated in the
  chargesheet cannot be put in the compartment of an
G individual or personal wrong. It is a social wrong and it
  has immense societal impact. It is an accepted principle
  of handling of finance that whenever there is
  manipulation and cleverly conceived contrivance to avail
  of these kind of benefits it cannot be regarded as a case
H                              506
    STATE OF MAHARASHTRA THROUGH CBI v.                 507
           VIKRAM ANANTRAI DOSHI
having overwhelmingly and predominantingly of civil A
character. The gravity of the offence creates a dent in the
economic spine of the nation. It is not such a case where
one can pay the amount and obtain a "no due certificate"
and enjoy the benefit of quashing of the criminal
proceeding on the hypostasis that nothing more remains B
to be done. The collec:tive interest of which the Court is
the guardian cannot be a silent or a mute spectator to
allow the proceedings to be withdrawn, or for that matter
yield to the ingenuous dexterity of the accused persons
to invoke the jurisdiction under Article 226 of the c
Constitution or under Section 482 of the Code and quash
the proceeding. It is not legally permissible. The Court is
expected to be on guard to these kinds of adroit moves.
The court's principal duty, at that juncture, should be to
scan the entire facts to find out the thrust of allegations D
and the crux of the settlement. It is the experience of the
Judge comes to his aid and the said experience should
be used with care, caution, circumspection and
courageous prudence. In the case at hand, the Single
Judge has not taken pains to scrutinize the entire
                                                             E
conspectus of facts in proper perspective and quashed
the criminal proceeding. The said quashment neither
helps to secure the ends of justice nor does it prevent
the abuse of the process of the Court nor can it be also
said that as there is a settlement no evidence will come
on record and there will be remote chance of conviction. F
Such a finding would be difficult to record. [Para 23] [524-
 E-H; 525-A-G]
    Gian Singh v. State of Punjab and Anr. (2012) 10 SCC
303; Narinder Singh & Ors. v. State of Punjab & Anr. 2014(4)   G
SCALE 195 - relied on.
    Madan Mohan Abbot v. State of Punjab (2008) 4 SCC
582: 2008 (5) SCR 526; Rumi Dhar v. State of WB. (2009)
6 SCC 364: 2009 (5) SCR 553; Central Bureau of                 H
    508     SUPREME COURT REPORTS              [2014] 10 S.C.R.


A   Investigation v. Duncans Agro (1996) 5 SCC 591 :1996 (3)
    Suppl. SCR 360; Nikhil Merchant v. C.B.I. (2008) 9 SCC
    677: 2008 (12) SCR 236; Central Bureau of Investigation v.
    A. Ravishanker Prasad and Ors. (2009) 6 SCC 351; Dimpy
    Gujral v. Union Territory through Administrator AIR 2012 SCW
B   5333; State of Rajasthan v. Sambhu Kevat 2013(14) SCALE
    235; CBI, ACB v. Narendra Lal Jain & Ors. 2014 SCALE 137;
    Gopakumar B. Nair v. CBI and Anr. 2014 4 SCALE 659;
    Central Bureau of Investigation v. Jagjit Singh (2013) 10 SCC
    686 - referred to.
c                        Case Law Reference:

     2008 (5) SCR 526            referred to          Para 10

     2009 (5) SCR 553            referred to          Para 1"

D    1996 (3) Suppl. SCR 360 referred to              Para 14

     2008 (12) SCR 236           referred to          Para 14

     (2009) 6 sec 351            referred to          Para 15

     c2012) 1o sec 303           relied on            Para 16
E
     2014(4) SCALE 195           relied on            Para 17

     AIR 2012 sew 5333           referred to          Para 17

     2013(14) SCALE 235          referred to          Para 17
F
     2014 SCALE 137              referred to          Para 18

     2014 4 SCALE 659            referred to          Para 19

     (2013) 10 sec 686           referred to          Para 22
G       CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
    No. 2048 of 2014.

        From the Judgment & Order dated 22.04.2010 of the High
    Court of Bombay in Criminal Application No. 2239 of 2009.
H
    STATE OF MAHARASHTRA THROUGH CBI v.                      509
           VIKRAM ANANTRAI DOSHI
     Pinky Anand, ASG, P.K. Dey, T.A. Khan, S.T. Ahmed,              A
B.V. Balaram Das, Arvind Kumar Sharma for the Appellant.

    Arunabh Choudhury, Anupam Lal Das, Vaibhav Tamar,
Karma Dorjee for the Respondents.

    The Judgment of the Court was delivered by                       B

     DIPAK MISRA, J. 1. The centripodal issue that strikingly
emerges, commanding the judicial conscience to ponder and
cogitate with reasonable yard-stick of precision, for
consideration how far a superior court should proceed to             c
analyse the factual score in exercise of its inherent jurisdiction
bestowed upon it under Section 482 of the Code of Criminal
Procedure or under Article 226 of the Constitution of India, to
quash the criminal proceeding solely on the ground that the
parties have entered into a settlement and, therefore, the           D
continuance of the criminal proceeding would be an exercise
in futility, or the substantial cause of justice warrants such
quashment to make the parties free from unnecessary litigation
with the assumed motto of not loading the system with unfruitful
prosecution, of course with certain riders, one of which, as
                                                                     E
regards the cases pertaining to commercial litigations,
appreciation of predominant nature of civil propensity involved
in the lis or social impact in the backdrop of the facts of the
case. The primary question that we have posed has a
substantial supplementary issue; i.e. should the courts totally
remain oblivious to the prism of fiscal purity and wholly brush      F
aside the modus operandi maladroitly adopted, as alleged by
the prosecution, on the part of industrial entrepreneurs or the
borrowers on the foundation that money has been paid back
to the public financial institutions. We think not, especially
regard being had to the obtaining factual matrix in the case at      G
hand.

      2. Presently to the factual exposition. On the basis of a
written complaint of chief vigilance officer, Bank of Baroda a
case was registered against the respondents on 6.1.2006 and          H
    510     SUPREME COURT REPORTS                 [2014] 10 S.C.R.


A after completion of investigation a report was filed before the
  Special Court, CBI cases, Mumbai with a prayer to forward the
  chargesheet to the learned Magistrate who was competent to
  take cognizance of the offences as the involvement of RC.
  Sharma, the concerned Bank Officer, a public servant, in the
B crime in question, could not be prima facie found during the
  investigation. As the facts would undrape, on 3.2.2006 upon
  perusal of the chargesheet the learned Special Judge, CBI
  cases directed to place the chargesheet before the appropriate
  court and accordingly a fresh chargesheet was filed before the
C ACMM, 19th Court, Esplanade, Mumbai vide criminal case no.
  82/CPW/2006 for commission of offences punishable under
  Section 120-B, Section 406, 20, 467, 468 and 471 IPC against
  the accused persons.

        3. On a perusal of the charge sheet, it is evincible that
D there are allegations to the effect that Vikram Doshi, A 1, Vineet
  Doshi, A 2, and Sanjay J. Shah, A 3, made number of
  applications to the Bank of Baroda for sanction of various credit
  facilities, stating that they wanted to induct the said bank as a
  new consortium member to replace the existing members,
E namely, the UTI Bank and the Federal Bank. They requested
  the said Bank to sanction 15% of the total Working Capital
  facility sanctioned by the consortium of Banks, so that, that
  much amount could be transferred to the UTI bank and Federal
  Bank to take over the existing liabilities with the said two
F banks. It was revealed during investigation that the account of
  the company, with the consortium of banks as well as the
  finance institutions, was highly irregular and in the said condition
  the accused persons approached the Bank for sanction of loan.
  In the application to the Bank, the accused persons concealed
G the fact relating to the dues outstanding against them.
  Thereafter, when asked for the outstanding position with the
  existing consortium members, the accused persons willfully and
  with the criminal intent to mislead the Bank of Baroda, furnished
  wrong statements about the outstanding position by giving
H considerably lesser amount as outstanding than the actual.
     STATE OF MAHARASHTRA THROUGH CBI v.                   511
     VIKRAM ANANTRAI DOSHI [DIPAK MISRA, J.)
        4. As further alleged, the amount of loan sought was A
  sanctioned on 24.01.2003 by one Mr. K.K. Aggarwal, General
  Manager and communicated to the branch. As per the terms
  and conditions of the said Term Loan, the primary security for
  the same was the first charge to be created on the fixed assets
  of the company ranking pari passu with the existing Term B
  Lending Institutions. The primary charge for the cash credit and
  working capital demand loan was the hypothecation of current
  assets such as stocks, stocks in trade, raw materials and book
  debts, and, that apart, one of the important terms and conditions
  was that the CC, WCDL and Term Loan amounts were to be c
  directly paid to the company's account with the UTI Bank and
  Federal Bank so as to take over the liabilities as well as the
· securities mortgaged with the two banks. Despite the said
  situation, the Bank on 29.01.2003 intimated the sanction to
  ATCOM, the company in question. It is further demonstrable D
  from the chargesheet that A-1 and A-2, with the intention to
  escape personal liabilities, made A-3 and one Mr. Chirag
  Gandhi directors in ATCOM and got all the loan documents
  including the Demand Promissory Note (DPN) signed by the
  said persons. The terms and conditions of the sanction was that
  the entire Working Capital of Rs.570.00 lakhs (Rs.114.00 lakhs E
  + Rs.456.00 lakhs) and the Term Loan of Rs.360.00 lakhs were
  to be directly paid to the UTI Bank and Federal Bank.
  Consequently, the Term Loan was released and paid as per
  the sanction terms and conditions. As alleged, A-1 induced the
   Bank to release the sanctioned Working Capital Funds to the F
  Current Account and from the said account money was
  dishonestly diverted to his own accounts with SBI and Dena
  Bank, to bring down the outstanding liabilities in those accounts.
  As per the Chargesheet, Rs.114.00 lakhs of Cash Credit (the
   Fund Based portion of Working Capital) and Rs.456.00 lakhs G
   (the Demand Based portion of Working Capital) were released
   into the Current Account on 27.03.2003. Thus, the total funds
   released into the Current Account was Rs.560.00 lakhs out of
  which A-1 dishonestly transferred Rs.352.00 lakhs to SBI and
   about Rs.200.00 lakhs to Dena Bank, which amounted to H
    512      SUPREME COURT REPORTS                  [2014] 10 S.C.R.


A   diversion of concerned Bank's funds dishonestly and caused
    wrongful loss to the said Bank.

          5. As is evident from the chargesheet the transfer of funds
    of CC and DL to the current account was with a dishonest
B   intention to further divert the funds from the current account, and
    for transfer of the said funds of CC and WCDL. A-1 used the
    cheque leaf available with him for the Current Account and
    substituted out the words "Current Account" and substituted
    them with "Cash Credit". It has come out in the investigation
    that in order to further divert the funds from the Current Account,
C   A-3 used to issue "Pay Yourself cheques" by obtaining Banker's
    Cheque favouring their account with SBI and Dena Bank. It is
    also perceivable from the chargesheet that though the accused
    A-1 and A-3 knew that the said Working Capital was
    sanctioned only for the purpose of taking over the liabilities of
D   UTI Bank and Federal Bank yet they dishonest;y diverted the
    funds to SBI and Dena Bank. The sanctioned money, as
    alleged, was not used for the purpose it was availed of and the
    sanction terms and conditions were violated as a consequence
    of which the Bank could not get the charge in pari passu with
E   the other consortium Banks. The said diversion of funds by A-
    1 and A-3 deprived the Bank of its security and the entire loan
    became unsecured.

         6. The investigation further revealed that A-1 got letter of
F credits (hereinafter referred as "LCs") issued from SBI and
  Dena Bank in favour of fictitious companies propped by the
  accused and used the said LCs to siphon the funds from these
  Banks. The LCs beneficiary firms, favoring whom the A-2 and
  A-3 had requested the LCs to be issued, were companies
G existing only on paper without any commercial activity. The said
  fictitious companies got the LCs discounted by attaching their
  bogus bills and portion of these discount proceeds were used
  for personal benefits of A-1 and a certain portion was routed
  back to ATCOM. On the due dates, ATCOM did not discharge
  its liabilities with SBI and Dena Bank. In the chargesheet, the
H
    STATE OF MAHARASHTRA THROUGH CBI v.                      513
    VIKRAM ANANTRAI DOSHI [DIPAK MISRA, J.]
particulars of the names of fictitious companies have been           A
given. The said list covers 10 companies. It has been further
mentioned in the chargesheet that the Proprietors/Directors of
these fictitious companies had issued false bills under their
signatures and discounted these false bills backed by the LCs,
with the discounting Banks, at the instance of one Kanakranjan       B
Jain. Some of these Proprietors/Directors are the employees
and domestic servants of said Kanakrajan Jain.

    7. After so stating the chargesheet proceeds as follows:

    'That, in two of these fictitious companies, viz., M/s Anew      C
    Electronics & Mis Covet Securities, Sh. Vikram Doshi (A-
    1) and Sh. Vineet Joshi, (A-2) were Directors for some
    period of time. These two companies were maintaining
    their accounts at United Western Bank. Sh. Vikaram Doshi
    (A-1) was also having his personal account in the same           D
    bank. From these two Accounts Sh. Vikram Doshi had
    received a sum of Rs. 1, 48,50,000/-. This amount was
    utilized by him towards purchase of residential flat. Thus it
    is clear that the accused persons under the garb of
    business requirements had obtained credit facilities from        E
    the bank but had utilized the funds for acquiring immovable
    property for personal use. In order to clear the liability
    generated because of such illegal acts, they had induced
    the Bank of Baroda to sanction the credit facilities, which
    facility was dishonestly used by them. The entire amount         F
    sanctioned and released by the Bank of Baroda is
    outstanding and nothing has been repaid. Because of the
    acts of the accused, the facilities sanctioned by the Bank
    of Baroda are rendered without any securities and the
    bank has thus suffered wrongful loss."
                                                                     G
      8. During the pendency of the case before the trial court
on 30th March 2009 the informant, Bank of Baroda, had
transferred its debts to a trust IARC - BOB-01-07 under the
control of Kotak Mahindra Bank. The accused, Vikram Doshi,
settled the disputes and paid Rs.42 lacs for settling the dispute.   H
    514       SUPREME COURT REPORTS                 [2014] 10 S.C.R.


A On that basis, Kotak Mahindra Bank issued a "no due
  certificate" to M/s Atcom Technology Limited stating that on
  receipt of Rs.42 lacs, there was no amount outstanding and
  payable by them in respect of facility advanced by Bank of
  Baroda. The said bank also confirmed that the guarantees
B issued by Vikram Doshi stood discharged.

       9. After the receipt of such "No dues certificate" the
  respondent preferred a petition under Section 482 of the
  Cr.P.C. bearing Criminal Application No. 2239 of 2009 before
C the High Court of Judicature at Bombay and the learned Single
  Judge vide order dated 24.2.2010 quashed the criminal
  proceedings pending before the learned Addi. Metropolitan
  Magistrate. The learned Single Judge referred to one of its
  earlier orders and came to hold as follows:-

D         "Both the offices under Sections 406 and 420 are
          compoundable with the permission of the court. As already
          discussed hereinabove, the Bank has already given its No
          Due Certificate to the borrower i.e. ATCOM. It can clearly
          be seen that even if the matter is permitted to go for trial,
E         no fruitful purpose would be served, except burdening the
          criminal Courts which are already over-burdened."

         10. To arrive at the same conclusion the High Court relied
    on the decision in Madan Mohan Abbot v. State of Punjab 1
    and distinguished the pronouncement in A. Ravishanker
F   Prasad (supra).

        11. We have heard Ms. Pinky Anand, learned ASG and
  Mr. P.K. Dey, learned counsel for the Central Bureau of
  Investigation and Arunabh Chowdhury and Mr. Anupam Lal Das
G for the respondents.

         12. In the backdrop of aforesaid facts the seminal question
    that arises is whether in the obtaining factual matrix the High
    Court is justified in quashing the criminal proceeding. Learned
H   1.   (2008) 4 sec 582 .
     STATE OF MAHARASHTRA THROUGH CBI v.                     515
     VIKRAM ANANTRAI DOSHI [DIPAK MISRA, J.]
counsel for the appellants submits that the High Court has           A
erroneously opined that the remaining offences are 406 and
420 of IPC whereas the chargesheet, also included other
offences against the accused persons. It is further contended
that the chargesheet was not filed against the public officer as
the allegation against public officer could not be substantiated     B
during the investigation and the High Court without appreciating
the gravity of the other offences has quashed the proceeding
which makes the order absolutely vulnerable in law. Learned
counsel for the respondent would contend that when "No due
certificate" was obtained from the bank and the matter had           c
been settled the High Court has correctly quashed the
proceeding and hence, it does not warrant any interference.

     13. At this juncture, we are obligated to state that when the
High Court decided, the issue was whether a proceeding could
be quashed in exercise of inherent jurisdiction in respect of the    D
non-compoundable offences and principle of law in that regard
was not in a state of certainty. The said position has been made
clear by this Court that High Court has the jurisdiction to quash
a criminal proceeding under Section 482 of the Code in
respect of non-compoundable offences barring certain nature          E
of crimes.

      14. To appreciate the complete picture in proper
perspective we think it seemly to refer to the relevant decisions
in the field. In Rumi Dhar v. State of W.B. 2 while dealing with     F
an order declining to discharge the accused under Section 239
of the Code by the learned Special Judge which has been
affirmed by the High Court, a two-Judge Bench referred to the
decision in Central Bureau of Investigation v. Duncans Agro
Industries Ltd3. and Nikhil Merchant v. C.B.l. 4 came to hold as     G
follows:-

2.   (2009) 6 sec 364.
3.   (1996) s sec 591.
4.   c2ooa) 9 sec 677.                                               H
    516       SUPREME COURT REPORTS                  [2014] 10 S.C.R.

A         "14. It is now a well-settled principle of law that in a given
          case, a civil proceeding and a criminal proceeding can
          proceed simultaneously. Bank is entitled to recover the
          amount of loan given to the debtor. If in connection with
          obtaining the said loan, criminal offences have been
B         committed by the persons accused thereof including the
          officers of the Bank, criminal proceedings would also
          indisputably be maintainable."

       In the said case, the Court took note of the fact the
  compromise entered into between the Oriental Bank of
C Commerce and the accused pertaining to repayment of loan
  could not form the foundation of discharge of the accused. The
  two-Judge Bench appreciated the stand of the C.B.I. before the
  High Court that the criminal case against the accused had
  started not only for obtaining loan but also on the ground of
D criminal conspiracy with the Bank officers and accordingly
  upheld the order passed by the High Court.

       15. In Central Bureau of Investigation v. A. Ravishanker
  Prasad and Others 5 , the Court was dealing with the fact
E situation wherein the accused persons had committed offences
  such as forgery, fabrication of documents and used the said
  documents as genuine. There was allegation that they had
  entered into conspiracy with the Bank officers for availing huge
  credit facilities. In course of the pendency of the criminal
F proceedings, the accused persons had settled the outstanding
  dues by paying a sum of rupees 157 crores and on that basis
  preferred an application under Section 482 of the Code for
  quashing of the criminal proceeding and the High Court
  quashed the proceedings on the basis of the settlement. Be it
G stated, the trial had progressed in the said case and 92
  witnesses had already been examined. The question that arose
  before this Court was whether such a proceeding should have
  been quashed. The Court distinguished the decision in
  Duncans Agro Industries Ltd. 's case and opined that the tenor

H   5.   (2009) 6 sec 351.
     STATE OF MAHARASHTRA THROUGH CBI v.                       517
     VIKRAM ANANTRAI DOSHI [DIPAK MISRA, J.]
of the language implied therein indicates that quashing of the         A
complaint depends on the facts of each case. The Court also
distinguished the decision in Nikhil Merchant's case.

       16. A three-Judge Bench in the case of Gian Singh v. State
of Punjab and Another while answering the reference whether            B
the High Court has the jurisdiction under Section 482 of the
Code to quash a proceeding in respect of non-compoundable
offences, after referring to number of authorities, ruled that
Section 482 of the Code, as its very language suggests, saves
the inherent power of the High Court which it has by virtue of it      C
being a superior court to prevent abuse of the process of court
or otherwise to secure the ends of justice. The words, "nothing
in this Code" which means that the provision is an overriding
provision and the said words leave no manner of doubt that
none of the provisions of the Code limits or restricts the inherent
power. The Bench proceeded to state that the guideline for             D
exercise of such power is provided in Section 482 itself i.e. to
prevent abuse of the process of any court or otherwise to
secure the ends of justice and in different situations, the inherent
power may be exercised in different ways to achieve its ultimate
objective. Formation of opinion by the High Court before it            E
exercises inherent power under Section 482 on either of the
twin objectives, (i) to prevent abuse of the process of any court,
or (ii) to secure the ends of justice, is a sine qua non. The Court
further added that it is the judicial obligation of the High Court
to undo a wrong in course of administration of justice or to           F
prevent continuation of unnecessary judicial process and the
maxim ex debito justitiae is inbuilt in such exercise for the whole
idea is to do real, complete and substantial justice for which it
exists.
                                                                       G
     After so stating, the three-Judge Bench addressed to the
issue pertaining to the quashing of a criminal proceeding on
the ground of settlement between an offender and the victim
and in this context, it ruled thus:-
6.   (2012) 10 sec 303.                                                H
    518       SUPREME COURT REPORTS                 [2014) 10 S.C.R.


A         "61. Inherent power is of wide plenitude with no statutory
          limitation but it has to be exercised in accord with the
          guideline engrafted in such power viz.: (1) to secure the
          ends of justice, or (ii) to prevent abuse of the process of
          any court. In what cases power to quash the criminal
B         proceeding or complaint or FIR may be exercised where
          the offender and the victim have settled their dispute would
          depend on the facts and circumstances of each case and
          no category can be prescribed. However, before exercise
          of such power, the High Court must have due regard to the
          nature and gravity of the crime. Heinous and serious
c         offences of mental depravity or offences like murder, rape,
          dacoity, etc. cannot be fittingly quashed even though the
          victim or victim's family and the offender have settled the
          dispute. Such offences are not private in nature and have
          a serious impact on society. Similarly, any compromise
D
          between the victim and the offender in relation to the
          offences under special statutes like the Prevention of
          Corruption Act or the offences committed by public
          servants while working in that capacity, etc.; cannot provide
          for any basis for quashing criminal proceedings involving
E         such offences. But the criminal cases having
          overwhelmingly and predominatingly civil flavour stand on
          a different footing for the purposes of quashing, particularly
          the offences arising from commercial, financial, mercantile,
          civil, partnership or such like transactions or the offences
F         arising out of matrimony relating to dowry, etc. or the family
          disputes where the wrong is basically private or personal
          in nature and the parties have resolved their entire dispute.
          In this category of cases, the High Court may quash the
          criminal proceedings if in its view, because of the
G         compromise between the offender and the victim, the
          possibility of conviction is remote and bleak and
          continuation of the criminal case would put the accused to
          great oppression and prejudice and extreme injustice
          would be caused to him by not quashing the criminal case
H
     STATE OF MAHARASHTRA THROUGH CBI v.                     519
     VIKRAM ANANTRAI DOSHI [DIPAK MISRA, J.] ·
     despite full and complete settlement and compromise with        A
     the victim."

    17. Recently, in Narinder Singh & Ors. v. State of Punjab
& Anr. 7 , a two-Judge Bench placed reliance on Gian Singh's
case (supra) and Dimpy Gujral v. Union Territory through             B
Administrato~ and    distinguished the decision in State of
Rajasthan v. Sambhu Kevat9, and came to hold that in the
facts of the said case the proceedings under Section 307
deserved to be quashed. The two-Judge Bench laid down
certain guidelines by which the High Courts would be guided          C
in giving adequate treatment to the settlement between the
parties and exercising its power under Section 482 of the Code
while accepting the settlement and quashing the proceedings
or refusing to accept the settlement. Some of the guidelines
Which are relevant for the present purpose are reproduced
below:-                                                              D

     "(II) When the parties have reached the settlement and on
     that basis petition for quashing the criminal proceedings
     is filed, the guiding factor in such cases would be to
     secure:                                                         E
      (i) ends of justice, or

      (ii) to prevent abuse of the process of any Court.

      While exercising the power the High Court is to form an        F
      opinion on either of the aforesaid two objectives.

      (Ill) Such a power is not be exercised in those prosecutions
      which involve heinous and serious offences of mental
      depravity or offences like murder, rape, dacoity, etc. Such    G
      offences are not private in nature and have a serious
      impact on society. Similarly, for offences alleged to have
7.   2014(4) SCALE 195.
s.   AIR 2012 sew 5333.
9.   2013(14) SCALE 235.                                             H
    520       SUPREME COURT REPORTS                [2014] 10 S.C.R.


A         been committed under special statute like the Prevention
          of Corruption Act or the offences committed by Public
          Servants while working in that capacity are not to be
          quashed merely on the basis of compromise between the
          victim and the offender.
B
          (IV) On the other, those criminal cases having
          overwhelmingly and pre-dominantly civil character,
          particularly those arising out of commercial transactions or
          arising out of matrimonial relationship or family disputes
          should be quashed when the parties have resolved their
c         entire disputes among themselves.

          (V) While exercising its powers, the High Court is to
          examine as to whether the possibility of conviction is
          remote and bleak and continuation of criminal cases would
D         put the accused to great oppression and prejudice and
          extreme injustice would be caused to him by not quashing
          the criminal cases."

        18. At this stage it is apt to notice a three-Judge Bench
E decision in CB/, ACB, Mumbai v. Narendra Lal Jain & Ors. 10
  In the said case during the investigation pertaining to the
  culpability of the accused in the crime, the concerned bank had
  instituted suits for recovery of the amount claimed to be due
  from the respondents and said suits were disposed in terms
  of the consent decrees. On the basis of the said consent
F decrees an application for discharge was filed which was
  rejected by the trial court but eventually was allowed by the High
  Court. Be it stated, charges were framed under Section 120-
  B/420 IPC by the learned trial Judge against the private parties.
  As far as bank officials are concerned, charges were framed
G under different provisions of the Prevention of Corruption of Act,
  1988. Being dissatisfied with the said order, the CBI had
  preferred an appeal by obtaining special leave and in that
  context the court observed that the accused respondent had

H 10. 2014 3 SCALE 137.
    STATE OF MAHARASHTRA THROUGH CBI v.                      521
    VIKRAM ANANTRAI DOSHI [DIPAK MISRA, J.]
been charged under Section 120-B/420 IPC and the civil liability     A
of the respondent to pay the amount had already been settled
and further there was no grievance on the part of the bank.
Taking note of the fact that offence under Section 420 of IPC
is compoundable and Section 120-B is not compoundable, the
Court eventually opined thus:-                                       B

    "11. In the present case, having regard to the fact that the
    liability to make good the monetary loss suffered by the
    bank had been mutually settled between the parties and
    the accused had accepted the liability in this regard, the       C
    High Court had thought it fit to invoke its power under
    Section 482 Cr.P.C. We do not see how such exercise of
    power can be faulted or held to be erroneous. Section 482
    of the Code inheres in the High Court the power to make
    such order as may be considered necessary to, inter alia,
    prevent the abuse of the process of law or to serve the          D
    ends of justice. While it will be wholly unnecessary to revert
    or refer to the settled position in law with regard to the
    contours of the power available under Section 482
    CR.P.C. it must be remembered that continuance of a
    criminal proceeding which is likely to become oppressive         E
    or may partake the character of a lame prosecution would
    be good ground to invoke the extraordinary power under
    Section 482 Cr.P.C."

     19. Slightly more recently in Gopakumar B. Nair v. CBI          F
and Anr. 11 the Court referred to the paragraph 61 of Gian
Singh's Case, distinguished the decision in Narendra Lal Jain
(supra) regard being had to the fact that the accused persons
were facing charges under Section 120-B r/w Section 13(2) r/
w 13 (1) (d) of the 1988 Act and Section 420/471 of IPC and          G
came to hold that substratum of the charges against the
accused-appellant were not similar to those in Narendra Lal
Jain (supra) wherein the accused was charged under Section


11. 2014 4 SCALE 659.                                                H
    522       SUPREME COURT REPORTS                 [2014] 10 S.C.R.


A   120-0 read with Section 420 IPC only. After so stating the Court
    observed as follows:-

          "The offences are certainly more serious; they are not
          private in nature. The charge of conspiracy is to commit
          offences under the Prevention of Corruption Act. The
B
          accused has also been charged for commission of the
          substantive offence under Section 471 IPC. Though the
          amount due have been paid the same is under a private
          settlement between the parties unlike in Nikhil Merchant
          (supra) and Narendra Lal Jain (supra) where the
c         compromise was a part of the decree of the Court. There
          is no acknowledgement on the part of the bank of the
          exoneration of the criminal liability of the accused-appellant
          unlike the terms of compromise decree in the aforesaid
          two cases. In the totality of the facts stated above, if the
D         High Court has taken the view that the exclusion spelt out
          in Gian Singh (supra) (para61) applies to the present
          case and on that basis had come to the conclusion that
          the power under Section 482 CrPC should not be
          exercised to quash the criminal case against the accused,
E         we cannot find any justification to interfere with the said
          decision."

        20. The present obtaining factual score has to be
  appreciated on the anvil of aforesaid authorities. On a studied
F scrutiny of the principles stated in Gain Singh (supra) it is limpid
  that the three-Judge Bench has ruled that proceeding in respect
  of heinous and serious offences and the offences under
  prevention of corruption Act and all other offences committed
  by public servants while working in that capacity are not to be
  quashed. That apart, the court has also emphasized on offences
G having a serious impact on society. It has been further laid down
  that criminal cases having overwhelmingly and predominantingly
  civil flavour stand on a different footing for the purposes of
  quashing, particularly the offences arising from commercial,
  financial, mercantile, civil partnership or such like transactions
H
    STATE OF MAHARASHTRA THROUGH CBI v.                      523
    VIKRAM ANANTRAI DOSHI [DIPAK MISRA, J.]
or the offences arising out of matrimony relating to dowry, etc.     A
or the family disputes where the wrong is basically private or
personal in nature. In Narendra Lal Jain (supra) the three-Judge
Bench quashed the proceeding as the charges were famed
under Section 120/420 IPC in respect of the private
respondents. In Gopakumar B. Nair's case the court                   B
distinguished the decision in Narendra Lal Jain (supra) and
opined that the accused had also been charged for the
commission of offence under Section 471 of IPC and on that
basis declined to interfere with the order passed by the High
Court which had refused to quash the criminal proceeding.            c
       21. In the case at hand, as per the chargesheet the
respondents had got LCs issued from the bank in favour of
fictitious companies propped up by them and the fictiLious
beneficiary companies had got letters of credits discounted by
attaching their bogus bills. The names of 10 fictitious              D
companies have been mentioned in the chargesheet. Thus,
allegation of forgery is very much there. As is manifest from the
impugned order, the learned Single Judge has not adverted to
the same. It is not a simple case where an accused has
borrowed money from the bank and diverted it somewhere else          E
and, thereafter, paid the amount. It does not fresco a situation
where there is dealing between a private financial institution
and an accused, and after initiation of the criminal proceedings
he pays the sum and gets the controversy settled. The expose'
of facts tells a different story. As submitted by the learned        F
Counsel for CBI the manner in which the letters of credits were
issued and the funds were siphoned has a foundation in criminal
law. Learned counsel would submit that it does not depict a
case which has overwhelmingly and predominatingly civil
flavour. The intrinsic character is different. Emphasis is laid on   G
the creation of fictitious companies.

    22. In this context, we may usefully refer to a two-Judge
Bench decision in Central Bureau of Investigation v. Jagjit
                                                                     H
    524       SUPREME COURT REPORTS                 [2014] 10 S.C.R.


A Singh 12 wherein the court being moved by the CBI had
  overturned the order of the High Court quashing the criminal
  proceeding and in that backdrop had taken note of the fact that
  accused persons had dishonestly induced delivery of the
  property of the bank and had used forged documents as
B genuine. Proceeding further the Court opined as follows:-

          "The offences when committed in relation with banking
          activities including offences under Sections 420/471 IPC
          have harmful effect. on the public and threaten the well-
          being of the society. These offences fall under the category
c         of offences involving moral turpitude committed by public
          servants while working in that capacity. Prima facie, one
          may state that the bank is the victim in such cases but, in
          fact, the society in general, including customers of the bank
          is the sufferer. In the present case, there was neither an
D         allegation regarding any abuse of process of any court not
          anything on record to suggest that the offenders were
          entitled to secure the order in the ends of justice."

       23. We are in respectful agreement with the aforesaid view.
E Be it stated, that availing of money from a nationalized bank in
  the manner, as alleged by the investigating agency, vividly·
  exposits fiscal impurity and, in a way, financial fraud. The
  modus operandi as narrated in the chargesheet cannot be put
  in the compartment of an individual or personal wrong. It is a
F social wrong and it has immense societal impact. It is an
  accepted principle of handling of finance that whenever there
  is manipulation and cleverly conceived contrivance to avail of
  these kind of benefits it cannot be regarded as a case having
  overwhelmingly and predominantingly of civil chara~ter. The
G ultimate victim is the collective. It creates a hazard in the ·
  financial interest of the society. The gravity of the offence
  creates a dent in the economic spine of the nation. The
  cleverness which has been skillfully contrived, if the allegations
  are true, has a serious consequence. A crime of this nature, in
H   12. (2013) 10 sec 686.
    STATE OF MAHARASHTRA THROUGH CBI v.                         525
    VIKRAM ANANTRAI DOSHI [DIPAK MISRA, J.]
our view, would definitely fall in the category of offences which       A
travel far ahead of personal or private wrong. It has the
potentiality to usher in economic crisis. Its implications have its
own seriousness; for it creates a concavity in the solemnity, that
is expected in financial transactions. It is not such a case where
one can pay the amount and obtain a "no due certificate" and            B
enjoy the benefit of quashing of the criminal proceeding on the
hypostasis that nothing more remains to be done. The collective
interest of which the Court is the guardian cannot be a silent
or a mute spectator to allow the proceedings to be withdrawn,
or for that matter yield to the ingenuous dexterity of the accused      c
persons to invoke the jurisdiction under Article 226 of the
Constitution or under Section 482 of the Code and quash the
proceeding. It is not legally permissible. The Court is expected
to be on guard to these kinds of-adroit moves. The High Court,
we humbly remind, should have dealt with the matter keeping
                                                                        0
in mind that in these kind of litigations the accused when
perceives a tiny gleam of success, readily invokes the inherent
jurisdiction for quashing of the criminal proceeding. The court's
principal duty, at that juncture, should be to scan the entire facts
to find out the thrust of allegations and the crux of the
settlement. It is the experience of the Judge comes to his aid          E
and the said experience should be used with care, caution,
circumspection and courageous prudence. As we find in the
case at hand the learned Single Judge has not taken pains to
scrutinize the entire conspectus of facts in proper perspective
and quashed the criminal proceeding. The said quashment                 F
 neither helps to secure the ends of justice nor does it prevent
the abuse of the process of the Court nor can it be also said
that as there is a settlement no evidence will come on record
and there will be remote chance of conviction. Such a finding
in our view would be difficult to record. Be that as it may, the        G
fact remains that the social interest would be on peril and the
 prosecuting agency, in these circumstances, cannot be treated
as an alien to the whole case. Ergo, we have no other option
 but to hold that the order of the High Court is wholly indefensible.
                                                                        H
    526       SUPREME COURT REPORTS          [2014] 10 S.C.R.


A      24. Ex consequenti, the appeal is allowed, and the order
  passed by the High Court is set aside and it is directed that
  the trial shall proceed in accordance with law. We may hasten
  to add that our observations in the present appeal are solely
  in the context of adjudicating the justifiability of order of
B quashing of the criminal proceeding and it would not have any
  bearing at the time of trial. And we so clarify.

    Devika Gujral                                Appeal allowed.