Prosecution against an Economic Offender can continue even if he settles the amount with the bank: SC [Read the Judgment]

To quash the proceeding merely on the ground that the accused has settled the amount with the bank would be a misplaced sympathy, the Supreme Court said while asking the Trial court to proceed with the trial in an economic offence case registered about two and half decades ago.

The Supreme Court of India today, set aside a Delhi High Court order which had quashed the Criminal proceedings against an accused in an economic offence case on the ground that he had settled the amount with the bank. Justices Dipak Misra and R.Bhanumati held that it is undesirable to quash the proceeding of economic offence crime merely on the ground that the accused has settled the amount with the bank. If the prosecution against the economic offenders are not allowed to continue, the entire community is aggrieved, the court said.

Background facts

The case against the accused was registered in 1987. They were charge sheeted in the year 1990, for the offence of criminal conspiracy with intention to cheat New Bank of India (PNB) to the tune of Rs.10.62 lakhs. The absconding accused were caught by CBI in 1995. During the pendency of trial, the accused settled the amounts with the bank and in 2006, he moved a petition in Delhi High Court under Section 482 Cr. P.C. for quashing of the FIR against him on that ground which was allowed. CBI appealed against this Order in Supreme Court.

Economic offences are fraud committed on society

The Court said that inherent power of the High Court under Section 482 Cr.P.C. to quash the proceedings should be exercised only when the Court comes to the conclusion that there would be manifest injustice or there would be abuse of the process of the Court if such power is not exercised. But in economic offences the Court observed that “it must not only keep in view that money has been paid to the bank which has been defrauded but also the society at large.” The court further said “It is not a case of simple assault or a theft of a trivial amount; but the offence with which we are concerned is a well-planned and was committed with a deliberate design with an eye of personal profit regardless of consequence to the society at large. To quash the proceeding merely on the ground that the accused has settled the amount with the bank would be a misplaced sympathy. If the prosecution against the economic offenders are not allowed to continue, the entire community is aggrieved.”

The court also said the High Court should not have ignored the facts such as the impact of the offence, the use of the State machinery to keep the matter pending for so many years coupled with the fraudulent conduct of the respondent. The High court had quashed the proceedings placing its reliance on   upon Nikhil Merchant vs. CBI (2008) 9 SCC 677. The Apex Court held that the present case is distinguishable in facts as in this case “The allegation --- is ‘forgery’ for the purpose of cheating and use of forged documents as genuine in order to embezzle the public money. “ The court also added that economic offences, in this era “are actually public wrongs or crimes committed against society and the gravity and magnitude attached to these offences is concentrated at public at large”.

Read the Judgment here.