Case Summary
Case Name: Tarina Sen vs Union of India & Anr.
Date of Judgment: 3rd October 2024
Judges: Hon'ble Justice B.R. Gavai and Hon'ble Justice K.V. Viswanathan
Advocates:
Appellants: Shri Dama Seshadri Naidu, Senior Counsel
Respondents: Shri Vikramjeet Banerjee, Additional Solicitor General, and Mr. Brijesh Kumar Tamber, Advocate
Acts and Sections:
Indian Penal Code (IPC), Sections 120B, 420, 468, 471
Prevention of Corruption Act, 1988, Sections 13(2) read with 13(1)(d)
Code of Criminal Procedure, 1973, Section 482
Cited Judgments:
Central Bureau of Investigation v. Duncans Agro Industries Ltd., (1996) 5 SCC 591
Nikhil Merchant v. Central Bureau of Investigation, (2008) 9 SCC 677
Gian Singh v. State of Punjab, (2012) 10 SCC 303
Central Bureau of Investigation v. Narendra Lal Jain, (2014) 5 SCC 364
Narinder Singh v. State of Punjab, (2014) 6 SCC 466
Gold Quest International Pvt. Ltd. v. State of Tamil Nadu, (2014) 15 SCC 235
Central Bureau of Investigation v. Sadhu Ram Singla, (2017) 5 SCC 350
Analysis of the Judgment
The recent judgment in Tarina Sen vs Union of India & Anr. delivered by the Hon'ble Supreme Court on 3rd October 2024, brings forward crucial deliberations on the application of Section 482 of the Code of Criminal Procedure, 1973, and the powers of the Court in quashing criminal proceedings in light of a settlement between the involved parties. The case revolves around allegations of financial misappropriations and a broader legal question: whether a compromise in a financial transaction should justify the quashing of criminal charges.
Background of the Case
The case originated from allegations of fraud concerning a loan sanctioned by the Allahabad Bank’s Temple Marg Branch, Bhubaneswar, between 1998 and 1999. The primary accused, Ajay Kumar Behera, while serving as the Branch Manager, allegedly sanctioned loans without adequate collateral or repayment measures. The loans were purportedly sought by two firms—M/s Indo Global Projects Ltd. (IGPL) and M/s Clarion Travels—whose directors and partners, including the appellants, were implicated in the conspiracy.
The FIR filed by the Central Bureau of Investigation (CBI) charged the appellants under Sections 120B (criminal conspiracy), 420 (cheating), 468 (forgery), and 471 (using forged documents as genuine) of the Indian Penal Code. Additionally, provisions of the Prevention of Corruption Act, 1988, were invoked due to the involvement of public servants in the alleged conspiracy.
It was later revealed that the borrowers had entered into a One-Time Settlement (OTS) with the bank, and the debt was fully discharged in January 2011. Based on this settlement, the appellants approached the High Court of Orissa under Section 482 CrPC, seeking quashing of the criminal proceedings. However, the High Court declined to grant such relief, leading to the present appeal before the Supreme Court.
Key Legal Issue
The core legal question in the appeal was whether the continuation of criminal proceedings was justified after the financial dispute between the bank and the appellants had been settled. This raised broader questions about the balance between civil and criminal liability and the Court's discretionary power to quash criminal proceedings when the underlying dispute is of a private or commercial nature.
The Court’s Analysis
Hon'ble Justice B.R. Gavai, who delivered the judgment, acknowledged that the facts of the case were not in dispute. The financial transaction had been settled through an OTS, and the appellants had discharged their obligations towards the bank. However, the prosecution argued that the settlement between the bank and the borrowers did not absolve the appellants of criminal liability, especially since public interest was involved due to the bank’s role as a public entity.
Despite these arguments, the Supreme Court leaned on several earlier decisions, notably Nikhil Merchant v. Central Bureau of Investigation and Gian Singh v. State of Punjab, to underscore the principle that in cases arising from commercial transactions, the continuation of criminal proceedings might not always serve the ends of justice, especially when the dispute has been amicably resolved.
Hon'ble Justice Gavai observed, “In matters arising out of commercial, financial, mercantile, civil, partnership or such like transactions or offences arising out of matrimony or family disputes, where the wrong is primarily 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 putting an end to the criminal proceedings.”
The Court reiterated that criminal proceedings, especially those that stem from private transactions, should not be allowed to continue merely to serve a technical purpose, when there is little or no chance of conviction. The emphasis was on preventing unnecessary harassment to the parties involved and allowing them to move on once the dispute has been resolved.
Reasoning for Quashing the Proceedings
The Hon'ble Court placed substantial weight on the fact that both Accused No. 2 (Surojit Sen) and Accused No. 3 (Kaushik Nath Ojha) had passed away, leaving only Accused No. 4 and 5, who had played minor roles in the alleged conspiracy. The appellants, who were related to Accused No. 2, were not involved in the active decision-making within the companies and were only implicated due to their familial connections.
The Court was of the view that the continuation of the criminal proceedings would cause undue prejudice and oppression to the appellants, particularly since there was no prospect of conviction. The reasoning aligned with earlier judgments where the possibility of conviction was deemed remote and the proceedings were seen as burdensome on the accused.
In one of the judgment's highlighted quotes, the Court stated, “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.”
Moreover, the Court emphasised that the settlement with the bank signified a closure to the financial aspect of the dispute, and therefore, the continuation of criminal proceedings would serve no purpose other than to perpetuate unnecessary litigation.
Key Precedents Relied Upon
The Court relied on the principles laid down in several cases, particularly:
Nikhil Merchant v. CBI: This case involved a similar scenario where a settlement between a bank and the borrower led to the quashing of criminal charges. The Supreme Court held that when the dispute is primarily of a commercial nature and has been settled, the continuation of criminal proceedings would be unjust.
Gian Singh v. State of Punjab: This landmark judgment reiterated that when the parties have resolved their differences, especially in private disputes, the Court should exercise its powers to quash the criminal proceedings.
These precedents, along with others cited in the judgment, reinforced the view that courts should adopt a pragmatic approach when dealing with cases involving financial disputes that have been settled.
Conclusion
The judgment in Tarina Sen vs Union of India marks an important reaffirmation of the Court’s discretion under Section 482 CrPC to quash criminal proceedings in cases of private or commercial disputes that have been amicably resolved. The decision underscores the importance of distinguishing between cases that serve a public interest and those that are primarily civil in nature.
By quashing the criminal proceedings, the Hon'ble Supreme Court has reiterated that the justice system must not be misused to harass individuals in situations where the chance of conviction is remote and where the dispute has been resolved to the satisfaction of all parties involved.
This judgment will have far-reaching implications for future cases involving commercial disputes, serving as a precedent for quashing proceedings when the underlying transaction has been settled.
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