C.B.I. New Delhi vs B.B.Agarwal .

C.B.I. New Delhi ….Appellant(s)

VERSUS

B.B. Agarwal & Ors. etc. ….Respondent(s)

JUDGMENT

Abhay Manohar Sapre, J.

1. These appeals are directed against the final

judgment and order dated 18.04.2009 passed by

the High Court of Delhi at New Delhi in Crl.MC

Signature Not Verified Nos.5722­30 of 2006 & Crl.MA No.9675 of 2006, Digitally signed by ASHOK RAJ SINGH

Crl.MC No.74 of 2007 & Crl.MA Nos.235­36 of Date: 2019.02.18 17:12:36 IST Reason:

1

2007, Crl.MC No.80 of 2007 & Crl.MA Nos.259­60

of 2007 and Crl.MC No.2376 of 2007 & Crl.MA

Nos.8341­42 of 2007 whereby the High Court

allowed the criminal petitions filed by the

respondents herein under Section 482 of the Code

of Criminal Procedure, 1973 (hereinafter referred to

as “Cr.P.C.”) and quashed the criminal proceedings

in CBI Case No.RC.4(A)/94­CBI/BSC/DLI pending

before the Special Judge, Tis Hazari, Delhi against

the respondents herein.

2. A few facts need mention hereinbelow to

appreciate the short controversy involved in these

appeals.

3. In the year 1992­93, it came to the notice of

Investigating Agency (CBI) that two Limited

Companies, namely, M/s New Beam Ferro Alloys

Ltd.(NBFAL) ­ Respondent No. 6 and M/s West

2 Coast Brewers & Distillers Ltd.(WCBDL)­

respondent No. 7 came out with public issue of their

companies and in execution of the public issue,

these Companies were alleged to have defrauded the

Punjab National Bank (PNB), PNB House Branch,

Sir P.M. Road, Fort, Mumbai to the tune of Rs.15

crores approximately.

4. It may not be necessary to set out the details

as to how the alleged defalcation was done by the

said two Companies.

5. Suffice it to say, the investigation was carried

out by the CBI which led to filing of a criminal case

bearing No. RC4(A)/94­CBI/BSC/DLI against the

Directors of the companies and the officials of PNB

under Section 120B read with Sections 409, 420,

468, 471 of the Indian Penal Code, 1860

(hereinafter referred to as “IPC”) read with Section

13(2) read with Section 13(i) (c) and (d) of the

3 Prevention of Corruption Act, 1988 (hereinafter

referred to as “PC Act”) in the designated C.B.I.

Court, Delhi.

6. The charge sheet was filed against 12 accused

persons out of which 6 are individuals and

remaining are the Companies. It is not in dispute

that during the pendency of this case, four

individual accused persons have died. It is also not

in dispute that out of the accused­Companies, the

names of two companies, namely, WCBDL

(respondent No. 7) and Surlex Dignostic Ltd.

(respondent No. 8) have been deleted vide order

dated 09.09.2011.

7. It is not in dispute that PNB had also filed two

civil suits bearing Nos. 342/1995 and 2740/1995

against the Companies­WCBDL(R­7) and NBFAL

(R­6) and its Directors in Bombay High Court for

recovery of the outstanding dues and for settlement

4 of the accounts which were later transferred to the

Debt Recovery Tribunal, Mumbai (OA

No.3174/2000) for trial. It is also not in dispute that

during the pendency of these civil suits and

pursuant to orders passed therein directing the

parties to undertake reconciliation of the accounts,

the PNB and the two companies through their

Directors reconciled their accounts and

compromised the matter by entering into a one­time

settlement on 06.06.2006. The consent application

in O.A. No.3174 of 2000 was accordingly filed by the

parties in DRT, Mumbai for disposal of the OA in

terms of the settlement arrived at between them.

8. The DRT by its order dated 11.05.2006

accepted the settlement and accordingly disposed of

OA No. 3174/2000 in terms of settlement. (See

documents filed in IA­12323/2019). In terms of

settlement order, the two companies were liable to

5 pay a total sum of Rs.12.20 crores to PNB, which

the two Companies, through their Directors, paid to

the PNB. It is not in dispute that now there are no

outstanding dues payable by these two Companies

to the PNB and the order of DRT stood complied

with.

9. It is with these background facts, the 12

respondents(accused) filed the petitions in the High

Court of Delhi under Section 482 of Cr.P.C. seeking

to quash the criminal proceedings filed against

them.

10. By impugned order, the High Court allowed

the petitions and quashed the criminal proceedings,

which has given rise to filing of the present appeals

by way of special leave by the CBI in this Court.

11. So, the short question, which arises for

consideration in these appeals, is whether the High

Court was justified in allowing the petitions filed by

6 the respondents under Section 482 of the Cr.P.C

and quashing the criminal proceedings.

12. Heard learned counsel for the parties.

13. Having heard the learned counsel for the

parties and on perusal of the record of the case, we

find no merit in these appeals.

14. In our considered opinion, having regard to the

background facts stated above, we find no good

ground to interfere in the impugned order.

15. The High Court was of the view that on

resettlement of accounts, the parties obtained the

consent decree from DRT and paid the entire sum,

therefore, there is no live issue, which now survives.

The High Court then examined the question as to

whether the issue of criminality is involved so as to

allow the Trial Court to continue on its merits.

After examining this issue with reference to charges

and documents, the High Court held that no

7 criminality issue is found involved notwithstanding

the settlement of the case between the parties.

16. We are also of the view that there arises no

occasion to prosecute the respondents as was

rightly held by the High Court while quashing the

criminal case against the respondents.

17. Learned counsel for the appellant, placing

reliance on the decision of this Court in Rumi

Dhar(Smt.) vs. State of West Bengal & Anr.,

(2009) 6 SCC 364 contended that notwithstanding

settlement of the civil suits by the parties, the

criminal case out of which these appeals arise has

to be brought to its logical end one way or the other

on merits and the High Court was, therefore, not

right in quashing the charge­sheet at its threshold

under Section 482 of the Cr.P.C.

18. We find no merit in her submission. When we

take into account the entire undisputed controversy

8 mentioned above, we also find that there is no

criminality issue surviving qua those accused, who

are alive so as to allow the prosecuting agency to

continue with the criminal trial on merits. Indeed, it

would be an abuse of process, as was rightly held

by the High Court to which we concur.

19. In view of the foregoing discussion, we find no

merit in these appeals. The appeals are accordingly

dismissed.

.………...................................J. [ABHAY MANOHAR SAPRE]

…...……..................................J. [L. NAGESWARA RAO] New Delhi;

February 18, 2019

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