Economic Offences Involving Corruption & Loss to Public Exchequer Cannot Be Quashed Based On Settlement : Supreme Court

Observing that the economic offences stand on a different footing than other offences and have wider ramifications, the Supreme Court refused to quash the corruption case based on the settlement arrived between the accused and the bank. Noting that the Bank has suffered a loss of approximately Rs. 6.13 Crores, the Court ruled that the settlement terms recorded by the parties at the DRT proceedings cannot erase the offence committed by the person. “In the instant case, it is on record that consent terms were submitted by the parties before the DRT. It is admitted that the bank had suffered losses to the tune of Rs. 6.13 Crores approximately. Hence, a substantial injury was caused to the public exchequer and consequently it can be said that public interest has been hampered. Keeping in view the fact that in the present case a special statute i.e. PC (Prevention of Corruption) Act has been invoked, we are of the view that quashing of offences under the said Act would have a grave and substantial impact not just on the parties involved, but also on the society at large.”, the court said. The Bench comprising Justice Vikram Nath and Justice Prasanna B Varale was hearing the appeal filed against the Bombay High Court decision dismissing the quashing petition filed by the Appellants for quashing the fraud, cheating, and corruption case against them. The appellants are Directors of M/s Sun Infrastructure Pvt. Ltd. and employees of Respondent No. 3, State Bank of India (SBI). The FIR and charge sheet arose from allegations of fund diversion, fraudulent valuation of collateral, and irregular loan repayment. The Appellants argued that the settlement recorded between themselves and the bank at the DRT proceedings would qualify as quashing a case against them. Opposing this, the Respondents stated that the settlement alone cannot justify the quashing of criminal cases where a societal interest is involved.Affirming the High Court's decision, the judgment authored by Justice Varale referring to Parbatbhai Aahir vs State of Gujrat & Anr. (2017) observed that economic offences involving financial fraud and economic losses to the public exchequer have broader societal implications and cannot be lightly quashed. “Thus, it can be concluded that economic offences by their very nature stand on a different footing than other offences and have wider ramifications. They constitute a class apart. Economic offences affect the economy of the country as a whole and pose a serious threat to the financial health of the country. If such offences are viewed lightly, the confidence and trust of the public will be shaken.”, the court observed. Accordingly, the Court dismissed the appeal observing that the High Court was justified in not exercising its jurisdiction under Section 482 of CrPC. Appearance: For Petitioner(s) Ms. Malvika Trivedi, Sr. Adv. Mr. Mahinder Singh Hura, Adv. Mr. Jasmeet Singh, AOR Mr. Saif Ali, Adv. Mr. Pushpendra Singh Bhadoriya, Adv. Mr. Vijay Sharma, Adv. Mr. Pranav Menon, Adv. Mr. Siddharth Bhatnagar, Sr. Adv. Ms. Ranjeeta Rohatgi, AOR Mr. Vivek Punjabi, Adv. Ms. Shrika Gautam, Adv. For Respondent(s) Mr. Samrat Krishnarao Shinde, Adv. Mr. Siddharth Dharmadhikari, Adv. Mr. Aaditya Aniruddha Pande, AOR 1 Mr. Bharat Bagla, Adv. Mr. Sourav Singh, Adv. Mr. Aditya Krishna, Adv. Ms. Preet S. Phanse, Adv. Mr. Preet S. Phanse, Adv. Mr. Adarsh Dubey, Adv. Mrs. Sonia Mathur, Sr. Adv.(V.C.) Mr. Mukesh Kumar Maroria, AOR Mrs. Noor Rampal, Adv. Mr. Digvijay Dam, Adv. Mr. Shantanu Sharma, Adv. Mrs. Sakshi Kakkar, Adv. Mr. Sanjay Kr. Tyagi, Adv. Mr. Sanjay Kapur, AOR Mr. Surya Prakash, Adv. Ms. Isha Virmani, Adv. Mrs. Shubhra Kapur, Adv. Ms. Mahima Kapur, Adv. Case Title: ANIL BHAVARLAL JAIN & ANR. VERSUS THE STATE OF MAHARASHTRA & ORS.Citation : 2024 LiveLaw (SC) 1039Click here to read/download the judgment

Economic Offences Involving Corruption & Loss to Public Exchequer Cannot Be Quashed Based On Settlement : Supreme Court

Yash Mittal

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