Tamil Nadu Mercantile Bank Ltd vs State Thru Deputy Suptd Of Police&Anr

3. Before granting relief to the five petitioners out of ten accused, the High Court noted the relevant facts in brief which disclose that out of ten accused in the charge-sheet dated 20th September 2004, the first five accused are Managing Director/Managing Partner/Director/Proprietor of different private limited companies, partnership firms/proprietary firms. Some of them are related to each other and some are family friends. Accused nos. 6 to 10 are Managers and Officials of Tamil Nadu Mercantile Bank Limited (hereinafter referred to as ‘Bank’), Tiruppur alleged to have colluded with the respondents in perpetration of a fraud against the bank. They are not the parties before this Court.

5. On the basis of FIR, Police initiated investigation and ultimately filed a charge-sheet on 20th September, 2004 against ten persons as noted earlier. But prior to that, the accused respondent and some others filed a petition under Section 482 Cr.P.C. for quashing of the FIR. On filing of reply by the informant that petition filed on 7.6.2004 was withdrawn. After the charge-sheet, on 18.10.2004 the accused respondents along with other accused filed another petition under Section 482 Cr.P.C for quashing of the FIR. That was dismissed on 9.2.2005 taking note of the charge-sheet already submitted. That order was not challenged. The concerned petitions which have been allowed by the High Court were filed in the year 2007 and 2009 respectively seeking quashing of the entire criminal proceedings but without disclosing any fresh cause of action. In the petition of 2007, the High Court initially granted interim stay but the appellant bank intervened, got impleaded and succeeded in vacation of the stay order on 13.9.2007. Thereafter the appellant filed a criminal original petition No.28663 of 2007 seeking orders for expediting the trial of the criminal case No.462 of 2004. The High Court allowed that prayer on 20th September 2007 and directed to complete the trial within four months. This order was also not challenged by the accused respondents.

9. This judgment also supports the other submission on behalf of the appellant that the High Court erred in interfering with criminal proceeding on the ground that bank could recover the loss caused by fraud through orders of Debt Recovery Tribunal or through the proceedings under the Negotiable Instruments Act or civil proceedings. Even if the accused voluntarily at a later stage settles the monetary claim, that cannot be made a ground to quash the criminal proceedings unless the well established principles for exercise of power under Section 482 Cr.P.C. are made out.

13. In our considered view, the High Court ought to have taken note of the fact that on two previous occasions the respondents accused failed to get any relief under Section 482 Cr.P.C. and they did not challenge an order passed by the High Court at the instance of the appellant bank for concluding the trial within a limited time.

14. For all the aforesaid reasons, we find and hold that the common judgment and order under appeal cannot be sustained in law and is fit to be set aside. We order accordingly.

15. Appeals are allowed with a direction to the learned Magistrate to conclude the trial expeditiously in accordance with law without being influenced by any observations made in this order.