In Brief
Two private companies obtained public share issues and allegedly defrauded Punjab National Bank of approximately Rs 15 crores. The CBI filed criminal charges under the IPC and Prevention of Corruption Act against twelve accused including company directors and bank officials. Subsequently, the bank and companies settled their dispute through the Debt Recovery Tribunal in 2006, reconciling accounts and paying all outstanding dues. The High Court quashed the criminal proceedings under Section 482 Cr.P.C as abuse of process. The Supreme Court upheld the quashing, holding that where civil settlement resolves all disputes and no independent criminality survives, continuation of criminal prosecution would be improper.
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