IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL CRIMINAL MISC. APPLICATION No. 1156 of 2016 Satish Kumar Gupta and Another ......Applicants Vs. Central Bureau of Investigation and Others …..Respondents Mr. S.K. Mandal, learned counsel for the applicants. Mr. Piyush Garg, learned counsel for the CBI. Hon’ble Ashish Naithani, J (Oral) The present Criminal Miscellaneous Application has been filed under Section 482 of the Code of Criminal Procedure, seeking the quashing of the charge sheet dated 23-11-2010, cognizance order dated 24-11-2010, and entire criminal proceedings in CBI Criminal Case No. 16 of 2010, pending before the Special Judge, Anti- Corruption (CBI), Dehradun. The case pertains to offences punishable under Sections 420, 467, 468, 471, and 120-B of the Indian Penal Code, 1860 (IPC) and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. 2. Heard Mr. S.K. Mandal, learned counsel for the applicants and Mr. Piyush Garg, learned counsel for the Central Bureau of Investigation. Perused the records. 3. The case originates from a large-scale banking fraud wherein the applicants, in collusion with bank officials, fraudulently availed credit facilities from the Central Bank of India by submitting forged and fabricated documents. The investigation revealed that the 2 misappropriated funds were diverted through multiple fake accounts, leading to substantial financial losses to the public exchequer. The CBI conducted a thorough forensic audit, uncovering financial irregularities, unauthorised loan approvals, and deliberate fund diversions. 4. The applicant further submits that the CBI has no locus to object to the settlement between the accused and the complainant bank. It is argued that the continuation of the criminal trial would serve no purpose, as the bank itself is no longer interested in prosecuting the matter. The applicant relies on Nikhil Merchant v. CBI, wherein the Hon’ble Supreme Court held that criminal proceedings could be quashed if the dispute is purely civil and has been settled amicably. 5. The learned counsel for the CBI strongly opposes the bail application, arguing that the offences committed by the applicant are not merely civil but involve serious financial fraud, forgery, and corruption. It is submitted that the applicant, in connivance with bank officials, fraudulently availed of a loan by submitting forged and fabricated documents, causing a wrongful loss to the bank. 6. The CBI further submits that while the OTS scheme allowed the applicant to clear his dues, it does not absolve him of the criminal liability arising from the 3 fraudulent acts committed to obtain the loan in the first place. The mere settlement of financial liability cannot be grounds for quashing criminal proceedings, as such an approach would encourage financial fraud and render anti-corruption laws meaningless. 7. Additionally, it is pointed out that multiple bank accounts were used to divert the fraudulently obtained funds, and forensic audits have revealed discrepancies in financial transactions, indicating deliberate fund misappropriation. The investigation has also uncovered unauthorised approvals, manipulation of account records, and involvement of fictitious entities, strengthening the case against the applicant. 8. Upon perusal of the records and arguments advanced by both sides, this Court finds that the allegations against the applicants pertain to systemic financial fraud involving collusion with bank officials. The CBI’s charge-sheet establishes a prima facie case against the applicants, supported by documentary evidence, witness statements, and forensic audit findings. The mere settlement of financial dues cannot erase the fraudulent means adopted to obtain the loans. The CBI investigation has revealed that the applicant, in connivance with bank officials, manipulated loan documents, submitted forged records, and diverted funds for purposes other than those originally sanctioned. 4 9. The OTS settlement, while relevant to civil recovery, does not negate the underlying criminality. The Supreme Court has repeatedly held that criminal proceedings cannot be quashed merely because financial dues have been repaid, especially in cases involving cheating, forgery, and corruption. 10. The allegations in the present case pertain to large-scale financial fraud and forgery, which have severe ramifications on the economy and banking system. The fraudulent practices employed by the applicants, in connivance with bank officials, resulted in a wrongful loss to the public exchequer and eroded trust in financial institutions. While the applicants argue that they have settled their financial liabilities under the One-Time Settlement (OTS) scheme, it is settled law that repayment of dues does not absolve the accused from criminal liability. The courts have repeatedly held that economic offences should be treated with stringent scrutiny due to their impact on public trust and financial discipline. 11. The evidence presented, including forged documents, financial audit reports, and witness testimonies, establishes a strong prima facie case against the applicants, negating any justification for quashing the proceedings at this stage. 5 12. Thus, allowing for the quashing of proceedings would set a dangerous precedent, encouraging fraudulent actors to misuse banking channels without fear of prosecution. 13. Given the seriousness of the allegations, the stage of the proceedings, and the weight of evidence against the applicants, this Court finds no merit in the present application. 14. Accordingly, the Criminal Miscellaneous Application stands dismissed. (Ashish Naithani, J.) 04.03.2025