N.S. Gnaneshwaran Etc. Vs Inspector of Police & Anr. (Supreme Court of India)
The appeals arose from an order of the Madurai Bench of the Madras High Court dismissing petitions filed under Section 482 CrPC seeking quashing of criminal proceedings for offences under Section 120B read with Sections 420, 468 and 471 IPC and the Prevention of Corruption Act, 1988. The proceedings originated from an FIR registered on the basis of a complaint by a bank alleging wrongful loss of Rs. 25.89 lakh, resulting in a charge sheet against nine accused, including the appellants.
The allegations against the first appellant were that he orchestrated the fraudulent diversion of funds sanctioned to a borrower by facilitating encashment of multiple cheques through relatives, employees and fictitious identities, forging signatures, and diverting funds through accounts of family members and associates. The second appellant was alleged to have assisted by operating a bank account through which cheques were deposited and funds withdrawn and by filling in cheques and facilitating their encashment as part of the alleged conspiracy.
Parallel recovery proceedings initiated by the bank before the Debt Recovery Tribunal (DRT) were subsequently settled. The main borrowers availed the One Time Settlement (OTS) scheme, the outstanding dues were fully repaid, the recovery proceedings were dismissed as settled, the recovery certificates were recalled, and No Dues Certificates were issued.
