It is definitely most shocking to see that inspite of so many big scams being unearthed one after the other so quickly in last few decades involving thousands of crores of rupees and still those who commit it are very rarely punished and even if they are punished, they manage somehow or the other to come out of jail in just few years or even few months in some cases by hiring top lawyers! This has to end if we are serious to combat, contain and crush corruption which is the root cause of all ills that are plaguing our nation to a very large degree but yet we hardly see any effort that has been made of any kind since last nearly 80 years and first effort very seriously was made by former PM late Mr Rajiv Gandhi when his government in Centre enacted the Prevention of Corruption Act, 1988 and till now there have been very few minor amendments to it but now after so many decades, it is imperative to overhaul this Act completely and include much more stricter provisions than were incorporated even some time back! It is high time to insert mandatory death penalty or mandatory life term for corruption involving crores of rupees because this cancerous malaise has been ruining our nation beyond repair and this is the reason why roads crack, bridges break within no time of being constructed!

By all accounts, this has to end now which is possible only if lawmakers tighten the screws of our penal laws and inflict most exemplary punishment on those who indulge in corruption especially the big sharks and not allow them to make merry in India or outside India in UK like we see many business tycoons like Vijay Mallya, Lalit Modi and many others doing gala after siphoning off more than 9000 or 10,000 crores without being held accountable thus making a huge mockery of our nation and our penal laws! Centre must definitely be held accountable if it allows big sharks to escape easily from India so that no one in Centre hope that they can get away very easily with Supreme Court watching like a helpless, hopeless and hapless spectator!

No elected government in Centre has right to stay in power if it fails to take effective steps to crush corruption that has been corroding our nation to the hilt as it frustrates the very purpose for which they are elected in a democratic system of serving the people honestly and not looting them or allowing looters to loot them and then escape to countries like USA and UK!

It is in this context that we must welcome with open arms what the Supreme Court in a most learned, laudable, landmark, logical and latest judgment titled Anil Bhavarlal Jain & Anr vs The State of Maharashtra & Ors in Criminal Appeal No. 2024 (@ Special Leave Petition (Crl.) No. 10078 With 12776 of 2023 and cited in Neutral Citation No.: 2024 INSC 1039 and so also in 2024 LiveLaw (SC) 1039 that was pronounced as recently as on December 20, 2024 has minced just no words to state in no uncertain terms that the economic offences stand on a different footing than other offences and have wider ramifications.

We see in this leading case that the Apex Court very rightly refused to quash the corruption case that was based on the settlement that had been arrived at between the accused and the bank.While noting that the Bank has suffered a loss of approximately Rs 6.13 crores, the Apex Court ruled that the settlement terms recorded by the parties at the DRT proceedings cannot erase the offence committed by the person. Very rightly so!

At the very outset, this notable judgment authored by Hon’ble Mr Justice Prasanna B Varale for a Bench of the Apex Court comprising of Hon’ble Mr Justice Vikram Nath and himself sets the ball in motion by first and foremost putting forth in para 2 that:
In these appeals filed under Article 136 of Constitution of India, the appellant is seeking setting aside of the common order dated 26.07.2023 passed by the High Court of Bombay in Criminal Writ Petition No. 2546 of 2022 and Criminal writ Petition no. 1960 of 2022, wherein the High Court dismissed the petitions filed by the appellants herein, under Section 482 of Code of Criminal Procedure, 1973 (In short, Cr.P.C.) seeking quashing of the FIR bearing No. RC/026/2020/A-0010 dated 24/07/2020, for offences punishable under Sections 409, 420 and 120B of the Indian Penal Code, 1860 (In short, IPC) along with Section 13(2) r/w 13(1)(d) of the Prevention of Corruption Act, 1988 (In short, PC Act) and the consequent chargesheet.

As we see, the Bench then discloses in para 3 that:
The appellants in the Appeal arising from SLP(Crl.) No.10078 of 2023 are the Directors of M/s Sun Infrastructure Pvt. Ltd. (In short, the Company); and appellants in the Appeal arising from SLP (Crl.) No.12776 of 2023 are the employees of respondent no.3 Bank. The appellants in both the appeals are the named accused in the abovementioned FIR.

To put things in perspective, the Bench envisages in para 4 that:
In the year of 2013, appellant nos. 1 and 2, being Directors of the Company, had obtained sanction for a building permit and commencement certificate for plot bearing Survey Nos. 145/1, 145/3,141/1,149/2, 151, 152 and 155/2 (In short, subject property).On 15.02.2014, the respondent no. 3- State Bank of India had sanctioned a loan of Rs. 50 crores to the Company. On 30.10.2014, the Company opened a collateral security and mortgaged the commercial land. The appellant had made timely payments till 2017, while on 28/11/2017 the bank declared the loan account of the Company as Non-Performing Asset with an outstanding amount of Rs. 23.86 crores.

The bank also started a recovery process and filed an application before the Debt Recovery Tribunal (In short, DRT). On 18.12.2019, the Company and respondent no. 3 filed consent terms before the DRT amounting to Rs. 15 Crore. According to the consent terms, the Company paid Rs. 20 lacs on 16.06.2020. Remaining amount of Rs. 14.88 crore was subsequently paid by the Company with interest and the loan account was closed as per the one-time settlement. Accordingly, the application before the DRT came to be disposed of.

As it turned out, the Bench enunciates in para 5 that:
Respondent no. 3 lodged a complaint with respondent no. 2-Central Bureau of Investigation, against the appellants for diverging the funds from the loan account of respondent no. 2, SICOM Ltd. from whom they had allegedly availed a loan of Rs.25 Crores in 2013; and against the Company for changing the building plans of the project which resulted in the reduced value of the collateral security, without the consent of the Bank. On 24.07.2022, On the basis filed by respondent no.3, an FIR came to be registered against the appellant by Central Bureau of Investigation, Anti-Corruption Bureau, Mumbai. Charge sheet dated 31.12.2021 was filed by respondent no.2 in the above-mentioned FIR.

Do note, the Bench notes in para 6 that:
The appellant preferred a Writ Petition before the High Court bearing WP No. 2546 of 2022 under Section 482 of Cr.P.C seeking quashing of the aforementioned FIR and chargesheet.

Do also note, the Bench further notes in para 7 that:
Vide order dated 26.07.2023, High Court rejected the said Writ Petition observing that the appellant has a substantive alternative remedy under the provisions of the Code of Criminal Procedure before the High Court.

While citing the case law titled Gian Singh vs State of Punjab (2012) 10 SCC 303, the Bench points out in para 15 that:
In the light of above, the facts of the present case are distinguishable from the facts that came for consideration before this Court in the above case relied on by the appellants herein.

Quite significantly, we must note that the Bench notes in para 16 that:
Another reference can be made to the judgment of this Court in Parbatbhai Aahir vs State of Gujarat and Anr. ( 2017) SCC Online SC 1189 wherein it was observed that, economic offenses involving financial and economic well-being of the state have implications which lie beyond the domain of a mere dispute between the private disputants. The High Court would be justified in declining to quash where the offender is involved in an activity akin to a financial or economic fraud or misdemeanour.

The consequences of the act complained of upon the financial or economic system will weigh in the balance. 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.

It would be instructive to note that the Bench notes in para 17 that:
A profitable reference in this regard can be made to the judgment in State vs. R Vasanthi Stanley (2015 SSC Online SC 815) wherein this Court declined to quash the proceedings in a case involving alleged abuse of the financial system. It was observed as under:

15. …….. A grave criminal offence or serious economic offence or for that matter the offence that has the potentiality to create a dent in the financial health of the institutions is not to be quashed on the ground that there is delay in trial or the principle that when the matter has been settled it should be quashed to avoid the head on the system. That can never be an acceptable principle or parameter, for that would amount to destroying stem cells of law and order in many a realm and further strengthen the marrow of unscrupulous litigations. Such a situation should never be conceived of.

Most significantly, the Bench encapsulates in para 18 what constitutes the cornerstone of this progressive judgment holding that:
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 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. As such the High Court committed no error in declining to exercise its inherent powers in the present case, thereby refusing to quash the criminal proceedings.

As a corollary, the Bench then hastens to add in para 19 holding that:
For the reasons stated above, we are of the view that the High Court was justified in not exercising its jurisdiction under Section 482 of CrPC. The appeals are accordingly dismissed.

Finally, the Division Bench then concludes by holding in para 20 that:
Pending application(s), if any, shall be disposed of accordingly.

In conclusion, we thus see that the Apex Court very rightly and rationally holds that economic offences involving corruption and loss to public exchequer cannot be quashed based on settlement. If such settlements are allowed, it will definitely only serve to further aid, accentuate and abet corruption which cannot be ever permitted under any circumstances! Of course, there can be just no gainsaying that corruption has to be completely bulldozed no matter who is involved in it and there has to be absolute zero tolerance for it.

It must be underscored that the starting point for it has certainly to be our Parliament itself which is the biggest shrine of our democracy and which, no doubt, essentially constitutes our lawmakers because if lawmakers are themselves corrupt then how can one expect them to work zealously to eliminate corruption or enact strictest laws in this regard? This is my whole point.

Sanjeev Sirohi, Advocate,
s/o Col (Retd) BPS Sirohi, A 82, Defence Enclave,
Sardhana Road, Kankerkhera, Meerut - 250001, Uttar Pradesh