REPAYMENT OF LOAN NOT TO EXEMPT CRIMINAL PROCEEDINGS - SUPEREME COURT

The Supreme Court has set aside the judgment of Madras High Court and declared that mere repayment of loan according to a settlement would not exempt a person who has cheated the bank from criminal proceedings. The High court had quashed action by the CBI against A Ravishankar Prasad stating that they had settled their dispute to the tune of Rs 157 crore to Indian Bank, though they had been charged with forgery and fabrication of documents. The debt recovery tribunal
had dismissed the complaint as settled out of the court. The high court then quashed complaint because of the settlement. The CBI appealed to the Supreme Court. It stated that the high court should not have exercised its discretionary powers to quash proceedings when there is a prima facie case for prosecution. It was alleged in the complaint that the accused person had conspired
with the CMD of the bank, Chennai, for recommending, sanctioning and disbursing of huge credit facilities