Saturday, 11 April 2009

Paying bank loan doesn’t absolve one of fraud: Apex court

New Delhi, April 11 (IANS) The Supreme Court has ruled that a person accused of having availed a bank loan through cheating, forgery or criminal conspiracy with bank officials would be liable to be prosecuted even after paying the loan.

A bench of Justice S.B. Sinha and Justice Mukundakam Sharma gave this verdict Wednesday, rejecting a West Bengal woman’s plea to exonerate her of the charges of taking the bank loan in collusion with its officials as she had paid back the loan.

“When a settlement is arrived at by and between the creditor and the debtor, various criminal offences (like forgery, cheating and criminal conspiracy) committed to take the loan do not come to an end,” said the bench, dismissing the woman’s plea.

“It is now a well settled principle of law that in a given case, a civil proceeding and a criminal proceeding can proceed simultaneously. The bank is entitled to recover the amount of loan given to the debtor,” the bench said.

“If in connection with obtaining the loan, criminal offences have been committed by the persons accused thereof including the officers of the bank, criminal proceedings would also indisputably be maintainable,” the bench added.

The apex court bench upheld the trial court ruling, which was further endorsed by the Calcutta High Court. All the courts below had consistently held that an accused cannot be absolved of his of her criminal liability by settling the civil dispute.

The case pertained to Calcutta woman Rumi Dhar, who had taken a loan from the Oriental Bank of Commerce in 1993.

As she failed to pay the bank loan in time, the bank initiated criminal proceedings against the woman, her husband and some other people, including some of its own officials saying they had defrauded and cheated the bank as per a criminal plot hatched amongst themselves.

The matter was referred to the Central Bureau of Investigation (CBI), which filed its probe report to the designated CBI court in Kolkata indicting all the accused for hatching a criminal conspiracy to cheat the bank and sought their trial.

Meanwhile, the bank also moved the debt recovery tribunal and it reached settlement with the woman that she would pay a sum of around Rs.2.5 million to settle her debt to the bank.

As per the settlement, the woman paid the requisite amount to the bank, which also returned her property documents, confiscated by the CBI, which she had pledged to the bank earlier.

After reaching settlement with the bank she approached the trial court in February 2006 pleading that she be exonerated from the criminal charges. But the trial court dismissed her plea. So did the high court in 2007 and the apex court now.

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