JUDGMENT : J.B. Pardiwala, J. Since the issues raised in all the captioned writ applications are interrelated, those were heard analogously and are being disposed of by this common judgment and order. 2. For the sake of convenience, the Special Criminal Application No.5238 of 2015 is treated as the lead matter. 3. By this writ application, the writ applicants - original accused have prayed for the following relief’s: "(22) (A) Your Lordships may be pleased to issue an appropriate writ, order or direction to quash and set aside Criminal Complaint bearing M. Case NO.7 of 2005 registered with Gandhinagar Zone Police Station as well as the consequential proceedings arising out of the said complaint in the interest of justice; (B) During pendency and final disposal of the present petition, Your Lordships may be pleased to stay further proceedings of Criminal Case No.1796 of 2011 pending before the learned Magistrate in the interest of justice; (C) Pass any such other and/or further orders that may be thought just and proper, in the facts and circumstances of the present case." 4. The case of the writ applicants, in their own words, as pleaded in the writ application, is as under: "(5) It is respectfully stated and submitted that the petitioners are the Directors of Gravity India Limited (hereinafter referred to as 'the accused No.1 Company'). The said accused No.1 Company is widely held Public Limited Company incorporated under the provisions of the Companies Act, 1956 on 13.3.1987, having registered office at Mumbai. The authorized capital of the accused No.1 Company is Rs.10 Crores and subscribed and paid up capital is 10 Equity shares of Rs.9,00,19,500/-. The shares are listed on the Stock Exchange, Mumbai and are tracked regularly. The accused No.1 Company is currently in the business of manufacturing synthetic fabrics and its factories are at Silvassa. The accused No.1 Company is managed by the Board of Directors appointed by the Shareholders in General meeting. Public at large holds 82% of shares. There are at present 4544 shareholders. (6) It is further respectfully stated and submitted that the petitioner No.1 is at present aged 65 years and is suffering from various ailments. He is not keeping good health. Similarly, the petitioner No.2 wife of the petitioner No.1 was also a Director of the accused No.1 Company and is suffering from various ailments. She is not keeping good health. (6) It is further respectfully stated and submitted that the petitioner No.1 is at present aged 65 years and is suffering from various ailments. He is not keeping good health. Similarly, the petitioner No.2 wife of the petitioner No.1 was also a Director of the accused No.1 Company and is suffering from various ailments. She is not keeping good health. The petitioner No.2 was a housewife and has never actively participated in the functioning or day to day affairs of the accused No.1 Company. It is respectfully stated and submitted that the Bank has also filed Lavad Suit being suit (7) It is respectfully stated and submitted that the Bank has also filed Lavad Suit being suit no 146 of 2003 in the year 2003 against the Company before the learned Arbitration Tribunal for recovery of the outstanding ambunt which is due to the Bank. In the said arbitration proceedings, an award was passed in favour of the Bank on 1-1-08 whereby the accused No.1 Company was directed to make payment of Rs. 14,64,08,139.68/paise. The said order has been challenged by the accused No.1 Company before the Hon'ble City Civil Court at Ahmedabad by filing Petition No.125 of 2008. (8) It is respectfully stated and submitted that after the M Case was registered, the Police conducted their investigation and filed C summary report under Section 173 of the Cr.P.C. wherein it was clearly stated that since the loan was availed at Mumbai, the Ahmedabad Police would have no jurisdiction to investigate the same. However, the said C Summary Report was rejected by the learned Magistrate and had passed an order to conduct investigation under Section 156 (3). The said order was challenged before the Revisional Court who was pleased to reject the revision application being Criminal Revision Application No.262 of 2006 vide order dated 22.9.2006. The said order was further challenged before this Hon'ble Court byI filing Special Criminal Application No.2149 of 2006 which also came to be rejected vide order dated 15.3.2007. This was further challenged before the Hon'ble Supreme Court by filing Special Leave Petition (Criminal) No.2915 of 2007. The said petition was rejected by the Hon'ble Supreme Court, thus confirming the jurisdiction of Ahmedabad Police in the said matter. This was further challenged before the Hon'ble Supreme Court by filing Special Leave Petition (Criminal) No.2915 of 2007. The said petition was rejected by the Hon'ble Supreme Court, thus confirming the jurisdiction of Ahmedabad Police in the said matter. (9) From the record and the Rojnama, It is very clear and evident that no warrants have ever been issued to the petitioners nor has any process also been issued to the petitioners. (10) It is respectfully stated and submitted that there is no progress in the trial and even the trial has also not started. (11) It is respectfully stated and submitted that the accused No.1 Company has on various occasions written letters to the Bank stating that it wants to repay the loan account and wanted to avail facility of One Time Settlement Scheme as offered by the Bank in the year 2006. However, the advantage of the' said One Time Settlement Scheme was not extended to the accused No.1 Company. Thereafter, on various occasions, different One Time Settlement Schemes were offered by the Reserve Bank of India with respect to the. Bank and the petitioners have on every occasion written to the Bank to avail the said One Time Settlement Scheme. In fact, writ petition being Writ Petition No. 301 of 2012 is filed before the Hon'ble Bombay High Court by the accused No.1 Company against rejection of the One Time Settlement Scheme by the Bank. Thereafter, recently in the year 2015, the Bank invited the accused No.1 Company to avail the new One time Settlement Scheme as floated by the Reserve Bank of India. Accordingly, mandatory deposit of 5% of the sanctioned loah amount, as is required to avail the One Time Settlement Scheme, has already been deposited by the Company. (12) It is respectfully stated and submitted that the petitioners have made various correspondences to the I.0. all throughout. The said representations made by the petitioners have been accepted and acknowledged by the concerned Police Department. One such representation was made on 18.11.2014 clarifying every aspect of the matter, more particularly, the fact that the said offence is a civil offence and that the accused No.1 Company had not forged any documents while availing the facility of loan. The said representations made by the petitioners have been accepted and acknowledged by the concerned Police Department. One such representation was made on 18.11.2014 clarifying every aspect of the matter, more particularly, the fact that the said offence is a civil offence and that the accused No.1 Company had not forged any documents while availing the facility of loan. It was also pointed out that the security which was given against the loan account was higher than the loan which was granted and sanctioned to the accused No.1 Company. In fact, of the various properties which were given as security to the bank, one property being factory land including plant and machineries of Gravity Silk Mills Ltd situated at Silvassa was valued on 30-5-99 by the valuer on the panel of the complainant bank to be worth Rs 10,06,52,000/-. Thus, it is very clear that the petitioners have been actively trying to resolve the dispute and settle the account with the Bank, they have also continuously made correspondences With the Police Department informing them about the progress With regard to the settlement going on between the Bank and the accused No.1 Company. (13) As already stated above, the accused No.1 Company has all throughout been pursuing to settle the matter and also paid various installments totaling to Rs.3 Crores even after the Bank operations were shut down and Administrator was appointed. This clearly goes on to show bonafide intent of the petitioners in fulfilling their obligations to repay the loan amount. The petitioners have reliably learnt that the complainant bank in a query of the Investigating Officer has specifically on 15-714 stated that no documents have been forged by the accused company. (14) It is further submitted that this Hon'ble Court in one such complaint filed by the same complainant alleging the same offences has been pleased to quash and set aside the said complaint in similar set of facts as that of the present petitioner." 5. Thus, by this writ application, the writ applicants pray for quashing of the proceedings of the Criminal Case No.1796 of 2011 pending in the Court of the Chief Metropolitan Magistrate, Ahmedabad arising from the M. Case No.7 of 2005 registered with the Gandhinagar Zone Police Station for the offences punishable under Sections 420, 406, 467, 468, 471 and 120B of the Indian Penal Code. 6. 6. The picture that emerges from the materials on record is that one Rashiklal Dalpatram Thakkar is the head of the family. The family floated, in all, five companies namely [1] Gravity (India) Limited [2] Gravity Textiles Private Limited [3] Jalaram Corporation [4] Jalaram Textiles [5] Dakshali Synthetics Private Limited. For the purpose of business, all the five companies approached the respondent No.2 - Bank namely the Madhavpura Mercantile Cooperative Bank to avail loan facility. 7. The Bank processed the loan applications, and ultimately, sanctioned the following amounts in favour of the five companies. The details are as under: Amount sanctioned Name of company M. Case number 3 Crore Gravity India Ltd '7/2005 1.4 Crore Gravity Textiles Pvt. Ltd. '6/2005 45 Lac Jalaram Corporation '2/2005 50 Lac Jalaram Textiles '3/2005 1.45 Crore Dakshali Synthetics Pvt. Ltd. '10/2005 8. The Madhavpura Mercantile Cooperative Bank went under liquidation in the year 2000. 9. It is the case of the Bank that the companies referred to above defaulted in the repayment of the loan amount with interest, and in such circumstances, filed five arbitration (Lavad) suits before the Board of Nominees. The details are as under: Lavad Suit NO. Against such company '146/2003 Gravity India Ltd '205/2003 Gravity Textiles Pvt. Ltd. '138/2003 Jalaram Corporation '137/2003 Jalaram Textiles '136/2003 Dakshali Synthetics Pvt. Ltd. 10. It is not in dispute that in the plaints of the Lavad suits, there is not a single allegation as regards any fraud or fraudulent representation or production of forged document, etc. The plaints of all the five Lavad suits are very clear. The case of the Bank, in all the five Lavad suits, was that the companies had availed of loan facility and they defaulted in making the repayment of the requisite amount with interest. 11. All the five Lavad suits came to be allowed. The awards were passed against the accused persons directing them to pay a particular amount with interest. 12. It appears from the materials on record that all the awards passed by the Board of Nominees in the above referred Lavad suits came to be challenged by the accused before the City Civil Court at Ahmedabad. The City Civil Court stayed all the awards from its operation, implementation and execution. 13. 12. It appears from the materials on record that all the awards passed by the Board of Nominees in the above referred Lavad suits came to be challenged by the accused before the City Civil Court at Ahmedabad. The City Civil Court stayed all the awards from its operation, implementation and execution. 13. The record further reveals that after the institution of the civil proceedings and five years thereafter of the Bank having gone into liquidation, the Bank, through its Administrator, filed criminal complaints in the Court of the Chief Metropolitan Magistrate at Ahmedabad for the offences punishable under Sections 420, 406, 467, 468, 471 and 120B of the Indian Penal Code and the Chief Metropolitan Magistrate directed the Officer In-charge of the Naranpura Police Station, Ahmedabad to carry out investigation under Section 156(3) of the Cr.P.C. This is how the M. cases came to be registered at the police station. 14. In the year 2006, the Bank floated 'One Time Settlement Scheme'. The accused persons, preferred appropriate applications to avail of the benefits of the One Time Settlement Scheme. The accused persons expressed their readiness and willingness to make the payment in accordance with the One Time Settlement Scheme. However, for some reason, the Bank declined to accept the offer made by the accused persons to make good the payment under the One Time Settlement Scheme. 15. In such circumstances referred to above, a writ application came to be filed being numbered as Writ Petition No.301 of 2012 in the High Court of Bombay on its original jurisdiction side with the following payers: "40. Under the circumstances, the Petitioners prays to this Hn.Court for invoking its jurisdiction under Article 226 of the Constitution of India and be pleased to exercise its powers under Article 226 of the Constitution of India and order, a. That Writ of Certiorari or appropriate Writ, order or direction be issued calling for the records and proceedings pertaining to the rejection orders in: (a) Exhibit "L2.5" dated 14/08/2010, (b) Exhibit "L.3.1" dated 22/10/210 and (c) Exhibit "I.3.6" dated 21/05/2011 of their application for availing the OTS scheme or acts carried out in its furtherance and/or in pursuance thereof and further after going through the same and examining the propriety, legality and validity thereof, set aside and/or quash the Same and permit the Petitioners to pay the clues as per the applicable OTS scheme. b. That 'Writ of Mandamus or any other appropriate Writ, Order or direction be issued to the Respondents directing them to accept payment of the balance settlement amount of Rs.4,52,22,l41.33/- as stated in Exhibit "K3" of the petition determined in accordance with the OTS schemes applicable in the case matter of the Petitioners and discharged the Petitioners in full and final settlement of their liability to the Respondents and issue No Dues Certificate to the Respondents. c. That Writ of Mandamus or any other appropriate Writ, Order or direction he issued to the Respondents directing them to permit the Petitioners to redeem the securities given by the Petitioners to the Respondents by sale of securities at market price. d. That Writ of Mandamus or any other appropriate Writ, Order or direction he issued to the Respondents, permanently restraining the Respondents, their subordinates, servants, agents and officers from doing or carrying out any further act, deed, matter or thing in furtherance or in pursuance or in implementation of their actions under or in pursuance of rejection of OTS application of the Petitioners. e. That pending the hearing and final disposal of this Petition, in the facts and circumstances of the case, the Petitioners he also granted Interim and ad-interim orders in terms of paragraphs (a) to (d) above of this paragraphs. f. Costs of this Petition be provided for and order be made thereon. g. Such further and other relief as the nature and circumstances of the case may require and as to this Hn. Court shall deem fit and proper." 16. The record further reveals that the writ application filed by the accused persons before the Bombay High Court, ultimately, came to be withdrawn as the Bank accepted the offer put forward by the accused persons under the One Time Settlement Scheme. In this regard, I may refer to the letter of the Bank dated 8th April 2015, which is at page: 92, Annexure : 'E' to this writ application: "Ref : Settlement of your group accounts under CSS-2018. Please refer to para 2 of our letter No.MMCB/HO/LIQ/47/1335/2014-15 dated 27/08/2015 advising that settlement of your group accounts under CSS-2013, without prejudice to bank's right to recover legitimate dues as per decree/award shall be strictly as per provisions of the Scheme, as modified from time to time, as the scheme is non-discretionary and nondiscriminatory in nature. Please refer to para 2 of our letter No.MMCB/HO/LIQ/47/1335/2014-15 dated 27/08/2015 advising that settlement of your group accounts under CSS-2013, without prejudice to bank's right to recover legitimate dues as per decree/award shall be strictly as per provisions of the Scheme, as modified from time to time, as the scheme is non-discretionary and nondiscriminatory in nature. 2 As your are aware, the last date for submission of applications under the scheme has already expired. Therefore, if you are interested in settling your accounts under CSS-2003, as modified from time to time, you may kindly submit your request in the enclosed format, together with upfront payment being 5% of the limit/amount sanctioned in each account, before 15.04.2015 to enable us to consider to same. Please order that this time limit is being granted as a special case and if your applications are not received by the aforesaid date, it would be presumed that you are not interested in settling your accounts under CSS - 2003. 3 However, please also note that this letter is without prejudice to the Bank's right to recover all its legitimate dues together with interest, cost and charges as per decree/award and/or documents executed by the borrower, from time to tie, in favour of the bank." 17. I may also refer to the letter addressed by the company to the Bank dated 13th April 2015, Annexure : 'F' to this writ application at page: 93: "Sub: Settlement of your group accounts under CSS2018. Ref : Your letter No.MMCB/HO/LIQ/48/31/201516 dated 08/04/2015 With reference to your above mentioned letter dated 08/04/2015, we state as under in due compliance of your requisition. 1 Your said letter require us to pay 5% of sanction amount limit in respect of our under mentioned group companies for each of which you have enclosed separate letters dated 23/09/2013 giving particulars of limit sanctioned, etc, as under: Name of the company Account No. Amount sanctioned (Rs. 1 Your said letter require us to pay 5% of sanction amount limit in respect of our under mentioned group companies for each of which you have enclosed separate letters dated 23/09/2013 giving particulars of limit sanctioned, etc, as under: Name of the company Account No. Amount sanctioned (Rs. in Crore) (a) M/s. Gravity (India) Ltd IHP 2029 '3.00 (b) M/s. Gravity Textiles P. Ltd IHP 2882 '1.45' (c) M/s. Jalaram Corporation IHP 4178 ''0.45 (d) M/s. Jalaram Textiles HYP4180 '0.50 (e) M/s. Dakshali Synthetics P. Ltd. IHP 3106 '1.45 Total sanctioned amount '6.85 5% of the sanctioned amount being Rs.34,25,000/- 2 We enclose herewith the under mentioned DD towards the payment of said amount of 5% DD No. Date Amount Bank 404225 13/04/2015 34,25,000 Bank of Baroda, Marine Drive Branch Mumbai payable at Mumbai Payee : The Liquidator, Madhavpura Mercantile Coop Bank Ltd. 3 We also enclose herewith, as required by you, five (5) application forms separately for each of the above companies for availing the settlement of account under CSS 2013 and duly signed for the respective companies. The said application forms are duly accompanies by the copy of the letter of offer dated 23/09/2013 for for each of the companies sent by you. 4 You may act accordingly." 18. After the acceptance of the offer under the One Time Settlement, a dispute cropped up between the Bank and the companies as regards the exact amount due and payable under the One Time Settlement Scheme. According to the accused persons, they are liable to pay Rs.16.19 Crore in accordance with the One Time Settlement Scheme. Whereas, according to the Bank, the company is liable to pay Rs.30.19 Crore. Thus, a dispute arose with regard to the difference of Rs.14 Crore. In such circumstances, the company preferred an application addressed to the Central Registrar of the Cooperative Societies dated 2nd February 2016 for the appointment of Arbitrator. The Central Registrar rejected the application for appointment of the Arbitrator on the ground that the High Court is ceased of the matter. In such circumstances, the writ applicants came before this Court by filing the Criminal Miscellaneous Application No.9450 of 2016 seeking necessary clarification. 19. In the Criminal Miscellaneous Application referred to above filed by the writ applicants, this Court passed the following order dated 6th May 2016: "1. In such circumstances, the writ applicants came before this Court by filing the Criminal Miscellaneous Application No.9450 of 2016 seeking necessary clarification. 19. In the Criminal Miscellaneous Application referred to above filed by the writ applicants, this Court passed the following order dated 6th May 2016: "1. In this application, the applicant has prayed for the following relief:- "9(A) That the order dated 30.10.2016 as well as order dated 4.2.2016 passed by this Hon'ble Court in Special Criminal Application no.5615 of 2015 may be clarified." 2. In the main matter i.e. Special Criminal Application No.5615 of 2015 and allied matters, this Court passed the following order on 30.10.2015:- "1. On 29th September, 2015, the following order was passed:- Since the issues involved in all the four captioned applications are more or less the same, those were heard analogously. By these writ-applications the applicants - original accused have prayed to quash the proceedings of the respective criminal cases pending before the learned Metropolitan Magistrate, Court No.7, Ahmedabad. To put it briefly, the case of the prosecution is that the applicants herein had availed of loan facility time to time from the Madhavpura Mercantile Co-operative Bank (now in liquidation). The principal amount, which was borrowed is to the tune of Rs. 6.85 crore. It appears that over a period of time with interest, the amount has accumulated to a considerable extent. It also appears that the complaint is of the year 2005. So far as other co-accused are concerned, the charge-sheets were filed, but I am told that the applicants herein were not arrested as they were absconding. The CID (Crime) is investigating into the complaints. According to Mr. Lakhani, the learned Senior Advocate appearing for the applicants, as such no offence, not to speak of any offence of forgery could be said to have been committed. According to him, this is a case wherein the borrowers have defaulted in making repayment of the loan amount. He further submitted that about Rs. 3 crore was deposited over a period of time. He further pointed out that the bank has introduced a One Time Settlement Scheme and to avail of the One Time Settlement Scheme, the applicants have deposited an amount of Rs. 34,25,000/- i.e. 5% of the sanctioned loan amount, as a condition precedent. This 5% of the sanctioned loan amount deposited is in accordance with the One Time Settlement Scheme. Mr. 34,25,000/- i.e. 5% of the sanctioned loan amount, as a condition precedent. This 5% of the sanctioned loan amount deposited is in accordance with the One Time Settlement Scheme. Mr. Raju, the learned counsel appearing for the Bank and Mr. Pandya, the learned APP appearing for the State pointed out that even after availing of or rather applying for One Time Settlement, there is no cooperation at the end of the applicants so far as verification of the mortgaged properties is concerned. I could have rejected all these four applications at the threshold simply on the ground that the applicants are absconding, although such a fact is seriously disputed by the learned senior advocate appearing for the applicants. However, I am of the view that the endeavour of the bank should be to see that the requisite amount in terms of the One Time Settlement Scheme is recovered from the applicants in the interest of the bank. By getting the applicants arrested and putting them behind bars probably the Bank may not stand to gain anything. At this stage, I deem it appropriate to observe without going into the merit or without prejudice to the rights and contentions of the bank that prima-facie no case of forgery is made out. This is a case where a party borrowed a particular amount from the bank and failed to repay the same with interest. Mr. Lakhani, the learned senior counsel submitted that his clients are ready and willing to extend full cooperation so far as the One Time Settlement Scheme is concerned. He submitted that his clients are also ready and willing to file an undertaking on oath to that effect in the Court. I am told that Lavad Suits were filed before the Board of Nominees, wherein decrees have been passed by the Board of Nominees against which the applicants have filed appeals before the Cooperative Tribunal and such appeals are pending as on today. After taking instruction from Mr. Chetan Shah, the Manager of the Bank, who is personally present in the Court, I am told by the learned counsel for the Bank that for the purpose of One Time Settlement, the Official Liquidator of the Bank has constituted a Settlement Advisory Committee consisting of three members. This Committee will look into the matters arising from the One Time Settlement Scheme. This Committee will look into the matters arising from the One Time Settlement Scheme. The applicants are directed to appear before the Members of the Committee with all the necessary documents for the purpose of finalising the One Time Settlement offered by the bank. The applicants are directed to extend full cooperation to the Members of the Committee for arriving at a just and fair settlement by way of One Time Settlement. The Committee shall thereafter take an appropriate decision in that regard and inform the applicants about the same. The decision shall also prescribe the requisite amount to be paid as well as the mode of payment and the time period. This exercise shall be completed within a period of four weeks from the date of receipt of the writ of the order. The final decision, which the Committee shall take, shall be placed before this Court on the next date. The matter shall be heard further after the receipt of the report of the Committee so far as One Time Settlement is concerned. At this stage, Mr. Lakhani also submitted that his clients have no objection if the properties which have been mortgaged to the Bank are put to auction. The aforesaid exercise shall be undertaken without prejudice to the rights and contentions of the Bank as well as the State, who is the prosecuting agency. I repeat that this exercise is only with a view to see that the amount comes back to the Bank. Let these matters appear on 29.10.2015 on top of the Board, along with Special Criminal Application Nos. 4574 of 2015 and 4511 of 2015, which are identical. On that day, the parties will inform to the Court about the progress in the matter. For any reason, if the settlement fails, the matter will be heard on merits. Till the next date of hearing no coercive steps shall be taken against the applicants. Needless to say that the observations made in this order are absolutely prima-facie. 2. It appears that the parties have been able to work out some interim arrangement. Before I proceed to pass an appropriate order, I may record few events. a. The petitioner had borrowed money from the respondent bank for 5 entities/companies. All the calculations, terms and agreement refered to are the aggregate for all those 5 entities/companies. 2. It appears that the parties have been able to work out some interim arrangement. Before I proceed to pass an appropriate order, I may record few events. a. The petitioner had borrowed money from the respondent bank for 5 entities/companies. All the calculations, terms and agreement refered to are the aggregate for all those 5 entities/companies. b. The respondent bank had written a letter to the petitioners dated 8-04-2015 and invited them to avail the benefit of One Time Settlement scheme being CSS 2013. Accordingly, the petitioners accepted the said scheme and paid Rs.34.25 lacs on 13-04-2015 towards the mandatory deposit of 5% of total principal amount, to be eligible to avail the benefit of the scheme. c. According to the petitioners, based upon the calculations made by a Chartered Accountant and as per the OTS CSS 2013, the petitioners are required to pay Rs.16.19 crore to respondent bank. This amount includes Rs. 3 crore already paid by the petitioners to the respondent bank from 2009 to 2011. Hence, after deducting Rs. 3 crore and Rs. 34.25 lac, the net amount payable by the petitioners is Rs.12.84 crore. d. As per the calculations made by the respondent bank based upon the OTS CSS 2013, the petitioners are required to pay net amount of Rs.27.19 crore after deducting the above mentioned Rs.3 crore and Rs.34.25 lac. e. Thereafter on 28-102015 the petitioners had paid a further amount of Rs. 1 crore which shall be adjusted by both parties to the calculations made by them in above para (c) and (d) respectively. f. The respondent bank is accepting the payment - on account basis as per calculations made by the petitioners as stated in para (c) above. The same shall not be construed as any admission or binding as far as the settlement amount recoverable under CSS-2013 Scheme, and the right of the Bank to recover the balance settlement amount which shall be subject to the rights and contentions and without prejudice of the parties in the pending litigation before the High Court of Bombay, being Writ Petition No. 301 of 2012. 3. The interim arrangment arrived at between the parties is in the following terms. 3. The interim arrangment arrived at between the parties is in the following terms. a. The Respondent Bank submits that the payment offered by the petitioners to the tune of Rs.16.19 crores is acceptable to the bank as on account payment and the same shall not be construed as any admission or binding as for as the settlement amount recoverable under CSS-2013 Scheme and the right of the Bank to recover the settlement amount of Rs.27.19 crore, (after deducting Rs.3 crore earlier paid) as per terms and conditions of approval as advised vide letters dated 14.10.2015 under the CSS-2013 Scheme, is concerned. The provisions of CSS-2013, which are non-discriminatory and no-discretionary, have been duly accepted by the petitioners for settlement of their accounts. b. The request of the petitioners to sell securities to pay banks dues shall be considered as per procedure of the Bank of facilitate recovery. c. This acceptance of on account payment is without prejudice to the rights and contentions of either party to agitate with respect to the balance settlement amount of approx. Rs.14 crore, as payable under the CSS 2013 Scheme as calculated by the bank in the ongoing dispute before the Hon’ble High Court of Bombay or before any other Forum. 4. The Bank is directed to take appropriate decision as regards granting permission to sell the securities, as early as possible, preferably within a period of 15 days from today. 5. The interim order earlier granted as regards no coercive steps, shall continue till further order. 6. The applicants are directed to abide by the terms of the settlement scheme i.e. CSS-2013. If there is any breach of the same, it will be open for the Bank to inform the Court about it at the earliest. 7. Mr. Thakkar, the learned senior advocate appearing for the applicant submitted that his clients are obliged to deposit 25% of Rs.13.29 crore being one of the conditions of the Settlement Scheme. Mr. Thakkar clarified that about a crore of Rupees has been deposited and the balance amount of Rs.2.21 crore shall be deposited with the Bank within a period of four weeks from today. 8. All other legal contentions without prejudice to the rights of the parties, are kept open including the one with regard to the Scheme, as submitted by Mr. Raju. 9. Let all these matters appear after Winter Vacation." 3. 8. All other legal contentions without prejudice to the rights of the parties, are kept open including the one with regard to the Scheme, as submitted by Mr. Raju. 9. Let all these matters appear after Winter Vacation." 3. On 04.02.2016, the following order was passed:- "Mr. Popat, the learned advocate appearing for the applicants, makes a statement that his clients have so far deposited Rs.8.81 crore with the bank and the balance amount of Rs.7.38 crore would be paid on or before 31st October 2016. An undertaking to this effect be filed on oath within a period of one week from today. As clarified by me, so far as the disputed amount is concerned, the same will be adjudicated and an appropriate decision in that regard will be taken. Let the matters appear on 5th April 2016." 4. So far as commitments made by the applicant as recorded in the order dated 04.02.2016 is concerned, the same continues and it is understood that the applicant will abide to pay the balance amount of Rs.7.38 crores on or before 31.10.2016. An undertaking to this effect has also been filed before this Court. 5. What I am taking about is the undisputed amount. The clarification which is sought for in this application is with respect to the disputed amount of about Rs.14 Crore. In this regard, the applicant requested the Central Registrar of the Cooperative Societies to appoint an Arbitrator to adjudicate the controversy as regards the disputed amount. It appears that the request has been declined by the Deputy Director (Cooperation) vide letter dated 30.03.2016 which reads as under:- "No.L1104/15/2016L&M Government of India Ministry of Agriculture & Farmers Welfare Department of Agriculture, Cooperation & Farmers Welfare (Office of the Central Registrar of Cooperative Societies) Room No.585 Krishi Bhawan, New Delhi Dated: March, 2016 To, Shri Raskilal D.Thakkar, 1315B, Mittal Industrial Estate Andheri Kurla Road, Andheri (East), Mumbai 400 056. Sub: Settlement of disputed/differential amount as payable under OTS 2013 regarding. Sir, I am directed to refer to your letter dated 02.02.2016 on the above mentioned subject and to say that the Honble Gujarat High Court vide its order dated 04.02.2016 in Special Criminal Application (Quashing) No.5615 of 2015 has mentioned that sof far as the disputed amount is concerned, the same will be adjudicated and an appropriate decision in that regard will be taken. 2. 2. As the matter is subjudice before the Hon'ble High Court and also there is no direction to Central Registrar of Cooperative Societies by the High Court to appoint an arbitrator to adjudicate the disputed amount, therefore, your request for appointment of an arbitrator to adjudicate the disputed amount payable under OTS 2013 cannot be considered at this stage. 3. The issue with the approval of Central Registrar of Cooperative Societies." 6. I am of the view that appointing an Arbitrator for the purpose of adjudication of the disputed amount is concerned should not be a problem. On the contrary it will help this court to resolve the issue once in for all. The request has been rejected only on the ground that the matter is subjudice before this Court. Let me clarify that the pendency of the main matters should not preclude or come in the way of the Central Registrar of the Cooperative Societies to appoint an Arbitrator for the purpose of adjudication of the disputed amount. Let such Arbitrator be appointed and the issue may be resolved through the Arbitrator. The further developments in the matter may be reported to this Court after a period of three months. Direct service is permitted. Let the exercise be undertaken at the earliest and completed within a period of four months from today." 20. Pursuant to the order passed by this Court referred to above, the Arbitrator was appointed by the Central Registrar of the Cooperative Societies vide order dated 9th June 2016. The Arbitrator adjudicated the dispute, and ultimately, allowed the claim put forward by the accused persons. I may quote the relevant findings recorded by the Arbitrator: "18 I have gone through the pleadings of both sides, documents filed In support. I have also gone through the Affidavit of concerned person of both the sides. The main important documents to be seen carefully and relied upon are the two. Audit Reports on which both the parties rely (1) Is that of P. Sanghani & Co. at Exh. 'E', Page 75-167 along with statement of claim, another is (2) that of statutory auditor a CA. M/s. Sanghvi & Mehta Co. by Respondent Liquidator. M/s. P. Sanghani & Co. whos report is at Exh. 'G', Page 61-74, after scrutinizing entire record, circular of RBI, statement of accounts etc. calculated in favour of Claimants. at Exh. 'E', Page 75-167 along with statement of claim, another is (2) that of statutory auditor a CA. M/s. Sanghvi & Mehta Co. by Respondent Liquidator. M/s. P. Sanghani & Co. whos report is at Exh. 'G', Page 61-74, after scrutinizing entire record, circular of RBI, statement of accounts etc. calculated in favour of Claimants. They have taken into account 180 days formula to find out exact NPA dates for all five Claimants companies. Their calculation is based on circular DBOD No.BP.BC/20/21.04.048/2001-2002 dated 1st September, 2001 & 30th August, 2001. Its copy is produced by the Claimants on 30/08/2016 however along with the statement of claim a copy of circular was filed wherein there is a mention about present circular at Exh. 'G' Page 60-74. Circular filed on 31/08/2016 Is at Exh. 'G/5' page 1 to 21 and in its para 2.1.2 procedure for calculating the NPA ls disclosed. It is a formula of 180 days. On the contrary Liquidator Respondent rely upon Audit Report prepared by its statutory auditor C.A. M/s. Sanghvi & Mehta Co. no doubt this report is based on the dates & Information given by the liquidator both the Audit Report is of year 2015. Another important document is copy of Compromise Settlement Scheme2013 at Exh. 'G-1' Page -168-171. The prayer clause of Claimant is based on RBI Master Circular DBOD No.BP.BC/20/21.04.048/2001-2002 dated 1St September, 2001 & 30th August, 2001. On 30tmust, 2016 this Arbitrator had some queries in this regard. As the circular on which the statement of Claim was based was not produced by both the sides. To my query the Claimants filed copy of the said Circular on 31st August, 2016 and copy of which is given to Advocate of Respondent Liquidator. Advocate of Liquidator requested some time for her submission which is granted till today. There are some correspondence between Claimants and Reserve Bank of India wherein directions are issued to Respondent Bank to consider the OTS for Claimants. Documents are hereinafter referred at the relevant stages. It is pertinent to note here that, the matter is transferred before me from the State of Gujarat as per order of Hon'ble High Court of Gujarat through Central Registrar CS and Commissioner for Co-operation and Registrar CS, Maharashtra. Documents are hereinafter referred at the relevant stages. It is pertinent to note here that, the matter is transferred before me from the State of Gujarat as per order of Hon'ble High Court of Gujarat through Central Registrar CS and Commissioner for Co-operation and Registrar CS, Maharashtra. Being a time bound matter both the parties were directed to help me expedite the matter in view of directions of Hon'ble High Court and fortunately both the co-operated me in doing so and therefore I am in a position to deliver the award today before expiry period given by Hon'ble High Court, Gujarat ie. 5th September, 2016. 19. Advocates of both sides have clearly admitted that difference of Rs.14 Crores is due to different dates of NPA relied upon by the parties. Thus in view of submission of advocates much emphasize was placed, only on the issue of dates of NPA. The important point to be discussed and to be decided is the date of NPA in calculating the amounts payable by Claimants to the Respondent Bank. The dispute is mainly with regard to date of NPA calculated by both the sides. The NPA dates calculated by the Claimant in the given chart are in respect of 1) Gravity (India) Ltd. 28/09/1998 and balance is Rs.5,16,49,607/-, 2) Gravity Textile Pvt. Ltd. 28/06/1997 and the balance is Rs.2,34,70,271/-, 3) Dakshali Synthetics Pvt. Ltd. 29/06/1997 and the balance is Rs.2,16,56,641/-, 4) Jalaram Corporation 22/09/1997 and the balance is Rs.1,14,39,412/-, 5) Jalaram Textiles 21/09/1997 and the balance is Rs.1,17,67,768/-. All the dates are based on RBI Guidelines. On the contrary for all the accounts, the date calculated by the Bank for NPA is 31/03/2001. It Is not disputed that difference in amount is due to difference in NPA dates calculated by parties. Now the only question remains to be answered is which is the proper date for calculating the NPA in the present situation? My answer to this is off course the dates given by the Claimants. It is admitted position that dates of availments of financial help for all five accounts are different and the period of 180 days required to calculate the NPA is different in all the cases. Therefore, it appears to be just on the part of Claimants to treat the date of NPA as per the guidelines of RBI. It is admitted position that dates of availments of financial help for all five accounts are different and the period of 180 days required to calculate the NPA is different in all the cases. Therefore, it appears to be just on the part of Claimants to treat the date of NPA as per the guidelines of RBI. It is the submission of Respondent Bank that since 4th June, 2012 the day on which the banking license is cancelled and liquidator is appointed, neither any circular of RBI nor guidelines are binding & applicable to it. I disagree because though the bank has-gone in liquidation the calculation is to be based on guideline of some of the institute and it is none other than the RBI. It is further submitted that the bank has gone in liquidation and it is the responsibility of liquidator to make good loss of all other member sufferer. The scheme is floated by the liquidator himself to facilitate the borrowers. In the present case prior to 4th June, 2012 there are some efforts on the part of Claimants to settle the matter. It Is also true that due to recession in market their business sustained losses but by showing their willingness to repay, It appears to me that they never evaded or attempted to evade the payment. It is also to be noted here that the Claimants approached Hon'ble High Court for clarification of earlier 2 orders of the same Hon'ble High Court. And after considering earlier 2 orders Hon'ble High Court of Gujarat directed parties to settle the amount through arbitration. Accordingly both the sides came with their pleadings and calculations before me. From the calculations it appears to me that difference date of NPA is the root cause for present Arbitral Proceeding. The Claimants calculation is based on RBI Guidelines but Respondents Calculation is based on CSS Scheme, 2013. The Scheme is at Exh. 'G-l' Page 168-171. It nowhere discloses as to how the NPA date is to be calculated. It has already fixed date. It nowhere discloses as to how the account becomes NPA and what procedure is to be adopted for the same. It is argued by Adv. For Respondent Bank that the Scheme C55 2013 is non-discretionary and non-discriminatory. Can liquidator bound borrower by this principle ? Is it not a violative of the legitimate claim of borrower or sufferer ? It nowhere discloses as to how the account becomes NPA and what procedure is to be adopted for the same. It is argued by Adv. For Respondent Bank that the Scheme C55 2013 is non-discretionary and non-discriminatory. Can liquidator bound borrower by this principle ? Is it not a violative of the legitimate claim of borrower or sufferer ? Is it not a scheme which gives a dictatorial setup to force borrower sufferer to part with their payment ?. The claim of the Respondent Bank is based on its statutory Audit Report of M/s.Sanghvi & Mehta Co. and Minutes of Advisory Committee. Conclusion of Advisory Committee and that of statutory audit report is based on the dates given by the bank to them. Therefore, it cannot be said that the proper adjudication was done earlier. It is further argument of Respondent Bank that Claimants have admitted terms & conditions under the CSS Scheme and they do not have any right to go back. The very purpose of Hon'ble High Court forwarding matter to adjudicate upon the amount is to see as to whether there is any admission on the part of Claimants and whether the Scheme floated is valid one as against Claimant? It appears to me that even before the Advisory Committee, Claimants offered 15 Crores to settle all the accounts which is negatived by Respondent Bank. I hardly feel that as to why the contentions. Of Claimants are not to be accepted. Even before advisory committee Claimants pressed for classification of NPA dates but Committee did not respond to the prayer of Claimants which is unjust and improper. By the order of Hon'ble High Court, Gujarat, all issue need to be seen afresh hence Liquidator cannot take, disadvantage of earlier admissions of Claimants if any. It is always a choice of litigants to see the benefit. If the scheme is not beneficial then litigants have every right to forgo the same. 20 One important point of referring the matter appears to me is reference of dispute to the Joint. Auditor Team of M/s.Rashmikant Shah & Co. and M/s.Shah Jagethia & Co. neither the findings of this companies are supplied to Claimants nor filed before me. If the scheme is not beneficial then litigants have every right to forgo the same. 20 One important point of referring the matter appears to me is reference of dispute to the Joint. Auditor Team of M/s.Rashmikant Shah & Co. and M/s.Shah Jagethia & Co. neither the findings of this companies are supplied to Claimants nor filed before me. Even at the time of argument of Respondent Bank fairly admitted that some of the record are missing, the Respondent Bank did not furnished complete details of Fixed Deposit and Share Values in the name of Claimants. It is to be seen that vide letter dated 2"d February, 2009 the Respondent Bank informed one of the Claimant that "your dispute about NPA classification have been given to our approved joint auditors team M/s.Rashmikant Shah & Co. and M/s.Shah, Jagethla & Co. by them on 17th January, 2009. We will inform you after receiving the report from the said Joint Auditors." Even till date no report is either given to Claimants or filed before me. Why such Important report is concealed which is a material evidence and Is not properly explained. Mere submission that record Is not available cannot justify the situation. Respondent Bank is bent upon only on terms of CSS Scheme 2013 and. Statutory Report received in 2015. At the same time liquidator ought to have considered efforts of claimants to find out exact date of NPA for the calculations of dues payable. Had the report of Jt. Auditors of the Respondent Bank itself is presented in 2009, the matter would have been settled then in 2009 itself. Thus only because of the negligence of bank Claimants are dragged into unwanted litigation till date. This is self sufficient to-note that, the Administration of the bank was not proper and negligence on the part of Managing Committee is the main cause for closure of the Respondent Bank. I feel pity for others and not the Claimants and management because to some extent along with the management Claimants are responsible for closure of Banking business of the Respondent Bank in the State of Gujarat. I feel pity for others and not the Claimants and management because to some extent along with the management Claimants are responsible for closure of Banking business of the Respondent Bank in the State of Gujarat. I do not refrain myself to mention here that In my 41 years of legal professional service I have seen number of cooperative banks gone into liquidation due to negligence & mismanagement of Managing Committee of the Bank in the State of Maharashtra and now it is a sorry state of affairs that even in State of Gujarat same problem is being faced by members. 21 It Is the submission of Respondent Liquidator Bank that the CSS Scheme 2013 is non-discretionary and non-discriminatory. Respondent Bank submits that as the claimants applied for availing the scheme they are bound by all terms & conditions of the CSS Schema. It Is true that they availed facility of the scheme but with Intent to have benefit of the scheme if subsequently they realized that the burden of payment is larger than decided earlier then claimants have got every right to say no to such discriminatory things. Mere admission cannot be treated as forgoing right to defend themselves legally. It Is also argued that as the Interest ls served upon accounts of Claimants their accounts cannot be treated as NPA. But mere service of Interest on account is not sufficient there must be a conscious service of interest on the Claimants. Moreover, claimants have denied this fact. Thus It Is clear that after applying the correct NPA dates the total outstanding on the dates In all the accounts is the sum of Rs.16.19 Crores. After deducting an amount of R53 Crores paid from 2009-2011 the balance payable amount ls Rs.13.19 Crores. The Claimants have already paid a sum of Rs.10.29 Crores after the order dated 30/10/2015 and therefore balance of Rs.2.90 Crores is payable by the Claimants to the Respondent Bank. Therefore, there is no question of payment of Rs.14 Crores by Claimants to the Respondent Liquidator as based on wrong notions of Auditor of Respondent Bank. In this light Claimants succeed In the matter. With regard to the point of jurisdiction, it Is argued on behalf of Respondent Bank, the present reference is out of scope of Arbitration. Therefore, there is no question of payment of Rs.14 Crores by Claimants to the Respondent Liquidator as based on wrong notions of Auditor of Respondent Bank. In this light Claimants succeed In the matter. With regard to the point of jurisdiction, it Is argued on behalf of Respondent Bank, the present reference is out of scope of Arbitration. It ls argued that It Is beyond the scope of the orders made by the Hon'ble Gujarat High Court and consequently beyond the scope of Arbitration.. It Is to be noted here that, the Hon'ble High Court after considering the earlier judgments and the prayers of both the sides decided for adjudication by way of Arbitral Proceeding. I do not understand why the Respondent Bank did not object before the Hon'ble High Court for the same. By these pleadings the Respondent Bank is questioning the jurisdiction of Hon'ble High Court too. I fully disagree with this as the Hon'ble High Court is above ail the subordinate judicial authorities. U/s 84 of Multistate Co-operative Society Act the parties have right to approach the Arbitrator to resolve their grievances and in the present case the Hon'ble High Court directed to do so, therefore this Arbitrator has got jurisdiction to entertain and decide the matter. Regarding cost I do not feel it proper to saddle with further cost of this Arbitrai Proceeding on the Respondent as It gone in liquidation. Hence, claimants to bear their own cost and Cost of this Arbitral Proceedings of which separate order is being issued for the same. For the reasons mentioned above I Suresh Bhagwantrao Pawar, Arbitrator appointed under Section 84 of Multistate Co-operative Societies Act, 2002 proceed to pass following award. AWARD Claimant's claim is allowed. It is hereby declared that, NPA Dates 28/09/1998 for Gravity India Ltd., 28/06/1997 for Gravity Textile Pvt. Ltd., 29/06/1997 for Dakshaii Synthetics Pvt. Ltd., 22/09/1997 for Jalaram Corporation and 21/09/1997 for Jalaram Textiles are valid and proper NPA dates for the purpose of OTS Scheme in view of Circuiar DBOD N0.BP.BC/20/21.04.048/2001-2002 dated 1St September, 2001 & 30th August, 2001. It is hereby declared that, NPA Dates 28/09/1998 for Gravity India Ltd., 28/06/1997 for Gravity Textile Pvt. Ltd., 29/06/1997 for Dakshaii Synthetics Pvt. Ltd., 22/09/1997 for Jalaram Corporation and 21/09/1997 for Jalaram Textiles are valid and proper NPA dates for the purpose of OTS Scheme in view of Circuiar DBOD N0.BP.BC/20/21.04.048/2001-2002 dated 1St September, 2001 & 30th August, 2001. It is further declared that claimants are liable to pay to Respondent a sum mentioned in Para 8 of Statement of Claim and reproduce as under: "In view of the prudential guidelines issued by RBI directives the accounts of the Claimants have to be classified as Non Performing Asset on the dates mentioned hereinabove Le. When the Claimants No.3 to 7 could not maintain the outstanding balance In the respective accounts within the sanctioned limits or drawing powers and the accounts remained, out of order for a period more than 180 days. As per the C55 2013 Scheme, the balance on the date of NPA (Le. Principal Outstanding + Interest + Cost & Charges) and adding debits other than accrued interest along with interest payable @ 6 % p.a. From 1st April, 2010 till the date of crystallization of settlement amount. After applying the correct NPA dates the total outstanding on the dates in all the accounts is the sum of Rs.16.19 Crores. After deducting an amount of R53 Crores paid from 2009-2011 the balance payable amount is Rs.13.19 Crores. The Claimants have already paid a sum of Rs.10.29 Crores after the order dated 30/10/2015 and therefore balance of Rs.2.90 Crores is payable by the Claimants to the Respondent Bank after adjusting the value of the Fixed Deposits and Share Value till 31/10/2016." Hence I conclude no liability of Claimants in respect of Rs.14 Crores." 21. It is brought to the notice of this Court that the Bank has preferred an appeal against the aforesaid award passed by the Arbitrator in the Bombay High Court and the said appeal is pending as on date. SUBMISSIONS ON BEHALF OF THE ACCUSED PERSONS: 22. Mr. P.M. Thakkar, the learned senior counsel assisted by Mr. It is brought to the notice of this Court that the Bank has preferred an appeal against the aforesaid award passed by the Arbitrator in the Bombay High Court and the said appeal is pending as on date. SUBMISSIONS ON BEHALF OF THE ACCUSED PERSONS: 22. Mr. P.M. Thakkar, the learned senior counsel assisted by Mr. Digant Popat, the learned counsel appearing for the accused persons in all the applications submitted that even if the entire case put forward by the Bank is believed or accepted to be true, none of the offences of any nature as alleged could be said to have been committed by the accused persons. The learned senior counsel submitted that the case on hand is one in which the companies availed of loan facility from the Bank and on account of various problems in the business, the companies were not in a position to repay the loan amount in time. He pointed out that some time in the year 2000, the Bank went under liquidation and three years thereafter, the Bank initiated civil proceedings before the appropriate authority for recovery of the loan amount with interest. He pointed out that some time in the year 2005 i.e. almost five years after the Bank went under liquidation and after the awards came to be passed in the Lavad suits, the Bank thought fit to file criminal complaints and those complaints were ordered to be sent for police investigation under Section 156(3) of the Cr.P.C. The learned senior counsel submitted that the initiation of the criminal prosecution by the Bank against the accused persons is nothing, but an abuse of the process of law. He submitted that there is not a single document on record, which could be termed as a false document within the meaning of Section 464 of the Indian Penal Code. The learned senior counsel submitted that the Investigating Officer has made himself very clear that the case is not one of obtaining loan from the Bank by production of fraudulent or forged document. The learned senior counsel submitted that the Investigating Officer has made himself very clear that the case is not one of obtaining loan from the Bank by production of fraudulent or forged document. The learned senior counsel submitted that the case essentially falls within the realm of civil dispute and the accused persons have paid an amount of Rs.16.19 Crore to the Bank, and ultimately, if the Bank succeeds in appeal, which is pending before the Bombay High Court, then, in such circumstances, the accused persons will have to make good the further payment of Rs.14 Crore. However, according to the learned senior counsel, there is no good reason or any justification to prosecute them for the offence of cheating and forgery. The learned senior counsel further submitted that there is not a single averment in the plaints of the Lavad suits that the accused persons had practiced fraud and obtained loan. He submitted that security worth Rs.10 Crore was offered to the Bank as against the sanctioned loan of the amount of Rs.6.85 Crore. The learned senior counsel further pointed out that the amount of Rs.16.19 Crore paid by the accused persons is also by selling the secured assets with the permission of the Bank. He further pointed out that some of the accused persons are being prosecuted only in their capacity as Directors. Some of the accused persons are female members of the family. One of the accused persons was a student aged eighteen years at the relevant time when the loan was sanctioned. 23. The learned senior counsel placed reliance on one decision delivered by a Coordinate Bench of this Court quashing the criminal proceedings of the same nature, in which the very same Bank was the complainant. The learned senior counsel has referred to the judgment and order passed by this Court dated 14th February 2007 in the Criminal Miscellaneous Application No.9249 of 2004. 24. In such circumstances referred to above, the learned senior counsel prays that there being merit in all the writ applications, those be allowed and the criminal proceedings be quashed. SUBMISSIONS ON BEHALF OF THE BANK: 25. On the other hand, all these writ applications are vehemently opposed by Mr. Bhadrish Raju, the learned counsel appearing for the Bank. Mr. Raju submitted that the accused persons should not mix up the civil liability with the criminal liability. SUBMISSIONS ON BEHALF OF THE BANK: 25. On the other hand, all these writ applications are vehemently opposed by Mr. Bhadrish Raju, the learned counsel appearing for the Bank. Mr. Raju submitted that the accused persons should not mix up the civil liability with the criminal liability. He submitted that as on date, the accused persons might have discharged their civil liability subject to the final outcome of the appeal filed by the Bank before the Bombay High Court, but the same, by itself, would not absolve them from their criminal liability. He submitted that one of the properties in the form of a freehold land admeasuring 4,000 sq. mtrs. situated at village : Khutali, Union Territory, Dadra Nagar Haveli together with the buildings and plant was offered as security to the Bank. However, it was later realised by the Bank that the first charge was of the I.D.B.I. Bank. Although there was a first charge of the I.D.B.I. Bank, the very same property was offered by the accused persons to the Madhavpra Mercantile Cooperative Bank. He further pointed out that one another property situated at Mumbai was found to be not of the ownership of the accused persons, but the goodwill of the said property was offered as a security. He submitted that the Bank at the time of sanction of the loan could not have accepted the goodwill of the property as a security. His third submission is that one another property situated at Mumbai came to be disposed of without the permission of the respondent - Bank. On the above three counts, according to Mr. Raju, a prima facie case could be said to have been made out to proceed against the accused persons for the offences punishable under Sections 420 and 406 of the I.P.C. Mr. Raju fairly submitted that the case on hand is not one, in which any forged document is on record. There is no prima facie case of any forgery. However, according to Mr. Raju, there is sufficient material on record to prosecute the accused persons for the offences of cheating and criminal breach of trust. 26. All the writ applications have also been opposed by the learned A.P.P. appearing for the State. The learned A.P.P., by and large, has adopted the submissions canvassed by Mr. Raju, the learned counsel appearing for the Bank. 27. 26. All the writ applications have also been opposed by the learned A.P.P. appearing for the State. The learned A.P.P., by and large, has adopted the submissions canvassed by Mr. Raju, the learned counsel appearing for the Bank. 27. The learned A.P.P. placed reliance on the following averments made in the affidavit-in-reply filed by the Investigating Officer on behalf of the respondent No.1 - State: "5.1 At present, I am in charge of the investigation of M. Case no. 7/2005 which has been registered with the Gandhinagar Zone Police Station for the alleged offences under section 406, 409, 420, 467, 468, 471, 120B of Indian Penal Code, pursuant to the direction issued by the learned Magistrate Court no.10, Ahmedabad in Inquiry Case No.20/2013. 5.2 I humbly say and submit that one Pradipbhai M. Parikh, authorized officer of the Madhavpura Mercantile Bank, Shahibaug, Ahmedabad is the original complainant and the impugned complaint has been filed against 13 accused persons, wherein present petitioners have been arraigned as accused no. 2 and 3. 5.3 That accused no. 1 M/s. Gravity India Pvt. Ltd. Is incorporated under the Companies act on 13.03.1987 and it's registered office is at Mumbai. The company is engaged in manufacturing synthetic fabrics and have their factories at Silvasa. The company is managed by the Board of Directors and accused no. 2 and 3 are it's directors right from incorporation of the company. 5.4 In the year 1998, for the purpose of expanding their business, approached to the complainant Bank for overdraft facility of sum of an amount of Rs. 3 crores, which was approved to the complainant bank on 27.02.1998 and mortgage papers were prepared on 02.04.1998. In the said transaction accused No. 2 and 3 petitioners herein and accused no. 10, stood personal guarantors. 5.5 Apart from personal guarantors, the accused no.1 company through accused no.2 and 3 had furnished immovable properties which include a free hold land admeasuring 40000 sq. mrts of S.No. 10/1at Village Khutali, Building structures Plant and machineries at Dadra Nagar Haveli and also lease hold land admeasuring 1200 sq. mrts S.No. 28A, GIDC, village Masat along With Building, Plant and machineries at Dadra Nagar Haveli. 5.6 Subsequently, the loanee had executed deed of equitable mortgage on Rs. 20/stamp paper, Without any title deeds/documents for following properties, which were furnished as additional securities which include : 1. Plot admeasuring about 10000 sq. mrts S.No. 28A, GIDC, village Masat along With Building, Plant and machineries at Dadra Nagar Haveli. 5.6 Subsequently, the loanee had executed deed of equitable mortgage on Rs. 20/stamp paper, Without any title deeds/documents for following properties, which were furnished as additional securities which include : 1. Plot admeasuring about 10000 sq. mrts at Bhiwandi, Thane. 2. Room no. 19 and 20 at 18t Floor, Chandabhavan, Mumbai. 3. Plot no. 42 admeasuring 800 sq. mrts at GIDC, Silvasa. 4. 1st floor plot no.28/A of M/s. Dakashali Synthetics Pvt. Ltd. 5. 2nd floor Vuyas Bhavan, Mumbai. 6. Five Galas at Gala Complex at Mumbai. 7. 200 power looms at Narpoli, Bhiwandi. 5.7 In the Year 2001, when the Ketan Parekh scam was un-earthed, RBI was forced to take extreme corrective steps to freeze and even suspend the operation of the Complainant Bank and liquidator was appointed. The account of the loanee were classified as NPA on 31.3.2001. 5.8 The Bank was constrained to initiate Civil suits for recovery of the outstanding amounts against all the accused whereby the Arbitral Tribunal Vide order dt. 01.01.2008, was pleased to pass an award of Rs. 14,66,408,139 : 68 paisa with 20.5% interest per annum with effect from 01.07.2003 till it's realization. The Tribunal has also awarded cost of Rs. 25,000/towards litigation. 5.9 The borrowers also tried to take benefit by opting for OTS scheme. In fact upon registration of the complaint being M. case 07/05, the investigating officer being Mr. M. S. Bhatt, Police Inspector, Economic cell, CID crime, Gujarat had stated that offence is committed at Bombay and therefore tender "C" summary report which came to be rejected by the learned Metropolitan Court, Ahmedabad and further directed to Inquiry Officer to report as to whether offence is made out or not?. Against the said order, the accused Rasiklal Thakkar had preferred an revision application being Cr. Rev. app. No. 262/06 to 266/06, wherein, the Learned City sessions Judge, Court no. 11, Ahmedabad, was pleased to reject the said revision applications vide order dt. 22/9/2006. That being aggrieved by the same, Special Criminal Application no. 2149 of 2006 to 2153 of 2006 were preferred before the Hon'ble High Court of Gujarat, wherein vide Oral Judgment dt. 15.03.2007, the Hon'ble Court was pleased to dismissed the said petitions. 11, Ahmedabad, was pleased to reject the said revision applications vide order dt. 22/9/2006. That being aggrieved by the same, Special Criminal Application no. 2149 of 2006 to 2153 of 2006 were preferred before the Hon'ble High Court of Gujarat, wherein vide Oral Judgment dt. 15.03.2007, the Hon'ble Court was pleased to dismissed the said petitions. In fact, thereafter, the accused Rasiklal D. Thakkar had approached Hon'ble Supreme Court by filing Criminal Appeal no. 2041 of 2009 which also came to be rejected by Judgment dt. 6.11.2009. 5.9 In an attempt to settled the matter, the accused company made an offer for amount of Rs. 133 lacs which was not accepted by the Bank. It is the case of the accused that they had approached to the central Registrar for appointment of arbitrator but failed. 6. That in light of the aforesaid facts, if the investigation case papers are examined, then the incriminating material which has been found for the commission of the alleged offence as emerges from the record is briefly summarized as under : 6.1 It may kindly be noted that the loan was availed by accused no.1 company of which accused No. 2 petitioner no.1 is the Chairman and Director and accused no. 3 petitioner No. 2 herein is the Director of the said company. 6.2 The original loan papers reveals that the application seeking loan contained incomplete details and no supporting documents were furnished. In spite of the said facts, the accused No. 1 to 10 in collusion with the Bank Chairman, Managing Directors and CEO with criminal intention got illegally sanctioned the loan of huge amount of Rs. 3 Crores in gross violation of the RBI guidelines. Accused no. 13 namely Jagdish Bhogilal Pandya had recommended for grant of loan. Even CEO of the Bank namely Devendraprasad Pandya, accused no. 12 had also recommended for grant of loan. That the investigation case papers indicate that resolution for grant of loan was passed on 27.02.1998, wherein it is specifically mentioned that bank has approved loan amount on condition that the loanee shall repay the 01d debt first. However, statement of complainant so recorded during course of investigation reveals that in spite of the fact that old debt has remained out standing in their group account, loan amount was released. It further appears that when the loan amount was released in the current account no. However, statement of complainant so recorded during course of investigation reveals that in spite of the fact that old debt has remained out standing in their group account, loan amount was released. It further appears that when the loan amount was released in the current account no. 2029, which was open on 01.07.1998, there was already over draft, which was again in violation of the RBI rules. 6.3 That the term period of the said loan was getting over on 28.02.1999 and an amount of Rs. 7,04,49,214 was to be recovered from the loanee. An application seems to have been given by accused No. 2 and 3, the said loan term was renewed on 8.3.1999. In fact, it is found that an undated application was made where accused no. 10 Bharatbhai Dalpatram Thakkar continued to be as guarantor and an additional amount of Rs. 4,60,00,000/was approved against stock and book debts of the company. In fact on perusal of the record it is found that no accounting was there on that application. The Board of directors of the Bank had approved renewal of an amount of Rs. 3 crores loan on 8.3.1999. At that stage also no documents were furnished with the application. The outstanding loan amount as on 30.06.2003 was 14,64,08,139 : 68 paisa. 6.3.1. That on 24.07.1999, Bank has approved loan for an amount of Rs.4 crores and 60 lakhs for term period upto 31.01.2000. That it appears that though an amount of Rs. 8,75,260,67/was outstanding to be recovered from the loanee, however the aforesaid loan was approved and released. That the accused no.2 and 3 had furnished additional securities which included two rooms No. 19 and 20, 151 floor "Chandrabhuvan" at Mumbai which the accused No. 10 claimed to be of their ownership. However, as per the statement of One Narendralal Shantilal Shah, the Manager of the complainant bank recorded on 21.12.2016 discloses that the said property does not belong to them. In fact it is found that they were the tenants of the said property. The accused persons therefore misrepresented before the bank officers by claiming the said property of their ownership and also furnishing the same as the collateral security which otherwise was not available as security. That the said property has been sold away. Though it was to be treated as security to the loan transaction. The accused persons therefore misrepresented before the bank officers by claiming the said property of their ownership and also furnishing the same as the collateral security which otherwise was not available as security. That the said property has been sold away. Though it was to be treated as security to the loan transaction. 6.6 Also it is required to be mentioned that other two properties which were also furnished as security against equitable mortgage executed by Rasiklal Thakkar included property being Land bearing R.S. no. plot no. 42 admeasuring about 800 sq. mtrs at GIDC, Masat, Darda Nagar Haveli. Plot of land admeasuring about 10000 sq. ft. at Kamath Ghar, taluka Bhiwandi, District Thane and plot no. 28/A with first floor constructed building of M/s Dakashali Synthetics at Silvasa. The statement of Noor Mohammed Bahadoorbhai, legal officer of the bank which is recorded on 14.08.2017 reveals that it is found that no original documents of the title of first property has been deposited by the accused and only declaration on Rs. 20/stamp paper was given by Rasiklal D. Thakkar, accused no.2. Even in the affidavit in reply filed by the said Nurmohmd Bahadurbhaj indicates that so far as Vyas Bhavan property at Mumbai is concerned, it has been sold on 23.11.2007, without permission of the Bank. Also it was subsequently learnt by the complainant Bank that another Security Five Gala situated at Mulund (w), Mumbai which was furnished as security to the complainant Bank in the Year 1997 has been again furnished as Security to the Bank of Baroda by co-accused Jay R. Thakkar, son of accused no.2 and 3, for availing advance loan of Rs. 47.26 lacs on which the said bank is claiming 1st charge over the said property. 6.7 That it may also be noted that on 31.01.2000, when the term period of loan transaction was renewed by the Board of Directors of Bank there was no application of the loanee. That at the time of renewal of loan an amount of Rs. 8,75,260,67/was outstanding to be recovered from the applicant. 7. 6.7 That it may also be noted that on 31.01.2000, when the term period of loan transaction was renewed by the Board of Directors of Bank there was no application of the loanee. That at the time of renewal of loan an amount of Rs. 8,75,260,67/was outstanding to be recovered from the applicant. 7. In light of the aforesaid facts and circumstances and the material evidence collected so far, I humbly say and submit that the petitioners have dishonest intention right from the inception of committing the alleged offence of criminal breach of trust and cheating and forgery, more particularly, the manner in which loan facility was availed by the accused in the name of five different companies of which Board of Directors mostly included close family members. Since Year 1998 when for the first time, they availed loan from the complainant Bank and in collusion with bank officers and directors have been successful to siphon off huge amount by getting renewal of loan term, in spite of outstanding amounts in their group accounts. The furnishing of incomplete details, misrepresenting the Bank about securities and diminishing of securities, seems to be part of criminal conspiracy which seems to be hatched by the accused in very systematic manner. That when the Bank was closed on 12.03.2001, at that time the outstanding amount to be recovered from the petitioners was to the tune of Rs. 10,23,80,139/and upto 30.03.2003 the outstanding amount with interest comes to around Rs. 14,64,08,139/- 68 paise as prayed for by the complainant bank for recovery in Civil suit instituted by the Bank. 8 It is further humbly stated and submitted that loan term has been renewed time again in spite of the fact that a huge loan amount has remained outstanding. That even the details furnished were incomplete, the security which was claimed to be their ownership was not actually belonging to them, insufficient security has been furnished, and even monthly stock statement and recovery list has not been furnished, and the administrators and the Bank Manager in collusion with the accused persons have abetted in commission of the alleged offence. That it is found that the applicant has opened 5 different companies and in their name have availed loan of crores of rupees and investigation is still going on. That it is found that the applicant has opened 5 different companies and in their name have availed loan of crores of rupees and investigation is still going on. That after the registration of the compliant, the accused persons were not found at their residential home and are absconding. That case diary reveals various dates when attempts were made by the investigating officer himself or through his officers to arrest the accused. In fact an application under section 70 of the Code of Criminal procedure code has been submitted before the concerned lower court which is pending adjudication. That charge sheet has been filed against CEO/MD of the Bank and subsequently CEO Rameshchandra Nandlal Parikh has expired. It may kindly be noted that approximately 232 criminal complaints/FIR have been registered against the said CEO/MD of the Madhupura Bank. I further humbly say and submit that the petitioners herein along with other co-accused have siphoned off money of the Bank which money was entrusted by public at large to the Bank with a promise that they will earn good return on their deposits. Even in the Judgement dt. 15.03.2007 of the Hon'ble High Court of Gujarat in Sp. Cr. A. no. of 2006 and allied matters, the Hon'ble court has taken note of the fact of the observations made by the Hon'ble Bombay High Court in it's order dt. 20.10.2004 in Writ petition no. 2551 of 2004 about delaying tactics in repayment of outstanding dues. The Hon'ble Court has further observed that the funds alleged to be misappropriated/siphoned off by the petitioner and other accused persons are undoubtedly money belonging to the public. I further humbly say and submit that by furnishing securities, the accused were successful in wining trust and inducing the Bank to release such huge amount and having knowledge about property being not in existent, itself suggest criminal conspiracy and dishonest intention of the accused persons right from the beginning. Also merely petitioners stood guarantor does not preclude them fastening of criminal liability as well, more particularly, when they were the ultimate beneficiary and appears to be the principal accused in the whole design of other offence. So far as non furnishing of the original title documents of the securities with the Bank is concerned, the same is again in gross violation of the instructions issued by the RBI and banking norms. So far as non furnishing of the original title documents of the securities with the Bank is concerned, the same is again in gross violation of the instructions issued by the RBI and banking norms. In fact, the bank officers are required to investigate into title and physically inspect the property, before the loan amount is released, which was totally ignored in the present case, which again raises serious involvement of Bank officers with the accused persons as part of criminal conspiracy. These are the questions which are minutely required to be gone into and the same can be un-earthed at the stage of recording of evidence during the course of trial. That during the course of investigation, the investigating officer has recorded various statements and has collected few documents Which prima facie indicates about commission of offence, though Bank has confirmed that no forge document is produced by the Loanee. I further humbly say and submit that it has been observed by the Hon'ble Supreme Court of India that exercise of inherent powers by the High Court under section 482 of the Code of Criminal Procedure is to be exercised sparingly and it depends upon facts of each case. It is only when the two objectives are fulfilled namely (1) T0 prevent abuse of process of any Court (2) To secure ends of Justice. These are the two objectives sine qua non for exercise of powers under section 482 of Cr.P.C. I humbly say and submit that economic growth of any nation or society depends on the displacement of its fiscal deposits from depositors to investors, so as to sustain developmental projects, boosting the socioeconomic development of the nation as a whole. In any economy, banks play an important role. Banks are considered as reliable financial institutions having core business of mobilizing the savings of people for investment. Banks receives money from one group and lends it to other group of people. As banks being financial institutions, operate like intermediaries between the depositors and investors and thus deal with the public money. I therefore, humbly say and submit that once the interest of public money being involved, the Hon'ble Court may not exercise it's discretion in peculiar facts 0f the present case. I crave leave of this Hon'ble Court to rely and refer upon the same during the Course of hearing of this matter." ANALYSIS: 28. I therefore, humbly say and submit that once the interest of public money being involved, the Hon'ble Court may not exercise it's discretion in peculiar facts 0f the present case. I crave leave of this Hon'ble Court to rely and refer upon the same during the Course of hearing of this matter." ANALYSIS: 28. Having heard the learned appearing for the parties and having gone through the materials on record, the only question that falls for my consideration is whether the criminal proceedings initiated against the accused persons should be quashed. 29. I have already given more than a fair idea as regards the civil dispute and the civil proceedings between the parties. For the sake of convenience, let me give a break up of the eight writ applications before this Court: S.Cr.A. No. Name of applicant M. Case 5615/2015 Rasiklal Dalpatran Thakkar (As guarantor of Jalaram Textiles) '3/2005 5238/2015 (1) Rasiklal Thakkar (2) Dakshaben R. Thakkar (As Directors of Gravity India Ltd.) '7/2005 5620/2015 (1) Rasiklal Thakkar (2) Dakshaben R. Thakkar (As Directors of Dakshali Synthetic Pvt Ltd) (3) Bharatbhai Thakkar (As guarantor of Dakshali Synthetic Pvt Ltd) 5616/2015 (1) Rasiklal Thakkar (2) Dakshaben R. Thakkar (As Directors of Gravity Textiles Pvt Ltd) (3) Bharatbhai Thakkar (As guarantor of Gravity Textiles Pvt Ltd) '6/2005 5618/2015 Rasiklal Thakkar (As guarantor of Jalaram Corporation) '2/2005 5239/2015 Bharatbhai Dalpatram Thakkar (as guarantor of Gravity India Ltd.) '7/2005 4574/2015 (1) Jay R. Thakkar (2) Pinky J. Thakkar (3) Samir R. Thakkar (as Directors of Gravity India Ltd.) '7/2005 4511/2015 (1) Jay R. Thakkar (2) Pinky J. Thakkar (3) Samir R. Thakkar (as Directors of Gravity India Ltd.) '7/2005 30. Let me also give a fair idea about the loan sanctioned by the Bank at the relevant point of time: Amount sanctioned Name of company M Case number 3 Crore Gravity India Ltd '7/2005 1.4 Crore Gravity Textiles Pvt. Ltd. '6/2005 45 Lac Jalaram Corporation '2/2005 50 Lac Jalaram Textiles '3/2005 1.45 Crore Dakshali Synthetics Pvt. Ltd. '10/2005 Lavad Suit NO. Against such company '146/2003 Gravity India Ltd '205/2003 Gravity Textiles Pvt. Ltd. '138/2003 Jalaram Corporation '137/2003 Jalaram Textiles '136/2003 Dakshali Synthetics Pvt. Ltd. 31. At this stage, I must refer to one letter addressed by the Bank to the Investigating Agency dated 15th July 2014, which reads thus: "Office of the Liquidator The Madhavpura Mercantile CoOp. Bank Ltd. (Under Liquidation) (H.O. Regd. At this stage, I must refer to one letter addressed by the Bank to the Investigating Agency dated 15th July 2014, which reads thus: "Office of the Liquidator The Madhavpura Mercantile CoOp. Bank Ltd. (Under Liquidation) (H.O. Regd. Office: Madhavpura Market, Shahibaug Road, Ahmedabad 380004) "Ganga Vihar, 94 Kazi Sayed Street, Mandvi, Mumbai 400003. Phone 23401712/2341, 8108 Fax No.02223422626 Email : mmcbmdv@yahoo.co.in UL/CID/AHD/Gravity/24/1415 15/07/2014 To, Shri A.A. Shaikh, Director P.I., CID Crime Branch, Meghani Nagar, Ahmedabad. Sub : Information of Gandhinagar Zone Post M. Case NO.7/05 I.P. Code, 406, 409, 420, 467, 468, 471, 120B Ref : Your Letter No.CID/EOC/A.A. Shaikh/103/2014 dtd. 15.07.2014 In reply of your above letter referred letter find here below pointwise details of M/s. Gravity India Ltd. 1. Outstanding as on NPA date i.e. 31.02.2001 Rs.1067.35 Lacs and as per Arbitral Tribunal Award Rs.1464.08 Lacs as on 30.06.2003 then after compound interest @ 20.50% to be recovered. 2. Deed of Equitable Mortgage on Rs.50020/stamp paper for second charge (First charge of IDBI Bank) for property (1) Plot No.28A42 of Industrial Estate, Masat, Dadra Nagar Haveli (2) Freehold Land admeasuring 4000 sq.mt. in survey NO.10/1, village Khutli, UT, Dadra Nagar Haveli, together with Building & Plant & Machinery (3) Leasehold land admeasuring 1200 sq. mt. in 28/A, at Govt. Inds. Estate, village Masat, UT, Dadra Nagar Haveli, together with Buildings (except 1st floor of the building) & Plant & Machinery. 3. Property owned by Co. 4. Not observed any fraudulent document of the borrower. 5. Statement of Bookdebt as on 10.04.2000 for Rs.286.14 Lac. 6. Applied for OTS 2007 with dispute of NPA Date. Same was rejected by MMCB. 7. Recovery from 01.04.2001 to 15.07.2014 Rs.217.75 Lacs. 8. W/P 301 of 2012 filed by borrower in Bombay High Court is at admission stage & next date is 05.12.2014 and appeal filed in the CC Court Ahmedabad, against arbitral tribunal award. 9. Recovery from 01.04.2001 to 15.07.2014 Rs.217.75 Lacs. 10. Enclosed copy of application of arbitral tribunal. 11. Detail available at our Head Office. Sd/- MANAGER OSD Authorised Official" 32. Thus, prima facie, it appears that there is nothing on record to indicate that any forged or false document or fraudulent documents were utilised at the relevant point of time for the purpose of obtaining the loan with the connivance of the office bearers of the bank. 33. Detail available at our Head Office. Sd/- MANAGER OSD Authorised Official" 32. Thus, prima facie, it appears that there is nothing on record to indicate that any forged or false document or fraudulent documents were utilised at the relevant point of time for the purpose of obtaining the loan with the connivance of the office bearers of the bank. 33. I must concentrate on three main submissions canvassed by the learned counsel appearing for the Bank. According to the Bank, when the freehold land admeasuring 4,000 sq. mtrs. situated at Dadra Nagar Haveli was offered as a security, the first charge over the same was with the I.D.B.I. Bank. The materials on record indicate that in the loan application itself, there is a reference of the same. Such a fact was not suppressed by the accused persons. The second charge of the Madhavpura Bank was created. It is brought to my notice that the Bank itself had gone to the Registrar of Companies and had got their second charge registered. More importantly, there are no dues payable to the I.D.B.I. since 2004. 'No Due Certificate' has been issued by the I.D.B.I. It is pointed out that a loan with the export credit facility of Rs.85 lakh was, thereafter, availed from the Bank of Baroda with the N.O.C. from the Madhavpura Mercantile Cooperative Bank and the same has also been repaid and 'No Due Certificate' has been issued by the Bank of Baroda. It is not in dispute that as on date, there is only one charge and that charge is of the Madhavpura Bank. 34. The second allegation of the Bank is that one property situated at Mumbai, although was not of the ownership of the accused persons, yet the same was offered as a security. It appears that the accused persons have leasehold rights over the said property. The Bank carried out the necessary valuation in 2015 with the consent of the accused persons. The said property is a rented property under the provisions of the Maharashtra Rent Control Act. The property occupied as "Handi" (PAGHDEE) has monetary value for the holder as well. So far as the third allegation is concerned, the same is with regard to one property at Bombay, which came to be sold by the accused persons with the permission of the Bank. The property occupied as "Handi" (PAGHDEE) has monetary value for the holder as well. So far as the third allegation is concerned, the same is with regard to one property at Bombay, which came to be sold by the accused persons with the permission of the Bank. This property was sold way back in the year 2006 on account of financial crunch in the business. The learned senior counsel appearing for the accused persons submitted that the accused persons had to keep the company running, as there were 200 workers employed in the said company. If this allegation is accepted, then there is no any illegality or irregularity as regards availing of the loan in the year 1998. 35. Let me clarify one relevant aspect of this litigation. Prima facie, it appears that everything was within the knowledge of the Bank at the relevant point of time. However, the case of the Bank, as on date, is that the management of the Bank was also in collusion, and therefore, all are guilty of criminal conspiracy. In my view, it would be too much to say that a criminal conspiracy was hatched for the purpose of obtaining the loan in 1996. All these problems arose for the Bank as the Bank went in liquidation. 36. Let me also refer to the decision of this Court relied upon by the learned counsel appearing for the accused persons in the case of Shri Shailesh I. Patwari and others vs. the State of Gujarat and others [Criminal Misc. Application No.9249 of 2004 decided on 14th February 2007]. It was also a case with similar facts and allegations. A learned Single Judge of this Court, while quashing the criminal proceedings, it observed as under: "17. There is also no dispute that the loans are duly secured against hypothecation of plant and machinery and book debts and by creation of charge on the immovable properties. As per the registered Valuer?s Report, the valuation of the plant and machinery is Rs.67,84,000/-, which is produced at Annexure-L. The book debts of the firm are to the tune of Rs.70,00,000/- which is evident form the extract of the balance sheets produced at Annexure-M. The property of land and building at Plot no.25/1, Phase III, GIDC, Naroda is valued at Rs.47,46,575/-, the value of the office premises is about Rs.7 lacs. The respondent no.2 bank is in possession of the aforesaid properties. 18. On the facts of the case, what can be inferred is that the petitioners have availed of loan from the respondent no.2 bank, but due to circumstances beyond the control of the petitioners, they could not pay the installments after some time. The bank has therefore filed Lavad Suit for recovery of the outstanding amount which is pending. 19. The bank has also taken over the securities. The bank has further issued notice under the Securitization Act for recovery of the amount. Thus, the bank has already proceeded to recover the amount in question. Therefore, it is an accepted fact that there is a civil dispute between the petitioners and the respondent no.2. bank. Now, the question is, whether on the very same set of facts, the bank was justified in filing criminal case against the petitioners or not. 20. In this regard it is required to be established that the petitioners ere willful defaulters or whether they have tried to cheat the respondent no.2 bank in any manner whatsoever. In this connection it is required to be noted that in the Lavad Suit the respondent no.2 bank has stated on oath that the petitioners have availed of loans after following the procedure and on execution of necessary documents. 21. In the notice issued by the respondent no.2 bank under the Securitization Act, reference has been made to immovable properties of the petitioners on which there is a charge of the Bank and action is proposed to be taken on the basis that they are secured assets of the bank. Having stated so in the Lavad suit, the respondent no.2 bank cannot take a contrary stand in the criminal proceedings to the effect that the petitioners have availed of the loans contrary to RBI norms and without adequate security. 22. As regards bonafides of the petitioners are concerned, the petitioners had made payments upto 1995. It is their contention that on account of various factors including closure of chemical business in Gujarat on account of a public interest litigation regarding pollution, and various other factors including recession, the petitioners faced serious financial crisis. There was also a fire at the factory in which the petitioners suffered huge loss. After the financial crisis, as the record shows, the petitioners have made serious efforts to settle the amount. There was also a fire at the factory in which the petitioners suffered huge loss. After the financial crisis, as the record shows, the petitioners have made serious efforts to settle the amount. Various communications produced on record shows that the petitioners were genuinely pursuing the issue of settling the matter with the bank. 23. The petitioners have also proposed one time settlement. Therefore, looking to the particular facts of the case, it is seen that the petitioners were pursuing the matter and showed no inclination to abandon the payment or to defraud the bank. Apart from that substantial amount has been paid by the petitioners even after the bank has gone into liquidation. In fact there was settlement between the parties in pursuance of which a deduction of 10% from the gross receipts of the petitioners was implemented by the Bank. Therefore I am of the view that prima facie there is no element of criminal breach of trust, cheating or criminal conspiracy so as to attract provisions of 406, 409, 420 and 120B of IPC. 24. From the above facts it is evident that even according to the respondent no.2 bank the dispute is a civil dispute for which a Lavad Suit has been filed. Notice under the provisions of Securitization Act has been issued for recovery of amount. On the very same set of facts the complaint has been filed, for non-payment of the loan amount. 25. The petitioners have paid substantial amount and the bank will be able to recover the remaining outstanding amount if any by appropriate civil proceedings. On the facts of the case nothing is pointed out to establish the alleged offence as stated in the complaint. I am therefore of the view that no useful purpose is likely to be served by allowing the criminal prosecution to continue and it would not be in the interest of justice to proceed against the petitioners who are bonafide borrowers. Looking to the fact that the dispute is of civil nature, the conduct of the petitioners and their intention to repay the amount in question and the also the fact that substantial payment has been made, I am of the view that this is a fit case to quash the complaint as the complaint does not establish a prima facie offence. 26 It would be relevant to refer to a decision of the Apex Court in the case of M/s. Indian Oil Corporation V. M/s. NEPC India Ltd & ors., wherein the observations made in Para 10 of the judgment are relevant, which reads as under; "10. While on this issue, it is necessary to take notice of a growing tendency in business circles to convert purely civil disputes into criminal cases. This is obviously on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. Such a tendency is seen in several family disputes also, leading to irretrievable break down of marriages/families. There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure through criminal prosecution should be deprecated and discouraged........? 27. In the case of Alpic Finance Ltd. Vs. P. Sadasivan and another reported in, (2001) AIR SC 1226, it is held that since there are no allegations that respondent made any willful representation, no allegation that there was fraud or dishonest inducement and in view of the fact that respondent has paid substantial payment as per hire purchase agreement, no element of misappropriation or cheating and the quashing of proceedings was proper and legal. Para 10 of the said decision as under "...Here the main offence alleged by the appellant is that respondents committed the offence under section 420 IPC and the case of the appellant is that respondents committed the offence under section 420 IPC and the case of the appellant is that respondents have cheated him and thereby dishonestly induced him to deliver property. To deceive is to induce a man to believe that a thing is true which is false and which the person practising the deceit knows or believes to be false. It must also be shown that there existed a fraudulent and dishonest intention at the time of commission of the offence. There is no allegation that the respondents made any willful misrepresentation. Even according to the appellant, parties entered into a valid lease agreement and the grievance of the appellant, is that the respondents failed to discharge their contractual obligations. It must also be shown that there existed a fraudulent and dishonest intention at the time of commission of the offence. There is no allegation that the respondents made any willful misrepresentation. Even according to the appellant, parties entered into a valid lease agreement and the grievance of the appellant, is that the respondents failed to discharge their contractual obligations. In the complaint there is no allegation that there was fraud or dishonest inducement on the part of the respondents and thereby the respondents parted with the property. It is trite law and common sense that an honest man entering into a contract is deemed to represent that he has the present intention of carrying it out but if, having accepted the pecuniary advantage involved in the transaction, he fails to pay his debt, he does not necessarily evade the debt by deception...." 28. In the case of Ram Biraji Devi and Another Vs. Umesh Kumar Singh and Another reported in, (2006) 6 SCC 669 it is held that even if the allegations made in the complaint are accepted to be true and correct, the appellants cannot be said to have committed any offence of cheating or criminal breach of trust, neither can any guilty intention be attributed to them nor can there possibly be any intention on their part to deceive the complainant. It was further held that the averments of the complaint and the statements of the complainant and his witnesses recorded by the Magistrate would amount to civil liability inter se the parties and not criminal liability and therefore cognizance taken by the Magistrate was clearly an abuse of the process of court. 29. In the case of Superintendent and Remembrancer of Legal Affairs, west Bengal V. Birendra Chandra Chakravarty reported in, (1974) AIR SC 290 it is held that where there was long and intimate relation between the accused and the complainant and there were numerous transactions between them it would be difficult to determine the extent to which the complainant was duped or persuaded by mis-representation to part with rights in certain properties alleged to be the subject matter of breach of trust. It was a dispute of an essentially civil nature to be decided between the parties before any question of criminal liability could be adjudicated upon. It was a dispute of an essentially civil nature to be decided between the parties before any question of criminal liability could be adjudicated upon. Therefore, it is held that criminal liability cannot be adjudicated upon where the dispute is of civil nature. 30. In the case of S.N Palanitkar V. State of Bihar reported in, (2001) AIR SC 2967 in para 27 it is held as under "....The approach and consideration while exercising power and jurisdiction by a Magistrate at the time of issuing process are to be in terms at the time of issuing process are to be in terms of sections 200 to 203 under chapter IV of CRPC having due regard to the position of law explained in various decisions of this court, and whereas while exercising power under section 482 of Cr. PC the High Court has to look at the object and purpose for which such power is available to the High Court to give to any order under the Cr. P.C or to prevent abuse of process of any court or otherwise to secure the ends of justice. This being the position, exercise of power under section 482. Cr. PC should be consistent with the scope and ambit of the same in the light of the decisions aforementioned. In appropriate cases, to prevent judicial process from being an instrument of oppression or harassment in te hands of frustrated or vindictive litigants, exercise of inherent power is not only desirable but necessary also, so that the judicial forum of court may not be allowed to be utilised for any oblique motive. When a person approaches the High Court under section 482, Cr. PC to quash the very issue of process, the High Court on the facts and circumstances of a case has to exercise the powers with circumspection as stated above to really serve the purpose and object for which they are conferred...." 31. It is required to be noted that recently a trend has been noticed that even for recovery of ordinary transaction of loan the machinery of criminal prosecution is misused by the banks, obviously with a view to bring undue pressure upon the creditor though there are enough measures provided under the the law. It is required to be noted that recently a trend has been noticed that even for recovery of ordinary transaction of loan the machinery of criminal prosecution is misused by the banks, obviously with a view to bring undue pressure upon the creditor though there are enough measures provided under the the law. On the facts of the case, and in view of the civil proceedings already initiated, it is evident that the dispute is of civil nature and no criminal action is warranted. 32. In the premises aforesaid, this petition is allowed. The C.R. No.207 of 2004 registered with Madhavpura Police Station by respondent no.2 herein for the alleged commission of offences punishable under sections 406, 409, 420 and 120-B of IPC is hereby quashed and set aside. Rule is made absolute accordingly. It is made clear that the present complaint has been quashed only on the basis of the special facts and circumstances of the case and this will not be treated as a precedent in any other case." 37. I may also refer to a very recent pronouncement of the Supreme Court in the case of Satishchandra Ratanlal Shah vs. State of Gujarat and another [Criminal Appeal No.9 of 2019 decided on 3rd January 2019], wherein the Supreme Court, while quashing and setting aside the judgment delivered by this Court has observed that mere failure to repay the loan amount, by itself, would not amount to cheating. The Supreme Court has taken the view that there has to be something in the complaint and other materials on record to prima facie indicate that the intention of the accused was to cheat the complainant right from the inception. I may quote the relevant observations as under: "10 Before we analyse this case, it is to be noted that the criminal application preferred by the accused before the High Court was against the order of the Trial Court at the stage of framing of charges, wherein it is the duty of the court to apply its judicial mind to the material placed before it and to come to a clear conclusion that a prima facie case has been made out against the accused. An order for framing of charges is of serious concern to the accused as it affects his liberty substantially. An order for framing of charges is of serious concern to the accused as it affects his liberty substantially. Courts must therefore be cautious that their decision at this stage causes no irreparable harm to the accused. 11 Coming to the aspect of quashing of the charges, it is well settled that such exercise needs to be undertaken by the High Court in exceptional cases. It is also well settled that the framing of charges being initial stages in the trial process, the court therein cannot base the decision of quashing the charge on the basis of the quality or quantity of evidence rather the enquiry must be limited to a prima facie examination. [refer to State of Bihar vs. Ramesh Singh, (1977) CriLJ 1606]. 12 Having observed the background principles applicable herein, we need to consider the individual charges against the appellant. Turning to Section 405 read with 406 of IPC, we observe that the dispute arises out of a loan transaction between the parties. It falls from the record that the respondent no.2 knew the appellant and the attendant circumstances before lending the loan. Further it is an admitted fact that in order to recover the aforesaid amount, the respondent no. 2 had instituted a summary civil suit which is still pending adjudication. The law clearly recognizes a difference between simple payment/investment of money and entrustment of money or property. A mere breach of a promise, agreement or contract does not, ipso facto, constitute the offence of the criminal breach of trust contained in Section 405 IPC without there being a clear case of entrustment. 13 In this context, we may note that there is nothing either in the complaint or in any material before us, pointing to the fact that any property was entrusted to the appellant at all which he dishonestly converted for his own use so as to satisfy the ingredients of Section 405 punishable under Section 406 of IPC. Hence the learned Magistrate committed a serious error in issuing process against the appellants for the said offence. Unfortunately, the High Court also failed to correct this manifest error. 14 Now coming to the charge under Section 415 punishable under Section 420 of IPC. In the context of contracts, the distinction between mere breach of contract and cheating would depend upon the fraudulent inducement and mens rea. Unfortunately, the High Court also failed to correct this manifest error. 14 Now coming to the charge under Section 415 punishable under Section 420 of IPC. In the context of contracts, the distinction between mere breach of contract and cheating would depend upon the fraudulent inducement and mens rea. (See Hridaya Ranjan Prasad Verma v. State of Bihar, (2000) 4 SCC 168 ). In the case before us, admittedly the appellant was trapped in economic crisis and therefore, he had approached the respondent no. 2 to ameliorate the situation of crisis. Further, in order to recover the aforesaid amount, the respondent no. 2 had instituted a summary civil suit seeking recovery of the loan amount which is still pending adjudication. The mere inability of the appellant to return the loan amount cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, as it is this mens rea which is the crux of the offence. Even if all the facts in the complaint and material are taken on their face value, no such dishonest representation or inducement could be found or inferred. 15 Moreover, this Court in a number of cases has usually cautioned against criminalizing civil disputes, such as breach of contractual obligations [refer to Gian Singh v. State of Punjab, (2012) 10 SCC 303 ]. The legislature intended to criminalize only those breaches which are accompanied by fraudulent, dishonest or deceptive inducements, which resulted in involuntary and inefficient transfers, under Section 415 of IPC." 38. In the overall view of the matter, I have reached to the conclusion that permitting the police to continue with the investigation on such allegations will be nothing, but a gross abuse of the process of law. The Bank shall proceed against the accused persons for the recovery of the amount towards the difference so far as the 'One Time Settlement Scheme' is concerned. Ultimately, if the Bank succeeds before the Bombay High Court in the First Appeal filed against the award passed by the Arbitrator, then it goes without saying that the accused persons will have to make good the payment, of course, subject to their rights of further appeal. Ultimately, if the Bank succeeds before the Bombay High Court in the First Appeal filed against the award passed by the Arbitrator, then it goes without saying that the accused persons will have to make good the payment, of course, subject to their rights of further appeal. I take notice of the fact that the various properties mortgaged with the Madhavpura Bank as per the mortgage deed entered into with the bank at the time of taking the loan, one property being (E) - freehold land admeasuring 4,000 sq. mt. in survey No.10/1, village : Khutali, Union Territory, Dadra Nagar Haveli, together with building and plant was valued at Rs.10,06,52,000/- as per the valuation report, which was undertaken by the bank at the relevant point of time. On the said property, a charge of Rs. 3 Crore was created and registered by the bank with the Registrar of Companies on 10th October 1998 at the time of sanctioning the loan. The said charge even today is subsisting and reflected in the Registrar of companies. 39. All the original documents including the Title Deed with regard to the property being five Galas situated in Gala Complex, Gala Industrial Estate, 2nd floor, Dumping Road, Mulud (West), Mumbai are with the bank even as on date. 40. Mr. Raju, the learned counsel appearing for the Bank submitted that the Madhavpura Mercantile Cooperative Bank, at one point of time, was one of the finest Banks in the cooperative sector. However, it is the gross illegalities and irregularities committed by the management in sanctioning of the loans in favour of different parties, which, ultimately, led to its debacle. He pointed out that in the year 2000, the Bank went in liquidation and the only people responsible for the debacle of the Bank are the office bearers at the relevant point of time. What is submitted by Mr. Raju, may be true. However, this Court may only say that the Bank would be justified in initiating criminal prosecutions against any defaulting party, if there are cogent materials to indicate that a large scale fraud was played upon in collusion or connivance with the office bearers. Instituting criminal prosecutions at random against all the defaulting borrowers would not be justified or sustainable in law. For the purpose of institution of criminal prosecution, there has to be something very gross and substantial. Instituting criminal prosecutions at random against all the defaulting borrowers would not be justified or sustainable in law. For the purpose of institution of criminal prosecution, there has to be something very gross and substantial. At the cost of repetition, I state that even while the Bank instituted arbitration suits, it was not in their mind to launch any criminal prosecution and this is evident from the pleadings in the plaints. Later, various criminal prosecutions came to be instituted against the defaulting borrowers including the office bearers of the Bank. The dispute as such has come to an end, except the First Appeal filed by the Bank before the Bombay High Court. It is clarified that the observations made by this Court in this judgment shall have no bearing at all so far as the First Appeal filed by the Bank against the award passed by the Arbitrator in favour of the accused persons is concerned. It goes without saying that the First Appeal would be decided on its own merits, and ultimately, if the Bank succeeds in the said First Appeal, then the accused persons will have to make good the balance amount. 41. In the result, all the writ applications succeed. The M. Cases Nos.7 of 2005, 6 of 2005, 2 of 2005, 3 of 2005 and 10 of 2005 registered with the Gandhinagar Zone Police Station are hereby quashed so far as the accused applicants are concerned. The criminal proceedings arising from all the above referred M. cases qua the other accused are concerned shall proceed further in accordance with law. Rule is made absolute. 42. In view of the final disposal of the main matter, the connected criminal miscellaneous application also stands disposed of.