JUDGMENT : 1. Since the issue raised in all the captioned petitions are interrelated, hence, they are heard together and are being disposed of by this common judgment. 2. The petitioner - Mr. Jagdishbhai Bhogilal Pandya, employee of the respondent Bank, has filed Criminal Misc. Application Nos.5245 of 2019, 5232 of 2019, 5234 of 2019, 5237 of 2019, 5241 of 2019, under Section 482 of the Code of Criminal Procedure, 1973, (for short “the Cr.P.C.”) praying to quash and set aside the complaints being (i) M. Case No.7/2005 (ii) M. Case No.6/2005 (iii) M. Case No.3/2005 (iv) M. Case No.10/2005 respectively filed before the Economic Offence Prevention Branch, Gandhinagar under sections 406, 420, 467, 471 and 120B of the IPC and sections 13(1)(d) and 13(2) of the Prevention of Corruption Act and even (v) I-C.R. No.1 of 2018 filed before the Ahmedabad Zone (CID Crime) Police Station under sections 406, 420, 467, 471 and 120B of the IPC and sections 13(1)(d) and 13(2) of the Prevention of Corruption Act impugned in Criminal Misc. Application Nos.16613 of 2019 and 19292 of 2018; where the petitioners are borrowers who too have made prayer of quashing and setting aside the FIR. 3. Facts as could be culled out from the memo of petitions, are enumerated hereunder: 3.1 The impugned complaints being M. Case No.7/2005 and M. Case No.6/2005 were filed against Gravity India Private Limited and others, whereas M. Case No.3/2005 was filed against Jalaram Textile and others and M. Case No.10/2005 was filed against Dantali Synthetic Pvt. Ltd. The complaint being I-C.R. No.1 of 2018 was filed against Virsons Impex Corporation and others. In all the impugned complaints, the accused arrayed are directors, sureties, borrowers and employees of the Bank. Originally, some of the cases were filed before the Chief Metropolitan magistrate, Ahmedabad as inquiry case and thereafter sent for investigation under section 156(3) of Cr.P.C. and thus the impugned M. Cases were registered for the alleged offences. 3.2 The complainant Bank - Madhavpura Mercantile Co. Op. Bank is a co-operative bank and has its office at Ahmedabad and Branches at various places. The facts, as per the complaint being M.Case No.7/2005, suggests that a loan of Rs.25 lakhs was granted by the Board of Directors of the Bank by resolution dated 31.01.1994 and documents of loan were executed on 05.04.1994, and thereafter new loan was granted on 03.04.2000 amounting to Rs.7,60,00,000/-. The facts, as per the complaint being M.Case No.7/2005, suggests that a loan of Rs.25 lakhs was granted by the Board of Directors of the Bank by resolution dated 31.01.1994 and documents of loan were executed on 05.04.1994, and thereafter new loan was granted on 03.04.2000 amounting to Rs.7,60,00,000/-. It is alleged in the said complaint that the accused were illegally operating the accounts, in connivance with the Bank employee, who were acting against the interest of the bank, who had granted loan to the accused no.1 – Company. 3.3 It is alleged in the complaint being M.Case No.6/2005 that a loan of Rs.1.45 crore was granted by the Board of Directors of the Bank in 1998, the documents of loan were executed on 02.04.1998. It is alleged that the petitioner - Mr. Jagdishbhai Bhogilal Pandya, Branch Manager of the Bank and some other higher officials were acting against the interest of the Bank and had granted loan to the company. 3.4 It is stated in the complaints that the process for loan sanction is undertaken at Ahmedabad, and the written information about the sanctioned loan is given to the joint branches. As per the instruction, in writing, by the head office, the Branch Manger or the other responsible employee, has to prepare all the documents as per the rules and regulations of the Bank. 3.5 The allegation is jointly against accused (i) Rameshchandre Nandlal Parikh (Ex-chairman) (ii) Devendra Bhagwanji Pandya (Former M.D. & CEO) (iii) Jagdish Bhogilal Pandya – Ex-Branch Manager) that all the accused though being the main administrator of the Bank, for their personal gain, failing to observe the legal responsibilities, in breach of the banking rules and regulations, have cheated the Bank and have committed criminal breach of trust against the depositors and shareholders. All in connivance have brought the Bank in the position of liquidation, with crores of rupees of bank getting sinked. Because of illegal and criminal act of these accused, the renowned bank possessing good reputation, has been brought in position of being closed. 4. Advocate Mr. Tejas Barot for the applicants submits that in Criminal Misc. Application No.16613 of 2019, out of seven applicants, two are the guarantors, while rest of the applicants in both the matters are the partners. Advocate Mr. Barot submits that the applicants had opened Current Account No.3807 in the Madhavpura Mercantile Co. Op. 4. Advocate Mr. Tejas Barot for the applicants submits that in Criminal Misc. Application No.16613 of 2019, out of seven applicants, two are the guarantors, while rest of the applicants in both the matters are the partners. Advocate Mr. Barot submits that the applicants had opened Current Account No.3807 in the Madhavpura Mercantile Co. Op. Bank, Mumbai Branch for the development of their business in the name and style of Virsons Impex Corporation, with other partners. The Bank had given facility of about 1,00,00,000/-, and as stated, the amount was disbursed and thereafter, it is alleged that further demand of Rs.25,00,000/- was made with incomplete information. Mr. Barot submitted that in the board meeting, further amount of Rs.25,00,000/- was granted, and all the requirements for sanctioning the credit facility was fulfilled, and, it is alleged that the credit facility was granted for the purpose of business, with the condition that the Company should deposit the amount from day-to-day business. 4.1 Mr. Barot submitted that the current account was closed on 19.07.1997, and, it was alleged that because of their influence and without paying overdraft amount, the account continued; so, the applicants had misused the funds of Bank, and that the money taken for the purpose of development of the business, the applicants failed to deposit the fund from 01.04.1997 to 29.12.2017, and that had damaged the Bank fund in huge amount. 4.2 Advocate Mr. Tejas Barot submitted that the alleged offence is of 1997, and the FIR came to be lodged on 16.01.2018 after inordinate delay of 20 years. The allegations in the complaint are got-up and concocted and not corroborated with the dealings of the petitioners with the Bank, and not even consistent with the documents dealt with by the Bank. 4.3 Mr. Barot submitted that petitioner no.1 was looking after the business and because of certain business crisis, the Company occurred a huge loss, and there were failure of payments by the customers towards the dues, therefore, subsequently from the year 1997, owing to financial crunch, the business was required to be closed. Mr. Barot submitted that the petitioner no.1 applied for O.T.S. scheme. Mr. Barot submitted that the petitioner no.1 applied for O.T.S. scheme. The petitioner from the very beginning had shown his willingness to dispose of his residential house being Bungalow No.3, Someshwara Complex-II, Satellite Road, Ahmedabad, and during the correspondence and negotiations, petitioner no.1 had always shown his willingness to repay the outstanding dues by selling the property, at the relevant time, which was worth Rs.1,80,00000/-. 4.4 Mr. Barot submitted that there would not have been any such allegation, had the Bank given the NOC and allowed the petitioner to sell the property to satisfy the dues of the Bank, and often written requests were made. Mr. Barot submitted that the correspondence of the year 2000, would satisfy that the petitioners in writing had requested the Bank Authority for transfer of mortgage of property, so the dues of the bank could be paid immediately. He further submits that in Final Settlement Scheme, which came in 2016, the petitioners had joined and shown their willingness to repay the money to the Bank and therefore initially had deposited marginal amount which was required to be paid for Final Settlement Scheme, 2016 (FSS–2016), and Mr. Barot submitted, the Bank, on 29.05.2018 had given No Objection Certificate pursuant to the request to sell the Bungalow No.3, Someshwara Complex-II, Satellite Road, Ahmedabad. 4.5 Mr. Barot submits that the petitioner had applied for O.T.S. scheme and showed his willingness to disposed of his property, which was mortgaged with the Bank, and throughout, the negotiations were going on, which was to the satisfaction of the Bank. He further submitted that the petitioners approached the complainant – Bank, which informed about the outstanding dues of the firms from the period up to 31.01.2017 as Rs.2,04,29,335.09/-. Mr. Barot submitted that the petitioners have made full payment of all the three companies to the respondent Bank, and now nothing remains outstanding, and the Bank had issued No Dues Certificate to all the three companies on 08.03.2019. 4.6 Thus, it is stated by Advocate Mr. Barot that since petitioners have fully paid the outstanding dues of all the companies, even the Bank has issued No Dues Certificate, there would not lie any criminality against the petitioners and since the credit/advance facilities were granted by the Bank, accordingly the same were disbursed, the petitioner would have no say to the functioning of Bank. 4.7 Mr. Barot that since petitioners have fully paid the outstanding dues of all the companies, even the Bank has issued No Dues Certificate, there would not lie any criminality against the petitioners and since the credit/advance facilities were granted by the Bank, accordingly the same were disbursed, the petitioner would have no say to the functioning of Bank. 4.7 Mr. Pratik Barot has referred to the case of Rasiklal Dalpatram Thakkar & Anr. Vs. State of Gujarat, decided in Special Criminal Application No.5238 of 2015 with allied matters, to submit that the similar issue was dealt with by the coordinate bench in connection with the same Madhavpura Mercantile Co. Op. Bank Ltd., where the petitioners have admitted about the One Time Settlement Scheme 2016, and the Court after having considered the submissions of the facts on record was pleased to quash the FIR. Facts of the matter discloses that Shri Mahesh V. Shah, petitioner no.1 of CRMA no.16613/2019 had written to the officer of liquidator. The Madhavpura Merc. Cooperative Bank Ltd. (under liquidation) for (1) Virson Impex Corporation (2) Pravin Brothers (3) H. Janak Kumar & Co. as a partner, to clear the debts from the sale of his property. 5. The ‘No Due Certificate’ was issued by the office of the Liquidator of Madhavpura Mercantile Co. Op. Bank Ltd. dated 08.03.2019 for all the three; corporation/ firm, certificate for M/s. Virson Impex Corporation is reproduced hereinbelow:- “NO DUE CERTIFICATE This is to certify that M/s Virson Impex Corporation has availed credit/advance facilities under A/c No HY 3807 with Madhavpura Mercantile Co-op Bank Ltd. (Under Liquidation), Ahmedabad. The said account has been closed on 07/03/2019 as per term of approval conveyed to the borrower vide our letter no. MMCB/HO/LIQ/49/A81/2016-17 dated 30/12/2016 under Final Settlement Scheme-2016 of the MMCBL (under liquidation). This ‘No Dues Certificate’ is issued without prejudice to any criminal case(s) initiated against the borrower and/or guarantors and/or third parties irrespective of whether the offence is compoundable or not and the Liquidator intends the law to take its own course till logical conclusion of such criminal cases as compromise is entertained as a commercial prudence to recover the money without prejudice to such criminal actions. For, The Madhavpura Mercantile Coop. Bank Ltd. (under liquidation)” Chief Executive Officer. 5.1 The impugned FIR dated 16.01.2018 is by the liquidator against the Virsons Impex Corporation. For, The Madhavpura Mercantile Coop. Bank Ltd. (under liquidation)” Chief Executive Officer. 5.1 The impugned FIR dated 16.01.2018 is by the liquidator against the Virsons Impex Corporation. The allegation in the impugned FIR is that from 1997 to 1999, all the accused, which included the Bank M.D. and C.E.O, Director and Bank Manager by misusing their positions going against the guidelines of the R.B.I., and by corrupt practice, by not managing funds of the depositors, though there were insufficient funds and recoveries of the partners of the firm, provided illegal credit/advance facilities under criminal conspiracy, the due amount was not paid from 01.04.1997 to 21.12.2017, and along with the interest, had caused the loss of Rs.5,20,33,390/-. 5.2 The office of the liquidator of Madhavpura Mercantile Co. Op. Bank Ltd. on 20.03.2017, addressed a communication to M/s. Virsons Impex Corporation, M/s. Pravin Brothers & M/s. Janakkumar at the address of Bungalw – 03, Someshwara Complex-II, Satellite Road, Nr. Jodhpur Cross Road, Ahmedabad-380015, for settlement of the dues under FSS-2016. The communication thus states, of approval of the settlement of dues in respect of captioned account, under FSS-2016 on terms and conditions stipulated. 5.3 The further allegation is that Virsons Impex Corporation, a partnership firm, with its current account had opened a current account no.3807 at Mumbai Branch of Madhavpura Mercantile Co. Op. Bank Ltd., and when partnership firm were in need of money, they had used the amount of the current account and had not repaid the same, and, had moved an application with incomplete information for a further facility of Rs.25,00,000/-, while had used amount of Rs.1,00,90,819.33 from the current account. It is also alleged that there was a meeting on 24.04.1997 by Board of Directors, and, Shri Devendra Prasad Bhagwanji Pandya, the former M.D./CEO of Madhavpura Mercantile Co. Op. Bank Ltd., had approved in the said board meeting, the credit/advance facility of Rs.25,00,000/-, and for that, documents like promissory note, letter of continuity, security continuity, letter of lien of stock, agreement for hypothecation of goods, letter of guarantee were executed on 24.04.1997; the maturity date of the said facility was 31.07.1997. It is alleged that this credit facility was given for the purpose of purchase of stock, and accordingly, recoveries from the business were to be deposited in the account. It is alleged that this credit facility was given for the purpose of purchase of stock, and accordingly, recoveries from the business were to be deposited in the account. It is alleged that after passing of the loan by Mandvi Branch on 19.07.1997, current account came to be closed, and allotting the same current account number, hypothecation account no.3807 was opened, which showed the recovery of Rs.1,00,90,819. It is alleged that the term of seasonal credit/advance facility was completed; in spite of that, exerting influence, they had continued to have the benefit of huge seasonal and additional credit facility, without paying the overdraft. 5.4 It is further alleged that, they were increasing the limits of overdraft in their account, and thereafter, for getting the same to be converted into regular limit, by using their influence in the meeting held at the Head Office, Ahmedabad on 12.09.1997, Devendraprasad Bhagwanji Pandya, the former M.D./CEO recommended to sanction their credit facility and therefore Rs.1,20,00000/- were sanctioned and documents were executed for Rs.1,00,00,000/- on 16.09.1997 and the maturity date of the hypothecation credit facility was 31.12.1997. It is alleged that though the limit of the seasonal credit facility was over; in spite of that, by using their influence, without any application, against the credit stock or any recovery, in the meeting of the Board of Directors at Head Office on 27.02.1998, Rs.1,30,00000/- were sanctioned. It is also alleged that prior to the sanction of the loan, the parties had already used this overdraft of Rs.10,00,000/-, alleging thereby that on 27.02.1998, the outstanding due in the account was Rs.1,30,58,436/-, and the maturity date was 28.02.1999. 5.5 It is alleged further that without any application, in the Board meeting on 08.03.1999 Rs.1,30,00000/- were sanctioned; wherein no documents were submitted to the Bank, and after the sanction in the account of the firm, the outstanding due amount with interest stood as Rs.1,55,76,781/- with the maturity date as 31.03.2000. Thereafter, it is stated that since no money was deposited in the bank account of the firm, the legal notice was issued for making good the payment of overdraft amount of Rs.1,77,41,605/- by 06.12.1999. Thereafter, again a notice was issued in July, 2000, and after the bank closure on 13.03.2001, again notices were issued on August 2001, October 2002, March, 2003, and, in spite of that, no amount was paid. Thereafter, again a notice was issued in July, 2000, and after the bank closure on 13.03.2001, again notices were issued on August 2001, October 2002, March, 2003, and, in spite of that, no amount was paid. Bank thereafter had filed a Suit as M/03/246/03, before Bank of Nominees, and the award was declared on 01.01.2006. 5.6 The allegation, as made by the liquidator, is that the partners of Virsons Impex Corporation from the year 1997 to 1999 had availed the credit/advance facilities against seasonal and regular stock appropriating the recoveries. It is alleged that the credit/advance facility was wrongly or illegally procured, and as per the letter of in-charge, Branch Manager, Kishorebhai Thakkar, dated 20.12.2017, on the basis of the account statements, it is alleged that former Branch Manager – Jagdishbhai V.Pandya and Bank CEO/M.D. - Devendra Bhagwanji Pandya to the assisted partnership firm from 01.04.1997 to 21.12.2017, along with interest, had given illegal credit facility to the extent of Rs.5,20,33,390/-, and by criminal breach of trust with the Bank and to the bank depositors, had caused great economic loss to the bank under a systematic conspiracy. 6. The allegation so made is of non-payment of Rs.5,20,33,390/- for the period between 01.04.1997 to 21.12.2017. The credit facility was given to the petitioners which was time to time extended. Under the Final Settlement Scheme – 2016 (FSS-2016) of Madhavpura Mercantile Co. Op. Bank (under liquidation), M/s. Virsons Impex Corporation, M/s. Pravin Brothers & M/s. Janakkumar, were invited by letter dated 20.03.2017 to settle the dues, as approved. The said letter reads as under: “To M/s Virson Impes corporation, M/s Pravin Brothers & M/s H.Janakkumar Bungalow -03 Someshwara Comples-II Ref: YOUR APPLICATIONs FOR SETTLEMENT OF DUES UNDER FSS:2016 1) M/s Virson Impex Corporation – HYP 3807 2) M/s Pravin Brothers – HY 208532 3) M/s. H. Janakkumar – HY 205573 Please refer out letter No.MMCB/HO/LIQ/49/A81 A26 & A25/2016-17 dated 30.12.2016 hereby advised approval of settlement of dues in respect of your captioned accounts under FSS-2016 on terms and conditions as stipulated thereby. In this connection, as per terms of approval you are required to pay balance 10% of NSA approved and submit acceptance letter within 30 days from the date of our above letters conveying the settlement of dues as approved. In this connection, as per terms of approval you are required to pay balance 10% of NSA approved and submit acceptance letter within 30 days from the date of our above letters conveying the settlement of dues as approved. However, we observe that you have so far not complied with above conditions and, therefore you are advised to pay the balance 10% of NSA as under and acceptance letter within 7 days from the receipt of this letter. S N A/c Name and A/c No. NSA 10% of NSA Less: Application Money Deposited Balance 10% application money payable 1 M/s Virson Impex Corporation HYP 3807 1,90,07,921.08 19,00,792.11 6,50,000.00 12,50,792.11 2 M/s Pravin Brothers HY 208532 5,95,385.01 59,538.50 25,000.00 34,538.50 3 H. Janakkumar HY 205573 16,33,029.00 1,63,302.90 60,000.00 1,03,302.90 Total 2,12,36,335.09 21,23,633.51 7,35,000.00 13,88,633.51 6.1 The Final Settlement Scheme – 2016 (FSS- 2016) covered all NPA accounts including decreed cases & cases pending before the Arbitrator/Board of Nominees/Courts/DRTs/ BIFR and also the cases where Bank has issued notice u/s 13(2) or had taken action under section 13(4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI-2002) except cases mention vide para 2.1 of the scheme. 6.2 The Final Settlement Scheme – 2016 (FSS- 2016) also provides coverage of accounts where complaints have been lodged with CBI / Police authorities for fraud or any other reason and where criminal investigations/ proceedings/ trial were pending or have been completed by such authorities to be considered on merits under the scheme. However, it was clarified that recovery of dues and the criminal action/proceedings were two separate and distinct matters. Hence, if the settlement proposal of the borrower was accepted, such settlement will relate only to the recovery proceedings and shall not, in any way, affect the criminal action taken against borrower and/or his guarantor and they shall remain to continue. Para 2.1 in Final Settlement Scheme- 2016 (FSS-2016) reads as under:- “Cases not eligible for coverage under the scheme i. Accounts of Ketan Parekh (11), Mukesh Babu (5) and Shirish Maniar (2) alongwith their group companies shall not be covered under the scheme. ii. Cases/Accounts already settled and duly closed under previous settlement schemes or otherwise fully satisfied shall not be reopened. iii. The cases in which borrowers already have given undertaking before the court of law to make payment to the Bank.” 7. ii. Cases/Accounts already settled and duly closed under previous settlement schemes or otherwise fully satisfied shall not be reopened. iii. The cases in which borrowers already have given undertaking before the court of law to make payment to the Bank.” 7. The coordinate bench in the case of Rasiklal Dalpatram Thakkar & Anr. Vs. State of Gujarat, decided in Special Criminal Application No.5238 of 2015 with allied matters, has observed in paragraph no.35 as under: 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.” 8. Here, in this case, the Current Account No.3807 was opened at Mumbai Branch by the Virsons Impex Corporation. The Bank had given the credit facility of Rs.1,00,00000/- against stock business of the Virsons Impex Corporation which was at Ahmedabad. The initial transaction, as stated by the petitioners, was with facility of rupees 1,00,00000/-, which has been disbursed. It is not alleged that is has been procured under some false or forged documents or by practicing any fraud. There is no allegation of any cheating at the relevant time. The Bank management time to time under the meeting of board of directors had approved the credit/advance facility in the current account towards the seasonal and current stock and the recoveries. The overdraft facility was provided on the account. It is stated that later on, on 19.07.1997, the current account was closed; still however, under the hypothecation account with the very same number, as was provided for the current account, the transaction continued and the limits were extended, but the fact remains that the decision was taken in the meeting of the Board of Directors, as noted in the FIR. The letter dated August 11, 2000 was written informing the Manager of Madhavpura Mercantile Co. Op. Bank, Mumbai for transfer of mortgaged property from account of Primex Overseas to M/s. Virsons Impex Corporation. The letter dated August 11, 2000 was written informing the Manager of Madhavpura Mercantile Co. Op. Bank, Mumbai for transfer of mortgaged property from account of Primex Overseas to M/s. Virsons Impex Corporation. The Bank was informed that the immovable property situated at 3, Someshwar Park No.2, Nr. Bidiwala Park, Satellite Road, Ahmedabad was mortgaged with them of Mr. Maheshbhai Virchand Shah (M/s. Primex Overseas), and it was also informed that another property of Mr. Vimalbhai H.Shah (partner of Primex Overseas) was also mortgaged with Bank. The request was made to transfer the mortgaged immovable property in the account of M/s. Virsons Impex Corporation to whom the Bank had granted credit facility, which at the relevant time, as per the letter addressed was to the tune of 1.50 Crore and the outstanding of the firm was shown as Rs.1,77,41,605/- as on 28.10.1999. It was also brought to the notice of the Bank that there was no other immovable property which was mortgaged as collateral security in account of M/s. Virsons Impex Corporation, and the Bank was also informed that Mr. Maheshbhai V.Shah is a common partner in M/s. Primex Overseas and M/s. Virsons Impex Corporation, and therefore it was informed to the Bank that it is within the legally permissible limit of the Bank to transfer the mortgaged property from one account to another account, and, thus through the communication, it was informed to the Bank to take necessary immediate action to transfer the immovable property mortgaged by Mr. Maheshbhai V.Shah to secure the outstanding amount of M/s. Primex Overseas to the account of M/s. Virsons Impex Corporation. It was also informed to the Bank that any delay in action would prejudice the interest of the Bank. 9. Mr. Mahesh V.Shah, by a communication dated 02.05.2016 to the office of liquidator, Ahmedabad had shown his willingness to repay the settlement amount against Bank dues under the OTS Scheme 2016, and had requested for full and final clearance and ‘No Objection Certificate’ from MMCB to sell the property in lien, and was ready to sell the property of Bungalow No.3, Someshwara Complex-II, Satellite Road, near Jodhpur Cross Road, Ahmedabad to clear the dues up to Rs.2,00,00,000/-, and he had also laid down mode of payment, in the letter. 10. Advocate Mr. 10. Advocate Mr. K.J. Panchal for the Bank resisting the argument relied on the judgments of (i) State of Maharashtra (Through Central Bureau of Investigation) Vs. Vikram Anantrai Doshi And Others, reported in (2014) 15 SCC 29 , (ii) Gopakumar B.Nair Vs. Central Bureau Of Investigation And Another, reported in (2014) 5 SCC 800 , (iii) Central Bureau of Investigation Vs. Maninder Singh, reported in (2016) 1 SCC 389 , (iv) Rumi Dhar (Smt.) Vs. State of West Bengal And Another, reported in (2009) 6 SCC 364 , (v) Sushil Suri Vs. Central Bureau Of Investigation And Another, reported in (2011) 5 SCC 708 (vi) Central Bureau of Investigation Vs. Jagjit Singh, reported in (2013) 10 SCC 686 , (vii) Central Bureau of Investigation Vs. Hari Singh Ranka And Others, reported in (2019) 16 SCC 687 , (viii) Ashok Sadarangani And Another Vs. Union of India And Others, reported in (2012) 11 SCC 321 , (ix) Tamil Nadu Mercantile Bank Ltd. Vs. State Through Deputy Superintendent of Police And Another, reported in (2014) 3 SCC 755 and (x) Central Bureau of Investigation Vs. A. Ravishankar Prasad And Others, reported in (2009) 6 SCC 351 , to contend that merely just because the dues have been settled by one time settlement scheme, the criminal proceedings cannot be quashed. He submitted that the inherent power of the High Court under section 482 Cr.P.C. should be sparingly used and could be used only, when the Court comes to the conclusion that there would be manifest injustice or there would be abuse of process of court. Advocate Panchal submitted that in the economic offence, the Court must also keep in mind that the Bank has been influenced and that has ultimately effected the depositors and the society at large. He submitted that the credit facilities were obtained in concert with the bank officials and the M.D./C.E.O., and when the settlement was arrived at, by the Bank and the debtor under the scheme so floated, it would be for the recovery of the public money, which itself would not absolve the offence committed against the Bank. He further submitted that the civil proceedings as well as the criminal proceedings can proceed simultaneously and when the bank is entitled to recover the amount given to the debtor, and in connection criminal offence is found, then bank is entitled to prosecute. 10.1 Mr. He further submitted that the civil proceedings as well as the criminal proceedings can proceed simultaneously and when the bank is entitled to recover the amount given to the debtor, and in connection criminal offence is found, then bank is entitled to prosecute. 10.1 Mr. B.S. Raju, learned advocate with Mr. Ganesh Patel submitted that the Bank officials, under systematic criminal conspiracy, had sanctioned the loan/credit facilities against the Bank’s rules and regulations. The recoveries were not timely made and the collateral securities were not bonafidely received and incomplete details misrepresenting the Bank about the securities were part of the criminal conspiracy hatched by the accused. Mr. Raju submits that the Bank officers were required to investigate into the title and were duty bound to inspect the property physically. The standing of the loan/credit facilities seekers were to be examined prior to granting any loan or subsequently to increase the limit. Advocate Mr. Raju for the Bank submitted that as the Bank being the financial institute, the depositors’ trust with a public money is to be safeguarded by the employees of the Bank and since the matter involves large public money, submitted that no discretion is to be exercised for quashing the FIR. 10.2 Mr. Dhawan Jayswal, learned APP submitted that all the accused, in criminal conspiracy, had led the Bank to sink, and the public as depositors, have lost their funds, as the Bank officials under the influence of the Corporation and the firms had lended the public money, which were never recovered and Madhavpura Mercantile Bank Ltd. went under liquidation. 10.3 Mr. Jayswal, learned APP, thus, submitted that the evidence is required to be produced and it is only after analyzing the material on record, deciding the pros and cons about the reliability and acceptability of the material, the charges could be framed by the Trial Court and thus, submitted to reject all the applications. 11. Sections invoked in the impugned FIR are 406, 409, 420 and 120B of IPC. There is no allegation of any forgery to form an offence under section 463 of IPC. 11. Sections invoked in the impugned FIR are 406, 409, 420 and 120B of IPC. There is no allegation of any forgery to form an offence under section 463 of IPC. The FIR does not state of making any false documents with an intention to cause damage or injury to the Bank or any person or to support any claim or title, or to cause any person to enter into express or implied contract to commit fraud or that the fraud may be committed. Here in the instant facts, the decision of extending the credit limit was taken in the meeting of board of directors, and the extension was granted. There is no allegation of fraud, or of producing false documents. 12. In the case of International Advanced Research Centre For Powder Metallurgy And New Materials (ARCI) & Ors. Vs. Nimra Cerglass Technics (P) Ltd & Anr., reported in 2015 LawSuit (SC) 885, the Hon’ble Apex Court held that distinction between breach of contract and the cheating would depend upon the intention of the accused at the time of alleged inducement. If it is established that the intention of the accused was dishonest at the time when accused made a promise and entered into a transaction with the complainant to part with the property or money, then the liability is criminal and the accused is guilty of the offence of cheating. On the other hand, if all that is established that a representation made by the accused has subsequently not been kept, criminal liability cannot be foisted on the accused and the only right which the complainant acquires is the remedy for breach of contract in a Civil Court. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown at the beginning of the transaction. 13. S.W. Palanitkar & Ors. Vs. State of Bihar & Anr., reported in (2002) 1 SCC 241 , has been referred to in the case of International Advanced Research Centre For Powder Metallurgy And New Materials (ARCI) & Ors. (supra), wherein it was held as under: “21 In order to constitute an offence of cheating, the intention to deceive should be in existence at the time when the inducement was made. (supra), wherein it was held as under: “21 In order to constitute an offence of cheating, the intention to deceive should be in existence at the time when the inducement was made. It is necessary to show that a person had fraudulent or dishonest intention at the time of making the promise, to say that he committed an act of cheating. A mere failure to keep up promise subsequently cannot be presumed as an act leading to cheating.” 14. The case of Satishchandra Ratanlal Shah Vs. State of Gujarat and Anr., reported in (2019) 9 SCC 148 , was of non-repayment of the amount back to the money lending company. It was observed in paragraph nos.11, 12, 13 and 14 as under: “11. 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. 12. 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. 13. 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. 13. 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. 14. 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 in-efficient transfers, under Section 415 of IPC.” 15. Here, in this case, repeated request was made by the petitioners for permitting them to sell the property for payment of dues. The limit was extended by way of a decision in the board of directors. The petitioner firm because of financial crunch could not make good the repayment. Their intention for repayment was made clear to the Bank. 16. In Vijay Kumar Ghai & Ors. Vs. State of West Bengal & Ors., reported in (2022) 7 SCC 124 , it was held in paragraph no.31 to 40 as under: “31. Section 415 of IPC define cheating which reads as under :- “415. Their intention for repayment was made clear to the Bank. 16. In Vijay Kumar Ghai & Ors. Vs. State of West Bengal & Ors., reported in (2022) 7 SCC 124 , it was held in paragraph no.31 to 40 as under: “31. Section 415 of IPC define cheating which reads as under :- “415. Cheating.—Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to “cheat”.” The essential ingredients of the offense of cheating are: 1. Deception of any person 2. (a) Fraudulently or dishonestly inducing that person- (i) to deliver any property to any person: or (ii) to consent that any person shall retain any property; or (b) intentionally inducing that person to do or omit to do anything which he would not do or omit if he were no so deceived, and which act or 23 (2009) 8 SCC 1 omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property. 32. A fraudulent or dishonest inducement is an essential ingredient of the offence. A person who dishonestly induces another person to deliver any property is liable for the offence of cheating. 33. Section 420 IPC defines cheating and dishonestly inducing delivery of property which reads as under :- “420. Cheating and dishonestly inducing delivery of property. — Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.” 34. Section 420 IPC is a serious form of cheating that includes inducement (to lead or move someone to happen) in terms of delivery of property as well as valuable securities. Section 420 IPC is a serious form of cheating that includes inducement (to lead or move someone to happen) in terms of delivery of property as well as valuable securities. This section is also applicable to matters where the destruction of the property is caused by the way of cheating or inducement. Punishment for cheating is provided under this section which may extend to 7 years and also makes the person liable to fine. 35. To establish the offence of Cheating in inducing the delivery of property, the following ingredients need to be proved:- (i) The representation made by the person was false (ii) The accused had prior knowledge that the representation he made was false. (iii) The accused made false representation with dishonest intention in order to deceive the person to whom it was made. (iv) The act where the accused induced the person to deliver the property or to perform or to abstain from any act which the person would have not done or had otherwise committed. 36. As observed and held by this Court in the case of Prof. R.K. Vijayasarathy & Anr. Vs. Sudha Seetharam & Anr., (2019) 16 SCC 739 , the ingredients to constitute an offence under Section 420 are as follows:- i) a person must commit the offence of cheating under Section 415; and ii) the person cheated must be dishonestly induced to; a) deliver property to any person; or b) make, alter or destroy valuable security or anything signed or sealed and capable of being converted into valuable security. Thus, cheating is an essential ingredient for an act to constitute an offence under Section 420 IPC. 37. The following observation made by this Court in the case of Uma Shankar Gopalika Vs. State of Bihar & Anr., (2005) 10 SCC 336 , with almost similar facts and circumstances may be relevant to note at this stage:- “6. Now the question to be examined by us is as to whether on the facts disclosed in the petition of the complaint any criminal offence whatsoever is made out much less offences under Section 420/120-B IPC. The only allegation in the complaint petitioner against the accused person is that they assured the complainant that when they receive the insurance claim amounting to Rs. 4,20,000, they would pay a sum of Rs. 2,60,000 to the complainant out of that but the same has never been paid. The only allegation in the complaint petitioner against the accused person is that they assured the complainant that when they receive the insurance claim amounting to Rs. 4,20,000, they would pay a sum of Rs. 2,60,000 to the complainant out of that but the same has never been paid. It was pointed out that on behalf of the complainant that the accused fraudulently persuaded the complainant to agree so that the accused persons may take steps for moving the consumer forum in relation to the claim of Rs. 4,20,0000. It is well settled that every breach of contract would not give rise to an offence of cheating and only in those cases of breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. In the present case, it has nowhere been stated that at the very inception that there was intention on behalf of the accused person to cheat which is a condition precedent for an offence under 420 IPC. “7. In our view petition of complaint does not disclose any criminal offence at all much less any offence either under Section 420 or Section 120-B IPC and the present case is a case of purely civil dispute between the parties for which remedy lies before a civil court by filing a properly constituted suit. In our opinion, in view of these facts allowing the police investigation to continue would amount to an abuse of the process of court and to prevent the same it was just and expedient for the High Court to quash the same by exercising the powers under Section 482 Cr.P.C which it has erroneously refused.” 38. There can be no doubt that a mere breach of contract is not in itself a criminal offence and gives rise to the civil liability of damages. However, as held by this court in Hridaya Ranjan Prasad Verma & Ors. Vs. State of Bihar & Anr. (2000) 4 SCC 168 , the distinction between mere breach of contract and cheating, which is criminal offence, is a fine one. While breach of contract cannot give rise to criminal prosecution for cheating, fraudulent or dishonest intention is the basis of the offence of cheating. Vs. State of Bihar & Anr. (2000) 4 SCC 168 , the distinction between mere breach of contract and cheating, which is criminal offence, is a fine one. While breach of contract cannot give rise to criminal prosecution for cheating, fraudulent or dishonest intention is the basis of the offence of cheating. In the case at hand, complaint filed by the Respondent No. 2 does not disclose dishonest or fraudulent intention of the appellants. 39. In Vesa Holdings Pvt. Ltd. & Anr. Vs. State of Kerala & Ors., (2015) 8 SCC 293 , this Court made the following observation:- “13. It is true that a given set of facts may make out a civil wrong as also a criminal offence and only because a civil remedy may be available to the complainant that itself cannot be ground to quash a criminal proceeding. The real test is whether the allegations in the complaint disclose the criminal offence of cheating or not. In the present case, there is nothing to show that at the very inception there was any inception on behalf of an accused person to cheat which is a condition precedent for an offence u/s 420 IPC. In our view, the complaint does not disclose any criminal offence at all. Criminal proceedings should not be encouraged when it is found to be mala fide or otherwise an abuse of the process of the courts. Superior courts while exercising this power should also strive to serve the ends of justice. In our opinion, in view of these facts allowing the police investigation to continue would amount to an abuse of the process of the court and the High Court committed an error in refusing to exercise the power under Section 482 Cr.P.C to quash the proceedings.” 40. Having gone through the complaint/FIR and even the chargesheet, it cannot be said that the averments in the FIR and the allegations in the complaint against the appellant constitute an offence under Section 405 & 420 IPC, 1860. Even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in the absence of a culpable intention at the time of making promise being absent, no offence under Section 420 IPC can be said to have been made out. Even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in the absence of a culpable intention at the time of making promise being absent, no offence under Section 420 IPC can be said to have been made out. In the instant case, there is no material to indicate that Appellants had any malafide intention against the Respondent which is clearly deductible from the MOU dated 20.08.2009 arrived between the parties.” 17. Thus, mere breach of contract would not amount to cheating, only if intention to cheat existed at the very inception, then that would bring the case U/s. 405 and 420 of IPC, however, if such intention is developed later on, the same would not amount to cheating, as has been observed in the judgment referred above and even in Uma Shanker Gopalika Vs. State of Bihar & Anr., reported in (2005) 10 SCC 336 . 18. Here, in this case, there is no allegation of any such inducement and cheating at the inception, when the initial credit facility was granted. Even, subsequent transaction would not disclose any cheating from the side of the petitioners, while Bank had taken the decision for extending the credit facility and that decision was taken by the Board of Directors, even if, it is considered that the intention to cheat was developed later on, the said would not cover the offence under section 420 and 120B of the IPC. Cr.M.A. No.5245 of 2019 (M. Case No.7/2005) 19. The loan of Rs.25 Lakhs for Gravita India Pvt. Ltd. was sanctioned by the Head Office at Ahmedabad by the Board of Directors by resolution dated 31.01.1994, and the documents of loans were executed on 05.04.1994, and the new loan was granted on 03.04.2000 amounting to Rs.7 Crores 60 Lakhs, and it is alleged that amount of Rs.3 Crores is due and payable. Advocate Mr. Parikh submitted that so far as sanctioning of loan amount is concerned, the petitioner was not a part of the body, and he was working as a Manager in Mumbai Branch of Madhavpura Mercantile Co.Op. Bank Ltd., which has registered office at Ahmedabad in Gujarat and all the work of management and granting of loan as well as meeting of Bank were held at Ahmedabad. Cr.M.A. No.5232 of 2019 (M. Case No.6/2005) 20. Bank Ltd., which has registered office at Ahmedabad in Gujarat and all the work of management and granting of loan as well as meeting of Bank were held at Ahmedabad. Cr.M.A. No.5232 of 2019 (M. Case No.6/2005) 20. The loan amount of Rs.1.45 Crores was granted by the Board of Directors of the Bank in 1998 in favour of Gravita Textile Pvt. Ltd., and the documents of loan were executed on 02.04.1998. The allegation is that the accused were illegally operating the account. Mr. Panchal submitted that the allegation is that the present petitioner and accused nos.5 and 6 were acting against the interest of the Bank and had granted loan to the Gravita India Pvt. Ltd., and on the date of the complaint Rs.6,33,54,464/- were due and payable. Cr.M.A. No.5234 of 2019 (M. Case No.3/2005) 21. It is contended that loan of Rs.15 Lakhs were granted by the Board of Directors on March, 2000 in favour of Jalaram Textile, and the allegation is that the accused were illegally operating the account and on the date of complaint Rs.2,10,90,937/- are due and payable. Cr.M.A. No.5237 of 2019 (M. Case No.10/2005) 22. In the impugned complaint, the allegation is that a loan of Rs.25 Lakhs was granted by the Board of Directors in favour of Dantali Synthetic Pvt. Ltd. by resolution dated 31.01.1994; and further loan was granted on 03.04.2000 amounting to 1 Crore 45 Lakhs and on the date of complaint an amount of Rs.4,77,03,003 was due and payable. Cr.M.A. No.5241 of 2019 ( I-C.R. No.1 of 2018 ) 23. It is alleged that loan on Rs.25 Lakhs was granted by the Board of Directors in favour of Virsons Impex Corporation and the documents were executed on 31.07.1997, and loan amount was increased to Rs.1,090,819. Further, it is alleged that loan was further advanced to Rs.1 Crore 30 Lakhs on 08.03.1999, without taking any documents and till 21.12.2017, there was due amount of Rs.5,20,33,390. 24. Mr. Parikh submits that the petitioner as the Manager of the Branch in all the above referred cases was required to obey the orders of the management and had to disburse the loan amount to the clients as per the sanction granted by the Board of Directors, and the loan advanced at Mumbai office, was under order and instruction of the management. Mr. Mr. Parikh submitted that various complaints have been filed against various debtors and not a single evidence suggests that the petitioner is liable for charges under the Prevention of Corruption Act, nor is he connected in the crime to attribute any element under section 120B of the IPC. He further submitted that it is a case of recovery of the amount, where civil recourse is available to the Bank. 25. Advocate Mr. Parikh referred to the statement of the complainant, Noormohammed Bahadurbhai Suma, who is liquidator of the Madhavpura Mercantile Co. Op. Bank and the complaint dated 16.02.2018, to submit that in case related to Virsons Impex Corporation, it is very categorically stated that the application with incomplete information was moved and the present petitioner had not made any recommendation on page no.6 of the application, and, this itself, Mr. Parikh states is a clear evidence in favour of the petitioner to show that he had not made any recommendation for the credit facility granted to Virsons Impex Pvt. Ltd. The said statement is also corroborated by Suresh Govindji Dhami, who too stated before the police that the applicant has not made any recommendation for the credit facility; and even Mr. Navinchandra Vitthaldas Suthar before the police on 07.02.2018 has clarified that the petitioner has not recommended on page no.6 towards application with incomplete details and the decision was taken by the Board of Directors on 24.04.1997 to grant the credit facilities. 26. In the complaint being M.Case No.7 of 2005, in paragraph-9, the liquidator himself has given the details that all the proceedings of sanctioning the loan is by the Head Office and after the sanction, written information is given to all the branches; and after the written information the Branch Manager and all the responsible employee has to prepare the documentation in accordance to the rules and regulations of the bank, and accordingly after the documentation, the loanee is permitted the monetary transaction. The said facts in complaints itself suggest that the loans are sanctioned at the Head Office and the present petitioner being the Branch Manager had only to follow the written instructions given by the Head office and accordingly the documentations are being made. 27. The averments in all the complaints itself suggest that the present petitioner was Manager at Mumbai Branch. 27. The averments in all the complaints itself suggest that the present petitioner was Manager at Mumbai Branch. He was required to follow the written instructions given by the Head Office, and thereafter the documentations are to be done. There is no specific allegations of any conspiracy by the present petitioner with the alleged co-accused – Rameshchandra Nandlal Parikh (Former Chairman) and Devendra Bhagwanji Pandya (Former M.D. & CEO). This Court has not found any criminality against the petitioners of all the captioned petitions. 28. For the foregoing reasons, the petitions are allowed. The impugned complaints being (i) M. Case No.7/2005 (ii) M. Case No.6/2005 (iii) M. Case No.3/2005 (iv) M. Case No.10/2005, and the FIR being I-C.R. No.1 of 2018 filed before the Ahmedabad Zone (CID Crime) Police Station and the proceedings initiated pursuant thereto are quashed and set aside qua the present petitioners of the aforesaid captioned petitions. Direct service is permitted.