Out-of-court settlement won’t absolve financial fraudsters: SC

Such offences are crimes against society, can lead to economic crisis

September 22, 2014 01:58 am | Updated 03:00 am IST - NEW DELHI:

The Supreme Court on Friday said no compromises could be made in cases of financial fraud, which were not just “private or individual wrongs” but crimes against society that could trigger economic crisis.

The apex court, as the guardian of the collective interest, could not remain a mute spectator or order quashing of criminal proceedings in financial fraud cases, said the Bench of Justices Dipak Misra and Vikramjit Sen; offenders could not be let off just because they were “dexterous” enough to cobble up an out-of-court settlement.

These statements formed part of the verdict delivered on an appeal by Maharashtra against a Bombay High Court order quashing criminal CBI proceedings against one Vikram Doshi and others, accused of defrauding the Bank of Baroda for credit worth crores of rupees in 2003.

Mr. Doshi, who had been able to settle the disputes while the case was pending in the trial court, had successfully moved the High Court to quash proceedings in February 2010.

On Friday, the Supreme Court set aside the High Court verdict and directed continuation of the trial, maintaining that the case was intrinsically criminal in nature.

The judgment said, “The modus operandi as narrated in the charge sheet cannot be put in the compartment of an individual or personal wrong. The ultimate victim is the collective. It creates a hazard in the financial interest of society. It has the potentiality to usher in economic crisis. Its implications [create] a concavity in the solemnity that is expected in financial transactions,” the Bench held.

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