Period of Dispute: Alleged loan and fund transfer incident occurred on 30.05.2016; FIR registered as No.85/2017.
Parties Involved
Appellant: Aniruddh Singh Chauhan
Respondents: State of Madhya Pradesh & Anr.
Complainant (Respondent No.2): Account holder of a current account in Canara Bank, Gwalior (named Sai Medicals) and his wife (savings account holder)
Bank Manager: Mr. Sachin Soni (Canara Bank, Gwalior Branch)
Third Party: M/s Om Sai Properties (recipient of transferred funds)
Bank: Canara Bank
Issues / Allegations / Violations
FIR No.85/2017 alleged offences under Section 409 (criminal breach of trust) and Section 420 (cheating) of the Indian Penal Code.
Allegation that Rs 6,00,000 was transferred from the complainant’s wife’s savings account to the appellant’s firm account and subsequently to M/s Om Sai Properties without authorization.
Application under Section 319 CrPC to add the appellant as an additional accused was initially rejected (order dated 15.02.2023) and later the appellant was arraigned (order dated 23.07.2024).
The parties later settled the dispute; the full amount of Rs 6,00,000 was repaid to the complainant via demand draft.
High Court rejected the appellant’s plea to quash the proceedings, stating manipulation of bank records is a serious offence.
Findings & Observations
The Supreme Court observed that Section 420 IPC is a compoundable offence, whereas the ingredients of Section 409 IPC were not established in the present case.
Notice was served on the complainant; however, the complainant did not appear before the Court.
The Court noted that the initiation of criminal prosecution was based solely on the Section 319 CrPC application linking the transferred amount to the appellant.
Since the disputed amount was fully refunded and a compromise was reached, continuation of the criminal prosecution would be futile and an abuse of process.
Penalties / Settlements / Directions
The appeal is allowed; the criminal proceedings initiated against the appellant under FIR No.85/2017 are quashed.
No monetary penalty or conviction is imposed on the appellant.
The Court expressly clarified that the bank’s right to recover the amount, if any, remains intact, and the bank may pursue recovery in accordance with law.
Corrective Actions & Future Obligations
The bank may initiate civil recovery proceedings for the Rs 6,00,000, if it chooses to do so.
No further compliance or corrective measures are directed at the appellant.
Final Ruling & Enforcement
The Supreme Court’s order quashes the criminal prosecution against Aniruddh Singh Chauhan.
All pending applications, if any, are consigned to the records.
The bank retains the liberty to recover the disputed amount independently.
