The Himachal Pradesh High Court has reaffirmed that criminal proceedings for offences of forgery, fraud, and economic offences involving banks cannot be quashed under Section 482 CrPC on the basis of settlement; such offences are against society, not just the individual victim. This judgment maintains and applies longstanding Supreme Court precedents, and serves as binding authority for subordinate courts in similar matters.
Summary
| Category | Data |
|---|---|
| Case Name | CRMMO/923/2024 of DISHA SHUKLA Vs STATE OF HP AND OTHERS |
| CNR | HPHC010415042024 |
| Date of Registration | 18-09-2024 |
| Decision Date | 17-10-2025 |
| Disposal Nature | Dismissed |
| Judgment Author | Hon’ble Mr. Justice Rakesh Kainthla |
| Court | High Court of Himachal Pradesh |
| Bench | Single Judge |
| Precedent Value | Binding on subordinate courts in Himachal Pradesh; persuasive for other High Courts |
| Overrules / Affirms |
|
| Type of Law | Criminal Law (CrPC, IPC – Economic Offences, Forgery, Cheating) |
| Questions of Law |
Whether offences involving forgery, using forged documents, and banking fraud can be quashed under Section 482 CrPC upon settlement between the accused and the bank. |
| Ratio Decidendi |
The High Court, applying binding Supreme Court precedents, held that criminal proceedings for offences involving forgery of documents and economic fraud—such as fraud on a bank—cannot be quashed under Section 482 CrPC on the ground of settlement between the parties. Such offences are not purely private/civil disputes but have a wider societal impact, harming the financial integrity of institutions and thus society at large. Repayment or civil settlement between the accused and the bank does not absolve criminal liability nor justify quashing prosecution for such grave offences. Continuation of such criminal proceedings is necessary to uphold the public interest in prosecuting serious economic offences. |
| Judgments Relied Upon |
|
| Logic / Jurisprudence / Authorities Relied Upon by the Court |
Offences involving forgery and fraud on banks have a social dimension, not merely a civil/private one; gravamen of such offences is societal harm and financial integrity; powers under Section 482 CrPC to quash are to be exercised sparingly, not for serious economic offences; civil settlement does not erase criminal culpability where offences are not private in nature. |
| Facts as Summarised by the Court |
The petitioner and others secured a vehicle loan from Punjab and Sindh Bank using forged invoices and documents. The bank later discovered the documents (sale certificate, insurance, and others) were fake and the entity purportedly issuing them did not exist. The bank repaid the loan in full through civil proceedings, which were then withdrawn. The police, however, found the petitioner’s signatures on forged documents, and filed a chargesheet. Petitioner sought quashing of FIR citing the civil settlement. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts in Himachal Pradesh |
| Persuasive For | Other High Courts, Supreme Court |
| Follows |
|
What’s New / What Lawyers Should Note
- Reiterates that offences involving forgery, fraud, and use of forged documents for bank loans are not quashable under Section 482 CrPC on the basis of settlement, even if the dispute is civilly settled.
- Reaffirms that repayment of loan or withdrawal of civil proceedings by bank does not mitigate criminal liability in such cases.
- Clarifies that such economic offences have a significant societal impact and go beyond the realm of private disputes.
- Lawyers cannot rely on mere settlement/repayment to seek quashing of proceedings for serious economic offences, especially those involving banks or public institutions.
Summary of Legal Reasoning
- The court relied on the Supreme Court’s authoritative pronouncements, particularly Parbatbhai Aahir v. State of Gujarat, which establishes a list of principles regulating when criminal proceedings can be quashed under Section 482 CrPC.
- It noted that while High Courts have inherent powers to prevent abuse of process and secure justice, such power must be sparingly exercised and not in cases of grave economic offences.
- Offences under Sections 467, 468, and 471 IPC (forgery, use of forged documents) involve harm to the public and society at large, and hence cannot be quashed on the basis of settlement.
- Cited State of Maharashtra v. Vikram Anantrai Doshi, CBI v. Maninder Singh, and CBI v. Hari Singh Ranka to emphasize that financial fraud and forgery committed by manipulating bank documents constitutes a “social wrong” with serious societal impact.
- The fact that the bank has withdrawn the civil suit and the accused repaid the outstanding amount does not erase the criminal conduct or its consequences.
- The role of the accused was established through investigation including forensic evidence (signature matching).
- The continuation of prosecution is necessary for such serious offences to act as a deterrent and protect societal and institutional integrity.
Arguments by the Parties
Petitioner
- Asserted that the petitioner has already repaid the amount due to the bank and the civil recovery suit has been withdrawn.
- Claimed that further prosecution would amount to an abuse of process, as the bank no longer has any claim.
- Argued the dispute was fundamentally civil in nature, with criminal attributes.
Respondent/State
- Opposed maintainability, emphasizing the petitioner’s role in producing forged and fraudulent documents.
- Stressed that allegations are serious in nature, affecting not just the bank but society at large.
- Highlighted that investigation established petitioner’s involvement and there is a cognizable offence which should proceed to trial.
Respondent No.2 (Bank)
- Submitted that withdrawal of the civil suit by the bank does not affect the continuation of the criminal proceedings.
- Supported the respondent/State’s opposition to quashing.
Factual Background
The petitioner, together with others, secured a vehicle loan from Punjab and Sindh Bank in April 2014 by submitting forged proforma invoices and other documents purportedly from a non-existent entity. After the loan was sanctioned and funds transferred, the bank realized that the documents (including sale certificate and insurance papers) were fake, and the accused failed to produce genuine documents despite repeated requests. The police, upon investigation, confirmed forgery and conspiracy, with handwriting analysis linking the petitioner to the forged documents. While the bank withdrew its civil suit for recovery following full repayment, criminal charges under Sections 420, 467, 468, and 471 IPC were pressed, and the petitioner sought quashing on grounds of settlement.
Statutory Analysis
- Interpreted Section 482 CrPC: The Court reaffirmed that its inherent powers are not to be used for quashing serious economic offences, even when parties settle.
- Sections 420 (Cheating), 467 (Forgery of valuable security), 468 (Forgery for purpose of cheating), and 471 (Using as genuine a forged document) IPC: The court underscored their serious nature, societal impact, and non-compoundable character (except 420 in certain circumstances), holding such offences beyond the scope of civil/private settlement.
Alert Indicators
- ✔ Precedent Followed – Judgment strictly adheres to binding Supreme Court precedents.