Supreme Court – Daily Orders
Standard Chartered Bank vs The State Of Karnataka on 24 April, 2025
Author: Rajesh Bindal
Bench: Rajesh Bindal
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IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.845/2018
STANDARD CHARTERED BANK Appellant(s)
VERSUS
THE STATE OF KARNATAKA & ORS. Respondent(s)
WITH
CRIMINAL APPEAL NO.846/2018
O R D E R
The appellants have approached this Court
seeking to quash the impugned judgment passed by the
High Court which declined to quash the First
Information Report (FIR) being FIR No. 418/2016 dated
16.12.2016, registered at Indiranagar Police Station,
Bengaluru against them for the offences under
Sections 406, 409, 420, 108-A, 109 and 120-B of the
IPC, 1860 on the premise that there is a statutory
violation and the allegations made in the FIR pertain
to fabrication of documents, amongst others.
This case has got a checkered history.
An Escrow and Settlement Transaction Agreement
(hereinafter referred to as “Escrow Agreement”) was
Signature Not Verified
entered into way back on 12.05.2007 between Corsair
Digitally signed by
ASHA SUNDRIYAL
Date: 2025.05.17
16:33:34 IST
Reason:
and katra, and Standard Chartered Bank, Mauritius.
The contesting respondent before us – M/s Vector
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Program Pvt. Ltd. (Vector) agreed to sell 13455
shares of Tamil Nadu Mercantile Bank unconditionally
and irrevocably to the entities identified by Corsair
Investments LLC.
Accordingly, one of the appellants – Starship
Equity Holding Ltd. (Starship) was identified as an
independent investor for the purchase of shares. A
letter was addressed by respondent-Vector to Corsair
recording an agreement between the two for
transferring shares which respondent-Vector was in
the process of acquiring. On 13.05.2007, the Tamil
Nadu Mercantile Bank approved the transfer of shares
in favour of respondent-Vector. On the very same day,
in accordance with the aforesaid letter recording an
agreement, the shares were further transferred and
the same were deposited with the Standard Chartered
Bank, India having its branch at Mumbai. Respondent-
Vector, after the completion of the said transaction
received a sum of Rs.32,53,68,810/- on 15.05.2007.
It seems to us that the valuation of the shares has
increased multifold thereafter.
Having lost a fortune by its own decision,
respondent-Vector made an abortive attempt by filing
a civil suit in the year 2011 seeking termination of
the Escrow Agreement, and return of the said shares.
The interim application filed at the instance of
respondent-Vector in Suit No.988/2011 was dismissed
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by the Bombay High Court inter alia holding that
respondent-Vector did not have the right to seek
termination of the Escrow Agreement and, thereafter,
return of the shares, as the transfer of shares was
complete qua respondent-Vector and there was no
regulatory implication against it.
Aggrieved, an appeal was preferred before the
Division Bench of the High Court. By way of a
speaking order, the Division Bench not only confirmed
the order of the learned Single Judge, but also
imposed costs.
We have also been informed that unrelented and
undaunted, the respondent-Vector had made one more
attempt by filing a Special Leave Petition before
this Court, which also met the same fate as before.
Surprisingly, a criminal complaint was made by
respondent-Vector on 16.12.2016, few days after the
dismissal of the appeal by the Division Bench of the
High Court. The said criminal complaint was
registered as an FIR on the very same day. It was
transferred on the next date to the respondent No.1-
Criminal Investigation Department Cyber Crimes Police
Station. Within two days thereafter, an
Investigating Officer was appointed and in a hurried
manner, an order has been obtained from the
jurisdictional Magistrate under Section 93 of CrPC,
1973 for search and seizure. In pursuance of the
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search, the shares certificate in the name of
respondent-Vector were seized.
The appellants approached the High Court seeking
to quash the First Information Report registered. As
stated earlier, the High Court by way of the impugned
order, was pleased to reject the prayer sought for.
Thus, the present appeals before us have been filed.
Learned senior counsel appearing for the
appellants would contend that the very criminal
complaint is nothing but a clear abuse of the
process of law. Nearly after nine years from the
date of the Escrow Agreement and the receipt of the
money after transfer of shares and immediately after
the dismissal of the intra-Court appeal by the
Division Bench of the Bombay High Court, respondent
No.3 has filed the criminal complaint. He has also
brought on record the Escrow Agreement and the letter
recording an agreement inter-se the parties. Even
the High Court of Karnataka, while dismissing the
quashing petition was pleased to take note of the
receipt of the money by respondent-Vector. There is
absolutely no criminal proceedings initiated at the
instance of either the Reserve Bank of India or the
Enforcement Directorate against the appellants,
pertaining to the present set of transactions. Thus,
the criminal proceedings, being a clear abuse of the
process of law are liable to be quashed.
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Mr. Sajan Poovayya, learned senior counsel
appearing for the respondent-Vector submits that
though it may not be against the respondents,
proceedings have been initiated against some other
persons. Mere dismissal of the intra Court appeal by
the Division Bench of the Bombay High Court would not
bar the FIR from being registered, particularly when
a cognizable offence is made out. The contents of the
criminal complaint subsequently registered as an FIR,
being one for investigation, this Court may not
interfere with the ultimate conclusion arrived at by
the High Court.
The facts, as narrated, speak for themselves.
On a perusal of the FIR, we find that it is
completely bereft of the material particulars. Most
of the transactions have either been suppressed or
have not duly been brought on record. This includes
the pendency of the civil litigation and the orders
passed both by the High Court and this Court. As
stated, the decision of the Division Bench of the
Bombay High Court has been confirmed by this Court.
All the contentions raised have been considered
threadbare. The very criminal complaint, as stated
earlier, has been given immediately after the
dismissal of the appeal by the Division Bench of the
High Court. It is not in dispute that respondent-
Vector signed the documents, transferred the shares
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and received the money. All these transactions were
complete way back on 15.05.2007. It is only
thereafter, by way of an afterthought, that
respondent-Vector made an abortive attempt by way of
filing a civil suit seeking termination of the Escrow
Agreement, and return of the escrowed shares. After
getting adverse orders at the hands of both the
learned single Judge and the Division Bench of the
Bombay High Court, hurriedly a criminal complaint has
been filed immediately thereafter. There is no
contra-material to hold that any other criminal
proceedings have been initiated against the
appellants. It is the respondent-Vector who was the
beneficiary of the transaction and received money at
the relevant point of time. Therefore, we have no
hesitation in holding that the High Court has
committed an error in not considering the relevant
materials in their correct perspective, especially,
the well merited decisions of the Bombay High Court.
The power under Section 482 of the Code of
Criminal Procedure, 1973 as it stood at the relevant
point of time, though is expected to be exercised
sparingly, shall be invoked when the pendency of the
criminal proceedings would result in a gross abuse of
the process of law. This is a fit case where the
High Court ought to have exercised the said power.
We have also been informed that subsequently, the
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very same High Court has quashed the impugned FIR as
against the co-accused namely, accused Nos.6 and 7 in
Criminal Petition No.565/2017 by order dated
28.03.2024.
Considering the above facts and discussion, the
impugned order stand set aside. Consequently, the
FIR being FIR No.418/2016 registered against the
appellants stands quashed. The escrowed shares will
have to be returned to the appellants.
We make it clear that our order will not have
any bearing on any other pending proceedings.
The appeals stand allowed in the aforesaid terms.
Pending application(s), if any, shall stand
disposed of.
……………….J.
[M.M. SUNDRESH]
……………….J.
[RAJESH BINDAL]
NEW DELHI;
APRIL 24, 2025.
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ITEM NO.102 COURT NO.8 SECTION II-C
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Criminal Appeal No(s). 845/2018
STANDARD CHARTERED BANK Appellant(s)
VERSUS
THE STATE OF KARNATAKA & ORS. Respondent(s)
WITH
Crl.A. No. 846/2018 (II-C)
FOR PERMISSION TO FILE ADDITIONAL DOCUMENTS/FACTS/ANNEXURES ON IA
66855/2018
Date : 24-04-2025 These appeals were called on for hearing today.
CORAM :
HON’BLE MR. JUSTICE M.M. SUNDRESH
HON’BLE MR. JUSTICE RAJESH BINDAL
[THROUGH VIDEO CONFERENCING]For Appellant(s) Dr. Abhishek Manu Singhvi, Sr. Adv.
Mr. M S Krishnan, Sr. Adv.
Mr. K. Shiva, Adv.
Mr. Anirudh Krishnan, Adv.
Mr. Kunal Shah, Adv.
Mr. Mohit Rohatgi, Adv.
Ms. Ankita Singhania, Adv.
Mr. Karthik Adlalka, Adv.
Mr. Kaustub Narendran, Adv.
Mr. Umang Nair, Adv.
Mr. Balaji Srinivasan, AOR
Dr. Harish Narasappa, Sr. Adv.
Mr. Divyam Agarwal, AOR
Mr. Hormuz Mehta, Adv.
Mr. Aniket Aggarwal, Adv.
Mr. Mayank Ratnaparkhe, Adv.
Mr. Ahsan Allana, Adv.
Mr. Pranav Nayar, Adv.
For Respondent(s) Mr. V. N. Raghupathy, AOR
Mr. Raghavendra M. Kulkarni, Adv.
Ms. Mythili S, Adv.
Mr. M. Bangaraswamy, Adv.
Mr. Venkata Raghu Mannepalli, Adv.
Mr. Md. Apzal Ansari, Adv.
Mr. Prakash Jadhav, Adv.
Mr. Shiv Kumar, Adv.
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Ms. Vaishnavi, Adv.
Mr. Dhanesh Ieshdhan, Adv.
Mr. Sajan Poovayya, Sr. Adv.
Mr. Palash Maheshwari, Adv.
Ms. Sanjanthi Sajan Poovayya, Adv.
Ms. Raksha Agarwal, Adv.
Mr. Yogesh Somani, Adv.
Mr. Saransh Bhardwaj, Adv.
Mr. Akash Chatterjee, AORUPON hearing the counsel the Court made the following
O R D E RThe appeals are allowed in terms of the signed order.
Pending application(s), if any, shall stand disposed of.
(ASHA SUNDRIYAL) (POONAM VAID) DEPUTY REGISTRAR ASSISTANT REGISTRAR
[Signed order is placed on the file]
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