Out-of-court settlement may save litigating parties a lot of trouble but not always. The Bombay High Court recently told two fighting parties, who made an out-of-court settlement to pay Rs 50,000 as expenditure for setting the investigative machinery in process. Justice B R Gavai said that the amount would go toward the police welfare fund.
While imposing the fine on the parties one of which was a bank, Justice Gavai said, “On account of the criminal complaints filed by the bank, the investigating machinery was unnecessarily set in motion and valuable time of the court and other agencies was wasted in investigating the matter.”
The case relates to filing of two petitions for quashing the criminal cases and FIR registered by the Economic Offences Wing (EOW).
The petitioner is one Tejas Kirtikumar Salot who is the proprietor of M/s Oean Steel Trading Company along with his two guarantors. Salot had taken two loans from a bank. One of that was of Rs 1.5 crore and the other of Rs two crore.
But since the loans were not re-paid, the banks lodged criminal cases against Salot and the guarantors.
However, while the matter was in the court, the parties arrived at an out-of-court settlement. Salot paid Rs 3 crore against the first loan and Rs 2.25 crore against the other. Once the settlement was done the parties came to the HC for quashing of the FIR.
Senior Counsels Shirish Gupte and Ashok Mundargi argued for the petitioners and submitted that the dispute between the petitioners and the bank was of purely personal nature.
They said that since the parties have settled their disputes amicably, no purpose would be served by keeping the criminal proceedings pending before the court.
However, A S Shitole, additional public prosecutor opposed the quashing of the FIR on the grounds that the intention of the loan seekers was to obtain loan on the basis of fraudulent documents and hence criminal proceedings should not be quashed.
While deciding the matter, Justice Gavai said that the criminal cases were filed because the loan amount was not repaid. “Even if the matter is permitted to go for trial, no fruitful purpose would be served, except burdening the criminal Courts which are already overburdened,” he said.
Justice Gavai explained that for such disputes, the court should accept the compromise terms even in criminal cases rather than keep the matter alive in the court.
He added that a common sense approach as opposed to technicalities of law could help the courts save time and that can be used for deciding more meaningful litigation.
MIDDAY 20 th March Mumbai Edition