Loan defaulters to face action even after dues settlement: SC

Posted: May 18, 2009 at 1904 hrs
New Delhi The Supreme Court has ruled that loan defaulters cannot escape prosecution even if they strike a deal with the banks to clear dues in one-go.

The judgement was delivered by a division bench comprising Justices Dalveer Bhandari and Harjit Singh Bedi while setting aside an order of the Madras High Court.

The CBI's Bank Securities and Frauds Cell had registered four criminal cases on June 27, 1998 on the written complaint of the Indian Bank and after investigation, the agency had filed chargesheets before the CBI Special Court, Chennai, in the year 2000, a CBI spokesperson said here on Monday.

While the trial was on, the accused businessman Ravishankar Prasad and Manohar Prasad entered into one-time settlement (OTS) with the Indian Bank and repaid Rs 157 crore in 2007, the spokesperson said.

On the basis of this OTS, the accused had approached Madras High Court seeking an order to quash criminal proceedings against them. The court on April 30, 2008 quashed the criminal proceedings.