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Fraud against bank is offence against society: Supreme Court

Offences related to banking activities are not only confined to banks but have a harmful impact on their customers and society at large, the Supreme Court has said while asking courts not to show leniency to the accused in such cases.

A bench of justices S J Mukhopadhaya and Ranjan Gogoi said such offences involve moral turpitude and the accused should not be let off after refunding the money taken from the bank fraudulently.

"The offences when committed in relation with banking activities including offences under Sections 420 (cheating), 471 (using forged document) have harmful effect on the public and threaten the well-being of the society. These offences fall under the category of offences involving moral turpitude committed by public servants while working in that capacity.

"Prima facie, one may state that the bank as the victim in such cases but, in fact, the society in general, including customers of the bank is the sufferer," the bench said.

It set aside the Calcutta High Court order which had quashed the criminal proceedings against a bank employee and a private person after they refunded the amount to bank.

"We set aside the impugned judgement and order dated March 31, 2010 passed by the high court and direct the trial court to proceed the matter in accordance with law and to conclude the trial expeditiously," the bench said.

In this case a person had obtained a loan of Rs 1.5 crore on the basis of forged documents with the aid of officers of Indian Overseas Bank.

A complaint was registered against a senior manager of the bank along with other persons including the director of a company which had taken loan.

All the accused were prosecuted under various sections of IPC. During the pendency of the trial, they refunded the amount and later on moved the high court for quashing the proceedings against them.

The high court allowed their plea and quashed the trial. The CBI then approached the apex court which set aside the high court order.


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