Delhi High Court Quashes Criminal Proceedings Against Bank Official in Fraud Case

Exoneration in Departmental Inquiry Leads to Dismissal of Criminal Charges Against Gurbachan Singh Matta  

In a significant ruling, the Delhi High Court has quashed the criminal proceedings against Gurbachan Singh Matta, a former General Manager of Indian Overseas Bank, accused of involvement in a financial fraud case. The judgment, delivered by Justice Neena Bansal Krishna on October 27, 2025, emphasized that continuation of criminal prosecution when a departmental inquiry has already exonerated the accused amounts to an abuse of the court's process.  

The case originated from an FIR registered on February 23, 2012, against Matta and other bank officials, based on allegations of dereliction of duty and conspiracy in the sanctioning and utilization of credit facilities by M/s Century Communication Limited (CCL). The prosecution claimed that Matta, along with other officials, failed to verify invoices and equipment installations, thereby facilitating a massive financial fraud that led to significant losses for a consortium of banks.  

However, Matta's defense highlighted that his role was limited to a site inspection on January 20, 2005, which was conducted under the instructions of his superiors, and that he was not responsible for invoice verification. The defense further argued that a detailed inspection had already been conducted by a subordinate officer a day prior to Matta’s visit.  

Crucially, Matta was exonerated in a departmental inquiry conducted by the Central Vigilance Commission (CVC), which examined the same allegations. The CVC's report concluded that Matta's inspection was conducted according to the bank's norms and found no lapse or misconduct on his part.  

The High Court's judgment referenced several precedents, including the Supreme Court's rulings in cases like Radheshyam Kejriwal v. State of West Bengal, which establish that exoneration in departmental proceedings with a lower standard of proof should preclude continuation of a criminal trial on the same facts. Justice Krishna noted that the allegations against Matta lacked evidence of mens rea, a necessary component to establish criminal liability, and recognized the CVC's findings as a substantive determination of innocence.  

The court's decision underscores the principle that criminal prosecution should not continue when identical departmental proceedings have cleared an accused of wrongdoing, highlighting the higher standard of proof required in criminal cases. The ruling, however, is confined to Matta and does not affect the proceedings against other accused individuals in the case.  

This judgment not only provides relief to Matta, who is now a senior citizen at 75, but also reinforces the judiciary's role in preventing the misuse of criminal proceedings when departmental inquiries have already addressed the allegations.  

Bottom Line:

Criminal prosecution cannot continue when the departmental proceedings, which require a lower standard of proof, have found no merit in the allegations.

Statutory provision(s): Criminal Procedure Code, 1973 Section 482; Prevention of Corruption Act, 1988 Sections 13(2) and 13(1)(d); Indian Penal Code Sections 120B, 420, 467, 468, 471.

Gurbachan Singh Matta v. Central Baureau of Investigation, (Delhi) : Law Finder Doc Id # 2799521