The Allahabad High Court has quashed all CBI criminal proceedings against the directors of now-dissolved edible oil manufacturer Shree Basant Oils Limited, holding that a comprehensive One-Time Settlement (OTS) with the complainant bank, rendered continuation of criminal proceedings an abuse of process.
Justice Deepak Verma passed a common judgment, disposing of five connected applications under Section 528 of the Bharatiya Nagarik Suraksha Sanhita (BNSS) filed by Gagan Agarwal, Pramod Agarwal, and Ayush Agarwal, erstwhile directors of the company.
The High Court quashed the two FIRs, the chargesheet dated September 30, 2023, the cognizance orders of October 2023, and the revision order dated March 4, 2025 passed by the Special Judge (CBI), Ghaziabad, all in one common order.
Shree Basant Oils availed credit facilities totalling INR 82.68 crore from Andhra Bank (now Union Bank of India) in 2016 to establish a new refining unit. The loan turned NPA in November 2019, was declared fraud in July 2021.
Following a complaint by the bank’s Regional Head, the CBI registered two FIRs in May 2022, initially alleging offences under Sections 120-B, 420, 468, 471, 477A IPC, and provisions of the Prevention of Corruption Act, 1988.
After investigation, the CBI filed its chargesheet, dropping the PC Act charges, as no public servant was found involved, and proceeding only under Sections 120-B, 420, and 471 IPC. Cognizance was taken by the Special Judicial Magistrate (CBI), Ghaziabad in October 2023.
The Special Judge further observed in April 2024 that the charge under Section 471 IPC (using forged documents as genuine) was not prima facie made out, as specimen signatures were never taken and the alleged forged documents were never sent to a CFSL for examination.
The Union Bank of India issued a Liability Discharge Certificate on June 12, 2024, releasing all collateral securities and personal guarantees, confirming full and final settlement of dues. The bank also filed a No Objection Certificate in September 2025 and wrote to the SP, CBI, New Delhi confirming it had no remaining grievance against the accused. Separately, National Company Law Tribunal Allahabad dissolved the company with immediate effect on February 21, 2024, under the Insolvency and Bankruptcy Code.
