The Allahabad High Court has quashed all criminal proceedings initiated by the Central Bureau of Investigation against the erstwhile directors of Shree Basant Oils, including businessman Ayush Agarwal, Pramod Agarwal and Gagan Agarwal.

The Court noted that the matter had been amicably settled with the lending banks on receipt of full amount as per One-Time Settlement and that continuation of proceedings would serve no useful purpose.

The proceedings arose from FIRs registered by the CBI in connection with credit facilities availed by Shree Basant Oils, a company engaged in the edible oil business.

The matter involved allegations under Sections 420 and 471 of the IPC, along with related provisions. During the course of the proceedings, the company underwent insolvency proceedings before NCLT and the lending banks entered into a comprehensive One-Time Settlement with the borrowers and guarantors.

The Court accordingly quashed the FIRs, charge sheets, cognizance orders, revision orders and all consequential criminal proceedings pending before the Special Judicial Magistrate, Ghaziabad.

The Court also relied upon recent Supreme Court precedents recognising that in appropriate commercial disputes, continuation of criminal proceedings after full settlement may amount to abuse of process of law where no larger public interest survives.

The case also drew attention for the Court’s observations that the dispute had its genesis in commercial and financial stress arising from volatility in international edible oil markets and hedging losses suffered by the company in the ordinary course of business, a finding confirmed by an independent forensic expert.

Shree Basant Oils had earlier undergone liquidation proceedings before the NCLT, Allahabad Bench, and stands dissolved as per orders passed under the Insolvency and Bankruptcy Code.

Published on June 2, 2026