The Supreme Court of India has determined that criminal proceedings against loan defaulters should cease if the debtor and the bank have reached a settlement. Justices B V Nagarathna and Ujjal Bhuyan stated that continuing such proceedings would be oppressive and could harm the economy. The case involved a businessman who had settled a loan of ₹4.25 crore, which was part of a larger outstanding amount of ₹6.49 crore, including a notional interest of ₹3.09 crore. The court criticized the bank for filing a criminal complaint of cheating and fraud two years after the settlement, indicating that this behavior undermines good faith and could discourage future resolutions of financial disputes. The ruling reinforces that settlements approved by judicial bodies like the Debt Recovery Tribunal should be respected, as allowing prosecutions to continue post-settlement could negatively affect the willingness of individuals and businesses to resolve their financial issues.