Recently, the Chhattisgarh High Court stated that if the mortgaged property is sold by the Bank for repayment of the loan and Later Found to be disputed one, the authority sanctioning the loan cannot be held guilty.
The bench of Chief Justice Ramesh Sinha and Justice Rajani Dubey was dealing with the petition filed for quashing the FIR registered for the offence punishable under Sections 420, 467, 468, 471 & 120 (B) of IPC.
In this case, the petitioner, currently working as Deputy General Manager at a Bank provided a credit facility of Rs. 1,000 Lakhs to M/s Sharma Vin Trade Services Private Limited in 2014. The credit facility was provided in the form of a Cash Credit (Hypothecation) facility. M/s Subhash Vin Trade Private Limited acted as guarantors for this credit facility and also submitted collateral security in the form of a property mortgage.
Despite the initial agreement, M/s Sharma Vin Trade Services Private Limited failed to adhere to repayment terms, leading to their account becoming Non-Performing Assets (NPAs) by December 31, 2014. Consequently, PNB initiated legal proceedings under The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
Various legal actions were taken, including issuing demand notices, possession notices, and seeking possession orders from the District Magistrate, Raipur. However, physical possession of the mortgaged property has not been delivered to PNB as of the current date.
Meanwhile, respondent no.2/complainant, who sold the property to M/s Subhash Vin Trade Private Limited, was aware of these legal proceedings. Nonetheless, the respondent filed a civil suit challenging the legality of the sale deed and claiming title and possession of the property.
Additionally, PNB filed a complaint with the police against the borrower and its directors, and when no action was taken, they filed an application under section 156 (3) of the Criminal Procedure Code. However, in an attempt to evade legal proceedings and protect the mortgaged property from repayment obligations, respondent no.2/complainant lodged an FIR against the petitioner.
Sharad Mishra, counsel for the petitioner submitted that the by virtue of Section 32 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002, no legal proceeding could be initiated against the petitioner, as he was performing his duty as Assistant General Manager in Punjab National Bank at the relevant point of time when the property in question contained in registered deed of sale was mortgaged with the Bank. It was submitted that entire allegation made against him is even otherwise pertaining to that of a civil nature. The allegation levelled against the petitioner does not constitute a prima facie offence and no criminality can be attributed to the petitioner on the basis of the allegation levelled against him.
Sangharsh Pandey, counsel for the respondent submitted that respondent No.2 had a good relationship with Subhash Sharma, as such sale deed was executed between Subhash Sharma and respondent No.2 for a sale consideration of Rs.4,97,16,000/- and for the payment of the aforesaid amount, Post Dated Cheques were given by Subhash Sharma. Thereafter all the cheques were presented at the Bank but because of the insufficient amount, all the cheques were bounced the information of the cheque bounce was also given to Subhash Sharma through legal notice, but he neither contacted respondent no. 2 nor gave any reply of the legal notice.
The bench stated that the jurisdiction to quash a complaint, FIR or a charge-sheet should be exercised sparingly and only in exceptional cases and Courts should not ordinarily interfere with the investigations of cognizable offences. However, where the allegations made in the FIR or the complaint even if taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused, the FIR or the charge sheet may be quashed in exercise of powers under Article 226 or inherent powers under Section 482 of the Cr.P.C.
High Court referred to the case of Medchl Chemicals & Pharma (P) Ltd. v. Biological E Ltd. & Ors where the Apex Court clearly held that if a prima facie case is made out disclosing the ingredients of the offence, Court should not quash the complaint. However, it was held that if the allegations do not constitute any offence as alleged and appear to be patently absurd and improbable, Court should not hesitate to quash the complaint. The note of caution was reiterated that while considering such petitions the Courts should be very circ*mspect, conscious and careful.
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The bench noted that the criminal proceedings maliciously instituted with ulterior motives can be quashed by this Court while exercising the power under Section 482 Cr.P.C.
High Court noted that the main dispute involves respondent No. 2 and M/s Subhash Vin Trade Pvt Ltd and M/s Sharma Vin Trade Pvt Ltd. The petitioner, who was an Assistant General Manager at the time, disbursed a loan to M/s Sharma Vin Trade Pvt Ltd based on a mortgaged property, unaware of any dispute regarding the sale deed used for the loan. The petitioner remains employed and has not faced prosecution or had an FIR filed against them by the bank.
In view of the above, the bench allowed the petition.
Case Title: Nikhil Chaudhary v. State Of Chhattisgarh
Bench: Chief Justice Ramesh Sinha and Justice Rajani Dubey
Case No.: CRMP No.2256 of 2018
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