Sarwan Singh and Others vs State of Punjab and Others

Nirmaljit Kaur, J.—All these petitions are being disposed of by one common order as the issue involved is identical. However, for facility of reference, facts are being taken from CRM M 33908 of 2008.

The Petitioners are the loanee of LIC HFL - Respondent No. 2 and applied loan for an amount of Rs. 3,00,000/- before the LIC HFL Limited i.e. Respondent No. 2 on 02.12.1998. The above said loan amount was sanctioned on 16.12.1998 by Respondent No. 2 to the tune of Rs. 2,00,000/- and it was agreed that the Petitioner shall pay additional interest @ 3% per annum in case of non-payment of any installment as per the agreed terms and conditions which was to be repaid within 10 years in equal monthly monthly installment of Rs. 3500/-. As per the terms and conditions of the LIC HFL, the Petitioners were paying the installments of loan regularly, but due to sudden weak financial position, they were unable to pay further loan installments to Respondent No. 2. In this regard, the Petitioners had also submitted a representation dated 13.08.1999 for the extension of one month time to repay the loan amount. However, the Manager, LIC HFL got registered FIR No. 305 dated 25.08.2001 u/s 420, 467, 468, 471 of Indian Penal Code at Police Station Division No. 5 Ludhiana against the Petitioners.

The officers of Respondent No. 2 in their official capacity took possession of the mortgaged property of the loanee/Petitioners on 09.02.2005. The Petitioners challenged the above said act of Respondent No. 2 vide CWP No. 2835 of 2005 for issuance of directions to the Respondents to accept amount of Rs. 2,00,000/- and release the Petitioners'' residential house. The above said writ petition was disposed of by this High Court vide order dated 15.12.2005. Meanwhile, the entire loan amount has already been paid by the Petitioners. In this regard, no due certificate dated 17.11.2006 has also been issued to the Petitioners.

While praying for quashing of the FIR, learned Counsel for the Petitioner submitted that it is a civil dispute and a colour of criminal proceedings has been given. It is further stated that challan has been filed only against the Petitioner. Whereas, Happy Goyal and Parveen Goyal, who alleged to have fabricated the documents have not been challaned. As such, the offence u/s 420, 467, 468, 471 of Indian Penal Code cannot be said to be made out against the present Petitioners.

Learned Counsel appearing for Respondent No. 2 - LIC Housing Finance Limited, vehemently opposed the prayer of the Petitioners and submitted that the repayment of the loan amount does not absolve the Petitioners from their criminal liability.

Learned State counsel while opposing the same on the ground that after due verification, it was found that although the loan amount was taken for the purpose of renovation of the house but no renovation of the house has been carried out. As such, the documents stating that the loan was required for renovation of the house were fabricated.

Heard.

From the documents and the reply filed by the State, the following facts emerge and which are also are admitted:

a) The matter was settled between the Respondent company and the present Petitioners;

b) In pursuance to the said settlement, loan amount stands repaid;

c) No objection certificate was issued to the present Petitioners by the complainant Company (LIC Housing Finance Limited);

d) Under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the possession of the mortgaged property was taken and thereafter, the possession of the same was restored back as ordered by the appropriate authority;

e) In fact, the complainant Insurance company waived of Rs. 25,000/- as charges of recovery/securitization etc. in pursuance to the said settlement.

Moreover, allegation qua fabricated documents, valuation and inspection report, on the basis of which, Sections 420, 467, 468, 471 IPC were added is specifically alleged against Happy Goyal and Parveen Goyal. The same reads as under:

So, Sarwan Singh and Jaswinder Singh have perpetuated a fraud on LIC Housing Finance Ltd. in criminal conspiracy with Pardeep Bansal, Happy Goel and Parveen Goel and Bansi Lal in order to cause wrongful loss to LIC Housing Finance Limited and wrongful gain to themselves by false forged and fabricated documents prepared by Happy Goel, Parveen Goel and Pardeep Bansal and cheated and defrauded with LIC Housing Finance Limited.

Whereas, as per the reply filed by the State, Happy Goel and Parveen Goel have been let off being innocent and no challan has been filed against them. Reply filed by the State reads thus:

The accused were associated with the investigation. Co-accused Parveen Goyal and Happy Goyal were declared innocent by the then DSP, Sarabha Nagar. Subsequently, the enquiry pertaining to the present case was conducted by the then SP/Headquarter, Ludhiana, who also declared Parveen Goyal and Happy Goyal innocent.

Thus, once the main accused Happy Goyal and Parveen Goyal have already been let off, it is not understood as to how the said offence would stand against the present Petitioners. The entire loan amount is repaid. Thus, intention to cheat is no where made out. The granting of no objection certificate by Respondent No. 2 in itself shows that the dispute between the complainant Insurance Company and the present Petitioners was settled. In fact, even an amount of Rs. 25,000/- was waived off in pursuance to the said settlement which further shows that no loss is caused to the Respondent-Company.

Hon''ble the Supreme Court in the case of Nikhil Merchant v. CBI and Anr. reported as AIR 2009 SC 428 in para 5 held as under:

Before the High Court, it was urged that since the subject matter of the dispute had been settled between the Appellant and the Bank, it would be unreasonable to continue with the criminal proceedings which had been commenced on a complaint filed on behalf of the Bank having particular regard to Clause 11 of the consent terms by which the parties had withdrawn all claims against each other. It was submitted that the learned Special Judge had erred in rejecting the Appellant''s prayer for discharge from the criminal case. In support of the aforesaid contentions made on behalf of the Appellant before the High Court, reference was made to the decision of this Court in the case of Central Bureau of Investigation, SPE, SIU (X), New Delhi Vs. Duncans Agro Industries Ltd., Calcutta, wherein on the basis of facts similar to the facts of this case, this Court had held that even if an offence of cheating is prima facie made out, such offence is a compoundable offence and compromise decrees passed in the suits instituted by the Bank, for all intents and purposes, amount to compounding of the offence of cheating. This Court accordingly, upheld the order of the High Court quashing the criminal complaint after the civil action had been compromised between the parties.

In the present case, although there is no specific compromise recorded but the loan amount has already been repaid. The matter was settled as one time settlement and in pursuance to the said settlement, an amount of Rs. 25,000/- was waived off and no objection certificate dated 17.11.2006 (P5) was issued. The said action of the Company amounts to compounding of the offence. As such, nothing survives in the present case. Moreover, the main accused i.e. Happy Goyal and Parveen Goyal have already been let off and as such, the said offence under Sections 420, 467, 468, 471 IPC also cannot be said to be made against the present Petitioners. Even otherwise, from the perusal of the FIR and from the facts narrated above, the intention to cheat is not made out. No wrongful loss has been caused to any party. Allowing the proceedings to continue in the facts of the present case, would be nothing but a sheer wastage of time as there is no likelihood of the same resulting in the conviction of the Petitioners and will only amount to sheer misuse of the process of law.

Resultantly, the present petitions are allowed and FIR No. 305 dated 25.08.2001 under Sections 420, 467, 468, 471 IPC, registered at Police Station Division No. 5, Ludhiana (In CRM M 33908 of 2009 and CRM No. 55486 of 2004) as well as FIR No. 286 dated 18.08.2001 under Sections 420, 467, 468, 120B IPC, registered at P S Division No. 5, Ludhiana (in CRM M 12711 of 2009) and all the subsequent proceedings arising out of the same are hereby quashed.

Allowed in the above terms.