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Judgment
Anil Kumar Choudhary, J
Heard the parties. No one turns up on behalf of the Opp. Party no. 2 in spite of repeated calls, though notice has validly been served upon the opp. Party no. 2.
Since both these criminal miscellaneous petitions have been filed with the same common prayer and have arisen from the common complaint being Complaint Case no. 856 of 2022, hence, both these Criminal Miscellaneous Petitions are being disposed of by this common judgment.
These Criminal Miscellaneous Petitions have been filed invoking the jurisdiction of this Court under Section 528 of BNSS, 2023 with the prayer for quashing and setting aside the entire criminal proceeding including the order dated 18.07.2023 passed by learned JMFC, Bokaro in connection with Complaint case no. 856 of 2022 whereby and whereunder, the learned Magistrate, has found the prima facie case for the offence punishable under Section 420 of IPC against the petitioners.
The brief fact of the case is that the petitioner of CrMP No. 2351 of 2024 is the Union Bank of India, which is body corporate constituted under Banking Company Act 1970 whereas the petitioner of CrMP No. 2352 of 2024 was the Chief Manager of City Centre, Sector IV Branch of the said Union Bank of India.
The allegation against the petitioners is that the petitioners in violation of the order of the Hon’ble Supreme Court of India which prohibited any loan account being declared as Non Performing Asset during the period of 01.03.2020 to 31.05.2020; on 29.05.2020, classified the loan Account of the complainant and his wife as Non Performing Asset. There is further allegation that the petitioners have realised the interest from the complainant at a rate more than the rate prescribed by the petitioner of CrMP No. 2351 of 2024. On the basis of the complaint, the statement of the complainant on Solemn Affirmation and the statement of the inquiry witnesses, learned JMFC, has found prima facie case for the offence punishable under Section 420 of IPC against the petitioners.
It is submitted by the learned counsel for the petitioners that the charge has not yet been framed and the case is next fixed to 28.01.2026 for appearance of the accused persons of the case. It is next submitted by learned counsel for the petitioners relying on the judgment of the Hon’ble Supreme Court of India in the case of K. Virupaksha and Another vs. State of Karnataka and Another reported in (2020) 4 SCC 440 that therein the Hon’ble Supreme Court of India Has observed that sanction of loan, creation of mortgage and the manner in which the sanctioned loan was to be released are contractual matters between the parties. The Hon’ble Supreme Court of India has further observed that the Securitisation and Reconstruction of Financial Assets And Enforcement of Security Interest (SARFAESI) Act, is a complete code in itself which provides for the procedure to be followed by the secured creditor and also the remedy to the aggrieved parties including the borrower.
It is next submitted that the loan account of the petitioner has been classified as Non Performing Asset in exercise of the power under Section with 13 (2) of the SARFAESI Act. As the Hon’ble Supreme Court of India in the said case has held that if there is any discrepancy in the manner of classifying the account of the complainant as Non Performing Asset or in the manner in which the property was valued or auctioned, the Debt Recovery Tribunal is vested with the power to set aside the auction deprecated filing of a complaint in the Criminal Court as the same is an intimidatory tactics and which is an abuse of process of law because it would amount to permitting the jurisdictional police to go through the process in respect of the matters in which power has been vested with the Debt Recovery Tribunal. The Hon’ble Supreme Court of India also considered the protection of the action taken in good faith against any secured creditor or any of its officers. It is next submitted that there is no allegation that any of actions done by petitioners are without any good faith and even if the entire allegations made against the petitioners are considered to be true in its entirety still the offence punishable under section 420 of IPC is not made out as there is neither deceit nor any dishonest or fraudulent inducement of the complainant resulting to part with any property by the Complainant. It is next submitted that the dispute between the parties is essentially a civil dispute and a cloak of criminal case is being given to the same solely, for the purpose of wrecking vengeance. Hence, it is submitted that the prayer as prayer for in this criminal miscellaneous petition be allowed.
Learned Spl. P.P. and learned counsel Addl.P.P. on the other hand, vehemently oppose the prayer of the petitioners and submit that materials in the record is sufficient to constitute the offence punishable under Section 420 of the IPC against the petitioners and no illegality has been committed by learned JMFC, Bokaro in passing the impugned order, hence, it is submitted that this criminal miscellaneous petition.
Having heard the submissions made at the Bar and after going through materials available in the record, it is pertinent to mention here that the essential ingredients to constitute the offence punishable under Section 420 of IPC are as under :-
(i) deceit i.e. dishonest or fraudulent mis-representation,
(ii) inducing the person deceived, to part with property or a person so induced to do anything which he would not do or omit, if he were not so deceived.
Now coming to the facts of the case there is absolutely no allegation against the petitioner of deceiving the complainant or inducing the complainant to part with any property. The only allegation against the petitioners is that the petitioners have classified the loan account of the complainant and his wife as Non- Performing Asset in violation of the order of the Hon’ble Supreme Court of India and assuming the said allegations to be true, certainly the offence punishable under Section 420 of IPC is not made out.
The other allegation is that the petitioners have charged interest at a rate more than the rate prescribed by the petitioners of CrMP No. 2351 of 2024 in respect of the category of loan which was taken by the petitioners. Assuming that the petitioners have charged a rate more than the rate, at which it was supposed to be charged, still in the absence of any allegation of any deception played by the petitioners since the beginning of the transaction between the parties, the offence punishable under section 420 of IPC is not made out. It is a settled principle of law as has been reiterated by the Hon’ble Supreme Court of India in the case of Uma Shankar Gopalika vs. State of Bihar & Another reported in (2005) 10 SCC 336 paragraph-6 of which reads as under:-
“Xxxx xxxx xxxx It is well settled that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. In the present case it has nowhere been stated that at the very inception there was any intention on behalf of the accused persons to cheat which is a condition precedent for an offence under Section 420 IPC.” (Emphasis supplied)
that in order to constitute the offence of cheating, the accused must have played deception since the very inception and if the intention to play the deception develops later on, the same cannot amount to cheating.
So in this case, there being no allegation against the petitioners of having played deception since the beginning of the transaction between the parties as admittedly, the loan transaction was going on smoothly for over a decade, certainly, the allegations made against the petitioners, even if are considered to be true in their entirety; in the absence of the essential ingredient that the petitioners have played deception since the beginning of the transaction, falls short of constituting the offence punishable under Section 420 of IPC.
Under such circumstances this court is of the considered view that since the sole offence in respect of which learned Magistrate has found prima facie case punishable under section 420 of IPC is not made out against the petitioners even if the entire allegations are considered to be true in their entirety hence, continuation of the this criminal proceeding will amount to abuse of process of law and therefore this is the fit case where the entire criminal proceeding including the order dated 18.07.2023 passed by learned JMFC, Bokaro in connection with Complaint case no. 856 of 2022 be quashed and set aside.
Accordingly, the entire criminal proceeding including the order dated 18.07.2023 passed by learned JMFC, Bokaro in connection with Complaint case no. 856 of 2022 is quashed and set aside.
In the result, these Criminal Miscellaneous Petitions are allowed.