Back
2025 Supreme(SC) 703
SUPREME COURT OF INDIA
VIKRAM NATH, SANDEEP MEHTA, JJ.
Sivakumar – Appellant
Versus
The Inspector of Police & Anr. – Respondents
Criminal Appeal No(s) 2140-2141 of 2025 (Arising From SLP(CRL) Nos.5815-5816 of 2023)
Decided On : 23-04-2025
For the Petitioner(s): Mr. Rajendra Sahu, AOR
For the Respondent(s): Mr. V.Krishnamurthy, Sr. A.A.G. Mr. Sabarish Subramanian, AOR Mr. Vishnu Unnikrishnan, Adv. Ms. Azka Sheikh Kalia, Adv. Ms. Jahnavi Taneja, Adv. Mr. Veshal Tyagi, Adv. Mr. Danish Saifi, Adv.
Criminal liability requires direct involvement in the transaction; mere association with the bank does not imply culpability.
Headnote:(A) Code of Criminal Procedure, 1973 - Section 482 - SARFAESI Act - Allegations of cheating and forgery against bank officials - High Court dismissed petition to quash chargesheet - Appellant contended lack of involvement in auction process - Court found no direct role of appellant in transaction leading to FIR - Criminal proceedings quashed. (Paras 2, 6, 18, 19)
(B) Criminal Liability - To establish criminal liability, involvement in the transaction is essential - Mere association with the bank does not imply culpability for actions taken by predecessors. (Paras 18, 19)
Facts of the case:
The appellant, a bank manager, was accused of cheating in a property auction where the property was already acquired by the Tamil Nadu Housing Board. The FIR alleged suppression of this fact, leading to the complainant's participation in the auction.
Findings of Court:
The appellant had no role in the auction or issuance of the sale certificate, and the allegations against him were baseless.
Issues: Whether the appellant was liable for the alleged offences given his lack of involvement in the auction process.
Ratio Decidendi: The court ruled that the appellant's lack of direct involvement in the transaction absolves him of criminal liability, emphasizing that criminal proceedings should not continue without sufficient evidence of culpability.
Result: Appeals allowed and criminal proceedings quashed.
Certainly. Based on the provided legal document, here are the key points:
-
The case involves allegations of cheating and forgery related to a property auction conducted by a bank, with the appellant being accused of involvement despite not playing a direct role in the transaction (!) [Paras 2, 6, 18, 19].
-
The appellant, a bank manager, was appointed after the auction process and issuance of the sale certificate, and at the relevant time, he was only serving as an Assistant Manager, not the authorized officer responsible for the auction or sale certificate issuance (!) [Paras 10, 17].
-
The court found that the appellant had no direct involvement in the auction or the issuance of the sale certificate, and the allegations against him were unfounded. The sale certificate was issued by his predecessor, and he was not the authorized officer at that time (!) [Paras 18].
-
The court emphasized that criminal liability requires direct involvement in the transaction; mere association with the bank or its officials does not imply culpability (!) [Paras 18, 19].
-
The court observed that the continuation of criminal proceedings against the appellant, who had no role in the transaction, would constitute an abuse of process and cause unjust harassment (!) [Paras 18].
-
The appellant's argument that actions taken in good faith under the applicable law provide immunity was considered, but the court noted that concealment and misrepresentation could negate this protection (!) [Paras 16].
-
Ultimately, the court held that since the appellant was not the authorized officer at the relevant time and had no direct involvement, the criminal proceedings against him should be quashed to prevent miscarriage of justice and undue harassment (!) [Paras 18, 19].
-
The appeals were allowed, and the impugned order dismissing the quashing petition was set aside, leading to the quashing of criminal proceedings against the appellant (!) [Paras 19, 20].
Please let me know if you need any further analysis or specific legal advice regarding this case.
JUDGMENT :
(Vikram Nath, J.)
1. Leave granted.
2. The present appeals have been preferred by the accused- appellant against the common judgment and order dated 12.01.2023 passed by the High Court of Madras in Crl. O.P. (MD) 21417 of 2016 and Crl. O.P. (MD) No. 10979 of 2016, whereby the High Court dismissed the appellant’s petition under Section 482 of the Code of Criminal Procedure, 19731[Cr.P.C.] to quash the chargesheet and consequential proceedings arising out of CC. No. 308 of 2016 on the file of the Judicial Magistrate No. 1, Tirunelveli.
3. The case of the prosecution in the instant matter is that the first accused was working as a Branch Manager in HDFC Limited at Palayankottai Branch and the second accused, i.e. the appellant herein, was working as a Manager in the Head Office of HDFC Limited at Thiruvananthapuram when the alleged offence was committed. In 2004, one Mr. A. Kannan had borrowed loan from HDFC Limited by mortgaging his immovable property in Survey No. 145/1 (Plot No. 96) situated at Keela Natham Village, Palayankottai Taluk, Tirunelveli District and the superstructure built up therein.
4. Since the said borrower had defaulted in repaying the loan amount, HDFC Ltd. initiated proceedings under the provisions of SARFAESI Act and auction notice for the above-mentioned property was issued on 22.05.2012 by the Head Office in the vernacular newspaper. On the basis of the auction notice, the respondent no. 2, i.e. the de-facto complainant, had participated in the public auction and purchased the property for a sum of Rs. 7,25,000/- (Rupees seven lakhs twenty-five thousand only). The entire sale consideration was paid and the sale certificate was handed over to the respondent no. 2 in the month of July, 2012.
5. However, it has been alleged that when the complainant approached the Sub-Registrar, Palayankottai to register the said sale certificate, respondent no. 2 came to know that the property in question was already acquired by the Tamil Nadu Housing Board. It is then in 2013 that the respondent no. 2 filed a consumer complaint before the District Consumer Redressal Forum vide Consumer O.P. No. 58/2013 against the Chairman, Managing Director and Senior Manager of HDFC Ltd.
6. Further, the complainant filed a complaint under Section 190 of Cr.P.C. before the Judicial Magistrate Court, Tirunelveli and the Court referred the matter to City Crime Branch Tirunelveli under Section 156(3) of Cr.P.C. Accordingly, FIR in Crime No. 21/2014 was registered on 15.07.2014 under Sections 197, 417, 418, 467, 468 and 420 of the IPC wherein the Branch Manager, Tirunelveli was arrayed as the first accused and the appellant herein was arrayed as the second accused. It was alleged in the FIR that the accused persons, by suppressing the acquisition of the property by the Tamil Nadu Housing Board, sold the property to the de-facto complainant in the public auction and, thereby, cheated her. After completion of the investigation, chargesheet was filed against the accused persons and the Judicial Magistrate No. I, Tirunelveli has also taken cognizance of the final report in CC. No. 308 of 2016.
7. Aggrieved by the filing of chargesheet, the appellant preferred an application under Section 482 of Cr.P.C. seeking quashing of the criminal proceedings against him. The High Court, vide the impugned order, refused to provide the relief sought and held that a prima facie case is made out against the appellant and it is not a fit case for quashing of the final report at the threshold. It was also observed by the High Court that the appellant, with a dishonest intention, suppressed the very fact of the encumbrance by the Tamil Nadu Housing Board in the subject property and made false promise that the property was free from encumbrance and made the de-facto complainant to participate in the auction sale and induced her to purchase the property. Thus, the offence of cheating is prima facie made out against the appellant. Similar observations were also r
