Default on loan payments does not constitute a criminal offence unless the loan agreement specifically provides for criminal prosecution in case of default.

Anand Prasad Sinha, J.

1. This application is for quashing of the First information Report, Annexure-1 to the petition, giving rise to Nawadah P. S. Case no.0190 1983 dated 30 6-1983 under Sec.406 of the Indian Penal Code and consequently to quash investigation.

2. It appears that the petitioner, who happened to be un-employed mining engineer had obtained loan to the tune of Rs.86,000 from the State Bank of india, Nawadah Branch hereinafter to be referred to as the Bank respondent for purchase of a mini bus. This was in response to a scheme launched by the State government for sell employment of unemployed Graduates. Accordingly, he had purchased a mini-bus being registration No. BHP 5606 and was also granted route permit (temporary) for plying of the said mini-bus in his name.

3. The petitioner had to execute an agreement with the respondent Bank at the time of taking the loan. He was required to pay of the entire loan with interest in 39 instalments and the rate of interest payable was 14 per cent perannum.

4. According to the ascertain of the petitioner he had already paid Rs.86,00/- and Rs.15,000 towards interest, learned counsel has stated that as a matter of fact, more payments have been made thereafter and the total amount of Rs.1,27,120 has been paid up till now. This has not been denied by the bank respondent. However, the Bank respondent has claimed that Rs.65,000/-and odd was still due against the petitioner till September, 1983.

5. Respondent Bank, probably, had issued a notice for payment of the loan and instalment amount and according to the case of the respondent Bank the petitioner had evaded and avoided to make payment and also had refused to produce the vehicle for inspection.

6. Consequently, a First Information Report dated 30-6-1983 had been lodged. (Annexure-1) by the Bank respondent against the petitioner. The relevant portion of the first information report is being mentioned below for its proper appreciation :

6_689_BLJ1_1988.htm

7. From perusal of the First Information Report it Would appear that an allegation had been made that the petitioner had obtained loan in the year 1976 payable in three years. In spite of information repeated requests and reminders, be did not turn up and had defaulted. Accordingly, a request was made to the police that the vehicle may be seized and the dues be recovered.

8. Consequently, as stated above, Nawadah P. S. Case No.0190 of 1983 under Sec.406 of the Indian Penal Code had been registered giving rise to the present writ application.

9. Learned counsel appearing on behalf of the pstitioner has submitte that the lodging of the First Information Report, the prayer for seizure and recovery of the amount by the police as also the registration of the police case and investigation consequent thereto is entirely mis-conceived and illegal.

10. Learned counsel appearing on bshalf of the Bank respondent has stated that, as a matter of fact the petitioner has evaded and avoided to make payments and had defaulted and that being so he has committed criminal breach of trust and rightly the First Information Report had been lodged and the case had been registered.

11. On careful consideration of the entire facts ane circumstances of the case I find sufficient force in the contention raised on behalf of the petitioner. Should ppear that at the time of taking loan the petitioner had executed an agreement with the Bank respondent for paying back the loan with interest in 39 Smelts In spite of the fact that the vehicle had been hypothecated to the Bank the ownership regarding minibus was with the petitioner and thus he happened to be the owner of the bus in accordance with the provisions of the motor Vehicles Act and also the route permit had been granted for the Bus in the name of the petitioner.

12. Taking into consideration the facts involved in this case and looking to the First Information Report, I have no hesitation in saying that no offence has been made out whatsoever re