Criminal prosecution should not be used as a shortcut for civil remedies, and non-repayment of loan amount or non-compliance with civil court awards does not constitute criminal offences unless fraudulent or dishonest intention is shown.

JUDGMENT :

Heard learned counsel for the petitioner, learned counsel for the State and learned counsel appearing for the Munger-Jamui Central Co-operative Bank Limited.

2. This application under Articles 226 and 227 of the Constitution of India has been filed by the petitioner for quashing the first information report (for short ‘FIR’) of Munger Kotwali P.S. Case No. 360 of 2018 dated 04.09.2018 registered under Sections 188, 406, 420 read with 34 of the Indian Penal Code.

3. The FIR in Munger Kotwali P. S. Case No. 360 of 2018 has been registered on the basis of the written report submitted by one Balgovind Pandit, Branch Manager, Munger-Jamui Central Co-operative Bank Limited, Munger to the officer-in-charge, Kotwali Police Station, Munger on 04.09.2018.

4. In the written report, the informant has alleged that altogether 17 borrowers including the petitioner had taken loan from Munger Branch of the Bank. The borrowers were required to return the loan amount with interest. Since they failed to repay the loan amount, the matter was taken to the Permanent Lok Adalat, Munger. The Permanent Lok Adalat passed award in terms of compromise arrived at between the parties. As per the award of the Permanent Lok Adalat, the borrowers were required to deposit amount agreed upon by them. However, they failed to comply the award in spite of repeated reminders given to them.

5. The informant has alleged that the borrowers have violated the terms of the agreement and have cheated the Bank and misappropriated the amount taken as loan.

6. Learned counsel appearing for the petitioner has submitted that the allegations made in the FIR would not attract the ingredients of the offences alleged. According to him, nonpayment of loan amount by a borrower cannot be a subject matter of criminal prosecution unless there is any element of cheating or fraud. It is not a case where the informant has alleged any element of cheating or fraud on the part of the borrowers rather the only allegation in the FIR is that the borrowers failed to repay amount and when the matter was taken to Permanent Lok Adalat, an award in terms of the compromise arrived at between the parties was passed, but they failed to comply with the award passed by the Permanent Lok Adalat. The said act, by no stretch of imagination, can be viewed as an offence punishable under penal code.

7. Learned counsel appearing for the Bank has contested the matter. He said that it is only out of fear of criminal prosecution the borrowers are repaying some amount to the Bank. He contended that the Bank had no other option but to institute an FIR as the borrowers were adamant not to comply the award passed by the Permanent Lok Adalat.

8. On the other hand, learned counsel appearing for the State fairly submitted that the award of Permanent Lok Adalat was executable as a decree made by civil court in view of Section 22-E(5) of the Legal Services Authorities Act, 1987 and the informant ought to have resorted to the execution proceeding for execution of the award instead of filing a criminal case.

9. Having heard learned counsel for the parties and perused the materials on record, I find substance in the submissions made by the learned counsel appearing for the petitioner and the State.

10. Along with the FIR, a chart showing name and address of borrowers, date of issuance of loan, amount advanced as loan, demand of loan, settlement amount, date of award by Lok Adalat and balance deposit has been annexed.

11. On perusal of the chart, it would appear that the name of the petitioner Bachchu Ram appears at serial 16. In the said chart, a total sum of Rs.1,92,425/-appears to be balance to be deposited by the petitioner. It would further appear that the loan amount advanced to the petitioner was Rs.2,50,000/-. Apparently, certain amount was deposited by the petitioner after taking loan from the Bank.

12. There is no allegation of fraud or dishonest inducement against the petitioner. There is also no allegation that the p