Indian Bank vs Mohan Murti Shandilya

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2026 Supreme(Del) 153

IN THE HIGH COURT OF DELHI AT NEW DELHI
AMIT MAHAJAN, J.
Indian Bank – Appellant
Versus
Mohan Murti Shandilya – Respondent
Crl. M.C. No. 266 of 2009, Crl. M.A. No. 22687 of 2022
Decided On : 09-02-2026

Important Points

The court quashed proceedings under Section 340 CrPC, ruling that allegations of forgery lacked merit and constituted an abuse of process due to pending appeal in Debt Recovery Appellate Tribunal.

Subject

Criminal Law - Quashing of Complaint

Act Referred

CRIMINAL PROCEDURE CODE: S.195, S.340, S.482
INDIAN PENAL CODE: S.120, S.219, S.34, S.405, S.409, S.420, S.467, S.471, S.477
SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT: S.14, S.14(2), S.17, S.2(1)(z)(d), S.29
RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT: S.18

Headnote

(A) Code of Criminal Procedure, 1973 - Section 482 - Section 340 - Indian Penal Code, 1860 - Sections 405, 409, 420, 467, 471, 477-A, 34, 120B - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Complaint quashed - Allegations of forgery and criminal breach lacking merit, constituting an abuse of process of the court, with the legal heirs' appeal still pending - Statutory provisions on secured creditor status not violated. (Paras 1, 32, 41)

Advocates Appeared:
For the Appellant : Ayush Choudhary
For the Respondents: Ananya Bhattacharya, Prerna Jain, Rubeka Daniel

Table of Content
1. factual basis for the complaint (Para 1 , 2)
2. arguments presented by petitioner bank (Para 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14)
3. court's analysis of section 340 of crpc (Para 15 , 16 , 17 , 18 , 19 , 20 , 21)
4. findings on petitioner's secured creditor status (Para 22 , 23 , 24 , 25 , 26 , 27 , 28)
5. review of allegations of forgery (Para 29 , 30 , 31 , 32 , 33 , 34)
6. court's conclusions on the prosecution's merit (Para 35 , 36 , 37 , 38 , 39)
7. final decision and order of the court (Para 40 , 41 , 42)

JUDGMENT :

AMIT MAHAJAN, J.

1. The present petition is filed under Section 482 of the Code of Criminal Procedure, 1973 seeking quashing of the criminal complaint under Section 340 of the Code of Criminal Procedure, 1973 (‘CrPC’) read with Sections 405 /409/219/420/467/471/477-A/34/120B of the Indian Penal Code, 1860 (‘ IPC ’) read with Section 29 of the SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT , 2002 (‘SARFAESI Act’) filed by the respondent and pending before the learned Magistrate, Tis Hazari Courts, Delhi in CC No. 820/2006.

2. The brief facts of the case are as follows:

i. It is alleged that the petitioner bank and certain employees conspired to cheat the respondent by dishonestly misappropriating movable and immovable properties of the complainant and thus hatched a conspiracy to falsely implicate the respondent and three companies of the respondent, namely, M/s Gambro Nexim (India) Medical Ltd., Nexim Export Pvt. Ltd. and Rexima Export Pvt. Ltd., before the learned Debt Recovery Tribunal-II, New Delhi.

ii. It is alleged that the petitioner bank, in the year 1996, instituted three Original Applications before the learned Debt Recovery Tribunal-II, New Delhi against the Companies of the respondent and its Directors seeking recovery of alleged outstanding dues. In those proceedings, the Bank alleged that property bearing No. F-23, Green Park Main, New Delhi (hereinafter referred to as “the Subject Property”) stood mortgaged with the Bank.

iii. It is alleged that subsequently, in the year 2006, the petitioner bank, vide notice dated 04.04.2006, purported to invoke the provisions of Section 13(2) of the SARFAESI Act, thereby initiating measures for enforcement of its alleged security interest in respect of the subject property.

iv. It is alleged that thereafter, in 2007, the petitioner bank proceeded to file an application under Section 14 of the SARFAESI Act before the learned Magistrate, wherein it claimed the status of a secured creditor and sought appointment of a court receiver for taking possession of the subject property.

v. It is alleged that the petitioner bank fraudulently obtained an order from the learned Magistrate to have police protection while taking possession of the subject property by invoking Section 13(4) of the SARFAESI Act, knowing fully well that the respondent never created equitable mortgage over the said property for the alleged debt which was the subject matter of the proceedings before the learned Debt Recovery Tribunal- II, New Delhi in O.A. 895/96; 870/96 and 871/96.

vi. It is alleged that in order to support their case, the petitioner bank also forged the valuable security of the complainant, namely the alleged equitable mortgage of the immovable property at F-23, Green Park, New Delhi by fabricating the alleged document of creating "Extension of Equitable Mortgage" and alleged "Acknowledgement of Debt" true copies of which were filed by the accused persons before the learned Debt Recovery Tribunal-II, New Delhi in O.A. 895/96; 870/96 and 871/96.

vii. It is alleged that the Notice dated 04.04.2006 and the follow up Notices sent by the petitioner bank to the respondent were contrary to the provisions of SARFAESI Act and in violation of settled law, that no bank can initiate proceedings simultaneously under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and SARFAESI Act in respect of the same