Criminal liability can arise from civil disputes; allegations of fraud and conspiracy must be examined despite ongoing civil litigation.

ORDER :

Accused Nos.1 and 2 in C.C.No.1083/2016 on the files of the Judicial First Class Magistrate Court, North Paravur have filed this petition under Section 482 of the Code of Criminal Procedure, 1973 (in short, ‘Cr.PC’), to quash the proceedings against them. The offence alleged in the said case, where in the North Paravur Police filed the final report, are under Sections 420 and 120B I.P.C read with Section 34 I.P.C.

2. The case arose out of a complaint filed by the de facto complainant/second respondent before the Judicial First Class Magistrate Court-I, North Paravur with the following allegations:

3. Accused Nos.1 and 2 were introduced to the de facto complainant by the third accused, a friend of the de facto complainant’s husband, at a time when the de facto complainant and her husband were in dire need of an amount of Rs.12,50,000/- for meeting the expenses of the marriage of their daughter. Accused Nos.1 and 2 had agreed to advance the above amount to the de facto complainant if the property having an extent of 19.775 cents where the de facto complainant resides, is offered as security by executing a document in favour of the accused. It was agreed that the aforesaid document will be styled as a sale deed but the right of the de facto complainant over the said property was not intended to be transferred to the accused. The amount advanced as loan to the de facto complainant was to be repaid within a period of fifteen years with a reasonable rate of interest. The aforesaid property belonging to the de facto complainant, was agreed to be reconveyed to the de facto complainant upon clearance of the above loan liability with the accused. At the request of the accused, the de facto complainant opened a savings bank account at Indian Overseas Bank, Edappally Branch from where the accused arranged funds for advancing the money to the de facto complainant. Though the de facto complainant sought a loan for Rs.12,50,000/- only from the accused, an amount of Rs.25,00,000/- was credited to her account. When enquired about this, the accused explained that the remaining Rs.12,50,000/- would be made use of for settling the liability with the bank. The accused took the above amount of Rs.12,50,000/- with the assurance to repay it to the Bank. It was informed to the de facto complainant that the aforesaid loan was availed by the first accused with the second accused as guarantor/co-obligant. As per the terms of agreement with the accused, the de facto complainant had been making repayment of the loan amount through the account of the first accused at State Bank of Travancore, Kottayam Branch. By way of 43 installments, the de facto complainant had remitted an amount of Rs.5,23,055/- into the account of the first accused towards repayment of the loan availed from the bank. However, the accused committed default in making payment to the loan account leading to the initiation of proceedings under the SARFAESI Act by the bank. In the month of May, 2010, the complainant received a possession notice from the bank towards proceeding against the 19.775 cents of land and building situated therein where she had been residing, towards realisation of the loan arrears. It was only at that time that the complainant realised that the property which she had offered as security to the accused was encumbered with the bank by the accused without her knowledge and consent for availing the loan. So also, the accused had availed a loan of Rs.25,00,000/- from the bank, as against the request of the de facto complainant to advance an amount of Rs.12,50,000/-, with the intention to deceive the de facto complainant. The accused had fraudulently and dishonestly offered the residential property of the de facto complainant as security for the loan availed from the bank under the pretext that they were having title over the said property. As a result of the aforesaid act of the accused, the property worth more than Rs.80 lakhs which belonged to the de facto complai