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IN THE HIGH COURT OF JHARKHAND AT RANCHI
SANJAY KUMAR DWIVEDI, J.
Regional Manager, Central Bank of India, Ranchi, through Sri Jagdish Ram Daroch - Petitioner
Versus
The State of Jharkhand and Anr. - Opposite Parties
Cr.M.P. No. 2397 of 2016
Decided On : 25-06-2024
SARFAESI Act - Criminal Proceedings - SARFAESI Act, 2002, Sections 13, 17, 32 - The court discussed the SARFAESI Act as a complete code governing the procedures for secured creditors and remedies for aggrieved parties. It highlighted the importance of following due process in loan sanctioning and property mortgaging, emphasizing that the bank acted in good faith based on the documents presented. The court interpreted Sections 13 and 17, affirming that aggrieved parties have recourse through the Debt Recovery Tribunal (DRT) and that the actions of the bank under the SARFAESI Act are subject to scrutiny, but not to be re-evaluated by police investigations. The court concluded that the petitioner, as a bank official, was protected under Section 32 of the SARFAESI Act, leading to the quashing of the criminal proceedings against him.
Fact of the Case:
The petitioner sought to quash criminal proceedings related to an FIR alleging that a land deed was forged to secure a loan from the Central Bank of India. The informant claimed to have purchased the land, which was later found to be mortgaged by the seller using a forged deed. The bank had followed procedures under the SARFAESI Act for loan recovery after the account became non-performing.
Finding of the Court:
The court found that the bank acted in accordance with the SARFAESI Act and had verified the documents before sanctioning the loan. It determined that the allegations against the petitioner were unfounded as he was not directly involved in the verification process and was protected under the SARFAESI Act.
Issues: Whether the criminal proceedings against the petitioner, a bank official, were justified given the circumstances of the loan and mortgage, and whether the SARFAESI Act provided adequate protection for the bank's actions.
Ratio Decidendi: The court held that the SARFAESI Act is a comprehensive framework governing the actions of secured creditors and the remedies available to aggrieved parties. It emphasized that the bank's actions were legitimate and that the petitioner was shielded from criminal liability under Section 32 of the Act.
Final Decision: The court quashed the criminal proceedings against the petitioner, allowing the petition and stating that the proceedings against other accused would continue as per law.
JUDGMENT :
SANJAY KUMAR DWIVEDI, J.
Heard Mr. P.A.S. Pati, learned counsel for the petitioner, Mr. Rajesh Kumar, learned counsel for the State and Ms. Akriti Shree, learned counsel for opposite party no.2.
2. The prayer in the petition is made for quashing of the entire criminal proceeding arising out of Jharia P.S. Case No.185 of 2016, corresponding to G.R. No.3203 of 2016, pending in the Court of the learned Additional Chief Judicial Magistrate, Dhanbad.
3. The FIR was lodged on the basis of the written complaint alleging therein that the informant, namely, Lal Bahadur Singh had purchased a land vide registered deed no.6154 dated 31.07.2013 from one Rajesh Kumar Gupta, which has been mentioned in Book No.1, Volume No.208, Page No.169 to 196 and link deed no.1034 dated 14.06.2000 was also in the name of Rajesh Kumar Gupta, which has been mentioned in Book no.1, Volume No.82, Page No.127 to 133. The informant after purchasing the land got mutation done vide mutation case no.56(11)/2014-15 and paid rent up to 2014-15. It was further alleged that the informant came to know from another person that another deed of the said land was deposited as mortgaged in the Central Bank of India, Jharia Branch on that basis Rajesh Kumar Gupta had taken loan from the bank. It was also alleged that on 07.11.2015, the informant received a letter from Bijay Kumar Das, Branch Manager of Central Bank of India and he was asked to appear before him on 19.11.2015 with all the original document thereupon the informant went there and produced original deed No.1034 dated 14.06.2000 and the bank has kept photo copy of deed signed by the informant with a view to get it verified, but the same was not done and the Branch Manager, namely, Vijay Kumar Das and Regional Manager, Jadgish Ram Daroch with connivance of accused Rajesh Kumar Gupta sent a fake enquiry report to the informant without his knowledge on 22.07.2016 through speed post. The informant has further alleged that after the above process, the informant came to know that deed no.1034 dated 14.06.2000 was mortgaged by accused Rajesh Kumar Gupta and obtained the amount of loan from the bank taking advantage of silence of accused, the then Branch Manager, namely, Ganga Balav Singh and Regional Manager, Jagdish Ram Daroch and did not pay the loan amount. The informant has also alleged that Rajesh Kumar Gupta got the loan amount sanction on the basis of forged document with the connivance of other accused persons named in the FIR and, as such, the FIR was lodged by the informant.
4. Mr. P.A.S. Pati, learned counsel for the petitioner submits that the petitioner at the time of filing of the present case was posted as Regional Manager of the Central Bank of India at Ranchi. He submits that one M/s Raj Steel Fabrication, Dhanbad a proprietorship firm made an application through Smt. Ritu Raj Gupa, the proprietor to the Central Bank of India, Jharia Branch for sanction of a case credit facility of Rs.25 Lakhs on 03.09.2008 and co-accused Rajesh Kumar Gupta and others were guarantors and have furnished mortgaged security and, hence, the liability of Rajesh Kumar Gupta is joint, several and co-existence. Upon sanction of the aforesaid credit facilities, both the borrower and guarantor executed and signed several security documents on 04.09.2008 in favour of the bank. He further submits that the accused Rajesh Kumar Gupta also with the intention to create security created equitable mortgage on 03.09.2008 and had deposited his title deeds i.e. sale deed no.1034 dated 14.06.2000 with the bank by way of an equitable mortgage. He also submits that the bank had taken due care to verify the title deed and after proper verification an Legal Scrutiny Report, the said property was mortgaged. He submits that the loan amount was disbursed, but the borrowers failed to repay the dues of the bank as per agreed terms and as the account became irregular and stick and, as such, it was declared NPA. The demand notice was issued b
The SARFAESI Act provides a complete legal framework for secured creditors, ensuring that their actions are protected when conducted in good faith, and establishes that criminal proceedings cannot be....
The Court emphasized that the power to quash criminal proceedings should be exercised sparingly and only in exceptional cases, and that the Court should not inquire about the reliability or genuinene....
The main legal point established in the judgment is that the protection provided under Section 32 of the SARFAESI Act, 2002 can be invoked to quash criminal proceedings when the actions are taken in ....
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.
Fraud allegations must provide specific particulars to circumvent the jurisdictional bar under Section 34 of the SARFAESI Act, 2002; vague claims are insufficient.
Criminal proceedings cannot be initiated to challenge actions taken under the SARFAESI Act, as it undermines the exclusive jurisdiction of the Debt Recovery Tribunal.
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