The absence of fraudulent intention at the inception of a transaction negates charges of cheating under Section 420 of the IPC, distinguishing civil disputes from criminal offences.

JUDGMENT :

Sanjeeb K.Panigrahi, J.

1. The petitioners, in the present petition, seek quashing of the impugned FIR in Talcher P.S. Case No.1042, dated 25.09.2025, registered under Sections 420 and 34 of the Indian Penal Code against Nabakishore Sahoo, Ex-Senior Manager, Orissa Gramya Bank, Talcher Branch, along with the present petitioners, corresponding to G.R. Case No.1870 of 2025, now pending before the learned S.D.J.M., Talcher.

I. FACTUAL MATRIX OF THE CASE

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

i. Pursuant to an application dated 23.01.2013, a housing loan to the tune of Rs. 15.00 lakhs was sanctioned in favour of the petitioners by Orissa Gramya Bank, Talcher Branch, vide sanction endorsement dated 28.12.2013. Out of the sanctioned amount, a sum of Rs. 9.00 lakhs was disbursed in phases during the period from 03.01.2014 to 19.08.2014 by crediting the amount to the savings bank account of petitioner No. 1. The petitioners state that against the disbursed amount of Rs. 9.00 lakhs, they made repayments in terms of the repayment schedule. According to them, deposits made between 30.10.2013 and 16.08.2021, aggregating to Rs. 10,20,000/-, have not been reflected or adjusted in the loan account.

ii. By letter dated 25.07.2024, the Bank called upon the petitioners to regularize the alleged default. In reply dated 16.08.2024 submitted through counsel, the petitioners disputed the disbursement entries of Rs. 3.00 lakhs on 28.03.2014, Rs. 2.00 lakhs on 28.04.2014 and Rs. 1.00 lakh on 29.05.2014, contending that the said amounts were not credited to the relevant account. They further asserted that various deposits made by them had not been adjusted towards the loan liability and expressed willingness to settle the account under a One Time Settlement after proper adjustment. The Bank submitted its reply on 21.08.2024.

iii. On 27.08.2024, the Bank issued a Possession Notice in respect of the mortgaged property.

iv. The petitioners thereafter filed WP(C) No. 4197 of 2025 seeking permission to settle the loan liability, which was withdrawn on 11.02.2025. Subsequently, WP(C) No. 11086 of 2025 was filed and is stated to be pending.

v. Subsequently, pre-litigation mediation being Proceeding No. 23 of 2025 was initiated before the High Court of Orissa Mediation Centre. The petitioners filed their objection contending that as against the disbursed loan amount of Rs. 9.00 lakhs, they had deposited Rs. 19,09,857/-, whereas the Bank reflected an outstanding of Rs. 13,63,474/-. They also alleged that certain payments were not accounted for and that interest and additional charges were recovered during the Covid-19 period. The mediation failed as per the failure report dated 10.09.2025.

vi. Thereafter, on the basis of a complaint lodged on 25.09.2025 at 4.30 P.M., Talcher P.S. Case No. 1042 dated 25.09.2025 was registered under Sections 420 and 34 of the I.P.C. against Nabakishore Sahoo, Ex-Senior Manager, Orissa Gramya Bank, Talcher Branch, along with the present petitioners, corresponding to G.R. Case No. 1870 of 2025, pending before the learned S.D.J.M., Talcher. The FIR alleges that the petitioners had availed the housing loan of Rs. 15.00 lakhs, that the loan was disbursed in phases without verification of end use, that construction was not initiated, and that the mortgaged property was sold to a third party without repayment of Bank dues and without prior intimation to the Bank.

vii. The petitioners have filed the present petition seeking quashing of the said FIR and the consequential criminal proceeding.

II. SUBMISSIONS ON BEHALF OF THE PETITIONERS

3. Learned counsel for the petitioner