Point of Law: Hon’ble Supreme Court held that when it appears that the proceedings are abuse of process of court, the High Court in exercise of its powers should not allow injustice but promote justice and Court also held that quashing of proceedings would serve ends of justice.

ORDER :

1. The petitioners are A1 to A4, filed the petition to quash the complaint and investigation in FIR No.41 of 2020, dated 28.02.2020 on the file of the Assistant Commissioner of Police, Division-C, CCS, DD, Hyderabad. However, the investigation was completed and charge sheet was filed and numbered as CC No.1247 of 2021 pending on the file of XII Additional Chief Metropolitan Magistrate, Hyderabad.

2. I.A.No.1 of 2022 is filed to amend the prayer in the present Criminal Petition to quash the proceedings in CC. No.1247 of 2021 pending on the file of XII Additional Chief Metropolitan Magistrate, Hyderabad. I.A. is allowed.

3. Briefly, the case according to the charge sheet is that one Sri E.Venugopal, Associated Vice President of SREI Equipment Finance Limited, situated at Banjara Hills filed complaint stating that the 1st petitioner/A3, 2nd petitioner/A4 who are partners of M/s.Aashi Realtors(A1) and 3rd petitioner/A5 and 4th petitioner/A6, who are directors of Neeharika Infrastructure Private Limited(A2), have approached the defacto complainant company for availing loan of Rs.110.00 Crores.

4. Accordingly, two immovable properties (i) land bearing Survey No.78 admeasuring Acs.8.08 guntas situated at Hafeezpet, Sheriilingampally, Hyderabad and (ii) house property bearing H.No.4-1-1, King Koti, Hyderabad admeasuring 28106 sq.yds, were mortgaged.

5. Though the installments were to be paid on 5th day of each quarter commencing from 5th October 2018, petitioners failed to pay the installments in spite of repeated reminders. The defacto complainant initiated proceedings under SARFAESI Act and the first asset was auctioned on 30.12.2019, which fetched Rs.102,60,00,000/-. Then the complainant company decided to mortgage the 2nd charged asset, it was found that the 2nd asset which is house property at King Koti was sold without notice, as such these petitioners and other accused caused wrongful loss to the company.

6. On the basis of the said complaint, FIR was registered and having investigated the offence, charge sheet was filed. It is stated in the complaint that after availing loan from the complainant company, the petitioners and others intentionally defaulted in repaying the loan amount, for which reason, proceedings under SARFAESI Act were initiated and the 1st mortgaged property was sold and an amount of Rs.102,60,00,000/- was recovered. However, the balance as on the date was Rs.58.90 Crores, which includes 24.81 Crores as OD and Rs.33.81 Crores as ODC-Penalties.

7. Sri V.Ravi Kiran Rao, learned Senior Counsel appearing on behalf of Sri H.Rajesh Kumar, learned counsel appearing for the petitioners, submits that even accepting all the transactions, it is purely of civil dispute, which has to be decided by the Civil Court. There is no allegation of either cheating or criminal misappropriation. The defacto complainant and the petitioners in fact entered into a MOU for settlement dated 07.09.2020, which was not considered by the Investigating Officer and without making a mention of the MOU for Settlement dated 07.09.2020, the said charge sheet is filed. In the said MOU, there is an understanding that against the outstanding liability of Rs.42,28,69,014/-, which includes interest and other charges, 3 cheques were issued. The three cheques were not presented by the defacto complainant. It is not the case that the amount was not in the accounts to honour the said cheques. It was further agreed that in view of the settlement, the parties shall take steps to withdraw all the pending cases, which includes the present Crime No.41 of 2020 initiated by the defacto complainant in pending investigation by the CCS, DD, Hyderabad. It is further argued that in case of delay or default in making balance liability, the defacto complainant/lender, shall be entitled to enforce and execute award, which would be before the arbitrator.

8. Learned Senior Counsel further argued that without resorting to either presenting the three cheques or enforcing the