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2023 Supreme(Online)(Ker) 57131
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K. BABU ND MONDAY, THE 22 DAY OF MAY 2023 / 1ST JYAISHTA, 1945 CRL.MC NO. 1301 OF 2023 (Crime No.919 of 2022 of Infopark Police Station, Ernakulam)
PETITIONERS/ACCUSED NOS.1 TO 6:
1 PNB HOUSING FINANCE LTD.
HAVING ITS REGISTERED OFFICE AT 9TH FLOOR, ANTRIKSH BHAVAN, 22 KASTURBA GANDHI MARG, NEAR CONNAUGHT PLACE, NEW DELHI-110001 REPRESENTED BY ITS CEO, GIRISH KOUSGI.
2 BRANCH MANAGER, (DURING DECEMBER 2015) PNB HOUSING FINANCE LTD., 1ST FLOOR, R.P. ARCADE, NEAR RAILWAY OVERBRIDGE, ADJACENT TO GOLD SOUK GRANDE MALL, PONNURUNNI, VYTILLA, KOCHI, PIN – 682019.
3 GIRISH KOUSGI, AGED 53 YEARS CEO & MANAGING DIRECTOR, PNB HOUSING FINANCE LTD.
9TH FLOOR, ANTRIKSH BHAVAN, 22 KASTURBA GANDHI MARG, NEAR CONNAUGHT PLACE, NEW DELHI, PIN – 110001.
4 THE AUTHORISED OFFICER (WHO SIGNED THE NOTICE DATED 15-11-2022)
PNB HOUSING FINANCE LTD., 9TH FLOOR, ANTRIKSH BHAVAN, 22 KASTURBA GANDHI MARG, NEAR CONNAUGHT PLACE, NEW DELHI, PIN – 110001.
5 SANJAY JAIN, AGED 59 YEARS COMPANY SECRETARY & HEAD COMPLIANCE PNB HOUSING FINANCE LTD., 9TH FLOOR, ANTRIKSH BHAVAN, 22 KASTURBA GANDHI MARG, NEAR CONNAUGHT PLACE, NEW DELHI, PIN – 110001.
6 JATUL ANAND, AGED 46 YEARS CASH CREDIT & COLLECTION OFFICER, PNB HOUSING FINANCE LTD. 9TH FLOOR, ANTRIKSH BHAVAN, 22 KATURBA GANDHI MARG, NEAR CONNAUGHT PLACE, NEW DELHI – 110001.
BY ADVS.MADHU RADHAKRISHNAN NELSON JOSEPH M.D.JOSEPH DEEPAK ASHOK KUMAR RESPONDENTS/STATE & DEFACTO COMPLAINANT:
1 STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, HIGH COURT P.O., ERNAKULAM, PIN – 682031.
2 REBY THOMAS, AGED 46 YEARS S/O.VARGHESE THOMAS THACHENPARAMBIL, REBY VILLA, MUNDANCAVU, ALAPPUZHA - 689121 NOW RESIDING AT VENUS 12- B, TRINITY WORLD, CHITTETUKARA, ERNAKULAM, PIN – 682030.
R2 BY ADV. SMT.AYSHA ABRAHAM R1 BY P.P.SMT.PUSHPALETHA M K THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON
22.05.2023, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:
“C.R.”
The court established that bank officials are entitled to immunity for actions taken in good faith under SARFAESI Act; however, allegations of fraud and conspiracy under IPC require further inquiry.
Headnote:(A) Indian Penal Code, 1860 - Sections 406, 409, 420, 442, 120-B, and 34 - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 32 - Criminal conspiracy and fraud allegations against bank officials and builder in relation to illegal apartment construction on paddy land without requisite approvals - Complaint filed contends collusion between builder and officials to cheat home buyer. (Paras 2, 10, 24)
(B) Quashing of FIR - High Court assesses the necessity of criminal proceedings based on the allegations in FIR; it refrains from weighing evidence or discussing merits at this stage. Court emphasizes that FIRs must be allowed to progress to investigation unless they are clearly baseless. (Paras 12, 16)
Facts of the case:
Allegations arose from the purchase of an apartment by the defacto complainant, who availed a loan from the accused, and later discovered significant irregularities regarding the legality of the project's construction. Complaints filed led to criminal proceedings against bank officials and builders. (Paras 1, 8, 10)
Findings of Court:
The FIR regarding Section 442 and 448 claims was quashed due to lack of culpability under the SARFAESI Act. However, allegations of fraud and conspiracy under Sections 406, 409, and 420 remain for further inquiry. (Paras 24, 25)
Issues: Whether the petitioners are entitled to protection under Section 32 of the SARFAESI Act and the validity of the FIR based on the evidence presented. (Paras 22, 25)
Ratio Decidendi: A finding of protectable action requires proof of actions being taken in good faith under statutory directives. The court ruled that while some actions were valid, others remaining unaddressed require further scrutiny under existing laws. (Paras 21, 23)
Result: FIR quashed regarding Sections 442 and 448 IPC; proceedings regarding other sections retained for further consideration.
ORDER
The prayer in this Crl.M.C. is as follows:-
“………. to allow the Criminal Miscellaneous Case, quash Annexure 1 complaint, Annexure 2 F.I.R and all further proceedings pursuant thereto in Crime No.0919/2022 of Infopark Police Station, Ernakulam District, against the petitioners/accused Nos.1 to 6, so as to secure the ends of justice.”
2. The petitioners, who are the officials of Punjab National Bank Housing Finance Limited, are accused Nos.1 to 6 respectively in the aforementioned F.I.R. They along with the co-accused face allegations under Sections 406 , 409, 420, 442 and 120-B read with Section 34 of the Indian Penal Code . The F.I.R was registered based on a complaint filed by respondent No.2.
3. Respondent No.2/the defacto complainant in the F.I.R. purchased an apartment in a project managed by Jain Housing and Constructions Ltd. called “Tuffnel Park”. He purchased the apartment along with his wife after availing a housing loan of Rs.40 lakhs from petitioner No.1 and further paying a sum of Rs.11,13,820/- by himself. A sale deed was executed on 18.12.2015 in favour of the complainant by Jain Housing and Construction Company. The complainant was allotted Flat No.4055 in the apartment complex. Based on the representation of the Builder that occupancy certificate was obtained from Thrikkakkara Municipality the complainant carried out interior works costing around Rs.10 lakhs. In May, 2019, the complainant came to know that the Supreme Court has ordered demolition of another project by name `Coral Cove’, a project of the same builder. He got information that the apartment was constructed illegally on a paddy land and the construction was made without getting mandatory consent from the Kerala Pollution Control Board and further that environmental clearance was also not obtained.
3.1. The complainant filed complaints with the Kerala Human Rights Commission. As the building was not numbered and there were issues related to supply of water and electricity the complainant approached the Anti Corruption Bureau of CBI and filed a written complaint against all Public Sector Banks that had approved the project and disbursed loan to the Builder. The complainant also approached the State Vigilance and Anti- corruption Bureau alleging collusion of the Builder with the officials of Municipality, Fire Department etc. After that, the complainant filed a complaint before the Judicial First Class Magistrate Court, Kakkanad against the petitioners, the Builder and others involved. The learned Magistrate directed investigation of the offences alleged. The Infopark Police registered the above crime.
4. Heard the learned counsel appearing for the petitioners, the learned Public Prosecutor and the learned counsel appearing for respondent No.2.
5. The learned counsel for the petitioners submitted that the attempt of the defacto complainant is to get away from the liability to pay the loan due to the Punjab National Bank Housing Finance Ltd. The learned counsel for the petitioners contended that the defacto complainant is a defaulter and the complaint which formed the basis of the registration of the FIR was filed when the Bank proceeded under the provisions of the Securitisation And Reconstruction of Financial Assets and Enforcement of Security Interest Act , 2002 (SARFAESI Act). The learned counsel, relying onPriyanka Srivastava and Ors. v. State of U.P. and Ors. ( AIR 2015 SC 1758 ), submitted that the petitioners are entitled to immunity under Section 32 of the SARFAESI Act.
6. The learned counsel for respondent No.2/the defacto complainant contended that the impugned FIR reveals cognizable offences against the petitioners and this Court is not expected to go into the merits of the allegations in the FIR. It is submitted that it would be premature to pronounce the conclusion based on the submissions of the petitioners. The learned counsel for the defacto complainant relied on M/s.Neeharika Infrastructure Pvt. Ltd. v. State of Maharashtra and Other
