FIR quashed in loan-mortgage dispute lacking dishonest intent at inception or entrustment; 8-year delay, counterblast after civil suit render proceedings abuse of process, purely civil matter.

ORDER :

L.VICTORIA GOWRI, J.

Preface:

1.The present Criminal Original Petition presents yet another instance where a monetary transaction secured by registered instruments is sought to be examined through the lens of criminal law. The boundary between a civil wrong and a criminal offence is sometimes thin, but never invisible. The Court, while exercising jurisdiction under Section 528 of BNSS, is required to examine whether the allegations, even if taken at their face value, disclose the foundational ingredients of the offences alleged, or whether the criminal process has been set in motion as a coercive instrument to settle a civil score.

2. The inherent jurisdiction of this Court is not intended to conduct a mini trial. Equally, it is not powerless where the complaint, read as a whole, is demonstrably attended by delay, improvements, civil antecedents and absence of essential criminal ingredients. The Court is therefore required to separate the substance of the accusation from its embellishment.

Case of the prosecution:

3. The prosecution case, as projected in the FIR and in the counter affidavit of the second respondent / defacto complainant, is that the petitioners, who are husband, wife and son, were known to the second respondent through business acquaintance. According to the second respondent, in the year 2017, the petitioners approached her seeking financial assistance of Rs.1 crore for their business needs and for the marriage expenses of the third petitioner / A3.

4. It is alleged that, believing the representation of the petitioners, the second respondent arranged funds through her father-in-law and others, and a total sum of Rs.1.10 crore was advanced to the petitioners.

5. As security for the said transaction, a mortgage deed was executed in respect of immovable property situated at Kodikulam, Madurai. A registered Power of Attorney in Document No.778 of 2017 dated 27.04.2017 was also executed in favour of the second respondent.

6. The grievance of the second respondent is that though the actual transaction was for Rs.1.10 crore, the mortgage deed was deliberately made to reflect only Rs.5 lakhs, allegedly at the instance of the petitioners, to avoid higher stamp duty.

7. It is further alleged that after receiving the money, the petitioners cancelled the Power of Attorney on 11.05.2017 and failed to repay the amount. According to the defacto complainant, such immediate cancellation of the Power of Attorney discloses dishonest intention from inception.

8. The second respondent would further state that after remaining evasive for several years, the petitioners issued a legal notice dated 26.07.2025 expressing willingness to discharge the mortgage only by paying Rs.5 lakhs. Therefore, she lodged the complaint on 15.10.2025, which culminated in registration of FIR in Crime No.39 of 2025 for the offences under Sections 406, 420 and 120(B) IPC.

Grounds for quash:

9. The petitioners seek quashing of the FIR on the following grounds:

9.1. Firstly, it is submitted that the alleged transaction is dated 27.04