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2026 Supreme(Online)(Mad) 55025
IN THE HIGH COURT OF JUDICATURE AT MADRAS
L. Victoria Gowri, J
N. Suresh Babu – Appellant
Versus
Jerome Martin – Respondent
Crl.O.P.(MD).No.2131 of 2025
For the Appellants/Petitioners: P.Pethu Rajesh
For the Respondents: I.Sam Jegan
Perjury proceedings under Section 379 BNSS against bank officers for alleged suppression in Section 14 SARFAESI affidavits require the Magistrate to record a finding of 'expediency in the interests of justice'; failing which, and where the dispute is primarily subject to DRT adjudication, such summons constitutes an abuse of process.
Headnote:(A) Bharatiya Nagarik Suraksha Sanhita, 2023 - Section 379 (corresponding to Section 340 CrPC) - SARFAESI Act, 2002 - Section 14 - Allegation of perjury in affidavit filed under Section 14 - Requirement of judicial satisfaction for summoning in perjury proceedings - Court must form an opinion that it is 'expedient in the interests of justice' - Impugned summons issued mechanically without recording mandatory satisfaction is hit by illegality -
(B) SARFAESI Act, 2002 - Role of Magistrate under Section 14 is ministerial - Dispute regarding computation of statutory periods (notice periods) or non-disclosure of certain facts in the affidavit are matters for the Debts Recovery Tribunal (DRT) to decide under Section 17 - Criminal proceedings cannot be used as a collateral mechanism to stall recovery or pressure bank officers when statutory forums exist. (Paras 33, 35, 38, 47, 50, 60).
Facts of the case:
The petitioners, authorized officers of a bank, initiated proceedings under Section 14 of the SARFAESI Act, 2002 to take possession of secured assets. The respondent, a guarantor, challenged these measures before the Debts Recovery Tribunal but failed to comply with conditional interim orders. Subsequently, the respondent initiated a perjury proceeding under Section 379 BNSS against the bank officers before the Chief Judicial Magistrate, alleging suppression of material facts in the Section 14 application. The Magistrate issued a summons, which the petitioners challenged in the High Court.
Findings of Court:
The Court held that the Magistrate failed to record the mandatory satisfaction that an inquiry into the alleged perjury was 'expedient in the interests of justice'. It further observed that the grievances regarding the validity of SARFAESI notices and the fullness of the affidavit are primarily actionable before the DRT. Initiation of criminal proceedings without clear proof of deliberate falsehood constitutes an abuse of process.
Issues: Whether a perjury proceeding under Section 379 BNSS can be initiated against bank officers for alleged suppression of facts in a Section 14 SARFAESI application without a finding of expediency in the interests of justice and while the underlying dispute is pending before the DRT.
Ratio Decidendi: The power to initiate perjury proceedings under Section 379 BNSS is governed by the requirement of judicial satisfaction regarding the expediency of prosecution in the interests of justice. Where the allegation relates to a dispute of fact or statutory compliance already before a specialized tribunal (DRT), and where no deliberate falsehood is manifest, criminal summons issued without recording such satisfaction is an abuse of process. Result : Criminal Original Petition allowed; impugned summons quashed.
| Table of Content |
|---|
| 1. nature of the legal challenge and question of immunity. (Para 1 , 2 , 3 , 4) |
| 2. factual matrix of the sarfaesi recovery and the perjury complaint. (Para 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21) |
| 3. contentions of parties regarding statutory interpretation and alleged suppression. (Para 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30) |
| 4. analysis of the requirement for judicial satisfaction in perjury proceedings. (Para 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54 , 55 , 56 , 57 , 58 , 59 , 60 , 61 , 62 , 63 , 64) |
| 5. final outcome and preservation of statutory remedies. (Para 65 , 66) |
ORDER
Prologue:
The present Criminal Original Petition brings before this Court a narrow but important question: whether an officer of a secured creditor, who invoked Section 14 of the SARFAESI Act, 2002 for obtaining assistance of the learned Chief Judicial Magistrate to take physical possession of secured assets, can be summoned in a proceeding styled as one under Section 379 of the Bharatiya Nagarik Suraksha Sanhita, 2023, merely because the borrower/guarantor alleges suppression of facts in the affidavit filed in support of the Section 14 application.
2. The petitioners are Chief Managers of the State Bank of India. They are not strangers to the transaction. They acted as authorised officers of the secured creditor under the SARFAESI Act, 2002 , and the Security Interest (Enforcement) Rules, 2002. The respondent is a guarantor/partner connected with the borrower concern, M/s.Hi-Tech Foams.
3. The impugned summons has been issued in Crl.M.P.No.1 of 2024 in Crl.M.P.No.12395 of 2024, on the file of the learned Chief Judicial Magistrate, Thoothukudi, in a petition filed by the respondent alleging perjury in relation to the proceedings under Section 14 of the SARFAESI Act, 2002 .
4. The petitioners seek quashment of the said summons and the consequential proceedings on the ground that the same is a retaliatory and collateral proceeding intended to obstruct SARFAESI recovery, though the respondent has already availed statutory remedies before the Debts Recovery Tribunal.
Case of the Petitioners:
5. The first petitioner, N.Suresh Babu, was working as Chief Manager, State Bank of India, Stressed Assets Recovery Branch, Madurai, during the period from 26.07.2021 to 08.11.2023. Thereafter, he was transferred and relieved from the said branch.
6. The second petitioner, Abhinav Bothra, is also a Chief Manager in the State Bank of India and is stated to have taken charge as Chief Manager and Authorised Officer, State Bank of India, Stressed Assets Recovery Branch, Madurai, from 04.11.2023.
7. According to the petitioners, M/s.Hi-Tech Foams, a partnership firm, availed several credit facilities from the State Bank of India, SME Branch, Dindigul, namely, cash credit facility of Rs.4,75,00,000/-, ad hoc limit under Guaranteed Emergency Credit Line of Rs.20,00,000/-, and term loan under Guaranteed Emergency Credit Line of Rs.80,00,000/-, in all aggregating to Rs.5,75,00,000/-.
8. The respondent, Jerome Martin, along with other partners and guarantors, executed loan documents, deeds of guarantee and documents creating security interest over immovable properties. According to the bank, the borrower committed default and the loan account was classified as Non-Performing Asset on 28.10.2022.
9. Thereafter, the bank issued demand notice dated 07.11.2022 under Section 13(2) of the SARFAESI Act, 2002 , demanding payment of Rs.5,39,95,694/- within the statutory period. On failure to discharge the liability, possession notice under Section 13(4) of the SARFAESI Act read with Rule 8(1) of the Security Interest (Enforcement) Rules, 2002 was issued on 09.01.2023 and symbolic possession was taken.
10. The borrower and guarantors approached this Court in W.P.(MD) No.2468 of 2023 challenging the possession action. This Court disposed of the writ petition by granting lib
