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SUPREME COURT OF INDIA
R. BANUMATHI, S. ABDUL NAZEER, A.S. BOPANNA, JJ.
K. Virupaksha & Anr. – Appellant(s)
Versus
The State of Karnataka & Anr. – Respondent(s)
Criminal Appeal No. 377 of 2020; (Arising Out of SLP (Criminal) No. 5701 of 2019)
Decided on : 03-03-2020
Indian Penal Code, 1860 – Sections 511, 109, 34, 120B, 406, 409, 420, 405, 417 and 426 – Code of Criminal Procedure, 1973 – Section 482 – Criminal breach of trust, cheating, forgery and conspiracy – Account of Complainant was classified as NPA is also admitted position – In that regard when a right accrues to secured creditor to enforce security interest, procedure as contemplated under Sections 13 and 14 of SARFAESI Act is to be resorted to – Security Interest (Enforcement) Rules, 2002 provides procedure to be adopted with regard to valuation and sale of secured asset – If Complainant, as a borrower had any grievance with regard to any of measures taken by secured creditor invoking provisions of Section 13 of SARFAESI Act, remedy as provided under Section 17 of SARFAESI Act was to be availed – SARFAESI Act is a complete code in itself which provides procedure to be followed by secured creditor and also remedy to aggrieved parties including borrower – In such circumstance if there is any discrepancy in manner of classifying account of appellants as NPA or in the manner in which property was valued or was auctioned, DRT is vested with power to set aside such auction at the stage after secured creditor invokes power under Section 13 of SARFAESI Act – Present case is a fit case wherein extraordinary power is necessary to be invoked and exercised – Complaint and FIR quashed. (Paras 13, 16, 17, 18 and 19)
Facts of the Case:
Appellants herein were the petitioners in Criminal Petition No.100323/2018 which was dismissed by High Court of Karnataka, Dharwad Bench through order dated 21.01.2019. The said order was passed by High Court while considering the petition filed by the appellants herein under Section 482 of the Cr.P.C. seeking that the order dated 20.05.2016 passed by the Principal Civil Judge & JMFC in PC No. 389/2016 referring the matter for investigation and consequential registration of FIR in Crime No. 152/2016 by the Hubballi Sub-Urban Police Station for the alleged offences punishable under Sections 511, 109, 34, 120B, 406, 409, 420, 405, 417 and 426 of IPC be quashed. In said proceedings the appellants herein are arrayed as Accused Nos. 9 and 11 respectively. The appellants herein were at the relevant point in time working as the Deputy General Managers in the Canara Bank (Accused No.1), Circle Office at Hubbali, Karnataka.
Findings of the Court:
In the matter of present nature if the grievance as put forth is taken note and if the same is allowed to be agitated through a complaint filed at this point in time and if the investigation is allowed to continue it would amount to permitting the jurisdictional police to redo the process which would be in the nature of reviewing the order passed by Single Judge and the Division Bench in the writ proceedings by the High Court and the orders passed by the competent Court under the SARFAESI Act which is neither desirable nor permissible and the banking system cannot be allowed to be held to ransom by such intimidation.
Result : Appeal allowed.
>JUDGMENT :
A.S. Bopanna, J.
Leave granted.
2. The appellants herein were the petitioners in Criminal Petition No. 100323/2018 which was dismissed by the High Court of Karnataka, Dharwad Bench through the order dated 21.01.2019. The said order was passed by the High Court while considering the petition filed by the appellants herein under Section 482 of the Cr.P.C. seeking that the order dated 20.05.2016 passed by the Principal Civil Judge & JMFC in PC No. 389/2016 referring the matter for investigation and consequential registration of FIR in Crime No. 152/2016 by the Hubballi Sub-Urban Police Station for the alleged offences punishable under Sections 511, 109, 34, 120-B, 406, 409, 420, 405, 417 and 426 of IPC be quashed. In the said proceedings the appellants herein are arrayed as Accused Nos. 9 and 11 respectively. The appellants herein were at the relevant point in time working as the Deputy General Managers in the Canara Bank (Accused No.1), Circle Office at Hubbali, Karnataka.
3. The brief facts leading to the present situation is that the respondent No.2 herein (hereinafter referred to as the 'Complainant') had approached the Canara Bank at Hubballi pursuant to which credit facilities were sanctioned on 16.03.2009. The total credit facility sanctioned amounted to Rs.2.68 crores. The property bearing Survey No. 213/2002 situated at Anchatageri Village, Hubballi measuring 3 acres 2 Guntas was offered as security for the said loan and a charge was created. The said property is hereinafter referred to as the 'Secured Asset'. As per the case of Canara Bank, the Complainant had not repaid the loan amount and in that view having committed default, the account of the Complainant was classified as 'Non-Performing Asset' ('NPA' for short) on 15.01.2013. The Canara Bank thus having invoked the power under Section 13(2) of The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 ('SARFAESI Act' for short) had issued appropriate notices and ultimately the possession of the secured asset as contemplated under Section 14 of the SARFAESI Act was taken on 22.03.2013. The secured asset was thereafter evaluated and was brought to auction through the public notice dated 13.10.2013 indicating the date of auction as 15.11.2013. The reserve price of the secured asset was fixed at Rs. 2,28,51,000/-. Though publication was made, no bids were received in the auction proposed on 15.11.2013 and since the same was a public holiday declared in the State of Karnataka the auction was postponed to 04.12.2013. Even on the said date no bids were received.
4. Accordingly, the Canara Bank had revised the valuation, indicating the reserve price as Rs. 1.10 Crore since the earlier reserve price at a higher rate had not attracted purchasers and issued the fresh auction notice dated 30.12.2013. The Complainant claiming to be aggrieved by such action, assailed the auction notice in a Writ Petition filed before the High Court of Karnataka, Dharwad Bench in Writ Petition No. 100382/2014. The learned Single Judge having considered the matter, apart from taking note of the contentions put forth by the Complainant had also taken into consideration the alternate remedy available to the Complainant under the SARFAESI Act and accordingly dismissed the writ petition with cost of Rs. 10,000/-, on 22.01.2014. The Complainant assailed the said order by filing a Writ Appeal before the Division Bench in WA No.100349/2014. The Division Bench through the order dated 19.08.2014 dismissed the Writ Appeal. The Complainant thereafter availed the remedy under Section 17(1) of the SARFAESI Act by filing an application in IR No.3044/2014 (SA) and also accompanying the same with an application under Section 5 of the Limitation Act bearing IA No. 4482/2014. The application seeking condonation of delay and consequently the main application were dismissed by the Debts Recovery Tribunal ('DRT for short) through its order dated 12.06.2015. Pursua
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