Dismissed

Krishna Kumar Sharma v. State of U.P.

Allahabad HC11 May 2023BAIL/2778/2023

Case brief

AI extract

What is this about?

AHC rejected a bail application for a director accused under IPC Sections 420, 467, 468, 471, and 406 for allegedly forging loss of title deeds and selling mortgaged property. The court directed expeditious trial under Section 309 Cr.P.C. and cited Vinod Kumar and Hussain judgments.

What did the court decide?

Bail application rejected. Trial directed to be concluded expeditiously within eight months under Section 309 Cr.P.C.

Krishna Kumar Sharma Vs State of U.P. — Company and Corporate | Allahabad HC (2023)

¶1

Neutral Citation No. - 2023:AHC:103882 Reserved On 5.4.2023 Pronounced On 11.5.2023

¶2

Court No. - 86

¶3

Case :- CRIMINAL MISC. BAIL APPLICATION No. - 2778 of 2023

¶4

Applicant :- Krishna Kumar Sharma Opposite Party :- State of U.P. Counsel for Applicant :- Raghuvansh Misra,Sr. Advocate Counsel for Opposite Party :- G.A.,A/S2293/2013,Rahul Agarwal

¶5

Hon'ble Vivek Kumar Singh,J.

¶6

Criminal Misc. Intervention Application No. Nil of 2023 :-

¶7

Sri Amit Saxena, learned Senior Counsel assisted by Sri Rahul Agarwal, learned counsel for the intervenor submits that the intervenor is the person who has been put to loss by the act of the applicant; though the first information report of the alleged incident is lodged by the Bank concerned, therefore, he submits that he has the locus to put forth his stand before this Court.

¶8

In view of the above the intervention application is allowed and the intervenor is permitted to put forth his stand.

¶9

Heard Sri Navin Sinha, learned Senior Counsel assisted by Sri Raghuvansh Misra, learned counsel for the applicant and Sri Amit Saxena, learned Senior Counsel assisted by Sri Rahul Agarwal, learned counsel for the complainant and Sri Mithlesh Kumar, learned A.G.A. for State.

¶10

This bail application has been moved on behalf of the applicant – Krishna Kumar Sharma to enlarge him on bail in Case Crime No.66 of 2021, under Sections 420, 467, 468, 471, 406 I.P.C., Police Station Lohamandi, District Agra.

¶11

The prosecution case is that, Oriental Bank of Commerce (as it then was) had sanctioned a loan of Rs.25.50 Crores in favour of M/s Shekhar Resorts Limited Company, for the purpose of building a hotel. In view of the load, 24

¶12

properties including plot nos.37, 38, 39 and 40 (Khasra No.139M village Basai Mustkil, Raj Nagar, Agra) were mortgaged with the bank, by handing over the original sale deeds (of the aforesaid plots) dated 26.12.20205. M/s Shekhar Resorts Limited Company had three Directors namely Chandra Shekhar Sharma, Naresh Sharma and Krishna Kumar Sharma who were responsible for management of affairs of the company. The company defaulted in re-payment of debt, as a consequence of which, term loan account No.03837032000019 and current account No.03831131000020 were declared as non performing asset (NPA) on 30.9.2015. Thereafter, the financial creditor of the company initiated the CIRP process as per the Insolvency Bankruptcy Code, 2016, before the National Company Law Tribunal, New Delhi. It was learnt that with an intent to delay or defeat the interest of creditors, the Directors of M/s Shekhar Resorts Limited Company had filed a report at Tajganj Police Station on 6.12.2013 that the original sale deed pertaining to mortgaged plots were misplaced on 4.12.2013 and could not be found despite best efforts. The aforesaid news was published in two daily newspapers on 24.12.2023 and 28.12.2013. Thereafter, the mortgaged land was transferred to M/s Raj Kumar & Sons Private Limited vide sale deed dated 22.4.2014.

¶13

Submission is that the applicant acted in good faith while executing the sale deed dated 22.4.2014, inasmuch as, the sale deed proceeds were remitted to the account of the company and not diverted to the personal accounts of the Directors. It hereby clarified that plots 37, 38, 39 & 40 situated at Raj Nagar Colony, Agra were sold for Rs.80,35,000/- and the entire sale consideration was received via cheque; and credited to the account of the Company. On 30.9.2015, when the company's accounts were declared non performing assets, balance of more than a sum of Rs.1 crore was available therein. No dishonest intention could be attributed to Krishna Kumar Sharma (applicant) in executing the sale deed dated 22.2.2014, inasmuch as, any step taken for creating liquidity for running the

¶14

business of the company and servicing its debts prior to the account being declared non performing assets/bankruptcy/insolvency was perfectly legal and justified, hence, no offence under Section 420 I.P.C. is made out against the applicant. No false document was prepared by the applicant, inasmuch as, neither the sale deed dated 22.2.2014 was prepared by an imposter nor under any ostensible authority. Hence prosecution of the applicant for the offence under Sections 467, 468 and 471 I.P.C. is unwarranted. Hypothecation of immovable property did not transfer any ownership or beneficial interest of the property. Hence there was no entrustment as contemplated under Section 405 I.P.C. Thus no offence under Section 406 I.P.C. is made out against the applicant. There is no prohibition in law on sale of hypotheticated/mortgaged property. To the contrary, even after sale, the bank continued to have the first charge on the property. The sale of hypothicated property did not constitute an offence. At the most, sale of hypothicated property constituted breach of contractual condition, if any. For the breach of contract recourse may be taken to the appropriate Civil remedies. The applicant did not act dishonestly, inasmuch as, the property in question did not form part of the land of the hotel, which was intended to be mortgaged with the bank. All dues of the bank as a financial creditor have been recovered in the insolvency proceedings, consequent to approval of the resolution plan. There is no order of National Company Law Tribunal for registration of FIR/criminal prosecution of the applicant. Sale of mortgaged property was never raised as an issue during the meetings of the committee of creditors. At the time the company was admitted for insolvency, the land in controversy was on the books of accounts of the company.

¶15

Learned counsel for the intervenor submits that on 22.12.2008, the Board of Directors of the M/s Shekhar Resorts Ltd. resolved to mortgage its properties by depositing their original title deeds with the Oriental Bank of Commerce as security against loan. The Oriental Bank of Commerce

¶16

subsequently became the Pubjab National Bank. The properties included in the resolution passed by Board of Directors of M/s Shekhar Resorts Ltd. were 24 in number, aggregating to an area 49974.52 sq. mtrs. These properties included inter-alia, the properties at Plot Nos.37, 38, 39 and 40 Raj Nagar-A, MaujaBasai Mustakil, Tehsil and District Agra mentioned above. In terms of resolution of the Board of Directors on 27.12.2008, the original title deeds of the 24 properties including the property bearing Plot Nos.37-40 measuring 794.88 M situated at Raj Nagar-A, Mauja Basari Mustakil, Tehsil and District were deposited with the Oriental Bank of Commerce, which on the same day created equitable mortgage and created/registered a charge over the said property with the Registrar of Companies. Subsequently, while the mortgaged was subsisting, on 3.2.2010, the then Oriental Bank of Commerce permitted the creation of pari-passu basis in favour of the State Bank of Hyderabad to cover the credit facility extended by the State Bank of Hyderabad and the charge created by the Oriental Bank of Commerce with the Registrar of Companies was modified accordingly.

¶17

Submission of the learned counsel for the intervenor is that the applicant mortgaged the original title deed with the Bank and applicant who was the then a Director of M/s Shekhar Resorts Ltd. had created a camouflage by submitting a letter on 6.12.2013 with the police station Tajganj District Agra which was later registered as an FIR, stating therein that he had lost the original tile deed of plot nos.37-40, Mauja Basai, Mustakil, Tehsil and District Agra on the way on 4.12.2013.

¶18

Further on 24.12.2013 and 28.12.2013 the applicant himself had published the public notice in the local newspaper in Hindustan and Amar Ujala respectively proclaiming to the world that the original title deed of Plot No.37-40, Raj Nagar-A Mauja Basai Mustakil, Tehsil and District Agra had been lost. Thereafter the applicant executed a sale deed of plot nos.37-40

¶19

Raj Nagar-A, Mauja Basai, Mustakil, Tehsil and District Agra in favour of M/s Raj Kunwar and Sons Pvt. Ltd. acting through its Director Mr. Puneet Agarwal for sale consideration of Rs.80,35,0000/- knowing very well that the said property had already been mortgaged with the Oriental Bank of Commerce and that the original title deed thereof was deposited with the Bank.

¶20

Perusal of the sale deed dated 22.2.2014 (annexure-4 to the bail application) would clearly indicate that the applicant has categorically averred that the tittle deed to the said property is absolutely clean & clear, there is no charge/mortgage on the said immovable property and neither there is any person with any share in the property, nor is there any dispute with respect to the said property in any competent Court. The deed further avers that no agreement, sale deed, lease deed or any other authority in favour of any other person has been granted by the seller and resultantly, the property is absolutely clean & clear.

¶21

The sale deed dated 22.2.2014 further permits M/s Raj Kunwar and Sons Pvt. Ltd. to get itself mutated as the owner of the property and further authorizes M/s Raj Kunwar and Sons Pvt. Ltd. to offer the property mortgage/as security to any Bank or Financial Institutions without any objection by the seller. All outstanding pertaining to the property till 22.2.2014 were to be paid by the seller, while any liability attaching to the property on or after 22.2.2014 would have been borne by M/s Raj Kunwar and Sons Pvt. Ltd.

¶22

Learned counsel for the intervenor has drawn the attention of this Court towards Sections 420, 467, 468, 471 and 406 I.P.C. which reads as under :-

¶23

" 420. Cheating and dishonestly inducing delivery of property. —Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a

¶24

valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.

¶25

467. Forgery of valuable security, will, etc. —Whoever forges a document which purports to be a valuable security or a will, or an authority to adopt a son, or which purports to give authority to any person to make or transfer any valuable security, or to receive the principal, interest or dividends thereon, or to receive or deliver any money, movable property, or valuable security, or any document purporting to be an acquittance or receipt acknowledging the payment of money, or an acquittance or receipt for the delivery of any movable property or valuable security, shall be punished with 1[imprisonment for life], or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.

¶26

468. Forgery for purpose of cheating. —Whoever commits forgery, intending that the 1[document or electronic record forged] shall be used for the purpose of cheating, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.

¶27

471. Using as genuine a forged 1[document or electronic record]. —Whoever fraudulently or dishonestly uses as genuine any 1[document or electronic record] which he knows or has reason to believe to be a forged 1[document or electronic record], shall be punished in the same manner as if he had forged such 1[document or electronic record].

¶28

406. Punishment for criminal breach of trust. —Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both."

¶29

A bare reading aforesaid sections would show that the applicant has not only committed the fraud with the Bank had also committed forgery with the subsequent purchaser of the property in question and bare reading of the aforesaid sections would certainly attracted against the applicant. As the applicant himself has mortgaged the property in question by mortgaging the

¶30

original title deed with the Bank and proclaimed in the newspapers that the original title deeds of the property in question has been lost and could not be traced out inspite of his best efforts.

¶31

Further the sale deed dated 22.2.2014 (annexure-4 to the bail application) would clearly indicate that the applicant has categorically averred that the tittle deed to the said property is absolutely clean & clear, there is no charge/mortgage on the said immovable property and neither there is any person with any share in the property, nor is there any dispute with respect to the said property in any competent Court. The deed further avers that no agreement, sale deed, lease deed or any other authority in favour of any other person has been granted by the seller and resultantly, the property is absolutely clean & clear.

¶32

After hearing the learned counsel for the applicant and learned counsel for the intervenor and learned A.G.A., and after perusing the averments made in the present bail application as well as rejection order, this Court is of the opinion, that learned counsel for the applicant could not point out any good ground for grant of bail to the applicant, at this stage.

¶33

Accordingly, the bail application filed on behalf of the applicant is hereby rejected .

¶34

However, it is directed that the trial of the aforesaid case pending before the concerned court below be concluded expeditiously, preferably within eight months in accordance with Section 309 Cr.P.C. and in view of principle as has been laid down in the recent judgment of Hon'ble Apex Court in the case of Vinod Kumar v. State of Punjab reported in 2015 (3) SCC 220 and Hussain and Another v. Union of India; 2017 (5) SCC 702 , if there is no legal impediment.

¶35

Order Date :- 11.5.2023 Dev/-

¶36

Digitally signed by :- DEV PRAKASH High Court of Judicature at Allahabad

Krishna Kumar Sharma v. State of U.P.

Case brief

What is this about?

What did the court decide?

Krishna Kumar Sharma v. State of U.P.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Momin Vs State of U.P. and 3 Others

Smt. Shankuntla Sharma Vs State of U.P.

Tarun Vs State of U.P.

Mitrapal Vs State of U.P.

Vikas @ Chamnesh Om Singh Vs State of U.P.

Ramesh Singh Vs State of U.P.