Allowed

M/S Meliora Assets Reconstruction Company Limited v. State of Karnataka

Karnataka HC24 Feb 2022CRL.P/331/2019

Case brief

AI extract

What is this about?

The High Court of Karnataka allowed a criminal petition under Section 482 CrPC to quash an FIR registered against the petitioner, a secured creditor acting under the SARFAESI Act. The Court quashed the FIR as it was filed based on unsuccessful civil litigation, violated mandatory CrPC provisions, and constituted an abuse of process to falsely implicate the petitioner.

What did the court decide?

The FIR dated 09.11.2018 registered as Crime No.244/2018 insofar it relates to the petitioner is quashed.

M/S Meliora Assets Reconstruction Company Limited Vs… — Banking and Recovery | Karnataka HC (2022)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 24^TH DAY OF FEBRUARY, 2022

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BEFORE

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THE HON'BLE MR.JUSTICE HEMANT CHANDANGOUDAR

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CRIMINAL PETITION NO.331 OF 2019

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BETWEEN:

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M/S MELIORA ASSETS RECONSTRUCTION COMPANY LIMITED HAVING ITS REGISTERED OFFICE AT NO.106, 503, MAY, BHARAT TOWERS, 5^TH LANE DWARAKA NAGAR VISHAKAPATNAM – 560 016 REPRESENTED BY ITS VICE PRESIDENT,MR. K.SRINIVASAN, S/O KRISHNA RAO, AGED ABOUT 63 YEARS ...PETITIONER

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(BY SRI. VINAY SWAMY C., ADV.)

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AND:

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STATE OF KARNATAKA MANGALORE SOUTH, THROUGH, POLICE STATION, PANDESWARA, REPRESENTED BY: PUBLIC PROSECUTOR, HIGH COURT BUILDING, BENGALURU- 560001.

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MR.ABDUL ASGAR ASSADI AGED ABOUT 45 YEARS R/AT H. NO 22/13/1687 MANGALORE ALSO AT NO 13, 3^RD CROSS, LALBHAG FORT ROAD, DOODDAMAVALLI BENGALURU – 560 004 … RESPONDENTS

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(BY SRI. RENUKARADHYA R.D., HCGP FOR R1; SRI. SANJEEV KRISHNA MURTHY, ADV. FOR R2)

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THIS CRL. PETITION IS FILED UNDER SECTION 482 OF CR.P.C., PRAYING TO QUASH THE FIR DATED 09.11.2018 REGISTERED AS CRIME NO.244/2018 BY THE HON'BLE COURT OF 2nd ADDITIONAL SENIOR CIVIL JUDGE AND C.J.M., COURT MANGALORE CITY AS PER ANNEXURE C.

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THIS CRL. PETITION COMING ON FOR 'FURTHER HEARING' THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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The petitioner for recovering the loan from the accused No.1, initiated proceedings under the provisions of SARFAESI Act, which culminated in an order passed by the Jurisdictional District Magistrate under Section 14 of the said Act taking physical possession of the property mortgaged with the Bank.

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The second respondent filed a suit in O.S.No.25190/2018 seeking for cancellation of registered partition deed, which was mortgaged with the Accused No.2 - Bank towards security for repayment of loan and in the said suit, the order of

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temporary injunction obtained against the petitioner was vacated. Thereafter, the mother of the second respondent filed a suit in O.S.No.25834/2018 seeking the relief sought for in the earlier suit and in the said suit, the order of temporary injunction, which was granted against the petitioner was also vacated.

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When such being the case, the second respondent filed a private complaint under Section 200 of Cr.P.C., against the petitioner and other accused alleging that the petitioner had criminally trespassed into the joint family properties belonging to him so as to dispossess him illegally and also alleging that the Petitioner -Accused No.3 aided the accused No.1 to knock away the joint family properties and further colluded with Accused to settle the loan account for much lesser money under one time settlement scheme thereby causing

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loss to the public. Allegation of cheating and forgery was alleged against the Accused No.1.

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The Jurisdictional Magistrate after

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recording the sworn statement of the second respondent, referred the matter to the police for investigation under Section 156(3) of CPC. The Police have registered the FIR against the petitioner for the offences punishable under Sections 120B, 420, 406, 408, 448, 468, 471, 506B read with Section 34 of the Indian Penal Code. Taking exception to the same, this petition has been filed.

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Learned counsel appearing for the petitioner would submit that the allegation made in the complaint does not disclose the commission of offences as alleged against the petitioner and the said complaint is filed as an afterthought by the Respondent No.1 so as to falsely implicate the petitioner after being unsuccessful in obtaining an order of temporary injunction against the petitioner

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in multiple suits filed by the petitioner as well as his mother.

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He further submits that the private complaint filed by the second respondent without complying with the requirements of Sections 154(1) and 154(3) of Cr.P.C. is not maintainable in law in view of the decision of the Apex Court in the case of

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Priyanka Srivastava and another vs. State Of U.P.

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and others reported in (2015) 6 SCC 287 . He further submits that the Petitioner has taken steps under the SARFAESI Act for recovering the loan amount from the Accused No.1 and the said acts are protected under Section 32 of the said act.

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On the other hand, learned High Court Government Pleader appearing for the respondent– State would submit that the FIR registered against the petitioner is in accordance with law and the same does not warrant any interference.

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I have examined the submission made by

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the learned counsel for the parties.

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Perusal of the documents annexed to the petition clearly indicates that the second respondent after being unsuccessful in obtaining an order of temporary injunction against the petitioner has filed a complaint alleging that the petitioner has criminally trespassed into the property, which was mortgaged with the petitioner - Bank and aided the Accused No.1 to knock away the joint family properties and also colluded with him to cause monetary loss to the public by the settling the dues with the Bank for lesser money under the OTS scheme, which clearly implies that the said complaint is filed as an afterthought so as to falsely implicate the petitioner for the offences alleged.

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Respondent No.2 has not filed an affidavit to the effect that after complying with the requirements of Sections 154(1) and 154(3) of CPC

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has filed the private complaint. In the absence of compliance of requirements of Sections 154(1) and 154(3) of CPC, the complaint filed by respondent No.2 is not maintainable, in view of the decision of the Apex Court in the case of Priyanka Srivastava (Supra).

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The material on record indicates that the second respondent being unsuccessful in obtaining temporary injunction has given criminal texture to civil dispute to harass the petitioner which is clear case of abuse of process of law in view of the decision of apex court in Randheer Singh v State of Uttar Pradesh and others reported in 2021 SCC Online SC 942.

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The petitioner, having taken steps to recover the loan amount in accordance with law, is protected under the provisions of SARFAESI, Act, 2002. Section 32 of the SARFAESI Act specifies that no suit, prosecution or other legal proceedings

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shall lie against secured creditor or any of its officers for anything done or omitted to be done in good faith under this Act. The petitioner, in pursuance of the order passed under section 14 of the SARFAESI Act, went to take the possession of the property mortgaged with the second accused– bank. The respondent No.2 so as to thwart the same has filed multiple suits against the petitioner from taking possession of the mortgaged property and after being unsuccessful in obtaining an order

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of temporary injunction, the respondent No.2 as an afterthought has filed the private complaint so as to circumvent the order passed under section 14 of SARFAESI Act by falsely implicating the petitioner. The petitioner has acted in good faith to recover the loan amount and the steps taken by the Petitioner are protected under section 32 of SARFAESI Act.

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In view of the forgoing reasons, I pass the following:

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ORDER

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i) The criminal petition is allowed.

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ii) The FIR dated 09.11.2018 registered as Crime No.244/2018 by Mangalore South police station, Pandeswara pending on the file of II Additional Senior Civil Judge, C.J.M., Court, Mangaluru City insofar it relates to petitioner/accused No.3 is hereby quashed.

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Sd/JUDGE

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M/S Meliora Assets Reconstruction Company Limited v. State of Karnataka

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M/S Meliora Assets Reconstruction Company Limited v. State of Karnataka

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