Allowed

Chief Manager v. Thirtha Kumaraswamy

Karnataka HC13 Nov 2024CRL.P/271/2022

Case brief

AI extract

What is this about?

Petitioner, a Chief Manager of a bank current to the court, filed a criminal petition seeking quashing of proceedings where he was arrayed as an accused for a scheme executed years prior when he was not the relevant official. Due to the complaint failing to identify the specific officer involved, proceedings were quashed.

What did the court decide?

The criminal proceedings initiated against the petitioner in C.C.No.28568/2021 are quashed.

Chief Manager Vs Thirtha Kumaraswamy — Cheating and Forgery | Karnataka HC (2024)

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1 - NC: 2024:KHC:46034 CRL.P No. 271 of 2022

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 13^TH DAY OF NOVEMBER, 2024

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BEFORE

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THE HON'BLE MRS JUSTICE M G UMA

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CRIMINAL PETITION NO. 271 OF 2022

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BETWEEN:

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CHIEF MANAGER UNION BANK OF INDIA ASSET RECOVERY BRANCH NO.1/1, JEEVAN SAMPIGE ROAD, MALLESHWARAM BANGALORE - 560 003

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…PETITIONER

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Digitally signed by SWAPNA V Location: high court of karnataka

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(BY SRI. DIVYA PURANDAR, ADVOCATE)

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AND:

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THIRTHA KUMARASWAMY W/O KUMARASWAMY AGED 65 YEARS NO. 52/1, CHURCH STREET, BENGALURU - 560 001

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MRS HEMA W/O PRASHANTH GOWDA NO.38, SY.NO.16, CHINNASWAMY LAYOUT, CHIKKABETTAHALLI VILLAGE, YELAHANKA HOBLI, BANGALORE - 560 097

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SENIOR SUB-REGISTRAR OF REGISTRATION AND STAMPS, BYTARAYANAPURA, 3^RD CROSS KODIGEHALLI, BANGALORE - 560 092

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…RESPONDENTS

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(BY SRI. S. VENKATESWARAN, ADVOCATE FOR R1

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R2, 3 - SD - UNREPRESENTED)

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2 - NC: 2024:KHC:46034 CRL.P No. 271 of 2022

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THIS CRL.P IS FILED U/S.482 CR.P.C PRAYING TO A. QUASH THE COMPLAINT IN C.C.NO.28568/2021 ON THE FILE OF THE XLI ACMM, BANGALORE (ANNEXURE-B) FILED U/S.417, 418, 419, 423, 420, 120-B OF IPC. B. QUASH THE ORDER DATED 04.10.2021 (ANNEXURE-A) IN C.C.NO.28568/2021 XLI ACMM, BENGALURU, TAKING COGNIZANCE OF THE OFFENCE AGAINST THE PETITIONER.

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THIS CRL.P, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MRS JUSTICE M G UMA

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ORAL ORDER

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The petitioner being accused No.1 is seeking to quash the criminal proceedings initiated against him in C.C.No.28568/2021 on the file of the learned XLI Additional Chief Metropolitan Magistrate, Bengaluru, for the offences punishable under Sections 417, 418, 419, 420, 423 read with Section 120B of Indian Penal Code, 1860 (for short ' the IPC Act').

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Brief facts of the case are that, the petitioner was working as an employee under Corporation Bank which is subsequently amalgamated with Union Bank of India. Initially, he was working as Typist cum Clerk. At the time of filing the petition, he was working as Chief Manager, Asset Recovery Branch and he was the Authorised Officer representing the Bank in various recovery actions initiated under Securitization and

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Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ( hereinafter referred to as 'SARFAESI Act').

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It is contended that one Chandana Kumaraswamy, daughter of respondent No.1 had availed education loan of Rs.8,50,000/- during 2002 for which respondent No.1 stood as surety. She offered two sites bearing Nos.37 and 38 belonging to her situated at Chikkabettadahalli Village, Yelahankar Hobli, Bangalore North Taluk, as security. Since there was default in repayment of the loan amount, the mortgaged property was brought for sale after issuance of notice both to the borrower as well as to the guarantor. Site No. 38 was sold in a public auction for valid consideration. Since the amount that was due to the bank was not clear even after the sale of Site No.38, the suit was instituted by the bank for recovery of the amount against the barrower as well as the guarantor. In the meantime, respondent No.1 is said to have approached the Commercial Court, Bangalore seeking to cancel the registered sale deed that was executed in favour of the auction purchaser - accused No.2. It is stated that the said plaint was rejected by the Commercial Court and the order is challenged by respondent No.1 before this Court, which is pending for consideration.

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Respondent No.1 filed the private complaint in PCR

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No. 17957/2021 against accused Nos. 1 to 3 alleging commission of the offence as stated above. The learned Magistrate took cognizance of the offence against all the accused and registered C.C.No.28568/2021. The petitioner being accused No.1 is before this Court seeking to quash the criminal proceedings initiated against him.

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Heard Smt. Divya Purandar, learned counsel for the petitioner and Sri. S. Venkateswaran, learned counsel for respondent No.1. Perused the materials on records.

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Learned counsel for the petitioner contended that the petitioner was working as Chief Manager of the public sector bank. For some time, he was working as an Authorized Officer and discharged his duties in such capacity. Respondent No.1 was the guarantor for the loan that was availed by her daughter and offered site No. 38 as security by executing the mortgage deed. Since there was default by the borrower, notice was issued and finally the mortgaged property i.e., Site No.38 was brought for auction sale. Accused No.2 purchased the site as the highest bidder in the public auction. Accordingly, registered sale

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deed was executed by the then Aurhorized Officer of Union Bank of India before the Sub-Registrar of Registration and Stamps, Bytarayanapura, who is arrayed herein as accused No.3. The sale certificate was issued by the Aurhorized Officer, Union Bank of India. It is stated that the petitioner was not the signatory to any of these documents.

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It is contended that respondent No.1 has not challenged any of the proceedings initiated by the Bank invoking the provisions of the SARFAESI Act. She never approached DRT with any grievance. On the other hand, she filed the suit before the Commercial Court, Bangalore seeking cancellation of the registered sale deed executed in favour of the auction purchaser - accused No.2. The said plaint was rejected by the Commercial Court which order is under challenge before this Court in the Commercial appeal. Apart from that, respondent No.1 has not initiated any action on civil side either against the banker or against any of the officers of the bank. However, she invoked penal provisions making baseless allegations. The Trial Court without taking into consideration all these facts and circumstances, proceeded to take cognizance of the offence. The

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said order is without application of mind. Therefore, the petitioner is seeking to quash the criminal proceedings.

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Learned counsel for the petitioner relying on Section 32 of SARFAESI Act contended that there is a specific bar for initiating any prosecution or other legal proceedings against the officer of the bank for anything done or omitted to be done in good faith under this Act. Under such circumstances, registration of criminal proceedings is bad under law and accordingly, prays for allowing the petition and to quash the criminal proceedings.

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Per contra, learned counsel for respondent No.1 opposing the petition submitted that even though respondent No.1 admits that she had stood as guarantor for the loan obtained by her daughter and offered 2 sites as security, it was not a secured loan. Therefore, provisions of SARFAESI Act will not come into force for invocation. Learned counsel submitted that none of the procedure as contemplated under law was followed by the Chief Manager of Union Bank of India before proceeding to hold the auction of site No. 38. Accused No.2 cannot be said as the highest bidder as the said sale was for a

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NC: 2024:KHC:46034 CRL.P No. 271 of 2022

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paltry sum of money. No notice was issued to respondent No.1 before initiating the procedure for holding the auction sale. Under such circumstances, the entire auction sale is vitiated.

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Learned counsel submits that since the bank has

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not followed any of the procedure, the complainant has made specific allegations against the Chief Manager that he is in collusion with accused Nos. 2 and 3, managed to execute the sale deed for a nominal price even though the site was valued crores of rupees. It is a clear case of cheating. Under such circumstances, the petitioner will have to face the trial before the Trial Court. They could produce the documents, if they have followed the procedure for conducting the auction sale as required under law. But the petitioner is not entitled for any relief in the present petition seeking quashing of criminal proceedings at the initial stage.

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Learned counsel further submitted that, detailed averments are made in the private complaint and on taking into consideration those averments in the private complaint, the learned Magistrate took cognizance of the offence and the same cannot be found fault with. The order in question is a reasoned

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order which do not call for any interference by this Court. Hence, he prays for dismissal of the petition.

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In view of the rival contentions urged by the learned counsel for both the parties, the point that would arise for my consideration is:

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“Whether the Petitioner has made out any grounds to allow the petition and to quash the criminal proceedings initiated against him?"

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My answer to the above point is in ‘Affirmative’ for the following:

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R E A S O N S

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Respondent No.1 filed the private complaint in PCR No. 17957/2021 before the Trial Court against accused No.1 - Chief Manager of Union Bank of India, Asset Recovery Branch, accused No.2 - the auction purchaser of site No.38, which was sold in public auction and accused No.3 - the Senior SubRegistrar of Registration and Stamps, Bytarayanapura, Kodigehalli, Bangalore. The present Chief Manager of Union Bank of India, Asset Recovery Branch has appeared before this Court, seeking to quash the criminal proceedings contending

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that, since accused No.1 is the Chief Manager of the bank at the time of taking cognizance of the offence, the petitioner being the Chief Manager, who is in charge of Asset Recovery Branch, it is he who is arrayed as accused No.1. In the private complaint, respondent No.1 herein contended that the Chief Manager has colluded with accused Nos.2 and 3 and committed the offence. No where in the private complaint, it is stated as to who was the Chief Manager, who colluded with accused Nos.2 and 3 and proceeded to hold auction sale by not following any of the procedures as contemplated under law. During the course of argument, learned counsel for respondent No.1 contended that it was one Mr. Chandramouli, who was the Chief Manager of Union Bank of India who colluded with accused Nos. 2 and 3 and managed to sell site No.38 belonging to respondent No.1 in favour of accused No.2 for a paltry sum. But strangely, no such averments are found in the private complaint even though it runs into several pages.

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When the complainant has made allegations against

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the Chief Manager, alleging commission of the offence under Sections 417, 418, 419, 420, 423 read with Section 120B of IPC, admittedly, the petitioner was not the Chief Manager of the

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bank concerned when the sale of site in question was held. Admittedly, the sale of the site was held in the year 2008. Immediately, after auction, the sale deed was registered and the sale certificate was issued. Admittedly, respondent No.1 filed the suit O.S.No.373/2020 before the Commercial Court at Bangalore seeking withdrawal or cancellation of registration of site No.38, directing the defendants therein to pay Rs.50 Lakhs with interest, Rs.25 Lakhs as compensation and the cost of legal proceedings. It is not in dispute that the said plaint presented by respondent No.1 was rejected by the Commercial Court which is under challenge before this Court. But the fact remains that other than filing the said suit before the Commercial Court, respondent No.1 has not initiated any other action challenging the sale of his site No.38 in the public auction. However, the appeal against rejection of the plaint is pending consideration before the Division Bench of this Court.

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In the meantime, the private complaint came to be filed by respondent No.1, making the Chief Manager of the Union Bank of India as accused No.1. In the entire complaint, the complainant has not made it clear as to who was the Chief Manager who colluded with other accused and committed the

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offence. Admittedly, the petitioner who is the Chief Manager of the bank concerned at the time of taking cognizance was not working as Chief Manager when site in question was sold in public auction.

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To array a person as accused, there must be some specific allegation against him and he should be named by the complainant to identify him and to relate the allegations made. But strangely, in the present case, the complainant has not made any such averments but arrayed the Chief Manager of Union Bank of India without making it clear as to who is he and at what period of time he worked as Chief Manager and in what matter he colluded with other accused or he has committed the offence. Admittedly the petitioner was not the Chief Manager at the relevant point of time. Under such circumstances, I am of the opinion that the criminal proceedings initiated against the present Chief Manager, who is the petitioner herein is liable to be quashed.

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Accordingly, I answer the above point in the Affirmative and proceed to pass the following:

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12 - NC: 2024:KHC:46034 CRL.P No. 271 of 2022

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ORDER

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(i) The petition is allowed.

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(ii) The criminal proceedings initiated against the petitioner/accused No.1 in C.C.No.28568/2021 on the file of the learned XLI Additional Chief Metropolitan Magistrate, Bengaluru for the offences punishable under Sections 417, 418, 419, 420, 423 read with Section 120B IPC is hereby quashed.

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In view of disposal of the main petition, pending IA No.2

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of 2022 stands disposed of.

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Sd/(M G UMA) JUDGE

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SPV

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List No.: 2 Sl No.: 33

Chief Manager v. Thirtha Kumaraswamy

Case brief

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Chief Manager v. Thirtha Kumaraswamy

Case brief

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