Allowed

P.Shanmugam v. the State Rep by Its

Madras HC25 Apr 2023CRL OP/2771/2019

Case brief

AI extract

What is this about?

The High Court quashed an FIR alleging offences under the Tamilnadu Prohibition of Charging Exorbitant Interest Act and the IPC. The Court held the FIR an abuse of process due to lack of alleged forgery, unsubstantiated cheating claims given the 14-year delay, and absence of documentary evidence for the alleged loan, directing civil proceedings for possession disputes.

What did the court decide?

Impugned FIR in Crime No.31 of 2019 is quashed. Connected miscellaneous petition is closed.

P.Shanmugam Vs the State Rep by Its — Contract and Commercial Disputes | Madras HC (2023)

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Crl.O.P.No.2771 of 2019

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED : 25.04.2023

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CORAM

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THE HONOURABLE MR. JUSTICE SUNDER MOHAN Crl.O.P. No. 2771 of 2019 and Crl.M.P. No. 1799 of 2019

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1.P.Shanmugam 2.P.Mani 3.P.S.Karthikeyan 4.Parvatham ... Petitioners Vs.

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1.State represented by Inspector of Police, Sankagiri Police Station, Salem District. 2.Ramasamy Gounder ... Respondents

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https://www.mhc.tn.gov.in/judis

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Crl.O.P.No.2771 of 2019

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PRAYER:

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PRAYER: Criminal Original Petition filed under Section 482 of the Criminal Procedure Code, to call for the records in F.I.R.No.31 of 2019 on the file of the 1^st respondent and quash the same.

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For Petitioners : Mr. M.R.Thangavel

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For Respondent 1 : Mr. A.Damodaran Additional Public Prosecutor For Respondent 2 : Mr.T.Balaji

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O R D E R

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The petition is filed to quash the FIR in Crime No.31 of 2019 for

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the alleged offences under Section 4 of the Tamilnadu Prohibition of Charging Exorbitant Interest Act, 2003 and Section 420, 467, 468 and 471 of the Indian Penal Code.

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It is alleged in the FIR that the 2^nd respondent had borrowed a

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sum of Rs.25,00,000/- from the 1^st petitioner and his brother the 2^nd petitioner in the year 1997; that in order to secure the said loan the 2^nd

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https://www.mhc.tn.gov.in/judis

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Crl.O.P.No.2771 of 2019

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respondent had executed a Power of Attorney in favour of the 1^st petitioner in the year 1997; that the 2^nd respondent had also given 10 blank cheques and 20 signed/undated bond papers to the 1^st petitioner; that the 2^nd respondent was paying interest till 15.02.2006 and had repaid a sum of Rs.10,00,000/- towards principal amount and continued to pay interest for the balance principal amount of Rs.15,00,000/- till 20.09.2012; that in November 2006, the defacto complainant had cancelled the Power of Attorney executed in favour of the 2^nd petitioner and executed a registered sale deed in favour of the 3^rd petitioner on 27.11.2006; that on 20.09.2012, the defacto complainant approached the petitioners for re-conveying the property which was sold by him and that he would return the principal amount borrowed from them; that the petitioners demanded Rs.1 Crore from the defacto complainant and threatened the defacto complainant to vacate the house; and that the petitioners were therefore liable for the offences under under Section 4 of The Tamilnadu Prohibition of Charging Exorbitant Interest Act, 2003 and Section 420, 467, 468 and 471 of the Indian Penal Code.

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https://www.mhc.tn.gov.in/judis

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Crl.O.P.No.2771 of 2019

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The learned counsel for the petitioners would submit that in

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respect of a sale transaction which took place in the year 2006, the impugned complaint has been given in the year 2019. There is no document produced by the defacto complainant to show that there was a loan transaction and that interest was paid for the alleged loan taken by the 2^nd respondent. Admittedly, the sale deed was executed in the year 2006 and the impugned complaint is contrary to the registered document, without any basis and is nothing but an abuse of process of law.

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The learned counsel for the 2^nd respondent, however would

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submit that the transactions are sham and the fact that the 2^nd respondent is in possession of the property would show that the sale deed was never intended to be acted upon. The petitioners had illegally

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grabbed the property by making false representation to the 2^nd respondent that they would re-convey the property after the loan amount is discharged by the 2^nd respondent. The 2^nd respondent made

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https://www.mhc.tn.gov.in/judis

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Crl.O.P.No.2771 of 2019

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all efforts to repay the loan amount and get the property re-conveyed on the promise by the petitioners. However, the petitioners with dishonest intention had delayed and hence the 2^nd respondent was forced to give this complaint.

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The learned Additional Public Prosecutor reiterated the submissions made by the learned counsel for the 2^nd respondent and submitted that since the matter is under investigation, the impugned complaint may not be quashed and prayed for the dismissal of the quash petition.

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This Court on perusal of the impugned complaint finds that the allegation is that the petitioners committed the offences of forgery, cheating and the offence under under Section 4 of The Tamilnadu Prohibition of Charging Exorbitant Interest Act, 2003. Firstly, in order to attract the offence of forgery, there is no allegation in the impugned FIR to show as to what were the documents allegedly forged by the petitioners. Admittedly, the 2^nd respondent had executed a sale deed in

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https://www.mhc.tn.gov.in/judis

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Crl.O.P.No.2771 of 2019

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the year 2006. The case is that he had executed the sale deed only to secure the loan obtained by him and it was not intended to be a sale deed. This would not amount to forgery. It is also the case of the 2^nd respondent that he had made an attempt in the year 2012 to obtain the release of the property. Even thereafter no steps have been taken by him to redeem the property. Hence, the allegation in the impugned FIR which is lodged 14 years after the alleged sale deed that the 2^nd respondent was deceived and made to execute the sale deed, cannot be sustained. Therefore, the offence of cheating is also not made out.

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As regards the offence under Section 4 of the Tamilnadu

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Prohibition of Charging Exorbitant Interest Act, it is seen that the 2^nd respondent is unable to produce any document evidencing the loan and the interest paid by him. Merely because the 2^nd respondent is in possession of the property, it cannot be said that there was a loan obtained by the 2^nd respondent. As to how the property is still in possession of the 2^nd respondent and as to whether the petitioners are entitled to possession are matters for adjudication by the Civil Court.

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https://www.mhc.tn.gov.in/judis

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Crl.O.P.No.2771 of 2019

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In the light of the facts narrated above, this Court is of the view that the

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impugned FIR is an abuse of process of law and is liable to be quashed.

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In the result, the petition is allowed. Consequently, the

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connected miscellaneous petition is closed. No costs.

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25.04.2023

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Index : Yes/No Internet : Yes/No Neutral Citation :Yes/No kan

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The Inspector of Police, Sankagiri Police Station, Salem District.

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https://www.mhc.tn.gov.in/judis

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Crl.O.P.No.2771 of 2019

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SUNDER MOHAN. J,

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kan

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Crl.O.P.No. 2771 of 2019

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25.04.2023

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8/8 https://www.mhc.tn.gov.in/judis

P.Shanmugam v. the State Rep by Its

Case brief

What is this about?

What did the court decide?

P.Shanmugam v. the State Rep by Its

Case brief

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