Sudhamayee Das Vs State of Orissa

By mea n s of this application, the Petitioner s e eks to quash the FIR under A n nexure-1 and the further proceeding in G.R. Case No.468 of 2015 p ending before the learned S.D.J.M., K aranjia.

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The bac k ground facts of the case are that the P etitioner had availed a cash c redit loan of Rs.47.00 lakhs and T e rm Loan of Rs.57.00 lakhs, thus a total loan of Rs.1.04 Cror e s, from the Mayurbhanj Ce n tral Co-operative Bank Ltd., Karanji a Branch for installation of a cold storage under the name and s tyle of M/s. Allied Cold Sto r age Pvt. Ltd. The Petitioner in order to create the loan furnished l a nded properties with building as colla t eral security besides mortga g ing the plant and machineries in f a vour of the Bank. The Peti t ioner, being the Managing Director of the cold storage, execute d necessary bonds In this regard to se c ure the loan in favour of th e Bank. However, the Petitioner def a ulted in the repayment of lo a n which remained outstanding to th e tune of Rs.

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5,92,91,076/- as an 31.07.2015. The Branch Manager , Central Cooperative Ltd., M ayurbhanj, lodged an FIR against t h e Petitioner, alleging that the Petitioner did not clear the outstanding dues to the Bank and instea d sold out the mortgaged properties v i de sale deed dated 29.07.201 5 , ignoring the restrictions in selling t h e mortgaged properties. On t h e basis of the complaint, the Karan j ia P.S. Case No.160 of 2015 w as registered against the Petitioner. T he Petitioner assails the proc e eding in the criminal case pursuan t to the FIR lodged by the Branch Manager, Central Co-op e rative Ltd., Mayurbhanj, pri m arily on the ground that the dispute between the Parties are civil i n nature pertaining to non-payment o f outstanding dues and there i s no criminality involved in it. Acc o rding to the Petitioner, the B a nk had sent a notice on 24.08.2015, requiring the Petitioner to c lear the outstanding dues to t h e tune of Rs.5,92,91,076/with interest within three days. As t h e Petitioner failed to repay t he loan within the said stipulated ti m e, the Bank lodged the FI R . It is further case of the Petitio n er that she responded to t h e notice of the Bank vide her letter dated 16.01.2007, wh e reupon the Bank had invited ap p lication for settlement of th e loan accounts under OTS. The Re g istrar of CoOperative Socie t y, Odisha also called for a report on the OTS proposal submitted by the Petitioner but the Bank did n ot place any report. Again in t he year 2010, a fresh proposal for OT S was invited and the Petitio n er, being the loanee, submitted ap p lication for settlement of the loan account but such proposal submitted was also not considered a nd no communication was made in that regard. According to th e Petitioner, it is because of the latch e s on the part of the Bank, the o utstanding dues escalated to Rs.5,92, 9 1,076/-. The

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Petitioner furthe r submits that in order to secure the l oan, she had mortgaged the property in question and had also executed mortgaged bond dated 07.04.1998, and one of the covenants of the said mortgaged b ond reads as follows:-

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“The Mo r tgagor agrees that in case the m o rtgaged properties is sold or re-mortgaged or given on will or transferre d by any other means, the Mortgag e e Bank without fo l lowing the terms of repayments, sha l l recall the entire o utstanding amount with interest at th e rate of 18½ % pe r annum along with other expenses etc. till to the date o f full realisation ”.

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Accordi n g to the Petitioner, she not only submitted a proposal for OTS with the Bank but also made represen t ations before various authoritie s of the Government, whereupon the R egistrar, Cooperative Societ y , vide letter dated 22.07.2009, d irected the Secretary, Centra l Co-operative Bank Ltd., Mayurbhan j , to consider the OTS propos a l of the Petitioner with reference t o the points indicated therein. The Bank compounded the quart e rly accrued interest with the p rincipal even though there was no default by the loanee in the pa y ment of the loan. It is further subm i tted that the loanee at times h a d made excess payments. It would f u rther appear from the letter that compound interest had been levied and, accordingly, the B ank was asked to submit the revised p roposal with the resolution of t h e Bank for onward transmission of th e same to the Government in t h e Co-operative Department. But the B ank did not submit the revis e d proposal, as is evident from the letter dated 08.08.2016 issue d from the office of the Registrar, Co-operative

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Society, Odisha. H owever, the Bank was once again requested to submit a report to the Registrar.

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As a ma t ter of fact, the Bank initiated a proc e eding under Section 68 of the O disha Co-operative Societies Act in D ispute Case No. 82/07-08. Th e said dispute was adjudicated and dis p osed of vide order dated 31. 1 0.2009, wherein a decree for a sum of Rs. 1,60,72,801.46 w a s passed. The said decree was never c hallenged by the Bank before t he higher forum and, as such, it atta i ned finality, and the decree so passed was executable under the pro v isions of the OCS Act, but the B ank has not initiated any execution p r oceeding for realisation of the d ecretal dues.

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It is furt h er the case of the Petitioner that subs e quent to the lodging of the FI R , the Bank also filed a suit bearing C. S . No. 101 of 2016 before the C ourt of Civil Judge (S.D.), Karanjia, to declare the sale deed dated 2 9 .07.2015 executed by the Petitioner i n favour of a third party, releg a ting the mortgaged properties, as null and void. In the said suit, the l oanee, i.e., the Petitioner, and the p u rchaser have been arrayed as d e fendants.

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The Peti t ioner respectfully submits that the g e nesis of the prosecution being one for non-payment of the loan a m ount availed by the Petitioner, and further that the Bank had alread y resorted to the provision un d er Section 68 of the OCS Act, an d further the challenge by the Bank to declare the action of the Petitioner in alienating the mo r tgaged property in favour of the third party as null and void, no cri m inal act apparently appears from the action of the Petitioner, but t h e entire gamut of allegations rest s upon civil consequences. This is further because the covenant u n der the fund

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categorically disc l oses that, in the event the mortgage d property is sold, re-mortgage d , given on will, or transferred by any other means, the mortgagee Ba n k, without following the terms of rep a yment, shall recall the entire o u tstanding amount with interest at th e rate of 18½ % per annum a l ong with other expenses till the date of full realisation. The B ank too has recalled the entire outs t anding dues and, as such, th e lodging of the complaint and init i ation of the criminal proceedi n g is just an abuse of the process of l a w, while the same has only civ i l consequences. Hence, the learned c o unsel for the Petitioner submits for quashing of the criminal proceedi n g.

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Mr. Mo h anty, learned counsel for the State, on the other hand, opposed t h e contentions of the learned cou n sel for the Petitioner and su b mitted that there was criminal intent o n the part of the Petitioner, as t he Petitioner, ignoring all the covena n ts under the Fund, preferred t o sell the properties, knowing them t o have been mortgaged with t h e Bank, in order to evade the Bank f r om realizing the outstanding lo a n upon the sale of the mortgaged pro p erties.

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Mr. Dh a l, learned counsel for the Petitioner re l ied upon the decisions in the m atter of Usha Chakraborty & another Vs. State of West Bengal and another reported in (2023) 15 SCC 135, wherein the Hon’ble Supr e me Court held as follows:-

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“8. In Pa r amjeet Batra v. State of Uttarakha n d, this Court hel d : (SCC p. 676, para 12)

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"12. W hile exercising its jurisdiction under Section 482 o f the Code the High Court has to be c autious. This p o wer is to be used sparingly and onl y for the purpose of preventing abuse of the proces s of any court o r otherwise to secure ends of justice. W hether a co m plaint discloses a criminal offence or not depen d s upon the nature of the facts alleged therein.

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Whether essential ingredients of criminal off e nce are presen t or not has to be judged by the High C ourt. A compl a int disclosing civil transactions m a y also have a criminal texture. But the High Court m ust see wheth e r a dispute which is essentially of a civil nature is given a cloak of criminal offence. I n such a situati o n, if a civil remedy is available and is , in fact, adopte d as has happened in this case, the Hi g h Court should not hesitate to quash the criminal pro c eedings to pre v ent abuse of process of the court."

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×××

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In Ka p il Aggarwal v. Sanjay Sharma, this C o urt held that Secti o n 482 is designed to achieve the pu r pose of ensuring t h at criminal proceedings are not per m itted to generate i n to weapons of harassment.

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In the decision in State of Haryana v. Bhaj a n Lal, a two-Judge Bench of this Court considered the s tatutory provisions as also the earlier decisions and held as under: (S C C pp. 378-79, para 102)

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"102.... (1) Where the allegations made in t he first infor m ation report or the complaint, even if t hey are taken at their face value and accepted i n their entiret y do not prima facie constitute any of f ence or make o ut a case against the accused.

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(2) W h ere the allegations in the first inf o rmation report and other materials, if any, accompan y ing the FIR d o not disclose a cognizable offence, j u stifying an in v estigation by police officers under Section 156(1) of the Code except under an order of a Magis t rate within the purview of Section 1 5 5(2) of the Co d e.

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(3) W h ere the uncontroverted allegations m ade in the FI R or complaint and the evidence coll e cted in suppo r t of the same do not disclose the co m mission of an y offence and make out a case against the accuse d .

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(4) W here the allegations in the FIR do not constit u te a cognizable offence but constitut e only a non-c o gnizable offence, no investigation is

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permit t ed by a police officer without an or d er of a Magis t rate as contemplated under Section 1 5 5(2) of the Co d e.

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(5) W here the allegations made in the FIR or compl a int are so absurd and inherently im p robable on the basis of which no prudent person c an ever reach a just conclusion that there is sufficien t ground for pr o ceeding against the accused.

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(6) W h ere there is an express legal bar eng r afted in any o f the provisions of the Code or t he Act concer n ed (under which a criminal proce e ding is institu t ed) to the institution and continuanc e of the procee d ings and/or where there is a specific provis i on in the Code or the concern e d Act, provid i ng efficacious redress for the grievan c e of the aggrie v ed party.

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(7) W here a criminal proceeding is m a nifestly attend e d with mala fide and/or where the pr o ceeding is mal i ciously instituted with an ulterior m o tive for wreaking vengeance on the accused and wit h a view to spit e him due to private and personal grud g e.

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×××

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As n o ticed hereinbefore, the respondent alleged commissi o n of offences under Sections 323, 3 8 4, 406, 423, 467 , 468, 420 and 120-B IPC agai n st the appellants . A bare perusal of the said allegation and the ingredient s to attract them, as adverted to here i nbefore would rev e al that the allegations are vague and t hey did not carry the essential ingredients to consti t ute the alleged of f ences. There is absolutely no allegati o n in the complaint that the appellants herein had caused hurt on the respon d ent so also, they did not reveal a case that the appellants had intentionally put the respondent i n fear of injury eit h er to himself or another or by putt i ng him under suc h fear or injury, dishonestly induced him to deliver an y property or valuable security. The same is the position with respect to the alleged o ffences punishabl e under Sections 406. 423. 467, 468, 4 20 and 120-B IP C . The ingredients to attract the alleged offence referred to hereinbefore and the nature of the all e gations

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contained in the application filed by the res p ondent would un d oubtedly make it clear that the respon d ent had failed to m ake specific allegation against the a p pellants herein in r e spect of the aforesaid offences.

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The f actual position thus would reveal t hat the genesis as also the purpose of criminal proceed i ngs are nothing b u t the aforesaid incident and further that the dispute i n volved is essentially of civil natu r e. The appellants b and the respondents have given a c loak of criminal o f fence in the issue. In such circumstan c e when the respon d ent had already resorted to the availa b le civil remedy a n d it is pending, going by the dec i sion in Paramjeet Batra, the High Court would have q uashed the crimi n al proceedings to prevent the abus e of the process of the Court but for the concealment.

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In the a foresaid circumstances, coupled with the fact that in re s pect of the issue involved, which is of civil nature, the respondent had already approac h ed the jurisdictio n al civil court by instituting a civil suit and it is pending , there can be no doubt with respect to the fact that the at t empt on the part of the respondent is to use the crimi n al proceedings as weapon of harassment against th e appellants. The indisputable facts that the responden t has filed the pending title suit in t he year 2015, he g ot no case that he obtained an interi m relief against hi s removal from the office of Secretar y of the School M a naging Committee as also the trustees h ip, that he filed the stated application for an or d er for investigati o n only in April 2017 together with absence of a case t hat despite such removal he got a rig h t to get informed o f the affairs of the school and also t h e trust, would onl y support the said conclusion.

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For al l these reasons, we are of the conside r ed view that this c ase invites invocation of the pow e r under Section 4 8 2 CrPC to quash the FIR registered b ased on the directi o n of the Magistrate Court in the af o restated applicatio n and all further proceeding in p u rsuance thereof. A lso, we have no hesitation to h o ld that permitting continuance of the criminal pro c eedings against th e appellants in the aforesaid circu m stances

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would res u lt in abuse of the process of court an d also in miscarriage of justice .”

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Coming t o the case in hand, admittedly the P etitioner had obtained a loan f r om the Mayurbhanj Central Co-oper a tive Bank in order to establish his business of cold storage in the n a me and style of M/s. Allied C o ld Storage Pvt. Ltd. The Petitioner continued to repay the loan; however, he defaulted in repayment. Th e effort of the Petitioner in getti n g the loan amount settled with the B ank through an OTS plan w a s never considered. On the contra r y, the Bank admittedly proce e ded under Section 68 of the OCS A c t to recover the loan amount, a nd the decree passed upon adjudicati o n of the said proceeding under Section 68 of the OCS Act could no t be finalized upon execution o f the said decree. As seen from the im p ugned order, the outstanding dues recoverable have been sh o wn to be Rs.1,60,72,801.4 6 , whereas the Bank lodged the re p ort showing outstanding of Rs.5,92,91,076/-, which is not in confor m ity with the amount sought to be recovered from the Petitioner upon adjudication of the proceedin g . Subsequently, the Bank also move d against the action of the Pe t itioner in alienating the mortgaged property in favour of a third p arty, challenging it before the approp r iate Court of civil jurisdiction, i.e., the Civil Judge, Senior Division, in Civil Suit No.101 of 2016.

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Needless to mention, the Petitioner had executed a mortgage bond with the Bank, and the covenant thereof, at Annexure-4, spec i fically stipulates that in the event, t h e mortgaged property is sold, re-mortgaged, bequeathed, or transf e rred by any other means, the B ank shall recall the entire outstandi n g dues with interest. There is nothing in the said mortgage bon d to indicate

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initiation of any c r iminal proceeding. Even otherwise, t h e ingredients to attract the alle g ed offences referred to in the FIR, as well as the proceeding in G .R. Case No.468 of 2015 and t h e nature of allegations contended in the application filed by the Peti t ioner, would undoubtedly give rise to a civil action, and there is n o material to indicate that the conduct of the Petitioner would be amenable to criminal action.

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In view o f the above reasons, this court is of t h e considered view that the ma t erial appearing in the case is fit for i nvocation of the power under S ection 482 and the same being abs o lutely in the nature of dispute i n the civil side, the proceeding in the c riminal case deserves to be qu a shed. The CRLMC is disposed of acc o rdingly.

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(Chittaranjan Dash) Judge

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Bijay

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Signature Not Verified

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Digitally Signed Signed by: BIJAY KETAN SAHOO Reason: Authentication Location: HIGH COURT OF ORI SSA Date: 22-Aug-2025 16:40:45

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Sudhamayee Das v. State of Orissa

Case brief

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Sudhamayee Das v. State of Orissa

Case brief

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