Allowed

M. Indrasena Chowdary v. The State of Telangana

Telangana HC14 Feb 2023CRLP/4830/2022

Case brief

AI extract

What is this about?

In a quashing petition under Section 482 Cr.P.C., the court examined allegations of cheating and criminal misappropriation arising from a bank loan fraud. Holding that the respondent voluntarily executed documents with knowledge of the mortgage and no fraudulent inducement was shown, the court ruled the matter civil and quashed the criminal proceedings.

What did the court decide?

Proceedings in C.C.No.147/2022 and pending miscellaneous applications are quashed.

M. Indrasena Chowdary Vs The State of Telangana — Cheating and Forgery | Telangana HC (2023)

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THE HONOURABLE SRI JUSTICE K.SURENDER

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CRIMINAL PETITION No.4830 of 2022

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ORDER:

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1. This Criminal Petition is filed under Section 482 of the Code of Criminal Procedure, 1973 (for short ‘Cr.P.C.’) by the petitioner/Accused to quash the proceedings against him in C.C.No.147/2022 on the file of II Additional Junior Civil Judgecum-XVIII Metropolitan Magistrate Court at Medchal, Malkajgiri District. The offences alleged against him are under Sections 406 and 420 of the Indian Penal Code,

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Heard learned counsel for the petitioner and learned Additional Public Prosecutor for the respondent State.

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The petitioner is being prosecuted for the offence of criminal misappropriation and cheating on the basis of complaint lodged by the 2^nd respondent. It is alleged in the complaint that this petitioner is an acquaintance and friend of her husband who died. The petitioner approached her and requested to help him out as he was in financial difficulty and requested to give the original documents of her house property to mortgage with the bank for obtaining a loan. To help the petitioner out of the situation, the 2^nd respondent gave the said

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documents and signed on certain papers which were brought by the accused. Trusting the petitioner, she signed on several papers. After some time, she received a notice from Canara Bank that an amount of Rs.1,61,71,042/- has to be paid within a period of 60 days. Then the 2^nd respondent realized that the petitioner had played a fraud on her and having obtained loan he did not repay the Bank, as such, the account was declared as Non Performing Asset (NPA). Canara Bank also initiated proceedings under SARFAESI Act, 2002.

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For the reason of obtaining loan by mortgaging her house property and not repaying the said loan amount, the 2^nd respondent filed a complaint against this petitioner that his acts amounted to cheating and criminal misappropriation.

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Learned counsel appearing for the petitioner/accused would submit that there are transactions between the petitioner and the 2^nd respondent. In fact, the 2^nd respondent had voluntarily executed mortgage deed of the documents before the bank authorities, having knowledge that property was being mortgaged towards security of loan taken by petitioner. However, she made a false claim in the present case that she was cheated. In fact, earlier also the Gift Deed No.5977 of 2005, dated 22.09.2005 was mortgaged with ‘Shriram City finance’ on

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26.06.2019. It is not as though the 2^nd respondent did not know about mortgaging the property with the banks. Having voluntarily signed before the bank authorities, subsequently claiming that this petitioner had cheated, cannot be believed. Apparently, a false story is made up against the petitioner, for which reason, the proceedings have to be quashed.

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On behalf of the respondents, it was argued that this is a case of deliberate fraud that was played upon the 2^nd respondent by taking her papers and mortgaging with the bank causing monetary loss to the 2^nd respondent. The 2^nd respondent believed the petitioner herein and handed over the gift deed, which was subjected to misappropriation by the petitioner, for which reason, the petitioner is liable to be prosecuted for cheating and criminal misappropriation punishable under Sections 420 and 406 of IPC. Accordingly, prayed to dismiss the petition.

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During the course of investigation, it was revealed that the 2^nd respondent filed a writ petition before this Court vide W.P.No.28291 of 2021 dated 10.11.2021 against the petitioner and the Canara Bank authorities. However, since the signatures of the 2^nd respondent were available on the loan sanctioned documents, this Court did not grant any relief to the 2^nd

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respondent. Even according to the investigation, the 2^nd respondent had executed loan documents before the bank authorities and mortgaged the gift deed. In the said circumstances, it cannot be said that the petitioner had cheated the 2^nd respondent in any manner. Fraudulent inducement is the basic requirement to attract an offence of cheating.

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Having knowledge that the documents are being mortgaged in a loan that was taken by the petitioner in Canara Bank, the 2^nd respondent executing loan documents will not in any manner amount to cheating the 2^nd respondent. Apparently, the 2^nd respondent had knowledge about the documents being mortgaged before the Bank and accordingly executed the loan documents before the Bank. Subsequently, the petitioner failing to pay the loan amount or the Bank taking steps to recover the amounts under SARFAESI Act, it cannot be said that the petitioner had cheated the 2^nd respondent. The transactions in question are purely civil in nature. 9. Further, the 2^nd respondent’s case is that the documents which were entrusted to the petitioner were misappropriated. The question of misappropriation punishable under Section 406 of IPC does not arise when the said document was mortgaged with the Bank after executing loan documents. In the present

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case, there is no misappropriation of the deed in any manner. The deed that was mortgaged with the Bank and was later returned, according to the counsel for the petitioner, after payment of complete dues by the petitioner herein.

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For the foregoing discussion, neither the ingredients of cheating punishable under Section 420 of IPC nor the offence of criminal misappropriation punishable under Section 406 of IPC are made out against the petitioner.

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In the result, proceedings against the petitioner in C.C.No.147/2022 on the file of II Additional Junior Civil Judge-

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cum-XVIII Metropolitan Magistrate Court at Medchal, Malkajgiri District, are hereby quashed.

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12. Accordingly, the Criminal Petition is allowed.

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Consequently, m iscellaneous applications pending, if any, shall stand disposed.

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__________________ K.SURENDER, J

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Date: 14.02.2023 kvs

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THE HON’BLE SRI JUSTICE K.SURENDER

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CRIMINAL PETITION No.4830 of 2022

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Dt. 14.02.2023

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kvs

M. Indrasena Chowdary v. The State of Telangana

Case brief

What is this about?

What did the court decide?

M. Indrasena Chowdary v. The State of Telangana

Case brief

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