# **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MRS. JUSTICE ANNIE JOHN**
**TUESDAY, THE 26TH DAY OF FEBRUARY 2019 / 7TH PHALGUNA, 1940**
## **Crl.MC.No. 2462 of 2014**
**AGAINST THE ORDER IN CC 974/2010 of JUDICIAL MAGISTRATE OF FIRST CLASS -I, ALUVA**
**CRIME NO. 162/2009 OF NEDUMBASSERY POLICE STATION, Ernakulam**
**PETITIONER/ 1ST ACCUSED :**
**GEETHU VISWANATH, AGED 45 YEARS, D/O.ANANDAVALLY, VIJI NIVAS, NAGARI, PADA SOUTH, KARUNAGAPPALLY.**
**BY ADV. SRI.MATHEW SEBASTIAN**
## **RESPONDENTS/ COMPLAINANT & STATE :**
**1 M/S. HOUSING DEVELOPMENT FINANCE CORPORATION LTD.,RAMON HOUSE, H.T.PAREKH MARG, 169, BACKBAY RECLAMATION, CHURCH GATE, MUMBAI-20, HAVING ITS BRANCH OFFICE AT HDFC HOUSE, P.B.NO.1667, RAVIPURAM JUNCTION, M.G.ROAD, KOCHI-15, REPRESENTED BY ITS LEGAL OFFICERRECOVERIES, ARUNKUMAR N.**
**2 SUB INSPECTOR OF POLICE, NEDUMBASSERY, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM, PIN - 682 031.**
**BY PUBLIC PROSECUTOR SMT.MAYA M.N.**
**THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 26.02.2019, THE COURT ON THE SAME DAY PASSED THE FOLLOWING :**
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## **ORDER**
The petitioner is the first accused in CC.No.974/2010 before the Judicial First Class Magistrate Court-I, Aluva. The charge against the petitioner is that the petitioner together with the other accused has committed offence punishable under Sections 120B, 418, 419 and 420 of the Indian Penal Code. The petitioner was an NRI lady working in Dubai. She had approached the first respondent for a housing loan. She filed application before the first respondent for financial assistance for purchase of 5.99 ares of land in Sy.No.186/2011 of Nedumbassery Village and the Building Nos. VIII/654 A & B of Nedumbassery Panchayath therein belonging to the 2[nd] accused in the above case. The application was allowed and an amount of Rs.90,00,000/- was sanctioned for purchase of land and buildings. The entire legal scrutiny of the title deeds and other documents relating to the property was carried out by the lawyer of the first respondent and the sale deed was prepared and executed
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by the lawyer himself. Since the petitioner is an NRI, she reposed full confidence in the officers of the first respondent. The sale deed No.1603/2008 of SRO, Chengamanad was executed on 06.03.2008 and an amount of Rs.90 lakhs was paid to the owner of the property, the 2[nd] respondent, by the first respondent.
2. After availing loan, the petitioner remitted the first instalment of the loan. Subsequently, it was revealed that the property was heavily encumbered. It was understood that the 3[rd] accused, the prior title holder of the property had availed loans from the Centurion Bank of Punjab and also the Union Bank of India, Athani Branch. The Union Bank of India had already filed OA.No.271/2008 before the Debt Recovery Tribunal, Ernakulam for realization of an amount of Rs.12 lakhs and the Centurion Bank has filed SA.No.105/2008. The Union Bank had also filed Writ Petition No.17880/2009 before this Court. The prior title deeds of the property were deposited with these banks in order to create equitable mortgage for availing loan. The first respondent and their lawyer did not reveal
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these facts to the petitioner. They were duty bound to disclose these facts before granting loan to the petitioner and execution of the sale deed on 06.03.2008.
3. The first respondent filed a criminal complaint before the JFCM Court-I, Aluva with false allegations against the petitioner and the prior title holders of the property. The allegation is that all the accused jointly, with fraudulent intention conspired together concealing the facts, created the registered deeds and agreements with a dishonest intention conspired together concealing the facts, created the registered deeds and agreements with a dishonest intention of cheating the complainant company and had made unlawful enrichment causing loss to the complainant company.
4. The learned Magistrate without applying the mind has forwarded the complaint to the Nedumbassery Police Station for enquiry under Section 156(3) of the Cr.P.C., 1973. On the basis of the said complaint, a crime was registered as FIR.No.162/2009. Thereafter, after investigation, charge sheet was filed against petitioner and
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others under Sections 120B, 418, 419 and 420 IPC as CC.No.974/2010.
5. According to the petitioner, she has not committed any offence as alleged by the first respondent. The act of the Magistrate in taking cognizance of the offence against the petitioner on the basis of Annexure-A1 complaint is totally illegal. The investigation done by the S.I. of Nedumbassery police station on the strength of Annexure-A1 complaint is also totally illegal and unwarranted.
6. Now the learned counsel for the petitioner has
submitted that Section 420 IPC is not attracted in this case. The learned counsel cited a ruling held in _**Vesa Holdings Pvt. Ltd v. State of Kerala [2015(2) KLT SN**_
_**131 (C.No.157) SC**_ wherein it has held that “every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. In other words for
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the purpose of constituting an offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. Even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in the absence of a culpable intention at the time of making initial promise being absent, no offence under S.420 of the Indian Penal Code can be said to have been made out.”
7. Here in this case, the definite case of the petitioner that she has admittedly availed Rs.90 lakhs by way of loan from the respondent and after payment of the first instalment, she was reluctant to pay further instalments as she came to know that the property was heavily encumbered by the prior title owners. According to the petitioner, the first respondent has verified the documents along with the assistance of their legal advisors and thereafter, the sale deed was executed. Thereafter, the loan was sanctioned. It is the case of the petitioner that she is an NRI and she _bona fidely_ trusted the first
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respondent company and accordingly the sale deed was happened to be executed. It was also stated by the petitioner that the prior title holders (3[rd] accused) encumbered the property to different bank and availed loan. Therefore, the Union Bank of India filed OA.No.271/2008 before the Debt Recovery Tribunal, Ernakulam for realisation of an amount of Rs.15 lakhs and Centurion Bank has filed SA.No.105/2008. Union Bank of India has also filed Writ Petition No.17880/2009 before this Court. Prior title deeds of the property were deposited with these banks in order to create equitable mortgage for availing loan. The first respondent is the Housing Development Finance Corporation Ltd., Ramon House, H.T.Parekh Marg, 169, Backbay Reclamation, Church Gate, Mumbai. According to her, sale deed was executed on 06.03.2008. After remission of the first instalment, she was advised not to remit further instalment without the entire prior liability being wiped of by the first respondent herein.
8. Now the petitioner has shouldered responsibility upon the first respondent to clear off the
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debts created upon the property. It was also stated by the petitioner that it was the bounden duty of the first respondent and their lawyer to see that the property was without encumbrance at the time of execution of the sale deed in favour of the petitioner. Now it was stated by the petitioner that the ingredients of Section 420 IPC is not attracted in this case. Ext.A5 charge sheet has already been laid against the petitioner and other accused. According to the petitioner, Annexure A5 charge sheet will not lie against the petitioner due to the fact that she has failed to remit instalment to the first respondent. According to her, non-payment of the instalment is only a civil liability. The petitioner has created mortgage with the first respondent and obtained Rs.90 lakhs on 06.03.2008. She has remitted only the first instalment. Thereafter, she has not paid back the amount. The reason, which was stated by the petitioner that this property was encumbered to different banks prior to her transaction. Being a seller, she is bound to enquire about the encumbrances upon the property and to verify the prior title deeds. So, there is
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some doubt regarding the receipt of Rs.90 lakhs by way of loan from the first respondent.
9. Here, it is evident that at the time of creation of mortgage by the petitioner with the first respondent and availing of loan, whether she had intention to cheat the first respondent, is a matter to be considered after taking evidence.
Therefore, the reason which she has stated that Section 420 IPC.is not attracted is not applicable in the nature and facts of this case. Therefore, I am not inclined to allow the application. Hence, this Crl.M.C.is only liable to be dismissed. Let the petitioner appear before the court below and contest the matter accordingly.
In the result, Crl.M.C.is dismissed.
Sd/- **ANNIE JOHN, JUDGE**
RKM
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## **APPENDIX**
## **PETITIONER'S EXHIBITS:**
**ANNEXURE A1 CERTIFIED COPY OF THE COMPLAINT IN C.C.NO.974/2010 BEFORE THE JUDICIAL FIRST CLASS MAGISTRATE COURT-I, DATED 19.1.2008. ANNEXURE-A2 CERTIFIED COPY OF THE F.I.R IN CRIME NO.162/2009 OF NEDUMBASSERY POLICE STATION. ANNEXURE-A3 PHOTOCOPY OF THE PLAINT IN O.S.NO.207/2009 BEFORE THE PRINCIPAL SUB COURT, ERNAKULAM DATED 20.2.2009. ANNEXURE-A4 PHOTOCOPY OF THE ORDER IN O.S.NO.207/2009 DATED 29.5.2010 OF THE PRINCIPAL SUB COURT, ERNAKULAM DATED 29.5.2010. ANNEXURE-A5 CERTIFIED COPY OF THE CHARGE SHEET IN C.C.NO.974/2010 ON THE FILE OF THE JUDICIAL FIRST CLASS MAGISTRATE COURT-I, ALUVA.**
