Madhavan S. Pillai and others v. State of Kerala and UCO Bank

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR. JUSTICE B.KEMAL PASHA** **FRIDAY, THE 24TH DAY OF JUNE 2016/3RD ASHADHA, 1938** **Crl.MC.No. 406 of 2015** **-------------------------** **CC 519/2014 OF CHIEF JUDICIAL MAGISTRATE COURT, KOLLAM OA 567/2014 OF DEBT RECOVERY TRIBUNAL, ERNAKULAM DTD 01-11-2014 ....** **PETITIONER(S)/ACCUSED 1-3:** **-------------------------** **1. MADHAVAN S.PILLAI, AGED 23 YEARS, S/O.SUNDARAN PILLAI, SIBANA MANDIRAM, ASRAMAM P.O., KOLLAM.** **2. LAKSHMI S.PILLAI,** **W/O.SUNDARAN PILLAI, SIBANA MANDIRAM, ASRAMAM P.O., KOLLAM.** **3. SUNDARAN PILLAI, AGED 58 YEARS, S/O.MADHAVAN PILLAI, SIBANA MANDIRAM, ASRAMAM P.O., KOLLAM.** **BY ADVS.SRI.M.T.SURESHKUMAR SRI.M.T.SURESHKUMAR** ## **RESPONDENT(S)/STATE AND DEFACTO COMPLAINANT:** **--------------------------------------------** **1. STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM, PIN-682 031.** **2. UCO BANK, BEACH ROAD, KOLLAM, REPRESENTED BY ITS CHIEF MANAGER-691 001.** **R1 BY PUBLIC PROSECUTOR SMT.HYMA R2 BY ADV. SRI.H.RAMANAN** **THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 24-06-2016, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **msv/** ## **Crl.MC.No. 406 of 2015** **-----------------------** ## **APPENDIX** ## **PETITIONER(S)' ANNEXURES:** **-------------------------** **ANNEXURE 1 : COPY OF THE COMPLIANT FILED AS CMP 5088/14 DT.14-7-2014 WHICH WAS TAKEN ON FILE AS CC 519/2014 BEFORE THE CJM, KOLLAM.** **ANNEXURE 2 : COPY OF THE LETTER DT.29-6-2011 ISSUED BY THE CHIEF MANAGER, UCO BANK.** **ANNEXURE 3 : COPY OF THE ACCOUNT STATEMENT ISSUED BY THE UCO BANK DT.18-1-2013.** **ANNEXURE 4 : COPY OF THE NOTICE DT.27-1-2011.** **ANNEXURE 5 : COPY OF THE POSSESSION NOTICE DT.5-5-2011.** **ANNEXURE 6 : COPY OF THE APPLICATION DT.1-11-14 IN OA 567/14 IN THE FILE OF THE DEBTS RECOVERY TRIBUNAL ERNAKULAM (WITHOUT DOCUMENT).** **RESPONDENT(S)' ANNEXURES:** **------------------------** ## **NIL** **//TRUE COPY//** **P.S.TO JUDGE** **Msv/** ## **B. KEMAL PASHA, J.** ````````````````````````````````````````````````````````````` Crl.M.C. No.406 of 2015 ````````````````````````````````````````````````````````````` _Dated this the 24[th] day of June, 2016_ ## **O R D E R** ~ ~ ~ ~ ~ ~ Heard learned counsel for the petitioners and learned counsel for the 2[nd] respondent. 2. Petitioners are A1 to A3 in CC No.519/2014 of the Chief Judicial Magistrate's Court, Kollam. The case before the court below is as a result of a private complaint filed by the Chief Manager of M/s.UCO Bank as complainant against the petitioners herein and one Abdul Vahid as accused, alleging offences punishable under Sections 420, 423 and 424 read with Section 34 IPC. 3. The averments in the complaint show that accused Nos.2 and 3 had allegedly borrowed an amount of Crl.M.C.406/2015 : 2 : ₹22,50,000/- from the Bank based on the security furnished by the 1[st] accused. It is alleged that the 1[st] accused mortgaged his property to the Bank through equitable mortgage by way of deposit of title deeds, by way of security to the loan transaction,. It is alleged that the loan became overdue and the borrowers had not cared to pay even a single instalment towards the repayment of the loan. It is alleged that in order to create hurdles to the Bank from recovering the loan amount with interest from the property mortgaged with the Bank, they have created a false document styling it as a sale deed, thereby conveying the property to the 4[th] accused. It is also pointed out that in the document, the vendors have made a recital that there was no subsisting liability over the property. According to the complainant, the said accused have deliberately suppressed the existence of the valid mortgage in respect of the property of the Bank. Crl.M.C.406/2015 : 3 : 4. The court below has taken cognizance of the offences and issued process. The matter is presently at the stage of Section 244 Cr.P.C. being a warrant trial based on a private complaint. 5. According to the learned counsel for the petitioners, the proceedings in the private complaint are not maintainable since the petitioners have cleared all the liability in respect of the said loan transaction. 6. _Per contra_ , the learned counsel for the complainant has pointed out that the petitioners have deliberately created hurdles by creating an encumbrance over the property which reflects in the encumbrance certificate, which paves way to have obstructions to the recovery of the amount by the Bank through the sale of the property. It has been pointed out that when such a hurdle has been created through an encumbrance, a right thinking member of the public will not normally purchase the property Crl.M.C.406/2015 : 4 : since he has to purchase a litigation also. Learned counsel for the petitioners has pointed out that the Bank need not suffer anything since such a document, if any executed, will not bind the Bank. 7. Learned counsel for the petitioners have forwarded another argument that even when there is a mortgage in respect of the very same property, the title holder of the property can very well transfer his title to another person through a sale deed. The said argument cannot hold good, especially when in the said sale deed the vendor had not revealed the then subsisting mortgage over the property. Had it been revealed and had the sale deed been executed subject to the liability created in favour of the Bank, the said argument could have been considered as meritorious. 8. As rightly pointed out by the learned counsel for the 2[nd] respondent/complainant, the fact that the liability has Crl.M.C.406/2015 : 5 : been discharged does not absolve the criminal liability caused, if any. The learned counsel for the 2[nd] respondent has invited the attention of this Court to the decision in _**State, Represented by Inspector of Police, Central Crime Branch v. R.Vasanthi Stanley and another** [AIR 2015 SC 3691]_ , wherein it was held that- _“Further a grave criminal offence or serious economic offence or for that matter the offence that has the potentiality to create a dent in the financial health of the institutions, is not to be quashed on the ground there is delay in trial or the principle that when the matter has been settled, it should be quashed to avoid the load on the system.”_ 9. From considering all the above, this Court is of the view that the present stage is too premature to consider these aspects. The petitioners will get sufficient opportunity at the stage of pre-charge evidence, at the stage of Section 244 Cr.P.C. to take up all these contentions. Crl.M.C.406/2015 : 6 : In the result, this Crl.M.C. is dismissed with liberty to the petitioners to take up all these contentions before the court below at the stage of Section 244 Cr.P.C., or at appropriate stage. The court below shall consider the matter quite untrammelled by any of the observations made by this Court in this order. Sd/- **(B.KEMAL PASHA, JUDGE)** aks/24/06 _// True Copy //_ _PA to Judge_