Shabjan and Rajula v. State of Kerala and Ors

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT`** ``` THEHONOURABLEMR.JUSTICERAJAVIJAYARAGHAVANV WEDNESDAY,THE7[TH]DAYOFJUNE2023/17THJYAISHTA,1945 CRL.MCNO.3734OF2023 CRIMENO.232/2022OFKOTTIYAMPOLICESTATION ``` ## **`PETITIONER/ACCUSED NOS.1 & 2 :-`** - **`1 SHABJAN, AGED 58 YEARS S/O SULAIMAN KUNJU, KARIKKUZHI VEEDU, MAYYANADU KOLLAM, PIN - 691303`** - **`2 RAJULA , AGED 53 YEARS W/O SHABJAN, KARIKKUZHI VEEDU, MAYYANADU KOLLAM, PIN - 691303 BY ADV ARUN BABU`** ## **`RESPONDENT/STATE/COMPLAINANT :-`** - **`1 STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, PIN - 682031`** - **`2 SUB INSPECTOR OF POLICE KOTTIYAM POLICE STATION, KOLLAM, PIN - 691020`** - **`3 REGIONAL HEAD, BANK OF BARODA , REGIONAL OFFICE, OPP OLD GPO, AMBUJAVILASOM ROAD , THIRUVANANTHAPURAM, PIN - 695001`** ``` BYADVS. SAIJOHASSAN NAGARAJNARAYANAN(K/700/1994) BENOJCAUGUSTIN(K/189/2004.) RAFEEK.V.K.(K/134/2003) U.M.HASSAN(K/00033/2016) AATHIRASUNNY(K/000638/2018) BINCYJOB(K/001080/2017) SALMANFARIS(K/002563/2022) DEVI.R.SENS(K/000671/2016) RAJALAKSHMIR.(K/1446/2020) SRI.T.R.RENJITH,SR.PP ``` ``` THISCRIMINALMISC.CASEHAVINGCOMEUPFORADMISSION ON07.06.2023,THECOURTONTHESAMEDAYPASSEDTHE FOLLOWING: ``` ``` CRL.MCNO.3734OF2023 ``` ``` 2 ``` ## **ORDER** The 1st petitioner is the husband of the 2nd petitioner. They have been arrayed as the accused in Crime No.232 of 2022 of Kottiyam Police Station registered under Section 420, 120B read with Section 34 of the Indian Penal Code. This petition is filed seeking to quash the criminal proceeding on the ground that the same is manifestly attended with mala fides with a view to harassing the petitioners. 2. The short facts are as follows:- The de facto complainant is the Regional Head of the Bank of Baroda. In his complaint filed before the Assistant Commissioner of Police, it is alleged that the petitioners herein are the co-obligants in respect of a mortgage loan of Rs 12,50,000/ availed on 11.4.2017. The said loan was disbursed on furnishing security of property having an extent of 5.96 Ares in Sy No 280/4/2 of Block No 32 of Veliyam Village, Kottarakkara. The loanees were irregular in paying the loan installments, and the loan was classified as Non-Performing Asset on 27.3.2019. It is alleged that on periodical verification of the mortgaged property, it was found that the property which was shown to the Bank during pre-sanction for valuation was not the actual property that was subsequently mortgaged with the bank when the loan was sanctioned. It is further alleged that at the time of initial verification and valuation, which was carried out on 24.03.2017, the first petitioner took the Branch Manager and Valuer to another item of ``` CRL.MCNO.3734OF2023 ``` ``` 3 ``` land farther away but in proximity to the main road. It is stated that the documents handed over by the petitioners did not give the correct picture of the property to the Manager and Valuer. Based on the said complaint, Crime No.232 of 2022 was registered inter alia under Section 420 and 120-B r/w Section 34 of the IPC. 3. Sri Arun Babu, the learned counsel, submitted that the registration of the crime against the petitioners is a clear abuse of process. The learned counsel highlighted that it was after adhering to all necessary formalities and upon receipt of all relevant revenue records that the loan was ultimately disbursed by the Bank. The documents tendered by the petitioners, including the Title Deed, Encumbrance Certificate, Possession Certificate of the Property Sketch, and Tax Receipt, were subjected to thorough scrutiny by the Bank, its appointed lawyer, and valuer before loan disbursement. Referring to Annexure A5, the location sketch issued by the Village officer, the learned counsel emphasized that the location of the 5.96 Ares of property is explicitly delineated within the sketch. As the sketch reveals, the mortgaged property is positioned approximately 100 meters from the Alimukku junction, adjacent to the Nedumankavu-Veliyam Road, with its sole access through a small pathway on the western side. Given its location—a corner property enclosed by pathways to the west and north, and situated about 100 meters from the Alimukku junction—it is untenable, the Counsel argues, that the petitioner could mislead the valuer and the bank manager into believing that the property is adjacent to the ``` CRL.MCNO.3734OF2023 ``` ``` 4 ``` main road. The learned counsel also referred to Annexure 6, the legal opinion rendered by the Bank's Advocate, which substantiates his contention that the allegations against the petitioner are false and are being made to harass him. The learned counsel pointed out that when the Bank used strong-arm tactics against the petitioner, he approached the Court seeking a writ of police protection. The Court, while disposing of the matter, directed the Bank or its agents not to use strong-arm tactics against the petitioner to discharge the liabilities. This judgment was rendered on June 29, 2021. It was thereafter that the de facto complainant lodged a complaint with the police on March 21, 2022, leveling false accusations. The learned counsel would bolster his submissions by relying on the principles laid down by the Apex Court in **Joseph Selvaraja v. State of Gujarat** [2011 (7) SCC 59], **Inder Mohan Goswami v. State of Uttaranchal** [2007 (12) SCC 1] and **Neeharika Infrastructure Pvt. Ltd. M/s. v. State of Maharashtra and Ors** [AIR 2021 SC 1918], and it was argued that criminal proceeding initiated against the petitioners is a clear abuse of process and liable to be quashed at the threshold stage itself. 4. Countering the contentions, it is submitted by the learned counsel appearing for the bank that the petitioner had persuaded the valuer and the Bank Manager to believe that the property was located elsewhere and managed to secure an inflated loan valuation. If it was not for the deception carried out by the petitioner, the valuation would have ``` CRL.MCNO.3734OF2023 ``` ``` 5 ``` been much less, contends the learned counsel 5. I have anxiously considered the submissions and have carefully gone through the records 6. It is undisputed that the petitioners availed themselves of a mortgage loan from the Bank by mortgaging an item of property having an extent of 5.96 Ares situated in Veliyam Village. Annexure A6 is the legal opinion rendered by the Bank's Advocate to the Bank of Baroda. Annexure 5 location sketch and Annexure 6 opinion are undisputed documents on the basis of which the loan was disbursed. The legal opinion discloses that at the time of submission of the loan application, the petitioner submitted documents, including the current tax receipt, encumbrance certificate, Possession Certificate, Location Sketch, Thandapper register, and Title deeds. The loan was disbursed only after thorough verification of all these documents and an assessment of the property's value. Upon examination of the location sketch issued by the Village officer, the precise location of the property is discernible. The property, being a corner plot, is situated approximately 100 meters from Alimukku. Narrow Pathways border the property to the west and north, converging at the northwestern corner. In that view of the matter, the allegation in the complaint that the petitioner deceived the valuer and the bank manager is clearly implausible. The main road is approximately 100 meters to the south of the property. if the Bank disbursed a loan that was more than the worth of the property, their officers are to be blamed and not the petitioner. It is next to impossible to ``` CRL.MCNO.3734OF2023 ``` ``` 6 ``` believe that the valuer and the Bank Manager were deceived and they were made to believe that the property was situated by the side of the main road, which is 100 meters to the south. 7. There appears to be some merit in the submission of the learned counsel that the Bank has ventured to lodge the criminal complaint in an effort to realize the amount that became due by recourse to criminal proceedings. 8. To attract the offense of cheating, the essential ingredient is a fraudulent or dishonest inducement. 9. Section 420 IPC defines “cheating and dishonestly inducing delivery of property” which reads as under: “420. Cheating and dishonestly inducing delivery of property.—Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.” ## 10. To establish the offence of cheating in inducing the delivery of property, the following ingredients need to be proved: (i) The representation made by the person was false. (ii) The accused had prior knowledge that the representation he made was false. (iii) The accused made false representation with dishonest ``` CRL.MCNO.3734OF2023 ``` ``` 7 ``` intention in order to deceive the person to whom it was made. - (iv) The act where the accused induced the person to deliver the property or to perform or to abstain from any act which the person would have not done or had otherwise committed. 11. It is by now a settled proposition of law that in order to attract the offense of cheating, there has to be a fraudulent or dishonest intention at the very inception of the transaction 12. In **Hira Lal Hari Lal Bhagwati v. Central Bureau of Investigation** [AIR 2003 SC 2545], the Hon'ble Supreme Court had occasion to hold that for establishing the offense of cheating, the complainant is required to show that the accused had the fraudulent intention at the time of making promise or representation. It was further held that from his making failure to keep up his promise subsequently, such a culpable intention right at the beginning, i.e., at the time when the promise was made, cannot be presumed. 13. In **Anil Mahajan v. Bhor Industries,** [2005 (10) SCC 228], it was observed by the Apex Court that the substance of the complaint is to be seen, and the mere use of the expression 'cheating' in the complaint is of no consequence. Therefore, unless the complainant is able to show that the petitioner had a dishonest or fraudulent intention at the inception, the offense of cheating would not be made out. ``` CRL.MCNO.3734OF2023 ``` ``` 8 ``` ## 14. In **Vesa Holdings Pvt. Ltd. v. State of Kerala** [2015 (8) SCC ## 29], it was held by the Apex Court as under: It is true that a given set of facts may make out a civil wrong as also a criminal offence and only because a civil remedy may be available to the complainant that itself cannot be a ground to quash a criminal proceeding. The real test is whether the allegations in the complaint disclose the criminal offence of cheating or not. In the present case there is nothing to show that at the very inception there was any intention on behalf of the accused persons to cheat which is a condition precedent for an offence under S.420 IPC. In our view the complaint does not disclose any criminal offence at all. Criminal proceedings should not be encouraged when it is found to be mala fide or otherwise an abuse of the process of the Court. Superior Courts while exercising this power should also strive to serve the ends of justice. In our opinion, in view of these facts allowing the police investigation to continue would amount to an abuse of the process of Court and the High Court committed an error in refusing to exercise the power under S.482 Criminal Procedure Code to quash the proceedings. ## 15. In **V.Y. Jose and Another v. State of Gujarat and Another** (AIR 2009 SC (Supp) 59) the Hon'ble Supreme Court has laid - down as under: "S.482 of the Code of Criminal Procedure, saves the inherent power of the court. It serves a salutary purpose viz. a person should not undergo harassment of litigation for a number of years although no case has been made out against him.It is one thing to say that a case has been made out for trial and as such the criminal proceedings should not be quashed but it is another thing to say that a person should undergo a criminal trial despite the fact that no case has been made out at all." ``` CRL.MCNO.3734OF2023 ``` ``` 9 ``` 16. In **Inder Mohan Goswami and Another v. State of Uttranchal and Others** [2007 (12) SCC 1], the Hon'ble Supreme Court, while quashing all the proceedings emanating from the FIR, inter alia, observed as under : "The Court must ensure that criminal prosecution is not used as an instrument of harassment or for seeking private vendetta or with an ulterior motive to pressurise the accused. 17. In **Indian Oil Corporation v. N.E.P.C. India Ltd.** [2006 (6) SCC 736], the Hon'ble Supreme Court cautioned against a growing tendency in business circles to convert purely civil disputes into criminal - cases. The Hon'ble Court observed that: "Any effort to settle civil disputes and claims, which do not involve any criminal offense, by applying pressure through criminal prosecution should be deprecated and discouraged." 18. The present case appears to be an attempt to solve a dispute which is of civil nature by putting pressure on the petitioners by initiating criminal proceedings against them. 19. In **State of Haryana v. Bhajan Lal** , (AIR 1992 SC 604) the Hon'ble Supreme Court has held that where the allegations made in the FIR or the complaint even if they are taken at their face value and accepted in their entirety do not, prima facie, constitute any offense or make out any case against the accused, the court would be justified in quashing the criminal proceedings in exercise of powers u/s. 482 of the ``` CRL.MCNO.3734OF2023 ``` ``` 10 ``` Code. 20. Having considered the entire facts in the light of the principles above, I am of the considered opinion that the continuance of the proceedings against the petitioners is a clear abuse of process. This petition will stand allowed. Crime No 232 of 2022 of the Kottiyam Police Station and all further proceedings pursuant thereto pending against the petitioners are quashed. Sd/- ## **RAJA VIJAYARAGHAVAN V** **JUDGE** ## **SMA** ``` CRL.MCNO.3734OF2023 ``` ``` 11 ``` ## **`APPENDIX OF CRL.MC 3734/2023`** ## **`PETITIONER ANNEXURES :-`** ``` AnnexureA1THETRUECOPYOFTHEJUDGMENTDATED 29/05/2021INWP(C)235/2021OFTHISHONBLE COURT AnnexureA2THETRUECOPYOFTHECOMPLAINTDATED 15.03.2021SUBMITTEDBYTHEREGIONALHEADOF BANKOFBARODABEFORETHEASSISTANT COMMISSIONEROFPOLICE,CHATHANOOR AnnexureA3THETRUEREADABLECOPYOFANNEXUREA2 AnnexureA4THECERTIFIEDCOPYOFTHEFIR232/2022DATED 19/03/2022OFTHEKOTTIYAMPOLICESTATION AnnexureA5THETRUECOPYOFTHELOCATIONSKETCHDATED 17.02.2017ISSUEDBYTHEVILLAGEOFFICER AnnexureA6THETRUECOPYOFTHELETTERISSUEDTOPRADMOD KUMARDFROMBANKOFBARODAKOTTIYAM,WHICH WASDELIVEREDBYTHEPETITIONER ```