Chief Manager/Authorized Officer, Canara Bank and Others vs State of Andhra Pradesh and Others

T. Sunil Chowdary, J.�This criminal petition is filed under Section 482 of Cr.P.C., against the petitioners/A1 to A5 in Crime No. 377 of 2010 of Sultan Bazar Police Station, Hyderabad, registered for the offences under Sections 406, 418 and 420 read with 34 I.P.C. Learned Counsel for the petitioners submitted that the allegations made in the complaint do not constitute the offences alleged. He further submitted that any act done by the petitioners in pursuance of the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) is protected by Section 32 of SARFAESI Act. Despite granting several adjournments, no representation was made on behalf of the second respondent.

A perusal of the record reveals that the petitioners are A1 to A5 and second respondent is de facto complainant in Crime No. 377 of 2010.

The facts that lead to filing of the criminal petition are briefly as follows: One G. Sree Rama Chandra Gupta had obtained housing loan from Canara Bank, Sultan Bazar Branch and purchased Plot No. 55 (Eastern Part) in Survey Nos. 125 and 129 (part), bearing House No. 1-1-320/55, Mohan Nagar, Kothapet, Hyderabad. Sree Rama Chandra Gupta committed default in payment of housing loan instalments and, therefore, his loan account was declared by Canara Bank as NPA (non-performing asset). The first petitioner being Authorised Officer of Canara Bank has initiated proceedings under SARFAESI Act to auction the property on 9.3.2010. The second respondent participated in the auction and has become highest bidder. The auction was knocked down in favour of second respondent. The second respondent paid Rs. 5,00,000/- towards part payment on 9.3.2010 and Rs. 15,00,166/- on 9.4.2010 towards balance consideration. The petitioners did not issue Sale Certificate in favour of the second respondent immediately after the payment of entire sale consideration. The second respondent lodged a complaint with the Station House Officer, Sultan Bazar Police Station, who in turn registered the case in Crime No. 377 of 2010 for the offences under Sections 406, 418, 420 read with 34 I.P.C.

As per the allegations made in the complaint, the petitioners intentionally concealed the factum of granting stay by this Court with regard to auction of the property in question and conducted auction on 9.3.2010. It is further alleged that the petitioners cheated him by not issuing Sale Certificate.

The question that fells for consideration is whether the petitioners have cheated the second respondent.

It is not the case of the second respondent that any one of the petitioners induced or made false representation to him in order to participate in the auction. The second respondent at his own volition participated in the auction knowing fully well the procedure. Since the auction was conducted by the Authorised Officer i.e., the first petitioner, petitioner Nos. 2 to 5 have nothing to do with the alleged offences. Simply because they are the employees of Canara Bank by itself is not a sufficient ground to implicate them as if they committed the alleged offences.

A perusal of the record reveals that Sree Rama Chandra Gupta filed WP No. 5235 of 2010 and obtained interim order on 8.3.2010. The contention of the second respondent is that in spite of interim order, the petitioners have conducted the auction on 9.3.2010. The petitioners have taken a specific plea that they were not aware of the interim order passed by this Court on 8.3.2010 in WPMP No. 6748 of 2010 in WP No. 5235 of 2010. The said interim order reads as follows:

In view of the averments in Para 7 of the affidavit filed in support of the writ petition, that the impugned tender/auction notice under Sections 12 and 13(4) and Rules 8 and 9 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short "that Act") and the Security Interest (Enforcement) Rules, 2002 respectively, has been issued without issuing a notice under Section 13(2) of the Act, which is a condition precedent for initiation of proceedings under Section 13(4) of the Act, there shall be a stay of confirmation of any sale pursuant to the proceedings initiated under the impugned tender/auction notice dated 5.2.2010. The other proceedings for auction may go on.

A perusal of the above order clearly manifests that this Court granted ex parte interim order. By the said interim order, the Authorised Officer was allowed to continue the auction proceedings except confirmation of sale. A perusal of the record reveals that the interim stay, which was granted on 8.3.2010, was continued till disposal of the writ petition. The writ petition was ultimately dismissed on 1.10.2010 observing that the second respondent has efficacious alternative remedy of appeal under Section 17 of SARFAESI Act. If the first petitioner issued Sale Certificate during pendency of writ petition, certainly it would amount to violation of the interim order passed by this Court on 8.3.2010. A perusal of the record clearly reveals that the first petitioner issued the Sale Certificate to the second respondent on 1.12.2010, after disposal of the writ petition. Viewed from any angle, no motives can be attributed for the first petitioner for non-issuance of the Sale Certificate immediately after payment of entire amount by the second respondent.

As observed earlier, criminal case was registered against the petitioners on 15.10.2010 i.e., during the subsistence of interim orders passed by the Division Bench of this Court in WPMP No. 6748 of 2010 in WP No. 5235 of 2010. If really the second respondent is aggrieved with the inaction, if any, on the part of the first petitioner, he ought to have filed appeal under Section 17 of the SARFAESI Act.

Learned Counsel for the petitioners has drawn my attention to the decision of Delhi High Court in Sh. M.A. Rashid Vs. Sh. Gopal Chandra and Another, , wherein it was observed as follows:

I am in entire agreement of the learned Counsel for the petitioner that Section 32 of the SARFAESI Act provides complete immunity to the petitioner. This section reads as under:

"32. Protection of Action taken in Good Faith - No suit, prosecution or other legal proceeding shall lie against any secured creditors or borrower for anything done or omitted to be done in good faith under this Act".

From the sequence of events as have been unfolded and discussed herein above, there does not appear to be any doubt that the petitioner had taken the possession of the flat in question as authorized representative of the bank and in discharge of his official duty. There does not appear to be any element of doubt in his good faith. He is completely protected of his acts under Section 32 of the Act.

In view of my above discussion, I do not find any basis in the complaint that has been made by the complainant/respondent against the petitioner. The same is nothing but a frivolous one and has been filed just to settle the score and to put pressure upon the bank as also the petitioner to negotiate as regard to the flat in question. The complaint manifests gross abuse of judicial process and I find it a fit case to exercise the powers under Section 482 Cr.P.C. and Article 227 of the Constitution to quash the complaint and the impugned order of the MM as also of ASJ.

As per the principle enunciated in the case cited supra, the Authorised Officer is protected under Section 32 of SARFAESI Act for any act done by him in good faith. As observed earlier, no mala fides can be attributed to the first petitioner, who is an Authorised Officer, in view of interim order passed in WPMP No. 6748 of 2010 in WP No. 5235 of 2010 on 8.3.2010. As observed earlier, petitioner Nos. 2 to 5 have nothing to do with the alleged offences.

The allegations made against the petitioners do not constitute the offences alleged. If the criminal proceedings are allowed to continue against the petitioners, who are bank employees, certainly it would amount to abuse of process of Court.

Having regard to the facts and circumstances of the case and also the principle enunciated in the case cited supra, I am of the view that it is a fit case to quash the proceedings against the petitioners/A1 to A5. Accordingly, the criminal petition is allowed quashing the proceedings against the petitioners/A1 to A5 in Crime No. 377 of 2010 of Sultan Bazar Police Station. Miscellaneous petitions, if any, pending in this criminal petition shall stand closed.