Madhya Pradesh High Court
M/S Vivekanand Vichardham Shiksha Evam ... vs The State Of Madhya Pradesh on 23 April, 2024
Author: Maninder S. Bhatti
Bench: Maninder S. Bhatti
1
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE MANINDER S. BHATTI
ON THE 23 rd OF APRIL, 2024
WRIT PETITION No. 249 of 2024
BETWEEN:-
1. M/S VIVEKANAND VICHARDHAM SHIKSHA EVAM
SAMAJ KALYAN SAMITI THROUGH ITS
CHAIRMAN MAA ANNPURNA MANDIR ACHARYA
NARENDRADEV NAGAR OLD SUBHASH NAGAR
GOVINDPURA BHOPAL (MADHYA PRADESH)
2. RAJESH SAHU S/O LATE SHRI K.K. SAHU, AGED
ABOUT 46 YEARS, OCCUPATION: CHAIRMAN
VIVEKANAND VICHARDHAM SHIKHA EVAM
SAMAJ KALYAN SAMITI, R/O A GEET
BUNGALOWS DURGESH VIHAR JK ROAD BHOPAL
(MADHYA PRADESH)
3. MANOJ KUMAR SAHU S/O LATE SHRI K K SAHU,
AGED ABOUT 45 YEARS, OCCUPATION:
SECRETARY VIVEKANAND VICHARDHAM
SHIKHA EVAM SAMAJ KALYAN SAMITI R/O A
GEET BUNGALOWS DURGESH VIHAR JK ROAD
BHOPAL (MADHYA PRADESH)
4. SANJAY SAHU S/O LATE SHRI K.K. SAHU, AGED
ABOUT 50 YEARS, OCCUPATION: SANCHALAK
VIVEKANAND VICHARDHAM SHIKHA EVAM
SAMAJ KALYAN SAMITI R/O A GEET
BUNGALOWS DURGESH VIHAR JK ROAD BHOPAL
(MADHYA PRADESH)
5. SMT SUNITA SAHU W/O SHRI SANJAY SAHU,
AGED ABOUT 45 YEARS, OCCUPATION:
SANCHALAK VIVEKANAND VICHARDHAM
SHIKHA EVAM SAMAJ R/O A GEET BUNGALOWS
DURGESH VIHAR JK ROAD BHOPAL (MADHYA
PRADESH)
6. SMT DHANESHWARI SAHU W/O RAJESH KUMAR
SAHU, AGED ABOUT 40 YEARS, OCCUPATION:
SANCHALAK VIVEKANAND VICHARDHAM
SHIKHA EVAM SAMAJ KALYAN SAMITI R/O A
GEET BUNGALOWS DURGESH VIHAR JK ROAD
Signature Not Verified
Signed by: PRADYUMNA
BARVE
Signing time: 5/4/2024
12:27:51 PM
2
BHOPAL (MADHYA PRADESH)
.....PETITIONERS
(BY SHRI AJAY MISHRA - SENIOR ADVOCATE ASSISTED BY SHRI ARPIT
KUMAR TIWARI - ADVOCATE)
AND
1. THE STATE OF MADHYA PRADESH THROUGHN PS
ECONOMIC OFFENCE WING DISTRICT BHOPAL
(MADHYA PRADESH)
2. M/S VISHNU VILAS SHIKSHA EVAM JANKALYAN
SAMITI THROUGH ITS SECRETARY, GRAM
SIKANDRABAD, POST RATIBAD, BHOPAL 462044
(MADHYA PRADESH)
.....RESPONDENTS
(SHRI MADHUR SHUKLA - ADVOCATE FOR RESPONDENT NO.1)
(SHRI SANJAY AGRAWAL - SENIOR ADVOCATE ASSISTED BY SHRI ARPIT
AGRAWAL - ADVOCATE FOR RESPONDENT NO.2)
WRIT PETITION No. 32022 of 2023
BETWEEN:-
1. MR. VAIBHAV CHOUDHARY S/O SHRI ANIL
CHOUDHARY, AGED ABOUT 36 YEARS,
OCCUPATION: PRESNTLY POSTED AS RISK
MANAGER SMALL AND MEDIUM ENTERPRISES
CITY CENTRE ZONAL OFFICE JAIL ROAD ARERA
HILLS BHOPAL (MADHYA PRADESH)
2. MR. AMIT KUMAR MITTAL S/O SHRI P.K.
MITTAL, AGED ABOUT 44 YEARS, PRESENTLY
POST AS CHIEF MANAGER, ASSET RECOVERY
BRANCH, ZONAL OFFICE, JAIL ROAD, ARERA
HILLS, BHOPAL (MADHYA PRADESH)
3. MR. JEETENDRA RAMCHANDANI S/O SHRI I.D.
RAMCHANDANI, AGED ABOUT 36 YEARS,
PRESENTLY POSTED AS SENIOR MANAGER,
SMALL AND MEDIUM ENTERPRISES CITY
CENTRE, ZONAL OFFICE, JAIL ROAD, ARERA
HILLS, BHOPAL (MADHYA PRADESH)
4. BANK OF INDIA A BODY CORPORATE
CONSTITUTED UNDER THE BANKING
COMPANIES (ACQUISITION AND TRANSFER OF
UNDERTAKINGS) ACT V, 1970, HAVING ITS HEAD
Signature Not Verified
Signed by: PRADYUMNA
BARVE
Signing time: 5/4/2024
12:27:51 PM
3
OFFICE AT STAR HOUSE C-5, G BLOCK, BANDRA
KURLA COMPLEX, BANDRA (E) MUMBAI
THROUGH ITS CHIEF MANAGER AND
CONSTITUTED ATTORNEY, PROFESSOR COLONY
BRANCH BHOPAL (MADHYA PRADESH)
.....PETITIONER
(BY SHRI K.C. GHILDIYAL - SENIOR ADVOCATE ASSISTED BY SHRI
ASHISH SHROTI - ADVOCATE)
AND
1. ECONOMIC OFFENCE WING THROUGH ITS
DIRECTOR GENERAL EOW BHAWAN 42 ARERA
HILLS BHOPAL (MADHYA PRADESH)
2. M/S VISHNU VILAS SHIKSHA EVAM JANKALYAN
SAMITI THROUGH ITS SECRETARY GRAM
SIKANDRABAD, POST RATIBAD, BHOPAL
(MADHYA PRADESH)
.....RESPONDENTS
(SHRI MADHUR SHUKLA - ADVOCATE FOR RESPONDENT NO.1)
(SHRI SANJAY AGRAWAL - SENIOR ADVOCATE ASSISTED BY SHRI ARPIT
AGRAWAL - ADVOCATE FOR RESPONDENT NO.2)
This petition coming on for admission this day, th e court passed the
following:
ORDER
This order shall govern disposal of both the aforesaid writ petitions. For the sake of convenience the facts as highlighted in Writ petition No. 249/2024 are being taken note of.
2. Petitioner No. 1 in W.P. No. 249/2024 is a registered Educational Society imparting education pertaining to different professional courses (hereinafter referred to as the petitioner society) and remaining petitioners are its office bearers. Respondent No. 2/complainant, which is also a Society registered under the provisions of Madhya Pradesh Society Registrikaran Adhiniyam, 1973 (hereinafter referred to as the Act of 1973) had availed a loan facility of Rs.700 Lakh from Bank of India, M.P. Nagar Branch, Bhopal, for Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 5/4/2024 12:27:51 PM 4 construction of building and purchase of equipments. In order to secure the aforesaid loan, respondent No.2 had mortgaged a property situated at Khasra Nos. 160/2, 161/1 and 161/2, area 2.00 hectares situated at Patwari Halka No. 41, near Ratibadh Phanda Road, Village Sikandarabad, Tahsil Huzur, District Bhopal. As respondent No. 2/complainant could not re-pay the aforesaid loan, its account was eventually classified as Non-Performing Asset (for short NPA) on 31.3.2017. In order to recover the dues, the Bank of India started action against respondent No. 2 under the provisions of Securitization of Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the SARFAESI Act) and initially conducted auctions on as many as 4 occasions, however, no one came forward to offer bid and all efforts went in vain. The Bank of India then conducted fifth auction by again issuing a notice dated 5.3.2023. The petitioner society upon coming to know about the auction of the aforesaid property moved an application before the Bank on 18.3.2023 (Annexure P-6). In the said application, it was informed to the Bank that the petitioner society was participating in the auction process and had also created its ID and password in the website of M.S.T.C. In the said application, a request was also made by the petitioner society to extend loan facility to the petitioner. Pursuant to petitioner society's application dated 18.3.2023 (Annexure P-6), a valuation report of the property, which the petitioner society intended to mortgage in order to avail the loan, was prepared on 21.3.2023. A detailed Title Search Report was also prepared on 24.3.2023. The auction was held on 27.3.2023 and as the petitioner society was the successful bidder, the bid was knocked down in its favour for a sale price of Rs.6,14,75,000/-. On 28.3.2023, a formal loan application was submitted by the petitioner society with Bank of India, M.P. Nagar Branch, Bhopal. A proposal Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 5/4/2024 12:27:51 PM 5 for sanction of aforesaid loan was forwarded by the concerned Branch to SMECC Branch, Zonal Office on 28.3.2023 and the loan was sanctioned in favour of the petitioner society on 29.3.2023. The petitioner society was also having a Bank Account with Bank of Baroda and, therefore, availed a Cash Credit/Loan Facility from the Bank of Baroda as well. A T.D.R of Rs.80 Lakh was deposited by the petitioner society with the Bank of India. Simultaneously, loan amount of Rs.4,62,00,000/-was disbursed in favour of the petitioner society on 5.4.2023 and sale certificate was also issued in favour of the petitioner society on 5.4.2023 (Annexure P-12). The sale certificate was registered in favour of the petitioner society on 6.4.2023 (Annexure P-13).
3. Thereafter, respondent No. 2/complainant filed a complaint with the Economic Offence Wing alleging inter alia that the property of respondent No. 2 was being alienated in favour of the petitioner society by the Bank Officials, who were hand-in-glove with the petitioner society. The petitioner society was not supplied copy of the said complaint. In the meantime the process pertaining to auction was disputed by respondent No. 2 by filing Securitization Case vide S.A No. 338 of 2023 before the Debts Recovery Tribunal, Jabalpur and the Debts Recovery Tribunal vide order dated 13.4.2023 refused to grant any interim relief in favour of respondent No.2/complainant. Yet the First Information Report has been registered against the petitioner society, which is being assailed by the petitioner Society in the present case.
4. In the connected petition W.P. No. 32022/2023, same FIR is being assailed by the officials of the Bank who have also been implicated along with the petitioner society and its office bearers in W.P. No. 249/2024.
5. Shri Ajay Mishra, learned Senior Counsel appearing for the petitioners Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 5/4/2024 12:27:51 PM 6 in W.P. No. 249/2024 submits that in the present case without there being any allegation of commission of any offence, the impugned First Information Report (for short FIR) has been registered. It is contended that the contents of the impugned FIR reflect that machinery of law was set in motion on the basis of some complaint moved by respondent No. 2/complainant dated 6.6.2023. The said complaint dated 6.6.2023 has not been brought on record either by respondent No. 1 or by respondent No.2/complainant. It is contended that a complaint moved by respondent No.2/complainant on 25.4.2023 is available on record as Annexure R-2/1 and the same nowhere reflects any mens rea against the petitioner society. The prayer made in the said complaint also reveals that complainant was trying to seek intervention by the police as regards the steps which were taken by the Bank of India to recover its loan. Senior Counsel further contends that the impugned FIR instead of disclosing any prima facie overt act, at the most suggests certain procedural lapses, which do not attract any criminality and, therefore, the implication of the petitioner society is unsustainable. As the impugned FIR does not disclose commission of any cognizable offcence, the entire proceedings are liable to be quashed.
6. It is further contended by the Senior Counsel that the impugned FIR poses a doubt as regards the manner in which the property was sold to the petitioner society and a suspicion is also being sought to be projected as to why the property was sold to the petitioner society in a hurried manner. It is contended by the counsel that even assuming that the steps were taken by the Bank in order to expedite the proceedings but the same ipso facto does not indicate any culpable state of mind and, therefore, there was no mens rea as mentioned in the F.I.R.
7. Learned Senior Counsel also contends that in the present case Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 5/4/2024 12:27:51 PM 7 ingredients of Section 420 I.P.C do not attract as no one was pitchforked to part with his or her property in a deceitful manner. In the present case entire transaction was conducted in a purely just and transparent manner. The auction notice was duly published. It was made known to the public at large that the property of respondent No. 2/complainant, which was mortgaged in order to recover the loan which remained unpaid, was to be auctioned. Any one from the society was free to participate in the auction. The present petitioner participated in the auction. The bid of the petitioner was accepted and accordingly, the sale was knocked down in favour of petitioner. During entire process of conduct of auction, no illegality or irregularity was committed by anyone, yet the defaulter who could not re-pay the loan despite his account being classified as N.P.A in 2017 decided to approach respondent No. 1/E.O.W with a request to intervene in the process of auction which was being conducted by the Bank. It is also contended by Senior Counsel that respondent No. 2/complainant could have submitted offer but prior to publication of notice in terms of Section 13 (8) of SARFAESI Act, respondent No. 2/complainant had not submitted any offer before the date of publication, thus, lost all rights to raise any objection subsequently.
8. Senior Counsel while placing reliance on the decision of Apex Court in Celir LLP Vs. Bafna Motors (Mumbai) Private Limited and others - (2024) 2 SCC 1 submits that offlate, the law pertaining to recovery of credit facility/loan has undergone drastic change and the Apex Court concluded that borrower has right to redeem the security as secured assets till the date of publication of notice for public auction under Rule 9 (1) of Security Interest (Enforcement) Rules, 2002. It is thus contended by the counsel that Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 5/4/2024 12:27:51 PM 8 respondent No. 2/complainant having not submitted any offer by the date of publication of auction notice, subsequently had no right to dispute the auction, which was made in favour of the petitioner society.
9. Senior Counsel has also placed reliance on the decisions of Apex Court in Mohammed Ibrahim and others Vs. State of Bihar and another - (2009) 8 SCC 751 and Harmanpreet Singh Ahluwalia and others Vs. State of Punjab and others - (2009) 7 SCC 712 and it is contended by the counsel that none of the ingredients of Section 420 I.P.C attracts in the present case and, therefore, the impugned FIR and ensued proceedings are liable to be quashed. The counsel has also placed heavy reliance on the decision of Apex Court in R.P. Kapur Vs. State of Punjab - AIR 1960 SC 866 and submitted that when the FIR even if read in its entirety, does not constitute the offence alleged, in such cases the FIR is liable to be set aside. The counsel has also placed reliance on the decision of the Apex Court in Mahindra & Mahindra Financial Services Limited and another Vs. Rajiv Dubey - (2009) 1 SCC 706 and submitted that if the proceedings are initiated with ulterior motive the same deserve quashment. Reliance has also been placed on the decision of Allahabad High Court in Criminal Misc. Writ Petition No. 11838 of 2023 (Himri Estate Pvt. Ltd. and others Vs. State of U.P. and others) and another connected matter decided on 15.4.2024.
10. Senior counsel further submits that even the Apex Court has taken note of the surge in complaint cases, which are being filed by the borrowers instead of taking recourse to remedy available under the SARFAESI Act and the Apex Court also expressed its concern regarding the orders which are being passed by the Courts under Section 156 (3) of Cr.P.C without any application of mind and ignorance of Section 32 of SARFAESI Act. Hence, Counsel Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 5/4/2024 12:27:51 PM 9 submits that impugned FIR and the prosecution of the petitioner society deserve to be quashed.
11. Shri K.C. Ghildayal, Senior counsel appearing for the petitioners in W.P. No. 32022 of 2023 submits that in the present case impugned FIR is liable to be quashed as the present petitioners have been made scapegoat unnecessarily. It is contended that the petitioners being sincere employees of the Bank made bona fide attempt to sell the property through auction as dues were not paid by the complainant for prolong period of more than six years, yet the present petitioners are being harassed at the behest of respondent No. 2/complainant, the author of FIR, which contains vague and baseless allegations. It is contended by the counsel that undisputedly there were five attempts to auction the property and after numerous efforts ultimately the property was sold. The action so taken by the petitioners was in the interest of public exchequer. It is undisputed that the defaulter did not pay any amount from 2017 till 2023. The counsel further contends that the petitioners being officials of the Bank are entitled for protection in terms of Section 32 of the SARFAESI Act. It is the further contention that as respondent No.2/complainant has already approached the Debts Recovery Tribunal by filing aforesaid Securitization Application, it is for the complainant to approach the Debts Recovery Tribunal highlighting its grievance, if any. Senior Counsel, thus, submits that as no illegality or irregularity has been committed by the petitioners hence, the prosecution launched against them, being unsustainable, deserves quashment.
12. Senior counsel also further contends that in the present case petitioner No. 4 is Bank itself, therefore, the action of the employee is being Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 5/4/2024 12:27:51 PM 10 supported by the employer as the action was taken in the interest of Banking institution. Learned Senior Counsel placed reliance on the decision of Apex Court in Celir LLP (supra) and K. Virupaksha and another Vs. State of Karnataka and another - 2020 (4) SCC 440.
13. Per contra, Shri Madhur Shukla, learned counsel for E.O.W submits that the present petitions filed by the petitioners are liable to be dismissed. It is contended by the the counsel that no interference is required by this Court in exercise of writ jurisdiction. It is also contended by the counsel that it is settled that the Court in exercise of jurisdiction under Article 226 of the Constitution or Section 482 Cr.P.C cannot conduct mini trial and also cannot interfere with the investigation. Thus, submits that the premature interference at the initial stage of investigation is not permissible. To bolster the aforesaid contentions, strong reliance has been placed by the counsel on the decision of Apex Court in Neeharika Infrastructure Pvt. Ltd. vs. State of Maharashtra and others, 2021 SCC OnLine SCC 315. The counsel has also placed reliance of the Apex Court in Criminal Appeal No. 843 of 2024 [@ SLP (Crl.) No. 10913 of 2023] - Directorate of Enforcement Vs. Niraj Tyagi and others and other connected matters.
14. It is further submitted that in the present case the FIR contains as many as 10 points, which palpably indicate commission of offence by the present petitioners. It is contended by the counsel that this is a case where in absence of any application for loan by the petitioner society, the loan was extended and the bid submitted in the auction was accepted. It is contended by the counsel that there is not a single document on record to demonstrate as to whether there exists any application for grant of loan before 28.3.2023. In the present case formal loan application was submitted by the petitioner society on Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 5/4/2024 12:27:51 PM 11 28.3.2023, whereas the Search Valuation Report as well as Title Search Report was prepared prior to submission of formal application for grant of loan. It is contended by the counsel that the FIR contains the specific allegations, which have been levelled against the petitioners. The petitioner society as well as the other petitioners in connected petitions, who are employees of the Bank, were hand-in-glove and as a result of the conduct of the present petitioners, respondent No. 2 was deprived of his property and Bank officials made all efforts to ensure that the property is sold to the petitioner society. It is contended by the counsel that ingredients of Section 415 of the Indian Penal Code directly apply in the present case and the allegations are still to be tested during course of trial. At this stage present petitioners cannot claim any immunity under the garb of Section 32 of SARFAESI Act. It is the further contention of the counsel that to seek protection in terms of Section 32 of SARFAESI Act, the present petitioners are required to adduce evidence before the Court. Hence the petitioners are not entitled for any protection under Section 32 of the SARFAESI Act. It is further submitted that that in the present case the Valuation Report was submitted on 21.3.2023 by Mukesh Shrivastava Associates and Title Search Report was submitted by Shri Manoj Saxena, authorized counsel of the Bank on 24.3.2023. It is contended by the counsel that Valuation Report as well as Title Search Report disclose that both the reports were prepared on the instructions of Bank and such instructions were given by the Bank in absence of any application for grant of loan. It is thus contended by the counsel that the present petitions are liable to be dismissed. It is thus contended by Shri Madhur Shukla that the contention of the petitioner that the offence has been registered on the basis of some complaint dated Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 5/4/2024 12:27:51 PM 12 6.6.2023 is misconceived. It is contended by the counsel that complaint dated 25.4.2023 (Annexure R-2/1) was registered by the respondent on 6.6.2023 and was numbered as Shikayat Janch No. 131/2023. Accordingly the said date is mentioned in the First Information Report.
15. Shri Sanjay Agrawal, learned senior counsel for respondent No. 2/complainant has supported the arguments advanced by Shri Madhur Shukla, Advocate and submitted that it is a case where the land owned by respondent No. 2 has been alienated by the officials of the Bank and a fraud was committed in complete ignorance of the offer given by respondent No.2. It is contended by the counsel that in the present case when the Bank decided to put the property in auction, respondent No. 2 gave an offer to the Bank to settle the entire outstanding as One Time Settlement ( for short OTS) and the said offer of a sum of Rs. 3 Crore was given by respondent No. 2 on 18.3.2023 . The Bank of India with an oblique motive sent a letter dated 24.3.2023, which was dispatched by post on 31.3.2023 and initiated auction proceedings. Respondent No. 2 again gave an offer of Rs. 6.25 Crore as OTS on 5.4.2023, yet, the said offer was not accepted by the Bank and on 5.4.2023 itself, loan amounting to Rs. 4.62 Crore in favour of the petitioner society was sanctioned/disbursed. On 5.4.2023 itself, the sale certificate was issued in favour of the petitioner society. The said certificate was registered on 6.4.2023. It is contended by the counsel that aforesaid series of events would reveal that the Bank officials and the petitioner society and its office bearers were in hand-in-gloves and the entire process was completed in a most haste and hurried manner, thereby depriving respondent No. 2 of his rights to the property. It is further contended that the declaration of the petitioner society to be a successful bidder on 27.3.2023, acceptance of loan application of the petitioner society on 28.3.2023 and Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 5/4/2024 12:27:51 PM 13 forwarding for sanction towards SMECC Branch, Zonal Office, Bhopal by the same Branch of the Bank on 28.3.2023 itself, all such event require consideration by the trial Court during course of trial. Learned senior counsel also submits that within 7-8 days from the date of auction i.e. 27.3.2023, the entire process was completed and the property was auctioned in favour of the petitioner society. The property was auctioned in favour of the petitioner society for an amount, which is close to reserve price and only a sum of Rs.50,000/-, in addition to reserve price, was offered by the petitioner society. Hence, it is submitted that the present petitions are liable to be dismissed. Learned senior counsel has placed reliance on the decisions of the Apex Court in Kaptan Singh Vs. State of U.P. - 2021 (9) SCC 35 and State of Uttar Pradesh and another Vs. Akhil Sharda and others - 2022 SCC Online SC 820.
16. No other point is argued or pressed by the counsel for the parties.
17. Heard the submissions advanced on behalf of the parties and perused the record.
18. On perusal of record, it reveals that on an information, a First Information Report was registered against the petitioner society and the Bank officials. The First Information Report reflects that respondent No.2/complainant, whose account, on account of non payment of loan, was declared as NPA, offered to settle the amount for a sum of Rs.3 Crore as OTS. The said offer was not accepted and the Bank initiated auction proceedings. Thereafter, the Bank in terms of SARFAESI Act, conducted auction and the property in question was put to auction on 27.3.2023. The petitioner society participated in the auction proceedings and qualified the same Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 5/4/2024 12:27:51 PM 14 being the successful bidder. It is alleged in the FIR that the petitioner society was well aware about the entire auction proceedings and the petitioner society as well as officials of the Bank were in constant touch and the Valuation Report as regards property, which was to be mortgaged by the petitioner society, was submitted by the valuer on 21.3.2023 and the Title Search Report was submitted on 24.3.2023. The said reports were submitted before the auction, which was to be conducted on 27.3.2023 and formal application for grant of loan was submitted on 28.3.2023 and the said proposal was forwarded to SMECC Branch on 29.3.2023. The complainant subsequently gave an offer of Rs. 6.25 Crore as OTS on 5.4.2023 but the Bank did not respond to the said offer. Thus, the allegations levelled in the First Information Report reflect following scenario:-
A. The auction notice was published on 5.3.2023. B. The petitioner society submitted an application (Annexure P-6) with the Bank on 18.3.2023.
C. The said application contained twofold prayer; firstly the petitioner society be permitted to purchase the property, which was mentioned in auction notice dated 5.3.2023 and secondly, the petitioner society be also extended loan facility .
D. The said application dated 18.3.2023 (Annexure P-6) contained reference of a plot, flat and duplex owned by the petitioner society and its office bearers but no details of the plot like number, area, colony, road, city etc,. were mentioned.
E. The application dated 18.3.2023 not being disputed by the officials of the Bank, was taken note of and then Valuation Report was submitted on 21.3.2023 and Title Search Report was submitted on 24.3.2023 Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 5/4/2024 12:27:51 PM 15 F. Thereafter, auction was held on 27.3.2023 and the petitioner society was declared as successful bidder.
19. The aforesaid chronology of events reveal that in the application dated 18.3.2023, the petitioner society did not mention any details of the plot, flat and duplex, which according to the petitioner society were owned by it as well as its office bearers, yet a Valuation Report regarding a duplex bearing No. A-4, Geet Bunglows, Phase-II, Village Narela Shankari, Bhopal was submitted by the valuer. It reflects that the said report was addressed to Assistant General Manager, Bank of India, SME City Center Branch, Zonal Office, Bhopal and opening paragrapah of the report reflects that upon receiving the instructions of Assistant General Manager, Bank of India, the valuation of the property was carried out. It is unintelligible that when there was no mention of any detail regarding identity of the property, as to how the officials of the Bank came to know that the aforesaid duplex was owned by the petitioner society or its office bearers and thereafter forwarded the matter to the valuer to submit valuation report. The aforesaid aspect is not clear and requires sifting of evidence.
20. Simultaneously, there is a Title Search Report dated 24.3.2023 submitted by Shri Manoj Saxena, Advocate in respect of the same property/duplex. The said report refers to letter no. - Nil, date - nil of Chief Manager, Bank of India, Sachivalaya Branch, Bhopal. Again it is difficult to understand that if the Bank was not in possession of the details of the property, which the petitioner society intended to mortgage, either by 21.3.2023 or 24.3.2023, as to how the Valuation Report and Title Search Report were submitted mentioning the details of the property, which was owned by the petitioner society.
Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 5/4/2024 12:27:51 PM 1621. There is another Title Search Report regarding residential plot No. 54, Part of Khasra No. 87/1/2, 87/2, 88/1, 95, 102 Chhatrasal Nagar, Phase-3, Village Narela Shankari, Tahsil - Huzur, District Bhopal. How and when the documents pertaining to title of aforesaid properties were provided by the petitioner society to Bank, is also an important issue, which requires consideration and also when the said documents were forwarded to valuer for the purpose of valuation report and also for Title Search Report, is also a debatable issue.
22. The impugned FIR also reflects that the aforesaid Valuation Report dated 21.3.2023 and Title Search Report dated 24.3.2023 were submitted before the auction, which was conducted on 27.3.2023 and according to the stand of the Bank itself, formal application for loan was submitted by the petitioner society on 28.3.2023. Thus, the circumstances under which the application for grant of loan dated 18.3.2023 was acted upon by the Bank officials, which also ensued in submission of Valuation Report as well as Title Search Report, is an issue which requires consideration upon sifting of evidence.
23. The allegations, which have been levelled against the officials of the Bank as well as the petitioner society, prima facie suggest that before actual conduct of auction on 27.3.2023, entire documents pertaining to title search and valuation were prepared in anticipation that the bid would knock-down in favour of the petitioner society only. Such allegations at this stage cannot be gone into by this Court while dealing with the petition under Article 226 of the Constitution of India. The contention of the petitioner regarding report dated 6.6.2023 is also unsustainable in view of the response given by Shri Madhur Signature Not Verified Shukla, Advocate. Complaint dated 25.4.2023 was registered and number was Signed by: PRADYUMNA BARVE Signing time: 5/4/2024 12:27:51 PM 17 given to the enquiry case as Shikayat Janch No. 131/2023 on 6.6.2023 only. Thus, the said date was mentioned in the F.I.R. Moreover, the petitioner's reply dated 16.6.2023 contained in Annexure P-17 to a notice given by E.O.W dated 14.6.2023 further leaves no scintilla of doubt that the present petitioner was aware about the complaint and accordingly filing of case by the complainant in D.R.T was also mentioned in paragraph 3 of the communication dated 16.6.2023 (Annexure P-17). Thus, the petitioner was well aware of the fact that who was the complainant and the nature of allegations which were levelled in the complaint.
24. Second part of the FIR raises issue regarding extension of overdraft facility to the petitioner society by its Bank i.e. Bank of Baroda also. However, preparation of documents in advance before scheduled date of auction, that too in absence of any application for grant of loan, prima facie suggest that the property was auctioned in favour of the petitioner society in a manner which requires cogitative scrutiny. As a result of entire process so conducted by the Bank and its officials, respondent No.2/complainant was deprived of his property. On 5.4.2023, the loan in favour of the petitioner society was sanctioned. On 5.4.2023, itself sale certificate was issued. On 5.4.2023, respondent No. 2 submitted an offer of Rs.6.25 Crore, fate of which is unexplained. Thus, under obtaining facts and circumstances, the truth is still to be unearthed. Therefore, as the First Information Report prima facie reflect commission of a cognizable offence, this Court at this stage is not inclined to interfere with the impugned First Information Report and ensued proceedings.
25. Scope of interference under Section 482 of the CrPC or under Article 226 of the Constitution of India has been considered by the Apex Court Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 5/4/2024 12:27:51 PM 18 in the case of Neeharika Infrastructure Pvt. Ltd. (supra), wherein in para 80 of the judgment it is held as under :
"80. In view of the above and for the reasons stated above, our final conclusions on the principal/core issue, whether the High Court would be justified in passing an interim order of stay of investigation and/or no coercive steps to be adopted, during the pendency of the quashing petition under Section 482 Cr.P.C and/or under Article 226 of the Constitution of India and in what circumstances and whether the High Court would be justified in passing the order of not to arrest the accused or no coercive steps to be adopted during the investigation or till the final report/charge-sheet is filed under Section 173 Cr.P.C., while dismissing/disposing of/not entertaining/not quashing the criminal proceedings/complaint/FIR in exercise of powers under Sect ion 482 Cr.P.C. and/or under Article 226 of the Constitution of India, our final conclusions are as under:
i ) Police has the statutory right and duty under the relevant provisions of the Code of Criminal Procedure contained in Chapter XIV of the Code to investigate into a cognizable offence;
ii) Courts would not thwart any investigation into the cognizable offences;
iii) It is only in cases where no cognizable offence or offence of any kind is disclosed in the first information report that the Court will not permit an investigation to go on;
iv) The power of quashing should be exercised sparingly w it h circumspection, as it has been observed, in the rarest of rare cases (not to be confused with the formation in the context of death penalty).
v ) While examining an FIR/complaint, quashing of which is sought, the court cannot embark upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR/complaint;
vi) Criminal proceedings ought not to be scuttled at the initial stage;
vii) Quashing of a complaint/FIR should be an exception rather than an ordinary rule;
viii) Ordinarily, the courts are barred from usurping the jurisdiction of the police, since the two organs of the State operate in two specific spheres of activities and one ought not to tread over the other sphere;
Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 5/4/2024 12:27:51 PM 19ix) The functions of the judiciary and the police are complementary, not overlapping;
x ) Save in exceptional cases where non-interference would result in miscarriage of justice, the Court and the judicial process should not interfere at the stage of investigation of offences;
xi) Extraordinary and inherent powers of the Court do not confer an arbitrary jurisdiction on the Court to act according to its whims or caprice;
xii) The first information report is not an encyclopaedia which must disclose all facts and details relating to the offence reported. Therefore, when the investigation by the police is in progress, the court should not go into the merits of the allegations in the FIR. Police must be permitted to complete the investigation. It would be premature to pronounce the conclusion based on hazy facts that the complaint/FIR does not deserve to be investigated or that it amounts to abuse of process of law. After investigation, if the investigating officer finds that there is no substance in the application made by the complainant, the investigating officer may file an appropriat e report/summary before the learned Magistrate which may be considered by the learned Magistrate in accordance with the known procedure;
xiii) The power under Section 482 Cr.P.C. is very wide, but conferment of wide power requires the court to be more cautious. It casts an onerous and more diligent duty on the court;
xiv) However, at the same time, the court, if it thinks fit, regard being had to the parameters of quashing and the self-restraint imposed by law, more particularly the parameters laid down by this Court in the cases of R.P. Kapur (supra) and Bhajan Lal (supra), has the jurisdiction to quash the FIR/complaint;
xv) When a prayer for quashing the FIR is made by the alleged accused and the court when it exercises the power under Section 482 Cr.P.C., only has to consider whether the allegations in the FIR disclose commission of a cognizable offence or not. The court is not required to consider on merits whether or not the merits of the allegations make out a cognizable offence and the court has to permit the investigating agency/police to investigate the allegations in the FIR;"
[Emphasis supplied] Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 5/4/2024 12:27:51 PM 20
26. In view of law laid down in Neeharika Infrastructure Pvt. Ltd. (supra), as the First Information Report prima facie contains the allegation of cheating, any interference at this stage, by this Court would amount to conduct of mini trial, which is impermissible.
27. The judgments relied upon by the counsel for the petitioners are distinguishable on fact and render no assistance to them, as in the present case there are allegations of connivance between the Bank officials as well as the petitioner society.
28. Thus, in view of the aforesaid analysis, this Court does not find any ground to make interference in the impugned First Information Report.
29. Resultantly, both the petitions stand dismissed.
( MANINDER S. BHATTI) JUDGE VKT/PB Signature Not Verified Signed by: PRADYUMNA BARVE Signing time: 5/4/2024 12:27:51 PM