Nand Kishore Malhan & Anr vs State Nct Of Delhi & Ors on 29 March, 2023

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Delhi High Court - Orders

Nand Kishore Malhan & Anr vs State Nct Of Delhi & Ors on 29 March, 2023

1. This petition is filed for quashing of FIR No.77/2021 under Sections 420/406/467/468/471/34 IPC registered at PS Model Town, Delhi and the proceedings emanating therefrom. The FIR was registered on a complaint filed under Section 156(3) Cr.P.C. by respondent no.2. The allegations in the FIR were the respondent no.3, son of petitioner no.1 had approached respondent no.2/complainant company in the second week of January, 2018 for availing a loan facility.

2. It was alleged by the complainant; the petitioner no.1 is a builder and has formed petitioner no.2, a family company along with other members of his family as directors. At the relevant time the petitioner no.1 and his son viz. respondent no.3 were directors of the petitioner no.2/company.

3. The petitioner no.2 company filed a resolution dated 22.01.2018 of Signature Not Verified Digitally Signed By:PRADEEP SHARMA CRL.M.C. 1669/2021 Page 1 of 7 Signing Date:05.04.2023 14:44 Board of Directors authorizing respondent no.3 to approach the complainant to obtain loan. The respondent no.3 then on behalf of petitioner no.2 company approached the complainant/respondent no.2 for obtaining a loan for a project at Mayfair Garden, Hauz Khas, New Delhi. A loan of Rs.65.00 lacs was disbursed by respondent no.2 in favour of petitioner no.2. In addition to further documents, the petitioner no.1 handed over signed KYC documents, details of directors, two signed cheques by petitioner no.1 qua security of loan amount and interest payable. However, the petitioner no.1 failed to make timely repayments and a notice dated 20.04.2019 was served. The cheques issued by the petitioners were also dishonored and hence proceedings under Section 138 NI Act were initiated. In the meanwhile the respondent no.2 started making enquiry and came to know neither the MCD nor the ASI has given sanctions in respect of the property and the petitioners obtained the loan by showing the sanctioned plan and letter from the ASI, which were sham and fabricated documents.

4. Before proceeding further let us examine the terms of Loan Agreement, as under:-

"1. That the First Party has given a sum of Rs.65,00,000/- (Rupees Sixty Five Lacs Only) as loan to the Second Party which is repayable on demand within a period of one month from the date it is demanded by First Party on interest @ 12% p.a. by way of RTGS drawn on Union Bank of India, Mall Road, Delhi vide cheque Number 148779 dated 24.01.2018 amounting to Rs.65,00,000/- . The signing of the loan confirmation/account statement by the Second Party from time to time will be treated as continuation of this loan agreement. The amount of loan will be taken from the latest loan confirmation/account statement. The Second Party also undertakes the responsibility of the correctness of the details in the loan application form signed by the Second Party if any. The Second Party is bound by the loan application form. The rate of interest may also vary as per mutual consent of the parties in writing.

2. That it is been agreed between the parties that the said amount shall be treated as loan amount and the Second Party hereby agree and Signature Not Verified Digitally Signed By:PRADEEP SHARMA CRL.M.C. 1669/2021 Page 2 of 7 Signing Date:05.04.2023 14:44 undertakes to return/refund the said amount as per the latest loan confirmation/account statement along with interest therein@ 12% p.a. within a period of one month whenever it will be demanded by the first party.

3. That it is hereby and undertaken that in case the Second Party fails to pay the said amount to the First Party or in case the cheques issued by the Second Party are dishonoured in that event the Second Party shall be liable to be prosecuted under the provisions of Section 138 of NI Act as well as under the relevant Civil and Criminal Laws of the land at the risk and cost of the Second Party.

4. That in discharge of their agreed liability of principal amount as on today the Second Party has issued a cheque of Rs.65,00,000/- with the authority of the First Party to fill the date with the assurance that the same shall be in cash whenever presented before the Bank. The Second Party has also handed over promissory note for the principal as on today of Rs.65,00,000/- and has assured that in future also whenever the loan limit exceeds the Second Party shall also handover the promissory note and another cheque of that amount from time to time. The interest is payable on monthly basis.

In witness whereof, both the parties to this loan agreement have signed hereto on the date, month and year first above written in the presence of the following witnesses.

Witnesses:

For DPA Finance Private Limited (First Party) Sd/-

Mr. Sushil Kumar Goel (Director) 1. For SKYLINK Construction Private Limited (Borrower/Second Party) 2. Sd/-

(Mr. Ashish Malhan) (Director)

5. The terms of loan agreement reproduced hereinabove clearly show the allegations of cheating and forgery are afterthoughts and even the loan agreement did not speak of any documents or ASI permission or assuring the repayment after getting payment from its ongoing project or any other documents required which later were found forged and fabricated.

6. Admittedly the respondent no.2 filed a complaint under Section 138 Signature Not Verified Digitally Signed By:PRADEEP SHARMA CRL.M.C. 1669/2021 Page 3 of 7 Signing Date:05.04.2023 14:44 NI Act and even in such complaint there is no whisper qua the offences of cheating, of forgery or of criminal breach of trust committed by petitioners. The relevant paragraphs of the complaint under Section 138 NI Act are as under:-

"2. That the accused No.2 on behalf of accused No.1 approached the complainant company to obtain loan of Rs.65 lacs on 23.01.2018 and also applied for the same in writing by filling up an application form for loan which was duly signed by the accused No.2. That thereafter the loan was sanctioned by the complainant and the said amount of Rs.65 lacs was transferred in his account through RTGS vide cheque No.148779, dated 24.01.2018 drawn on Union Bank of India, Mall Road Branch (Model Town), Delhi and accordingly the said amount was duly received by the accused on 24.01.2018, the accused agreed to pay interest @ 12% p.a. on the said loan amount of Rs.65 lacs and in pursuance therefore, a loan agreement was also executed between the complainant company and the accused No.2 on behalf of accused No.1 and 3. The accused No.1 has authorized the accused No.2 to deal with the Complainant company to obtain loan on its behalf vide resolution dated 22.01.2019."

"3. That in additional to the execution of the loan agreement the accused No.2 had also executed a promissory note dated 24.01.2018 on behalf of the accused No.1 and 3, the accused No.2 and 3 are responsible for looking after and managing the affairs of the accused No.1.

4. That the accused No.2 submitted PAN Card of addressee No.1 and 3 and also submitted the copy of adhaar card of accused No.2 to 3 duly signed by them. The accused person submitted the confirmation of account.

As per the terms and conditions of the said loan agreement, the said amount of loan was repayable by the accused persons alongwith interest @ 12% p.a. within a period of one month, whenever demanded by the complainant. The interest on the said amount of loan lent to the accused persons was to be paid by the accused persons on monthly basis to the complainant. It is pertinent to mention here that the said Loan agreement was executed by the accused No.2 on behalf of accused No.1 and 3.

5. That as per terms and conditions of the loan agreement, the accused persons despite of repeated requests, calls, and personal visits made by the complainant are not making the said loan and the accused persons deliberately, willfully, knowingly and intentionally avoiding the same and the accused persons at the time of taking loan had given the full assurance and promise that they will make the payment of said loan and so on the assurance of the accused persons, the Complainant and had agreed to give the said loan.

Further, as per the terms of the said loan agreement, it was agreed by the Signature Not Verified Digitally Signed By:PRADEEP SHARMA CRL.M.C. 1669/2021 Page 4 of 7 Signing Date:05.04.2023 14:44 accused that the said amount shall be treated as loan amount and the accused agreed and undertook to return/refund the said amount as per the latest loan confirmation/account statement alongwith interest thereon @ 12% p.a. within a period of one month, upon demand by the complainant.

Thus, in the above manner, the complainant lent the accused persons a total sum of RS.65,00,000/- (Rupees Sixty Five lacs) alongwith interest."

6. That the accused persons proved to be very bad paymasters in as such they did not pay even a single penny to the complainant on account of the monthly interest accrued on the aforesaid loan amount, despite repeated requests and demands made to the accused in this regard and merely kept on killing the time by making false assurances to the complainant."

7. A bare perusal of the above averment clearly establish neither the notice under Section 138 NI Act nor the complaint under Section 138 NI Act speaks of any forgery etc. qua documents relating to the property being shown by the petitioners. The complaint under Section 138 NI Act was filed in August, 2019 wherein no such allegations were made but subsequently a complaint dated 14.10.2020 was given to the police and later a complaint under Section 156(3) Cr.P.C. was filed wherein new allegations propped up. I have also perused the legal notice under Section 138 NI Act wherein no such allegations are made. I may also refer para 13 of the status report filed by the State as under:-

"13. Neither complainant nor alleged person produced any alleged forged documents related to the permission of construction at the property."

8. In State of Haryana vs. Bhajan Lal 1992 Suppl. (1) SCC 335 it was held criminal proceedings is manifestly actuated with malafide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused, it cannot be permitted. The Hon'ble Supreme Court in Ahmad Ali Quraishi and Anr. vs. State of UP and Anr. (2020) 13 Signature Not Verified Digitally Signed By:PRADEEP SHARMA CRL.M.C. 1669/2021 Page 5 of 7 Signing Date:05.04.2023 14:44 SCC 435 took note of the nature of dispute between the parties and held the same was of civil nature to which criminal colour was being given at the behest of the complainant and thus, quashed the proceedings.

9. It is a settled position of law that civil wrong cannot be converted into a criminal wrong to wreck vengeance and enforce recovery as held in Joseph Salvaraja A vs. State of Gujarat (2011) 7 SCC 59 and in G.Sagar Suri and Anr. vs. State of UP and Ors. (2000) 2 SCC 636.

10. The above facts do show the complainant/respondent no.2 concocted a new story alleging serious criminal acts whereas none of the documents relating to loan or loan transactions reveal of fraud/forgery etc. The respondent no.2 thus tried to make a new case on an oral understanding between petitioner no.2 company and complainant company which oral allegations in the wake of written documents cannot be looked into.

11. The facts show the dispute is wholly civil in nature which has been given criminal color to pressurize the petitioners to settle. The respondent no.2 has already filed a complaint under Section 138 NI Act and the facts stated in it would not attract penal provisions under which the present FIR has been registered.

12. The criminal justice system cannot be allowed to be misused when prima facie it is clear the complainant is trying to make a new case from what it has been alleging till the time the complaint under Section 138 NI Act was filed.

13. None of the documents filed by the complainant in complaint under Section 138 NI Act, even briefly hint towards commission of any criminal act as alleged in complaint under Section 156(3) Cr.P.C., hence there is no impediment in quashing the present FIR against the petitioners.

Signature Not Verified Digitally Signed By:PRADEEP SHARMA CRL.M.C. 1669/2021 Page 6 of 7 Signing Date:05.04.2023 14:44

14. Accordingly, the petition is allowed. Consequently, the FIR No.77/2021 under Sections 420/406/467/468/471/34 IPC registered at police station Model Town, Delhi and the proceedings emanating therefrom stands quashed. Pending application(s), also stands disposed of.

YOGESH KHANNA, J.

MARCH 29, 2023 DU Signature Not Verified Digitally Signed By:PRADEEP SHARMA CRL.M.C. 1669/2021 Page 7 of 7 Signing Date:05.04.2023 14:44

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Delhi High Court - Orders