Delhi District Court
Pushpa Chugh vs Muthoot Finance Limited on 17 January, 2025
IN THE COURT OF MS AMBIKA SINGH, ASJ-02/ WEST
DISTRICT, TIS HAZARI COURTS, NEW DELHI
NO. DLWT01-006960-2024
Criminal Revision No. 388/2024
Sh. Pushpa Chugh
R/o D-53/54, Ground Floor,
Saraswati Garden, Ramesh Nagar
New Delhi.
.....Revisionist
Versus
(1) Muthoot Finance Ltd
Through its Manager
Office at 2/67, Ground Floor,
Ramesh Nagar, New Delhi
(2) Unknown persons.
.....Respondents
Date of institution of the cases : 16.08.2024
Date when the cases reserved for order : 17.01.2025
Date of announcement of order : 17.01.2025
JUDGMENT
17.01.2025
1. This criminal revision petition assails the order dated 15.07.2024 (hereinafter to be referred as the impugned order) passed by the Ld. MM whereby the application u/s 156 (3) Cr.
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PC has been dismissed. A prayer has been made to set aside the said impugned order.
2. Briefly stated, it is the case of the revisionist/complainant that she is an old aged lady and on 03.01.2023, when son of revisionist/complainant checked the Paytm app account information of the complainant, then she came to know that one active loan of Rs. 19,750/- taken in the name of the revisionist/complainant from Muthoot Finance Limited out of which Rs.15,750/- was due against her after payment of two installments, however, complainant had never taken any such loan from Muthoot Finance Limited. It is further stated that the revisionist/complainant inquired about the said loan then she came to know that the loan in question was taken by some one in her name on 04.10.2022. It is further stated that the revisionist/complainant had taken two- three loans from Muthoot Finance Limited in the year 2018 to 2021 but the loan in question was not taken by her. It is further stated that revisionist/complainant and son of complainant made inquiry from Muthoot Finance Limited about the said loan and talked about the same from one Mr. Pawan working there but till date revisionist/complainant has not received any satisfactory reply/answer from the Muthoot Finance Limited despite being assured by the officials to get it sorted out. It is further stated that when any person approaches Muthoot Finance Limited for a loan then his documents are verified in different steps and after taking the OTP from the borrower which comes only on the contact number of the borrower, then the loan is finalized. however, in CR No. 388/2024 Page No 2 of 16 Pushpa Chugh Vs. Muthoot Finance Ltd.
this case revisionist/complainant never received any such OTP and thus, complainant has an apprehension that Muthoot Finance Limited had used the ID cards, documents, signatures and other information of the complainant and given a loan of Rs. 19,750/- to someone else which is showing due on complainant and this has been done with the help of staff/employees of Muthoot Finance Limited. It is further stated that when no action or reply was received by the complainant on her complaint from Muthoot Finance Limited then she made a complaint to SHO, PS Kirti Nagar on 27.01.2023 but no action was taken on her complaint, then she made a complaint to DCP, West District on 08.02.2023 but no action was taken on this complaint as well. Thus, left with on other option complainant filed a complaint before the Court and has prayed that an FIR U/s 406/420/468/471/34/120-B IPC be registered.
3. Revisionist/complainant has assailed the impugned order dated 15.07.2024 on the ground that the Ld. Trial Court has mechanically passed the judgment dismissing the application under Section 156(3) Cr. PC without due application of mind to the factual and legal position of the case. The dismissal order appears to have been issued without proper consideration of the evidence and legal principles that govern the matter. Further, the impugned Order passed by the Ld. Trial Court is in contravention of the settled principles of law and has been issued without due appreciation of the relevant facts of the case. The failure to properly apply established legal doctrines and consider the factual context has resulted in a miscarriage of justice. Further, CR No. 388/2024 Page No 3 of 16 Pushpa Chugh Vs. Muthoot Finance Ltd.
Ld. Trial Court failed to consider the crucial fact that without a proper investigation conducted by the police, it is not possible for the petitioner to uncover the necessary details regarding to whom the said Gold Loan was disbursed by Muthoot Finance Limited. The petitioner lacks the means and authority to independently investigate such matters, and the involvement of the police is essential to unearth the truth and ensure justice. Further, it is essential to seize the gold loan application form, which every customer is required to file when approaching Muthoot Finance. This form typically contains crucial information, including the personal details, contact information, and specifics about the gold being pledged by the customer. Additionally, the documents submitted with the form are verified to comply with the KYC norms mandated by regulatory authorities. However, it is not within the petitioner's capacity to obtain and present this vital document without the assistance of the Police. Further, Ld. Trial Court has erred in its consideration of the fact that the loan amount sanctioned by Muthoot Finance Limited is based on the evaluated value of the gold and the applicable Loan to Value (LTV) ratio. The terms of the loan, including the interest rate and repayment schedule, are finalized accordingly, and the applicable interest rate is communicated to the customer, which can vary depending on the loan amount and tenure. However, without a proper investigation, it is impossible for the petitioner to determine what security or gold has been deposited with Muthoot Finance Limited for the purpose of securing the gold loan. The respondent has not disclosed these crucial details, and the lack of investigation prevents the petitioner from uncovering the CR No. 388/2024 Page No 4 of 16 Pushpa Chugh Vs. Muthoot Finance Ltd.
necessary facts. This oversight by the Trial Court necessitates a reconsideration of the matter. Further, Ld. Trial Court has failed to consider the crucial fact that, upon disbursal of a gold loan, the customer signs a loan agreement that details the loan amount, interest rate, tenure, repayment terms, and conditions. Additionally, a pledge receipt or memorandum of deposit is issued to the customer, acknowledging the gold deposited as collateral. These documents are vital in establishing the legitimacy and details of the transaction. However, without the assistance of the police, it is not possible for the petitioner to seize and secure certified copies of these critical documents, which were utilized by the respondents in the disbursal of the gold loan. Further, Ld. Trial Court has failed to appreciate that Muthoot Finance Limited, like other non banking financial companies (NBFCs) in India, is required to adhere to various government regulations and guidelines. These regulations, primarily set by the Reserve Bank of India (RBI) and other regulatory bodies, are designed to ensure transparency, fairness, and financial stability in the operations of NBFCs. The failure to comply with these regulatory requirements could result in serious legal and financial repercussions. Given the complexities involved and the potential for regulatory breaches, it is imperative to lodge a First Information Report (FIR) to initiate a thorough investigation. Such an investigation is necessary to uncover any irregularities or violations of the law by the respondents, which may not be evident without the involvement of law enforcement authorities. Ld. Trial Court oversight in this regard warrants a reconsideration of the matter. Further, Ld. Trial CR No. 388/2024 Page No 5 of 16 Pushpa Chugh Vs. Muthoot Finance Ltd.
Court has failed to appreciate the fact that Muthoot Finance, like all financial institutions, is mandated to adhere to Know Your Customer (KYC) norms to prevent money laundering and fraudulent activities. These KYC norms involve the thorough verification of the identity and address of all customers through valid documents before any financial transaction, including the disbursement of gold loans. Adherence to these norms is crucial in maintaining the integrity and legality of financial operations. Ld. Trial Court has failure to consider the significance of these regulatory obligations and the need for an FIR is a serious oversight that must be addressed. Further, Ld. Trial Court has failed to appreciate that Muthoot Finance, as a financial institution, is legally obligated to implement Anti-Money Laundering (AML) measures in accordance with the Prevention of Money Laundering Act (PMLA). These measures include the critical responsibilities of monitoring financial transactions, reporting any suspicious activities to the relevant authorities, and maintaining detailed records of all transactions. The failure to properly implement these measures could facilitate financial crimes, and it is crucial that these obligations be taken seriously. Ld. Trial Court oversight in not considering the necessity of these measures, and the potential non-compliance by Muthoot Finance, underscores the importance of conducting a thorough investigation, which further justifies the lodging of an FIR to ensure that any violations are properly addressed. Further, Ld. Trial Court has obligated to compliance with consumer protection laws, which mandate fair and ethical treatment of customers and the safeguarding of their interests. This includes CR No. 388/2024 Page No 6 of 16 Pushpa Chugh Vs. Muthoot Finance Ltd.
protecting customer data and ensuring adherence to data protection laws to prevent misuse of personal information. However, it is evident from the present complaint that Muthoot Finance Limited has failed to uphold these obligations, resulting in significant difficulties for the complainant. The failure to protect customer data and ensure ethical treatment directly impacts the complainant and underscores the need for a thorough investigation. Therefore, lodging a First Information Report (FIR) is necessary to address these compliance failures and ensure that appropriate actions are taken to safeguard consumer rights and rectify the grievances presented. Further, Ld. Trial Court has failed to appreciate that the application clearly disclosed a prima facie case of a cognizable offense, which necessitates an investigation by the police. The application, as presented, outlines sufficient grounds and evidence indicating the commission of a cognizable offense, warranting the involvement of law enforcement authorities to conduct a thorough investigation. Ld. Trial Court has oversight in recognizing this prima facie case undermines the procedural requirement for police investigation, which is crucial for determining the veracity of the allegations and ensuring justice. Therefore, the failure to mandate an investigation in this context is a serious lapse that needs rectification to uphold the legal process and address the grievances effectively. Further, Ld. Trial Court did not consider the settled law that an application under Section 156(3) of the Criminal Procedure Code (Cr.P.C.) necessitates a judicial application of mind. Further, Ld. Trial Court has failed to appreciate the presence of fraudulent and dishonest intention on CR No. 388/2024 Page No 7 of 16 Pushpa Chugh Vs. Muthoot Finance Ltd.
the part of the accused, which has led to the inducement and deception of the complainant. This fraudulent conduct also involved the use and alteration of the complainant's valuable security by the deceived party. The Magistrate's oversight in recognizing these elements of dishonesty and inducement undermines the gravity of the offense and the complainant's right to seek justice. Addressing these concerns is crucial for ensuring that the legal process appropriately reflects the seriousness of the fraudulent acts and the harm caused. Further, Ld. Trial Court has failed to appreciate that the accused engaged in the making, alteration, and signing of the complainant's documents with a dishonest intention. This conduct was aimed at causing wrongful gain to one individual or wrongful loss to the complainant. Additionally, the forged documents were intended to be used for cheating purposes. The Magistrate's oversight in recognizing the deliberate fraudulent intent and the use of these forged documents for deceitful purposes undermines the seriousness of the offense. Proper acknowledgment of these factors is essential for ensuring that the legal process accurately addresses the fraudulent acts committed and the resulting harm to the complainant. Further, Ld. Trial Court has failed to appreciate that the respondent had knowledge and reason to believe that the document in question was forged. Despite this awareness, the respondent used the forged document as if it were genuine, demonstrating a clear intent to deceive the complainant. The use of such a forged document with the intention to mislead and defraud the complainant is a serious offense. Ld. Trial Court has oversight in recognizing the accused's awareness of the forgery CR No. 388/2024 Page No 8 of 16 Pushpa Chugh Vs. Muthoot Finance Ltd.
and their deliberate use of the document for deceitful purposes undermines the gravity of the fraudulent conduct. Addressing these factors is crucial for ensuring that the legal process accurately reflects the nature of the offense and the harm caused to the complainant. Further, it is prayed the file of the Ld. Trial Court may be summoned and impugned order be set aside.
4. Notice of the revision petition was issued to the respondent on which the respondent entered his appearance. TCR was also summoned.
5. Ld. Counsel for respondent/accused has argued the matter and submitted that Ld. Trial Court had rightly passed order which has no error or irregularity manifesting the revisionist to set aside the same.
6. I have heard the arguments and perused the record carefully.
7. ATR has been filed and stated that police official had sent a notice to the Bank Manager, Muthoot Finance Ltd. and had enquired about the loan status upon the complainant/revisionist herein to which he has submitted that "This customer does not have any loan in this finance company at present time". Customer name as Pushpa Chugh, contact no. 7******583, thus no loan is pending with the complainant in the Muthoot Finance Ltd. at present, therefore, no criminal offence is made out from the enquiry conducted so far.
11. Before further adverting to the facts of the present case I CR No. 388/2024 Page No 9 of 16 Pushpa Chugh Vs. Muthoot Finance Ltd.
would like to mention the guiding principles for the Magistrates, which have to be kept in mind while issuing directions for the investigation U/s 156 (3) Cr.PC. In this regard, the law is well settled that the provisions U/s 156 (3) Cr.P.C. should not be used unless there is something unusual or extraordinary, like miscarriage of justice, which warrants a direction to the police to register a case. Hon'ble Supreme Court has held in number of cases, if the allegations are not very serious and complainant herself/ himself is in a position to prove his/her allegations as made, there should be no need to pass orders U/s 156 (3) Cr.PC for directing investigation by the police. In this regard, the Hon'ble Supreme Court of India has laid down the guidelines to decide the application U/s 156 (3) Cr.PC in case titled as Priyanka Srivastava & Ors. Vs. State of U.P. & Ors , inter alia, observing that the power U/s 156 (3) Cr PC must be exercised judicially and not in a mechanical manner and that the said provision can never be used in manner that results into harassment of the opponent party.
12. In the case of Skipper Beverages Pvt. Ltd. Vs. State 2001 (92) DLT 217, after taking note of the judgment of Apex Court in "Suresh Chand Jain Vs. State of Madhya Pradesh"
2001 (1) Supreme 129, the Hon'ble High Court of Delhi dealt with this question. The relevant paragraphs of this judgment are reproduced here as under:-
" It is true that Section 156(3) of the Code empowers a Magistrate to direct the police to register a case and initiate investigations but this power has to be exercised judiciously on proper grounds and not in a mechanical manner. In those cases where the allegations are not very serious and the complainant himself is in possession of evidence to prove his allegations there should be no need to pass CR No. 388/2024 Page No 10 of 16 Pushpa Chugh Vs. Muthoot Finance Ltd.
order under Sec. 156(3) of the Code. The discretion ought to be exercised after proper application of mind and only in those cases where the Magistrate is of the view that the nature of the allegations is such that the complainant himself may not be in a position to collect and produce evidence before the court and interests of justice demand that the police should step in to help the complainant. The police assistance can be taken by a Magistrate even u/s 202(1) of the Code after taking cognizance and proceeding with the complaint under Chapter XV of the Code as held by Apex Court in 2001 (1) Supreme 129 titled "Suresh Chand Jain Vs. State of Madhya Pradesh and Ors."
"Section 156(3) of the Code aims at curtailing and controlling the arbitrariness on the part of the police authorities in the matter of registration of FIRs and taking up investigations, even in those cases where the same are warranted. The Section empower the Magistrate to issue directions in this regard but this provision should not be permitted to be misused by the complainants to get police cases registered even in those cases which are not very serious in nature and the magistrate himself can hold inquiry under Chapter XV and proceed against the accused if required. Therefore, the Magistrate, must apply him mind before passing an under U/s 156(3) of the Code and must not pass these orders mechanically on the mere asking by the complainant. These powers ought to be exercised primarily in those cases where the allegations are quite serious or evidence is beyond the reach of complainant or custodial interrogation appears to be necessary for some recovery of article or discovery of fact."
13. Further, the Hon'ble Supreme Court of India in G. Sagar Suri & Anr. Vs. State of UP & Ors observed that it is the duty and obligation of the criminal court to exercise a great deal of caution in issuing the process, particularly when matters are essentially of civil nature. Infact the Hon'ble Apex Court has time and again cautioned about converting purely civil disputes into criminal cases. Similarly, the Hon'ble Supreme Court of India in Indian Oil Corporation case held that there is prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors, and further observed that:-
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"13...any efforts to settle civil disputes and claims which do not involve any criminal offence, by applying pressure through criminal prosecution should be deprecated and discouraged".
14. After going through the records and hearing the arguments, this court is of the view that Ld Magistrate has rightly dismissed the application u/s 156 (3) as no facts are needed to be unearthed as the same are well within the knowledge of the complainant and custodial interrogation of alleged accused is not necessary, no assistance of police is required to gather the same. Further, the fact of the case is not such that would warrant a detailed and complex nivestigations to be carried out by the State Agency.
It is trite law, once an application under section 156 (3) Cr.P.C. is moved before a Magistrate, he has two options, he can either send the case for investigation to concerned Police Station in the facts and circumstances of a particular case or instead of doing so, he may opt for taking cognizance on the complaint of the complainant, may proceed to record the testimony of the complainant and his witnesses in pre-summoning evidence. Thereafter, Ld. Magistrate may decide whether a case for summoning of accused is made out or not. Once, Ld. Magistrate has opted to exercise his discretion of not sending the matter for investigation, this court, while exercising the power of revisional jurisdiction, can only see that the order should not be illegal or there should be no miscarriage of justice, it can not substitute its own opinion with the opinion of Ld. Magistrate. Further, the present court have to keep in mind that revisional jurisdiction is normally to be exercised in exceptional cases where there is a CR No. 388/2024 Page No 12 of 16 Pushpa Chugh Vs. Muthoot Finance Ltd.
glaring defect in procedure or there is manifest error of law and consequently there has been a flagrant miscarriage of justice. In Taron Mohan v. State & Anr, 2021 SCC OnLine Del 312, Hon'ble Delhi High Court has observed as under:-
"9. The scope of interference in a revision petition is extremely narrow. It is well settled that Section 397 CrPC gives the High Courts or the Sessions Courts jurisdiction to consider the correctness, legality or propriety of any finding inter se an order and as to the regularity of the proceedings of any inferior court. It is also well settled that while considering the legality, propriety or correctness of a finding or a conclusion, normally the revising court does not dwell at length upon the facts and evidence of the case. A court in revision considers the material only to satisfy itself about the legality and propriety of the findings, sentence and order and refrains from substituting its own conclusion on an elaborate consideration of evidence."
15. Further, the Hon'ble Apex Court in Sanjaysinh Ramrao Chavan vs. Dattatray Gulabrao Phalke and others, 2015 (3) SCC 123 has observed as under :
"14.....Unless the order passed by the Magistrate is perverse or the view taken by the court is wholly unreasonable or there is non-consideration of any relevant material or there is palpable misreading of records, the Revisional Court is not justified in setting aside the order, merely because another view is possible. The Revisional Court is not meant to act as an appellate court.The whole purpose of the revisional jurisdiction is to preserve the power in the court to do justice in accordance with the principles of criminal jurisprudence. The revisional power of the court under Sections 397 to 401 CrPC is not to be equated with that of an appeal. Unless the finding of the court, whose decision is sought to be revised, is shown to be perverse or untenable in law or is grossly erroneous or glaringly unreasonable or where the decision is based on no material or where the material facts are wholly ignored or where the judicial discretion is exercised arbitrarily CR No. 388/2024 Page No 13 of 16 Pushpa Chugh Vs. Muthoot Finance Ltd.
or capriciously, the courts may not interfere with decision in exercise of their revisional jurisdiction."
16. Therefore, in the opinion of this court the Ld Magistrate has passed the impugned order after considering all the relevant factors and this court can not interfere with rightful exercise of the discretionary powers vested in the Ld. Magistrate. Ld counsel for revisionist has failed to point out any patent illegality or jurisdictional error in the impugned order. Moreover, the facts and circumstances of the case shows that order has been passed rightly.
17. In furtherance to the above discussion, references is made to the decision of the Hon'ble Allahabad High Court in the case titled as "Gulab Chand Upadhyay Vs. State of UP, 2002(2) Crimes, 488, wherein the Hon'ble Court observed as under:-
"Where the complainant is in possession of the complete details of all the accused as well as the witnesses who have to be examined and neither recovery is needed nor any such material evidence is required to be collected which can be done only by the police, no 'investigation' would normally be required and the procedure of complaint case should be adopted. The facts of the present case given below serve as an example. It must be kept in mind that adding unnecessary cases to the diary of police would impair their efficiency in respect of cases genuinely requiring investigation. Besides even after taking cognizance and proceeding under Chapter XV the Magistrate can still under Section 202 (1) of Cr.PC order investigation, even through of a limited nature."
18. Applying the aforesaid principle of law to the facts and circumstances of the case as well as the law, as discussed in preceding paragraphs, it is crystal clear that the Ld. Trial Court has rightly dismissed the application u/s 156 (3) Cr. PC. Further, CR No. 388/2024 Page No 14 of 16 Pushpa Chugh Vs. Muthoot Finance Ltd.
the Ld. Trail court has rightly observed that evidence to prove the offence are within the knowledge, reach and control of complainant. No investigation is required by the police authorities. The witnesses enquired by the police during inquiry can also be examined during the course of examination in court. The Ld. Trial Court has taken the cognizance of offence and proceeded further and posted the case for pre-summoning evidence and if any requirement would be necessitated by the Ld. Trial Court, the power u/s 202 Cr.PC may be exercised. So, at this stage, I am of the view that Ld. Trial Court has taken a judicious decision.
19. Ld. Trial Court has rightly taken into consideration the law on the issue and has applied its judicial mind while passing the impugned order, taking into consideration, the material on record, while coming to the conclusion of dismissal of the application u/s 156 (3) CR. PC and taking cognizance of offence, putting the matter for the pre-summoning evidence.
20. It cannot be said at this stage that the conclusion arrived at by the Ld. Trial Court is unreasonable or unjustified, calling for interference by the present Court in exercise of revisional jurisdiction. I do not find any infirmity or flaw in the impugned order passed by the Trial Court. Accordingly, the petition is dismissed.
21. Revision is accordingly disposed of as dismissed.
22. Nothing said herein shall tantamount to have effect on the CR No. 388/2024 Page No 15 of 16 Pushpa Chugh Vs. Muthoot Finance Ltd.
merits of the case.
23. Trial Court record be sent back alognwith the copy of this judgement.
24. After necessary formalities, revision file be considered to Record Room.
Announced in the open court (Ambika Singh)
on 17th January, 2025 ASJ-02/THC, West/ND
17.01.2025
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Pushpa Chugh Vs. Muthoot Finance Ltd.