(BY SRI. JAGADEESHA B.N., ADDL. SPP FOR R1 (P/H);
SRI. C. VINAY SWAMY, ADVOCATE FOR R2)
THIS CRL.P IS FILED U/S.482 CR.P.C (FILED U/S.528
BNSS) PRAYING TO: (A) CALL FOR RECORDS IN PCR NO.3817
OF 2024 PENDING BEFORE THE XXX ADDL. CHIEF
METROPOLITAN MAGISTRATE, BENGALURU CITY; (B) QUASH
THE FIR BEARING CRIME NO.173/2024 FOR THE OFFENCES
PUNISHABLE UNDER SECTION 120-B, 420, 464, 465, 468, 471
R/W 34 OF THE INDIAN PENAL CODE, 1860, LODGED BY THE
SUBRAMANYAPURA P.S., THE RESPONDENT NO.1 HEREIN, ON
THE FILE OF XXX ACMM, BENGALURU IN PCR.NO.3817/2024.
THIS CRIMINAL PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 29.10.2025, COMING ON FOR
PRONOUNCEMENT THIS DAY, THE COURT MADE THE
FOLLOWING:
CORAM: HON'BLE MR. JUSTICE MOHAMMAD NAWAZ
CAV ORDER
This criminal petition is filed by the petitioner/accused
No.2 under Section 482 of the Code of Criminal Procedure,
1973, seeking to quash the FIR registered in Crime
No.173/2024 of Subramanyapura Police Station, Bengaluru,
for the offences punishable under Sections 120B, 420, 464,
465, 468, and 471 read with Section 34 of the Indian Penal
Code, 1860, and the consequent proceedings pending on the
file of the XXX Additional Chief Metropolitan Magistrate,
Bengaluru, arising out of PCR No.3817/2024.
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2. Heard the learned counsel for petitioner, learned
Additional SPP for the respondent no.1/ State, the learned
counsel for respondent no.2 and perused the material on
record.
3. Respondent No.2, Senior Manager, Asset Recovery
Management Branch-II, Canara Bank, filed a private
complaint in PCR No.3817/2024 on 07.03.2024 before the
learned 2nd Additional Chief Metropolitan Magistrate,
Bengaluru, under Section 200 read with Section 156(3) of
Cr.P.C. The learned Magistrate by order dated 15.03.2024,
referred the matter to the Station House Officer,
Subramanyapura Police Station, for investigation under
Section 156(3) Cr.P.C.
4. The Subramanyapura Police Station registered an
FIR in Crime No.173/2024 on 29.04.2024, for the offences
punishable under Sections 120B, 420, 464, 465, 468, and
471 read with Section 34 of IPC, 1860, against five accused
persons, including the present petitioner (accused No.2).
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5. It is alleged that accused No.1, namely
Doreswamy Reddy, during the year 2018, obtained a loan of
Rs.2 crores from Canara Bank by mortgaging an immovable
property situated at Dodda Kalasandra Village, bearing Site
No.18 in Survey No.44/1, which stands in the name of
accused No.2- P. Vijayashekar / petitioner. The said property
was offered as collateral security in favour of the Bank for the
loan availed by Accused No.1 for his company, Kartar
Corporation. The accused failed to repay the said loan, and
consequently, the Bank, in accordance with law, took
possession of the mortgaged property and brought it to sale
by way of public auction held on 05.01.2024, wherein the
property was purchased by one Sri Balakrishna G. and
Smt. K. Neela. When the auction purchasers proceeded to
register the sale deed in their favour, it came to light that
accused Nos.1 and 2, in collusion with each other, had earlier
executed sale agreements in respect of the very same
property in favour of Accused Nos.3, 4, and 5 on 30.06.2023
and 17.10.2023, despite the said property having already
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been mortgaged to the Bank. The complaint alleges that the
accused persons, without informing the Bank and by creating
false and fabricated documents, conspired together to cheat
the Bank and unlawfully transferred the mortgaged property
in favour of accused Nos.3 to 5.
6. The learned counsel for the petitioner contended
that the complaint filed by respondent No. 2 and the
consequent registration of FIR are actuated by mala fides and
have been initiated with an intention to harass the petitioner
for offences which are purely civil in nature. It is submitted
that the dispute essentially arises out of loan-related
transactions between the petitioner and the bank, and that
the allegations, even if accepted on their face value, do not
constitute the ingredients of the offences alleged. The entire
complaint, according to the petitioner, is a misuse of the
criminal process for enforcing a civil liability, and continuation
of the proceedings would amount to an abuse of process of
law.
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7. It is further contended that pursuant to the One-
Time Settlement (OTS) accepted by the bank, the petitioner
had executed sale agreements dated 30.06.2023 and
17.10.2023 and deposited the sale consideration of
Rs.2,20,00,000/- towards the loan account, balance loan
amount was of Rs.2,90,00,000/-. Despite such payment and
while the OTS was still in force, the bank proceeded to sell
the very same mortgaged property to third parties by issuing
a sale certificate dated 20.01.2024. It is submitted that the
present complaint was lodged thereafter, only to cause
undue harassment to the petitioner, that there is an
inordinate and unexplained delay in initiating the
proceedings, and that the allegations, even if taken in
entirety, do not disclose any cognizable offence against the
petitioner.
8. Per contra, the learned Additional Special Public
Prosecutor appearing for the respondent-State submitted
that the allegations made in the complaint disclose prima
facie material constituting the offences alleged, and the
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investigation is still at a nascent stage. It is contended that
there are specific allegations of creation of false documents
and cheating the bank after mortgaging the property, and
therefore, the question as to whether the petitioner is guilty
or not cannot be gone into at this stage. Hence, it is urged
that the petition is premature and devoid of merit and the
same deserves to be dismissed.
9. Learned counsel for respondent No. 2/complainant
submitted that the petitioner, despite being fully aware that
the subject property was mortgaged to the bank and that
possession had been taken under Section 13(4) of the
SARFAESI Act through notice dated 03.09.2020, has
executed agreements of sale dated 30.06.2023 and
17.10.2023 in favour of third parties. It is contended that
such conduct is in clear violation of the mortgage terms and
constitutes a deliberate attempt to defeat the lawful recovery
proceedings initiated by the bank. The sale agreements are
alleged to be collusive documents created to defraud the
bank and the auction purchasers, and the petitioner's actions
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disclose a clear element of criminal conspiracy and fraudulent
intention.
10. It is further contended that the petitioner, having
admitted execution of the sale agreements during the
subsistence of the mortgage and without the bank's consent,
cannot now claim that the dispute is civil in nature. The
learned Magistrate, after considering the materials produced
by the complainant, has rightly found that the allegations
disclose criminal intent and that the matter requires
investigation and trial. It is therefore urged that this petition
under Section 482 Cr.P.C. is misconceived, as the issues
raised involve disputed facts which cannot be adjudicated at
this stage, and the petition deserves to be dismissed in
limine.
11. Learned Counsel appearing for Respondent No.2
placed reliance upon the judgment of the Hon'ble Supreme
Court in Dinesh Sharma v. Emgee Cables and
Communication Ltd. and Anr. in Special leave to Appeal
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(Crl.) Nos.10744-10745/2023 reported in 2025 INSC
571 observed in para nos. 18 and 23 as hereunder:
"18. Though the High Court had unfettered powers
conferred by the Cr.P.C for exercising its inherent
jurisdiction under section 482., the same is expected to
be used very sparingly and only in exceptional
circumstances. There cannot be any straight jacket
formula as to when the High Court would be justified to
exercise jurisdiction under section 482 Cr.P.C and each
case is required to be dealt with on its own merits.
23. A profitable reference can be made to the case of
Parbatbhai Ahir v. State of Gujrat and Anr. Reported
in 2017(9) SCC 641 wherein it was observed that
economic offences by their very nature lie beyond the
domain of mere dispute between private parties and the
High Court would be justified in declining to quash where
the offender is involved in an activity akin to a financial or
economic fraud or misdemeanor. The consequences of the
act complained of upon the financial or economic system
will weigh in the balance. Thus, it can be concluded that
economic offences by their very nature stand on a different
footing than other offences and have wider ramifications.
They constitute a class apart. Economic offences affect the
economy of the country as a whole and pose a serious
threat to the financial health of the country. If such
offences are viewed lightly, the confidence and trust of the
public will be shaken."
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12. This Court finds that the allegations made in the
complaint and the FIR disclose prima facie material
constituting the offences alleged against the petitioner. The
records indicate that the petitioner had executed sale
agreements in respect of the mortgaged property even after
the Bank had taken possession under Section 13(4) of the
SARFAESI Act. Such transactions, made during the
subsistence of the mortgage and in the face of pending
recovery proceedings, raise serious questions of fraudulent
intent and criminal conspiracy, which necessarily require
investigation. Therefore, the contention that the dispute is
merely civil in nature cannot be accepted at this stage. The
contentions raised by the petitioner touch upon disputed
questions of fact, which cannot be adjudicated in these
proceedings. At this nascent stage, this Court is not justified
in interdicting the investigation or terminating the
proceedings.
13. While exercising inherent jurisdiction under
Section 482 of Cr.P.C., this Court cannot conduct a roving
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inquiry or a mini trial to assess the correctness or otherwise
of the allegations. At this stage of investigation, when the FIR
and complaint disclose prima facie material against the
petitioner, the proceedings cannot be quashed merely on the
basis of the petitioner's defence.
14. It is well settled that mere existence of civil
remedy does not automatically warrant the quashing of
criminal proceedings under the same set of facts and if
allegations disclose prima facie element of criminality, civil
and criminal proceedings may validly co-exist and the
complainant is not precluded from setting in motion the
proceedings in criminal law.
15. For the forgoing reasons, petition is dismissed.
Sd/-
(MOHAMMAD NAWAZ)
JUDGE
TL
