Madras High Court
K.M.C.Stephenson vs The Superintendent Of Police ... on 18 August, 2023
W.P(MD)No.21244 of 2022
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 18.08.2023
CORAM :
THE HONOURABLE MR.JUSTICE K.K. RAMAKRISHNAN
W.P(MD)No.21244 of 2022
K.M.C.Stephenson ... Petitioner
Vs.
1.The Superintendent of Police South Zone,
CBI Anti-Corruption Branch,
Shastri Bhawan, Haddows Road,
Chennai – 600 006.
2.The Additional Superintendent of Police,
Special Investigation Cell,
i/c Headquarters,
Vigilance and Anti-Corruption,
Chennai – 600 016.
3.The Superintendent of Police,
Nagercoil,
Kanyakumari District.
4.The General Manager,
State Bank of India (SBI),
No.16, Circle Top House, Aparna Complex,
7th Floor, College Road,
Chennai – 600 006.
5.The Branch Manager,
State Bank of Travancore (SBT),
State Bank of India (SBI),
Muttakkad Branch,
Kanyakumari District.
1/9
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W.P(MD)No.21244 of 2022
6.The Sub Registrar,
O/o the Sub Registrar,
Thuckalay – 629 175,
Kanyakumari District.
7.Y.Rethina Balan ... Respondents
PRAYER: Writ Petition filed under Article 226 of the Constitution of
India, praying this Court to issue a Writ of Mandamus directing the first
respondent to complete the investigation on the fraudulent alienation of
the petitioner's property in R.S.No.398/12B in an extent of 16.5 cents at
Kumarapuram Village (Kothanalloor) within Kalkulam Taluk as
contained in the complaint dated 01.01.2019 within the time stipulated
by this Court.
For Petitioner : Mr.S.Louis
For R1 : Mr.M.Karunanithi,
Special Public Prosecutor
For R2, R3 & R6 : Mr.T.Senthil Kumar
Additional Public Prosecutor
For R4 & R5 : Mr.C.Karthik
ORDER
This Writ Petition has been filed to direct the first respondent to
complete the investigation on the fraudulent alienation of the petitioner's
property in R.S.No.398/12B to an extent of 16.5 cents at Kumarapuram
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W.P(MD)No.21244 of 2022
Village (Kothanalloor) within Kalkulam Taluk as contained in the
complaint dated 01.01.2019 within the time stipulated by this Court.
2. The petitioner obtained loan from the State Bank of Travancore.
He defaulted in paying the loan properly. So, the Bank Authorities
initiated the proceedings against the petitioner under SARFAESI Act,
2002 and brought the mortgaged property to the public auction. In the
public auction, the seventh respondent has participated and he was also
declared as a successful bider. After depositing the sale consideration, the
sale certificate was issued in favour of him and on that basis, he got
registration. At that stage, the petitioner lodged a complaint before the
first respondent seeking direction to the second respondent to take
necessary action against the Bank Officials and the Auction Purchasers.
The second respondent namely, the Vigilance and Anti-Corruption
Department, Tamil Nadu, has not taken any action on the complaint
lodged by the petitioner and hence, he filed this Writ Petition seeking
writ of mandamus to issue a direction to the official respondents to take
necessary action against the Bank Officials and the Auction Purchaser.
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W.P(MD)No.21244 of 2022
3.The learned counsel for the petitioner submitted that the auction
purchaser and the bank officials colluded together and sold the property
worth about Rs.1,50,00,000/- to the lessor value of Rs.23,01,010/- and
hence, they committed the criminal offence.
4.The learned counsel for the respondents 4 and 5 submitted that
since the petitioner committed default in making the payment of loan, his
account has been declared as 'Non Performing Asset' and suitable
SARFAESI proceedings has been initiated and the mortgaged property
was legally brought to the public auction. Further, the petitioner has filed
a proper petition before the Debt Recovery Tribunal and the same was
also dismissed. In the said situation, the petitioner ought to have filed
petition to set aside the sale in the manner known to law. Without taking
steps to set aside the sale as per law, filing this petition to initiate
criminal proceedings is amount to the clear abuse of process of law and
hence, he seeks for dismissal of this petition.
5.The learned Additional Public Prosecutor appearing for the
respondents 2, 3 & 6 on instructions, reiterated the above submission
made by the learned counsel for the respondents 4 and 5 and also
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W.P(MD)No.21244 of 2022
submitted that the respondent police conducted enquiry on the allegation
made by the petitioner and found that the bank officials have acted as per
law. If any grievance, the petitioner has to approach the proper forum to
set aside the said alleged sale. Hence, prayed for dismissal of this
petition.
6.This Court considering the rival submission of the parties and
perused the records.
7.The grievance of the petitioner is that his mortgaged property
was sold for lessor value and hence, huge loss has been occurred to him.
It is settled principle that the bank officials entitled to bring the
mortgaged property for auction as per the SARFAESI Act. The bank
officials correctly brought the mortgaged property for auction. The
private respondent rightly participated in the auction and obtained sale
certificate after paying entire sale amount.
8. It is relevant to note that the Hon'ble Supreme Court judgment
in Priyanka Srivastava Vs. State of U.P reported in 2015 6 SCC 287
specifically held that the bank officials discharged their duty as per law
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W.P(MD)No.21244 of 2022
and hence, unnecessary prosecution should not be initiated against them.
“19. We have narrated the facts in detail as the
present case, as we find, exemplifies in enormous
magnitude to take recourse to Section 156(3) CrPC, as if,
it is a routine procedure. That apart, the proceedings
initiated and the action taken by the authorities under
the SARFAESI Act are assailable under the said Act before
the higher forum and if, a borrower is allowed to take
recourse to criminal law in the manner it has been taken,
it needs no special emphasis to state, has the inherent
potentiality to affect the marrows of economic health of
the nation. It is clearly noticeable that the statutory
remedies have cleverly been bypassed and prosecution
route has been undertaken for instilling fear amongst the
individual authorities compelling them to concede to the
request for one-time settlement which the financial
institution possibly might not have acceded.
27...... when a borrower of the financial institution
covered under the SARFAESI Act, invokes the jurisdiction
under Section 156(3) CrPC and also there is a separate
procedure under the Recovery of Debts Due to Banks and
Financial Institutions Act, 1993, an attitude of more
care, caution and circumspection has to be adhered to.
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W.P(MD)No.21244 of 2022
28. ......When a citizen avails a loan from a financial
institution, it is his obligation to pay back and not play
truant or for that matter play possum.
33. At this juncture, we may fruitfully refer to
Section 32 of the SARFAESI Act, which reads as follows:
“32.Protection of action taken in good faith.—No suit,
prosecution or other legal proceedings shall lie against
any secured creditor or any of his officers or manager
exercising any of the rights of the secured creditor or
borrower for anything done or omitted to be done in
good faith under this Act.”
In the present case, we are obligated to say that
the learned Magistrate should have kept himself alive to
the aforesaid provision before venturing into directing
registration of the FIR under Section 156(3) CrPC. It is
because Parliament in its wisdom has made such a
provision to protect the secured creditors or any of its
officers, and needless to emphasise, the legislative
mandate has to be kept in mind.”
9. Therefore, the petitioner has to file proper petition to set aside
the sale. Without doing that, filing of this petition is amount to clear
abuse of process of law.
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W.P(MD)No.21244 of 2022
10. In view of the above, this Court finds no merit in this petition.
Accordingly, this Writ Petition is dismissed. No costs.
18.08.2023
NCC :Yes/No
Index :Yes/No
Internet : Yes/ No
dss
To
1.The Superintendent of Police South Zone,
CBI Anti-Corruption Branch,
Shastri Bhawan, Haddows Road,
Chennai – 600 006.
2.The Additional Superintendent of Police,
Special Investigation Cell,
i/c Headquarters,
Vigilance and Anti-Corruption,
Chennai – 600 016.
3.The Superintendent of Police,
Nagercoil, Kanyakumari District.
4.The Sub Registrar,
O/o the Sub Registrar,
Thuckalay – 629 175,
Kanyakumari District.
5.The Additional Public Prosecutor,
Madurai Bench of Madras High Court,
Madurai.
https://www.mhc.tn.gov.in/judis
W.P(MD)No.21244 of 2022
K.K. RAMAKRISHNAN. J.,
dss
W.P(MD)No.21244 of 2022
Dated : 18.08.2023
https://www.mhc.tn.gov.in/judis
