Madras High Court
City Union Bank Limited vs Sumerchand Bafna on 18 March, 2025
Author: G.K.Ilanthiraiyan
Bench: G.K.Ilanthiraiyan
Crl.O.P.No.15172 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 27.02.2025
PRONOUNCED ON : 18.03.2025
CORAM:
THE HONOURABLE MR. JUSTICE G.K.ILANTHIRAIYAN
Crl.O.P.No.15172 of 2024
and Crl.M.P.No.9276 of 2024
1. City Union Bank Limited,
Rep. by its Managing Director and CEO,
Admin Office, “Narayana”,
24B, Gandhi Nagar,
Kumbakonam – 612 001.
2. N.Kamakodi
3. B.Praksh
4. G.Venkatesh ... Petitioners
Vs.
1. Sumerchand Bafna
2. The Sub Inspector of Police,
Central Crime Branch,
Land Fraud Investigation Wing,
Team V-A, Vepery,
Chennai – 600 007. ... Respondents
Prayer: Criminal Original petition filed under Section 482 of Code of
Criminal Procedure, to set aside the order dated 01.04.2024 passed by the
learned Metropolitan Magistrate for Exclusive Trial of CCB Cases
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Page 1 of 12
Crl.O.P.No.15172 of 2024
(Relating to Cheating Cases in Chennai) and CBCID Metro Cases,
Egmore, Chennai in Crl.M.P.No.25130 of 2023 in CNR TNCH0f-
035792-2023.
For Petitioners : Mr.Abudukumar Rajaratnam
Senior Counsel
for Mr.Sharath Chandran
For Respondents
For R1 : Mr.B.Kumar,
Senior Counsel
For M/s. Aruna Ganesh
For R2 : Mr.K.M.D.Muhilan
Government Advocate (Crl.Side)
ORDER
This petition has been filed challenging the order dated
01.04.2024 passed by the learned Metropolitan Magistrate for Exclusive
Trial of CCB Cases (Relating to Cheating Cases in Chennai) and CBCID
Metro Cases, Egmore, Chennai in Crl.M.P.No.25130 of 2023 in CNR
TNCH0f-035792-2023, thereby directed the Deputy Commissioner of
Police to appoint an office in the level of Inspector of Police to enquiry
the complaint lodged by the first respondent and whether, if it is
necessary registered an FIR or to file report within a period of fifteen
days from the date of receipt of that order and investigate into the matter
and file report within a period of three months.
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2. The petitioners are the proposed accused persons in the
complaint lodged by the first respondent. On the complaint lodged by the
first respondent, the learned Magistrate issued direction under Section
156(3) of Cr.P.C., thereby directed the Deputy Commissioner of Police
to engage an officer not below the rank of Inspector of Police to enquiry
the complaint dated 07.12.2022 and file report.
3. The learned Senior Counsel appearing for the petitioners
submitted that the petitioners are being bankers, they have nothing to do
with the allegations leveled against them and there is absolutely no
prima facie case to enquire further. The first respondent suppressed
several facts such as initiation of SARFAESI proceedings in O.A.No.162
of 2023 on the file of the Debt Recovery Tribunal-3, Chennai and
obtained direction from the Magistrate. Further the suit in C.S. (Comm
Div) No. 178 of 2023 also filed before this Court by one Mahalaxmi Inn
Private Limited and the same was suppressed by the first respondent. If
the pendency of these proceedings disclosed before the learned
Magistrate, no directions would have been issued to conduct enquiry into
the complaint lodged by the first respondent. The learned Magistrate
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without application of mind mechanically issued direction and without
even gone through the complaint.
3.1. He further submitted that the first respondent availed
financial assistance to the tune of 27.43 croroes. Thereafter, the first
respondent committed default and their loan amount has been declared as
non-performing assets which resulted in initiation of proceedings under
the SARFAESI Act. Accordingly, the petitioners served notice under
Section 13(2) of the SARFAESI Act. On receipt of the same, the first
respondent requested for one time settlement. It was considered
favorably and as per the terms of the settlement a sum of Rs.20,00,000/-
were to be deposited in a time bound manner. The last installment was
payable on 31.03.2022. However, one time settlement was also not
effected and committed default. Therefore, the petitioners had terminated
one time settlement scheme on 30.11.2021. Hence, no offence is made
out as against the petitioners as alleged by the first respondent.
3.2. In support of his contention, he relied upon the judgment
reported in 2020(2) LW (Crl) 562 in the case of Vinubhai Haribhai
Malaviya and ors Vs. State of Gujarat and anr., in which the Hon'ble
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Supreme Court of India held that the learned Magistrate before taking
cognizance of the offence, can order investigation under Section 156(3)
of the Code. If he does so, he is not to examine the complainant on oath.
He also relied upon another judgment of the Hon'ble Supreme Court of
India in the case of Om Prakash Ambadkar Vs. The State of
Maharashtra & ors., in Crl.A.No.352 of 2020 dated 16.01.2025, which
held that before approaching the Magistrate under Section 156(3) of the
Cr.P.C., which is a discretionary remedy as the provision proceeds with
the word 'may'. The Magistrate is required to exercise his mind while
doing so. He should pass orders only if he is satisfied that the
information reveals commission of cognizance offences and also about
the necessity of police investigation for digging out of evidence neither
in possession of the complainant nor can be procured without the
assistance of the police. Further the Magistrate ought to have directed the
investigation by the police only where the assistance of the investigating
agency is necessary. Therefore, the Magistrate is not supposed to act
merely as a post office and needs to adopt a judicial approach while
considering an application seeking investigation by the police. He relied
upon another judgment reported in (2015) 6 SCC 287 in the case of
Priyanka Srivastava and anr Vs. State of Uttar Pradesh and ors., in
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which the Hon'ble Supreme Court of India held that prior to making an
application to the Magistrate under Section 156(3) of Cr.P.C., the
applicant must necessarily make application under Section 154(1) &
154(3) of Cr.P.C.
4. Heard the learned counsel appearing on either side and
perused the material placed before this Court.
5. On perusal of the complaint filed by the first respondent
revealed that the first respondent is one of the directors and he is in-
charge of day-to-day affairs of the companies viz., M/s.Vinitha
Associates Ltd., M/s. Shopper's Spot (Chennai) Lrd., M/s. Mahalaxmi
Inn Pvt. Ltd., M/s. Mahalaxmi & Sons and M/s. Vinitha Resorts Ltd.
These companies have availed credit facilities from the petitioners from
the year 2017 onwards. However, during Covid-19, these companies
failed to repay the loan amount and defaulted. Therefore, the petitioners
declared the companies loan account as non performing assets and
initiated proceedings under the SARFAESI Act. At that juncture, the first
respondent requested for one time settlement. Accordingly, the
petitioners agreed that the property belonging to each company would be
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released from all manner of encumbrances on completion of pro-rata
payments by the respective company and its entity. Accordingly, the first
respondent settled the outstanding to retrieve the properties and made
remittances. However, the petitioners merely returned the original title
deeds and parent documents of M/s. Vinitha Associates Limited and
Shoppers Spot (Chennai) Limited and issued no objection certificate for
opening of accounts with any other bank. The petitioners had given false
assurance that they would release the documents from their
encumbrances. However, the properties of company are not released
from encumbrance of the petitioners as agreed by them. Hence, the
companies were put to wrongful loss by reason of all encumbrance over
the properties. Though the properties were put on sale, they were not
drawing interest from the investors on account of the charge over the
properties to an extent of Rs.130 crores in respect of all companies.
6. Therefore, the first respondent caused legal notice to release
the properties from encumbrance. The mortgage documents and
extension of mortgage documents were in the custody of the petitioners.
Thereafter, the first respondent came to understand that the false entry
created by the petitioners in the Memorandum of Deposit of Title
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document No.480 of 2021 dated 22.02.2021. They also made false
entries and falsification of records and records made in the mortgage
deed, falsely claiming a sum of Rs.1260 crores.
7. That apart, on the basis of the false and fabricated records,
which have been uploaded by way of electronic records on the portals of
Ministry of Corporate Affairs and Registrar of Companies to detriment
the first respondent, whose business can never be free of the online debts
foisted by the petitioners. Therefore, the first respondent lodged
complaint before the Commissioner of Police, Greater Chennai and same
was duly acknowledged on 07.12.2022, Thereafter it was forwarded to
the Inspector of Police R-1, Mambalam Police Station for conducting
enquiry. Thereafter, the first respondent was issued with C.S.R.No.40 of
2023 dated 23.01.2023. For want of pecuniary jurisdiction, the complaint
was once again forwarded to the first respondent for investigation.
During the enquiry, the petitioners gave their statements and thereafter
the first respondent without conducting any further enquiry simply
closed the complaint by holding that there is another court case filed by
the first respondent and as such the petitioners have not created any
falsified documents. Therefore, the first respondent filed private
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complaint before the learned Metropolitan Magistrate for Exclusive trial
of CCB Cases (relating to cheating cases), Chennai in Crl.M.P.No.25130
of 2023.
8. After perusal of the complaint and the documents thereon,
the learned Magistrate found that the complaint made out prima facie
offence and it requires police investigation and therefore, directed the
Deputy Commissioner of Police to engage officer not below the rank of
Inspector of Police to conduct enquiry and whether, if necessary register
FIR or to file the report, on the basis of the complaint lodged by the first
respondent within fifteen days and file final report within a period of
three months.
9. The Hon'ble Supreme Court of India repeatedly held that the
power of the Magistrate under Section 156(3) of Cr.P.C., to direct further
investigation is clearly an independent power and does not stand in
conflict with the power of the State Government. It can be exercised by
the Magistrate even after submission of a report by the investigating
officer which would mean that it would be open to the Magistrate not to
accept the conclusion of the investigating officer and direct further
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investigation. This provision does not in any way affect the power of the
investigating officer to further investigate the case even after submission
of the report.
10. The first respondent initially lodged complaint before the
Commissioner of Police and the same was forwarded to the Inspector of
Police to investigate the same. However, it was closed and as such the
first respondent rightly filed private complaint before the jurisdiction
Court. On receipt of the complaint, the Judicial Magistrate, before taking
cognizance of the offence, can order investigation under Section 156(3)
of Cr.P.C., for the purpose of enabling the police to start the
investigation and also the Magistrate can direct the police to register the
FIR. There is nothing illegal in doing so. After all registration of FIR
involves only the process of entering the substance of information
relating to the commission of cognizable offence in a book kept by the
officer in charge of the police station as indicated under Section 154 of
Cr.P.C. Even if a Magistrate does not say in so may words while
directing investigation under Section 156(3) of Crl.P.C., that an FIR
should be registered. It is the duty of the officer in charge of the police
station to register the FIR regarding the cognizable offence disclosed by
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the complainant because that police office could take further steps
contemplated in Chapter XII of the Code only thereafter. Therefore, the
judgments cited by the learned Senior Counsel appearing for the
petitioners are not applicable to the case on hand.
11. In view of the above discussions, this Court finds no
infirmity or illegality in the order dated 01.04.2024 passed by the learned
Metropolitan Magistrate for Exclusive Trial of CCB Cases (Relating to
Cheating Cases in Chennai) and CBCID Metro Cases, Egmore, Chennai
in Crl.M.P.No.25130 of 2023 and the present petition is devoid of merits
and liable to be dismissed.
12. Accordingly, the Criminal Original Petition stands
dismissed. Consequently, connected miscellaneous petition is closed.
18.03.2025
Index : Yes/No
Neutral citation : Yes/No
Speaking/non-speaking order
rts
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G.K.ILANTHIRAIYAN. J,
rts
To
1. The Metropolitan Magistrate
for Exclusive Trial of CCB Cases
(Relating to Cheating Cases in Chennai)
and CBCID Metro Cases,
Egmore, Chennai
2. The Sub Inspector of Police,
Central Crime Branch,
Land Fraud Investigation Wing,
Team V-A, Vepery,
Chennai – 600 007.
3. The Public Prosecutor
Madras High Court,
Chennai.
Pre delivery Order in
18.03.2025
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