K. Suresh Kumar Paruchuri Kumar vs The State Of Telangana
2021 Latest Caselaw 1451 Tel

      THE HONOURABLE SRI JUSTICE K. LAKSHMAN

             CRIMINAL PETITION No.1301 OF 2021

ORDER:

This criminal petition is filed under Section 482 Cr.P.C., to

quash the proceedings in FIR No.RC0352021A0003 of 2021 pending

on the file of CBI, Anti Corruption Branch Police Station, Hyderabad.

The petitioners herein are accused Nos.2 and 3 in the said crime. The

offences alleged against the petitioners are under Sections 471, 468

and 420 read with Section 120B IPC and Section 13(2) read with 13(i)

(d) of the Prevention of Corruption Act.

2. Heard learned counsel for the petitioners and the learned

Public Prosecutor for the State. Perused the record.

3. The allegations against the petitioners, as per the complaint

dated 04.01.2021, are as follows:

The State Bank of India, SME Branch, Hyderabad, is the de

facto complainant. The 1st petitioner-A2 created twin identities i.e.

one as Sri Paruchuri Kumar S/o.P. Raju, as per Aadhar Card and

another one as Kanuganti Suresh Kumar S/o.Kanuganti Rajendra

Kumar as per ID card issued by Election Commission of India. The

1st petitioner in conspiracy with the 2nd petitioner-A3, his wife, and

others with dishonest intention has submitted fake and forged

documents to the 2nd respondent-de facto complainant and availed

Asset Backed Loan (ABL) of Rs.5.10 Crores and cheated the bank to

an extent of Rs.482.93 lakhs. The 1st petitioner mis-represented that 2 KL,J Crl.P. No.1301 of 2021

the loan is being availed for construction of Vasantha Happy Homes

Nest at Sainikpuri belonging to him and whereas the building and

project thereof is owned by M/s.Vasantha Engineers, represented by

one A. Srinivas Reddy. The said loan was guaranteed by the 2nd

petitioner, wife of 1st petitioner, and as a collateral security, she has

deposited the title deeds, which are specifically mentioned in the

complaint, to create equitable mortgage knowing very well that the

said title deeds does not confer a valid title and it was already

mortgaged to other banks as collateral security.

The 2nd petitioner with dishonest intention to cheat the Bank

also executed false declaration cum affidavit on 17.11.2017 stating

that there is no subsisting mortgage, charge, lease or other

encumbrance or attachment over the property (whereas the property

was already mortgaged to Agrasen Cooperative Urban Bank Limited).

The 2nd petitioner-borrower in the said declaration cum affidavit dated

17.11.2017 further declared that she has not executed any agreement

of sale, transfer or alienation, whereas at the material time, the said

property was already subjected to other transfers, one of which was

executed by the borrower to the guarantor and others by the father of

the borrower K.Rajendra Kumar to his wife Smt. Bharathi Devi. The

numbers and the dates of the gift deeds were also specifically

mentioned in the complaint. The petitioners herein, borrower and

guarantor, along with the parents of the 1st petitioner, with dishonest

intention to cheat and defraud the Banks, created two sets of 3 KL,J Crl.P. No.1301 of 2021

documents and submitted to the Bank to create mortgage. Two chains

of said documents were specifically mentioned in the complaint

including the document numbers, plinth area, number of floors, name

of the banks etc., are specifically mentioned in the complaint.

Originals of the two documents were already mortgaged to

Agrasen Cooperative Urban Bank Limited and were seized by CBI

from Agrasen Bank on 21.02.2013 as part of investigation in CC

No.16 of 2014. It is also specifically alleged that Agrasen Bank as

part of its recovery measures sold the said property to Mr. P. Uday

Bhasker by executing sale deed bearing document No.1164/2017

dated 31.03.2017 and sale deed bearing document No.1165 of 2017

dated 31.03.2.017 by obtaining consent from 2nd petitioner and Smt.

K. Bharathi Devi. The said purchaser thereafter has also executed a

gift deed bearing No.1166 of 2017 and 1167 of 2017 both dated

31.03.2017 by falsely misrepresenting that the 1st petitioner is his real

brother. Thus, the 1st petitioner with an intention to cheat the bank

and the SRO authorities has created twin identities as stated supra. He

has changed the vendors' name in both the documents. The very

execution of the above said gift deeds by P. Uday Bhasker in favour of

the 1st petitioner constitutes an act of forgery and they have used those

forged documents as genuine ones. He admitted the said facts in one

of the letters addressed to the SBI, Bible house Branch for release of

documents. The said fraud came to the light when the 2nd petitioner

and the said Uday Bhasker approached the SBI, Bible House branch, 4 KL,J Crl.P. No.1301 of 2021

claiming that they are the Directors of M/s.JBC Broadcasting

Corporation Pvt. Ltd., by using the second identity. They have also

applied for loan of Rs.6.00 crores with the said bank and the said bank

has sanctioned the said loan of Rs.6.00 crores, but the same was not

disbursed as the 1st petitioner could not produce originals of prior

deeds despite repeated requests and based on clarification obtained

from Agrasen Bank vide letter dated 31.10.2018.

Thus, the modus operandi adopted by the petitioners along with

the other accused in commission of offence is also specifically

explained in the complaint. The petitioners, in collusion with the

official valuers and panel advocates inflated the value of the property

and also by obtaining false investigation report from the panel

advocates, obtained the said loan. The details of documents, loan

obtained etc., are specifically mentioned in the complaint. It is also

specifically mentioned that as the fraud amount is less than Rs.50.00

crores forensic audit was not conducted. Thus, the officials have

colluded with the petitioners, borrower and guarantor, in getting the

loan sanctioned to ineligible borrowers on the basis of the forged

documents. With the said allegations, the 2nd respondent has lodged a

complaint with the 1st respondent, who inturn, registered the above

said crime for the aforesaid offences against the petitioners and other

accused.

4. Sri P. Vishnu Vardhan Reddy, learned counsel representing

Sri K. S. Suneel, learned counsel for the petitioners would submit that 5 KL,J Crl.P. No.1301 of 2021

on the complaint lodged by the very same P. Bhanu Prakash, the

Police, CCS, Hyderabad, have registered a case in Crime No.218 of

2019 for the offences under Sections 406, 420 read with 34 IPC

against the 2nd petitioner. Therefore, on the very same allegations,

registration of multiple crimes against the 2nd petitioner is not

permissible under law. He has relied upon the principle laid down by

the Hon'ble Apex Court in T.T. Antony v. State of Kerala and

Ors.1, on the said principle. He would further submit that this Court

vide Order dated 21.10.2019 in I.A No.1 of 2019 in Crl.P. No.6617 of

2019 stayed the proceedings in Crime No.218 of 2019.

5. Referring the No Dues Certificates dated 31.03.2017 issued

by the Agrasen Cooperative Urban Bank, learned counsel for the

petitioners would submit that the loan in respect of the said Agrasen

Bank, availed by M/s.Hanuman Traders represented by the 1st

petitioner and M/s.P.S.Corporation, represented by K. Rajendra

Kumar (father of the 1st petitioner) was cleared and therefore, on

receipt of the same, the said Bank issued No Dues Certificates. By

referring the No Dues Certificate, dated 21.11.2015 issued by the

Indian Bank (Asset Recovery Management Branch), learned counsel

for the petitioners would submit that the petitioners have also cleared

loan with the said Indian Bank. Learned counsel for the petitioners

thus, would submit that there is no mens rea or intention to the

petitioners herein to cheat the Banks including the 2nd respondent

2001 SCC (Crl.) 1048 6 KL,J Crl.P. No.1301 of 2021

bank. The contents of the complaint lack the ingredients of the

offences alleged against the petitioners. The property which was

furnished as security towards the loan is a costly property and its value

is ten times more than loan sanctioned by the bank. The amount given

to the petitioners as loan is fully secured by the immovable property.

Even the SBI, Bible House branch, has sanctioned the loan and

retained the same. The petitioners have requested the 2nd respondent

to adjust the said amount towards loan. The 2nd respondent has

already initiated proceedings under the Securitisation and

Reconstruction of Financial Assets and Enforcement of Security

Interest Act, 2002 (for short 'SERFAESI Act') by way of issuing

possession notice under Section 13 (2) of the SERFAESI Act and

therefore, proceedings under SERFAESI Act and also the Criminal

proceedings cannot go simultaneously. The 2nd respondent in the

complaint dated 04.01.2021 suppressed the fact of giving earlier

complaint, on which a case in Crime No.218 of 2019 was registered

by the Police,Central Crime Station, Hyderabad. Thus, there is

suppression of fact by the 2nd respondent. This Court vide order dated

25.10.2019 in Crl.P. No.6747 of 2019 directed the Investigating

Officer in Crime NO.218 of 2019 to strictly follow the procedure laid

down under Section 41 A Cr.P.C. and also the guidelines formulated

by the Apex Court in Arnesh Kumar v. State of Bihar and

another2. He would further submit that the Hon'ble Supreme Court

granted stay of all further proceedings in CC No.16 of 2014. With the

(2014) 8 SCC 273 7 KL,J Crl.P. No.1301 of 2021

said submissions, learned counsel for the petitioners sought to quash

the proceedings in the above said crime against the petitioners.

6. On service of notice, the 2nd respondent entered

appearance through their Advocate. But there is no representation on

behalf of the 2nd respondent both on 06.01.2021 and 08.04.2021.

7. Sri K. Surender, learned Special Public Prosecutor, CBI,

referring to the contents of the complaint filed by the 1st respondent

would submit that the petitioners have conspired criminally and the 1st

petitioner has obtained twin identities and submitted fake and forged

documents with the 2nd respondent and availed loan of Rs.5.1 crores

and cheated the Bank to an extent of Rs.482.93 lakhs. Since the

allegations made in the complaint submitted by the 2nd respondent,

reveals commission of cognizable offence by the accused persons

including the petitioners, the 1st respondent has registered the above

said case against the petitioners and others. He would further submit

that the modus operandi adopted by the petitioners in commission of

offence and also their misrepresentation to the bank are specifically

mentioned in the complaint. There are several factual aspects to be

investigated into by the Investigating Officer during the course of

investigation. The petitioners cannot claim that the property

mortgaged is costly property and its value is ten times more than the

due amount. The said issue cannot be decided by this Court in the

present criminal petition under Section 482 Cr.P.C. Mere initiation of

proceedings under SERFAESI Act will not absolve the criminal 8 KL,J Crl.P. No.1301 of 2021

liability of the petitioners and the said principle was also laid by the

Hon'ble Supreme court in a catena of decisions. The different

identities used by the 1st petitioner are also specifically mentioned in

the complaint. Crime No.218 of 2019 filed with the CCS, Hyderabad,

against the petitioners is for a different crime. The facts are totally

different and whereas the loan availed by the 2nd petitioner-A3 for an

amount of Rs.2.10 lakhs and the collateral security offered is also

different. Therefore, there is no suppression of fact and the present

crime is different from Crime No.218 of 2019. There are specific

allegations of cheating and criminal conspiracy, forgery etc., and

therefore, the dispute is not civil in nature as contended by the

petitioners.

8. Referring the principle laid down by the Hon'ble Apex

Court in S.M. Datta v. State of Gujarat3, the Special Public

Prosecutor would submit that the investigation of an offence is within

the exclusive domain of the police department and not the law courts.

By relying upon another judgment reported in Parbatbhai Aahir @

Parbatbhai Bhimsinhabhai Karmur and ors. v.State of Gujarat

and Anr.4, learned Special Public Prosecutor would submit that

economic offences involving the financial and economic well-being of

the State have implications which lie beyond the domain of a mere

dispute between private disputants. The High Court would be justified

in declining to quash where the offender is involved in an activity akin

2001 (7) SCC 659

2017 AIR (SC) 4843 9 KL,J Crl.P. No.1301 of 2021

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. With the said contentions, the learned Special

Public Prosecutor for CBI sought to dismiss the present petition.

9. The above stated facts would reveal that the 1st petitioner is a

loanee, the 2nd petitioner, his wife, is the guarantor to the loan availed

by them with the 2nd respondent. There are specific allegations

against the 1st petitioner that he has obtained twin identities i.e. one as

Sri Paruchuri Kumar S/o.P. Raju, as per Aadhar Card and another one

as Kanuganti Suresh Kumar S/o.Kanuganti Rajendra Kumar as per ID

card issued by Election Commission of India. There are specific

allegaitns with regard to obtaining loan by way of creating two sets of

documents. The two chains which were submitted to different banks

were specifically mentioned in the complaint. The description of

property and title deeds are also specifically mentioned. There is a

specific allegation against the petitioner that he has approached the 2nd

respondent bank by mis-representing that the loan is being availed for

construction of Vasantha Happy Homes Nest at Sainikpuri belonging

to him and whereas the building and project thereof is owned by

M/s.Vasantha Engineers, represented by Sri A Srinivas Reddy.

10. The 2nd petitioner has also submitted a false declaration

cum affidavit dated 17.11.2017 stating that there is no subsisting

mortgage, charge, lien or other encumbrance or attachment over the 10 KL,J Crl.P. No.1301 of 2021

property and whereas the property was already mortgaged to Agrasen

Cooperative Urban Bank Limited and that the borrower has not

executed any agreement of sale, transfer or alienation and whereas at

the material time, the property was already subjected to other

transfers, one of which was executed by the borrower to the guarantor.

The modus operandi adopted by the petitioners is also specifically

mentioned in the complaint. There is also serious allegations that

Agrasen Bank as part of its recovery measures sold the property to one

P. Uday Bhasker and executed two sale deeds both dated 31.03.2017

by obtaining consent from the 2nd respondent and the mother of the 1st

petitioner.

11. It is also specifically alleged that the 1st and 2nd

petitioners along with said P. Uday Bhasker approached the SBI,

Bible House branch, claiming to be the Directors of JBC Broadcasting

Corporation Pvt. Ltd.., by using his second identity, for a loan of

Rs.6.0 crores and submitted title deeds of the said property (in the

second chain) which were already submitted to Agrasen Bank and the

said bank has sanctioned the said loan. Since the 1st petitioner could

not produce the originals of the said documents, the said Bank has not

disbursed the said loan amount. There is also a specific allegation

against the petitioners that in collusion with the approved valuers and

panel advocates of the 2nd respondent bank, they inflated the value of

the property offered as security with dishonest intention. Thus, prima

facie, there are specific allegations against both the petitioners herein.

                                     11                                    KL,J
                                                        Crl.P. No.1301 of 2021

12. As discussed supra, there are several factual aspects to be

investigated into by the Investigating Officer during the course of

investigation.

13. The Hon'ble Apex Court in Parbatbhai Aahir's case (4

supra) categorically held that economic offences involving he

financial and economic well-being of the State have implications

which lid beyond the domain of a mere dispute between private

disputants. 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.

14. In this regard, it is apt to refer to the decision rendered by

the Hon'ble Supreme Court in Kamal Shivaji Pokarnekar v. The

State of Maharashtra5, wherein the Apex Court has categorically

held that quashing criminal proceedings was called for only in a case

where complaint did not disclose any offence, or was frivolous,

vexatious, or oppressive. If allegations set out in complaint did not

constitute offence of which cognizance had been taken by Magistrate,

it was open to High Court to quash same. It was not necessary that, a

meticulous analysis of case should be done before trial to find out

. AIR 2019 SC 847 12 KL,J Crl.P. No.1301 of 2021

whether case would end in conviction or acquittal. If it appeared on a

reading of complaint and consideration of allegations therein, in light

of the statement made on oath that the ingredients of the offence are

disclosed, there would be no justification for High Court to interfere.

The defences that might be available, or facts/aspects which when

established during trial, might lead to acquittal, were not grounds for

quashing complaint at threshold. At that stage, only question relevant

was whether averments in complaint spell out ingredients of a

criminal offence or not. The Court has to consider whether complaint

discloses that prima facie, offences that were alleged against

Respondents. Correctness or otherwise of said allegations had to be

decided only in trial. At initial stage of issuance of process, it was not

open to Courts to stifle proceedings by entering into merits of the

contentions made on behalf of Accused. Criminal complaints could

not be quashed only on ground that, allegations made therein appear to

be of a civil nature. If ingredients of offence alleged against Accused

were prima facie made out in complaint, criminal proceeding shall not

be interdicted.

15. In Skoda Auto Volkswagen India Private Limited v.

The State of Uttar Pradesh and Ors.6, the Hon'ble Supreme Court

referring the principle laid by it in earlier Judgments, categorically

held that the High Court has to exercise its inherent powers under

Section 482 Cr.P.C., to quash the FIRs and criminal proceedings in

Manu/SC/0898/2020 13 KL,J Crl.P. No.1301 of 2021

rarest of rare cases and the said power has to be exercised very

sparingly and with circumspection.

16. In M/s. Neeharika Infrastructure Private Limited v.

State of Maharashtra and others7, the Three-judge Bench of Hon'ble

Apex Court laid certain parameters for the purpose of exercising

powers by High Courts under Section 482 of Cr.P.C and also under

Article 226 of Constitution of India. The relevant parameters are

extracted as under:

"....

i) Police has the statutory right and duty under the relevant provisions of the Code of Criminal Procedure contained in Chapter XIV of the Code to investigate into a cognizable offence;

ii) Courts would not thwart any investigation into the cognizable offences;

iii) It is only in cases where no cognizable offence or offence of any kind is disclosed in the first information report that the Court will not permit an investigation to go on.

iv) The power of quashing should be exercised sparingly with circumspection, as it has been observed, in the 'rarest of rare cases ( not to be confused with the formation in the context of death penalty).

v) While examining an FIR/complaint, quashing of which is sought, the court cannot embark upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR/complaint;

vi) Criminal proceedings ought not to be scuttled at the initial stage;

vii) Quashing of a complaint/FIR should be an exception rather than an ordinary rule'

viii) Ordinarily, the courts are barred from usurping the jurisdiction of the police, since the two organs of the State operate in two specific spheres of

Criminal Appeal No.330 of 2021, decided on 13.04.2021 14 KL,J Crl.P. No.1301 of 2021

activities and one ought not to tread over the other sphere'

ix) The functions of the judiciary and the police are complementary, not overlapping;

x) Save in exceptional cases where non-interference would result in miscarriage of justice, the Court and the judicial process should not interfere at the stage of investigation of offences;

xi) Extraordinary and inherent powers of the Court do not confer an arbitrary jurisdiction on the Court to act according to its whims or caprice;

xii) The first information report is not an encyclopaedia which must disclose all facts and details relating to the offence reported. Therefore, when the investigation by the police is in progress, the court should not go into the merits of the allegations in the FIR. Police must be permitted to complete the investigation. It would be premature to pronounce the conclusion based on hazy facts that the complaint/FIR does not deserve to be investigated or that it amounts to abuse of process of law. After investigation, if the investigating officer finds that there is no substance in the application made by the complainant, the investigating officer may file an appropriate report/summary before the learned Magistrate which may be considered by the learned Magistrate in accordance with the known procedure;"

17. Coming to the facts of the case on hand, as discussed

supra, prima facie, there are specific allegations against the both the

petitioners herein. There are several factual aspects to be investigated

into by the Investigating Officer. The crime is at the investigation

stage. In view of the same, this Court is not inclined to exercise its

inherent powers under Section 482 Cr.P.C., and the present case is not

a rarest of rare case to quash the proceedings in the above said FIR.

18. In view of the fact that the punishment prescribed for the

offences alleged against the petitioners is seven years and below seven 15 KL,J Crl.P. No.1301 of 2021

years and the Investigating Officer has already issued notices under

Section 41-A of Cr.P.C., and the petitioners have already submitted

their replies. Considering the said facts, this Criminal Petition is

disposed of directing the Investigating Officer in Crime No.

RC0352021A0003 of 2021 pending on the file of CBI, Anti

Corruption Branch Police Station, Hyderabad, to follow the procedure

laid down under Section 41-A of Cr.P.C., and also the guidelines

issued by the Hon'ble Apex Court in Arnesh Kumar's case (2 supra).

The petitioners shall cooperate with the Investigating Officer by

furnishing the information and the documents as sought by him in

concluding the investigation of the crime.

Miscellaneous petitions, pending if any, shall stand closed.

                                                 _________________
                                                  K. LAKSHMAN, J
Date: 01.06.2021

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                               16                                KL,J
                                              Crl.P. No.1301 of 2021



      THE HONOURABLE SRI JUSTICE K. LAKSHMAN




          CRIMINAL PETITION No.1301 OF 2021

                      Date:        .06.2021



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