WP/24471/2014 of C.V.R. Rajendran, Vs The State of Telengana Rep. by its Secretary on 29 December 2023

ORDER:

This Writ Petition is hled by the petitioners under Article 226 ofthe Constitution o[ India seeking issuance of Writ of Mandamusthe Constitution o[ India seeking issuance of Writ of Mandamusdeclaring the prosecLltion in IrlR No.662 of 2014 belore the 2ndrespondent as illegal, arbitrary, abuse of due process of law and violativeof Articles 14 and t9(t)(g) of the Constitution of India and Section 32 ofrespondent as illegal, arbitrary, abuse of due process of law and violativeof Articles 14 and t9(t)(g) of the Constitution of India and Section 32 ofSecuritisation and Reconstruction of Financial Assets and Enlorcemcntof Security Interest Act, 2OO2 (for short 'SARFAtrSI Act").of Security Interest Act, 2OO2 (for short 'SARFAtrSI Act").

2. Heard Sri Narender Reddy, learned Senior Counselappearing for Sri M. Srikanth Rcddy, learned counsel for the petitioners,Sri Sairam, Iearned Assistant Government Pleader representing learnedGovernment Pleader for Home and Sri W Ramana, learned counscl lorthe respondent Nos.3 to 5. Perused the record.

3. Andhra Bank, Besant Nagar Branch sanctioned term loanfacility of Rs.10,O0,O0O/- Lakhs on 22.1I-2010 to a proprietary concernviz.M/s.Sai Source Consultancy Service, represented by its ProprietorMr.KH Madhusudhan Rao on the equitable mortgage of property bearingPlot No.218, admeasuring 372.22 Sq.Yards in Sy.Nos. 121/3 and l2l/4,situated at Annavarappaclu, Ongole Municipal Area, [Ongole ][Town,]Prakasham District by depositing title [deeds dated ][30.O7.2O03 bearing]\\

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document No.2998 ol 2003 of the sa-1d propers by Smt.Alluri Leelavati,W /o.Late Subba Rao and to tha-r effect a Men:ora.ndum of Deposit of TitleDeeds was executed and registered on 22.11.2C1O with the ofhce of Sub-Registrar, Ongole, Prakasham District vide document bearing No.16043of 2OlO. The said mortgage ryas accepted aftcr obtaining legal opinionand valuation report from the bank's panel valuer and legal adviser.Due to default committed by the borrower, the said account has becomenon-perforrning asset as on 04.07.2012 with an outstanding due ofRs.12,01,5O9/- and the bank has initiated recovery proceedings nnderSARFAESI Act, by following due procedure. The 3.d respondentparticipated in the auction dated 3O.O8.2O 13 and became successfulbidder quoting an amount ol Rs.9,05,O00/- anci obtained sale certilicatedated 16.09.2O13. Later, the 3.d respondent cleliberately evaded the salet-ransaction and sent legal notices stating that the property was nottraceablc and demanded for return of the sale consideration. Theauthorized ofhcer of the bank gave reply stating that the property is verymuch identifiable and expressed the banks willingness to register thesaid property and further stated that sale certihcate cannot be cancelledand sale consideration cannot be refunded.

4. It is contended on behalf of the pei.itioners that the 3.drespondent along with respondent Nos.4 and 5 made complainl dated2A.O5.2014 before the learned I Additional Chief Metropolitanv:, tI

Magistrate, City Criminal Courts at Nampally, Hyderabad against thepetitioners for the offence punishable under Sections 1208, 4O9,42O,467 and 505 IPC with a view to harass the petitioners and also totarnish the image of the bank. Further, the learned Judge of the trialC'ourt, without examining the matter in detail, referred the same to the2nd respondent for investigation and report as per order dated05.08.2014. Accordingly, the 2"d respondent registered FIR No.662 of20 14 against the petitioners. When the matter was got published in thenewspapers by the 3.d respondent with a view to defame the petitionersas well as the bank off-rcials, then only the petitioners came to knowabout registration of FIR. lt is the further averment of the [petition ]thatthe authorized officer of Andhra Bank in exercise of [powers ]conferredunder the provisions of the SARFAESI Act, 2OO2, [proceeded ]to [recover]the loan amount bonafidely by issuing notice under Section 13 of thesaid Act. All the procedural aspects were strictly followed before [putting]the property for auction and that the property in question is very muchidentihable. Section 32 of the said Act prohibits prosecution of thepetitioners or the bank ofhcials for the action taken by them for recoveryof debt.

5It is further averred in the petition that registration oi FIRNo.662of 2Ol4 is nothing but arbitrary, illegal and in violation ofArtia, 19 1(g) of the Constitution of India and also in violation of\""No.662of 2Ol4 is nothing but arbitrary, illegal and in violation ofArtia, 19 1(g) of the Constitution of India and also in violation of\""

Section 32 of the said Act. Furthcr, [the ][complainl ][does ][not ][disclose any]of the offenses much less the olfences alleged [to have ][been ][committed ][by]the petifioners. Further, as per orders in WP No.7637 [of ][2Ol0 this Courl]held that launching of criminai proceedings in [the ][matter ][of ][recovery of]loan amount is nothing but harassment of the [officers ]concerned. [In]support of their contentions, learned counsel [lor ][the ][petitioners ][relied]upon tl-re decisions rendered in Priyanka [Srivastava ][and another ][Vs.]State of Uttar Pradesh and othersl and order [dated ][23.06.2016 ][passed]in Writ Petition No.4O413 of 2O15 [of ][this ][Court.]

6. Learned senior counsel on behalf of the [petitioners ][wouid]contend that the matter is civil in nature . He [further ][contended ][that ][the]petitioners have expressed their unconditionai [willingness ][to register the]property as per the auction proceedings but [the ][3'd respondent ][is ][not]coming forward to complete the sale [transaction ][for ][which, ][the]petitioners cannot be made Iiable. Lcarned senior [counsel ][further]contended that in view of Section [17 ][oi ][the ][Act ][the ][remedy ][available ][to]the unofficial respondents, if they have any [grievance, ][is to ][file ][an]application under section 17 before [DRT ][against ][the ][measures ][taken ][by]the bank within 45 days from the date [of ][the section ][13 (2) ][notice ][issued]by the bank. But the 3'd respondent [without ][resorting ][to ][such ][exercise,]has maliciously, adopted the arm twist [methods ][like ][initiation ][of]

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criminal proceedings only to defame [he petitioners and the image of thebank, which is nothing but illegal and abuse of process of law. Hefurther contended that since the property is situated in the State ofAndhra Pradesh and due to bifurcation of the composite State of AndhraPradesh, the 3.d respondent, who is unwilling to purchase suchproperty, only to evade performance of his part of obligation inpursuance of thc public auction and to exert pressure on the petitionersto prevent them from performing their duties, has resorted to initiatecriminal proceedings. He further contended that the petitioners haveperformed their duties strictly adhering to the rules and they cannot beforced to lace criminal proceedings for the delay tactics played by the 3.arespondent. He further contended that in view of Section 32 ofSARFAESI Act, learned Judge of the trial Court ought not to have takencognizance cf the offences against the petitioners. Thus stating, herequested to quash the impugned criminal proceedings against thepel-itioners.

7. On the other hand, learned counsel for the respondentNos.3 to 5 vehemently opposed the present writ petition contending [hatthe petitioners and the bank ofhcials conspired together and tried tocheaL the respondent No.3 due to which, the future of the 3'd respondenthas stuck in limbo since he has been roaming around the Courts forwant of justice. Further, it is also an admitted fact that the 3rd respondent, being the successful [bidder ][in ][tl-re ][auction, ][had ][deposited]huge sums in the bank with a [fond ][hope ][rl-rat ][the ][property would ][be]rcgistered in his favour but the [petitioners, ][without ][showing/ ][identifying]the property with correct boundarics [in ][accordance ][with ][the ][guidelines]prescribed under Survey and Boundaries Act, [with ]a [view ][to ][evade]registration of the [property ]in [his ][favour, subjected ][the ][3'd ][respondent ][to]huge hnancial loss, trauma and [mental ][agony. ][Due ][to ][the ][inaction ][on]the part of the petitioners in [showing ][the ][property ][rvith ][correct]boundaries to the 3'd respondent, [the ][registration of property could ][not]be effected. Learned counsel for the [unofhcial ][respondents further]submitted that since the [petitioners ][did ][not ][register ][the ][property ][in]favour of the 3rd respondent or return [the ][money ][deposited ][by him ][in]furtherance of auction proceedings. [he left ][with ][no ][other option ][except to]knock the doors of the criminal [Court ][seeking ][fair ][investigation ][into ][the]matter. He further contended that [unless and ][until ][criminal ][law ][is being]allowed to be pressed into service [the ]truth [will ][not ][come ][out. It ][is]further contended on behalf of [the ][3'd ][respondent ][that ][under ][these]circumstances, to meet the [ends ][of ][justice, ][the learned ][Judge ][of ][the ][trial]Court has rightly ordered the [2nd ][respondent ][to ][register ][crime ][and]hence, there is no illegality in the [said action ][and ][requested ][to ][dismiss]the present writ petition. At this stage, [the ][learned ][counsel ][for the ][3'd]respondent submitted that if the bank [authorities ][pay ][back ][the amount]deposited by him in pursuance [of the ][auction ][proceedings, logether ][with]

the applicable interest, he has no objection for quashing the criminalproceedings impugned ir-r this writ petition against the petitioners.

8. Learned Assistant Government pleader representing learnedGovernment Pleader for Home would submit that unless and until thefair trial is being conducted the truth will not come out and interferenceof this Court at this premature stage is not warranted.

9. In Priyanka Srivastava (lst suprat the Hon,ble Supreme Court held at paragraph No.33 as under:

"32. Protection of qction to.ken in qood fdith.-

No suit, prosecution or other legal proceedingsshall lie against any secured creditor or any of hisofhcers or manager exercising any of the rights ofthe secured creditor or borrower lor anything doneor omitted to be done in good faith under thisAct. ["]

10. Having regard to the submissions made by learned counsel from all the corners and as seen from the record, this matter is pendingfor quite a long time making the parties to roam around the Courts.Further, it is an undisputed fact that inspite of depositing money in thebank by the 3.d respondent in pursuance of the auction, the propertywas not registered in his favour due to the difficulty in its identification.In order to get his grievance redressed, the 3.d respondent has toapproach a competent civil Court and file a suit for specilic performanceof the contract/ sale certihcate, but he cannot initiate criminal\

prosecution against the petitioners. Since it is also the case of thepetitioners that the authorized officer o[ the bank addressed a letter toLhe 3.d respondent that they are ready to identify the property andLhe 3.d respondent that they are ready to identify the property andregisler the same in the name of 3'd respondent, the 3.d respondenLoulht to have taken further steps thereon. But without resorting to suchcourse of action and pursue his remedies available under law, the 3.drespondent set the criminal law into motion. In such circumstances, theoulht to have taken further steps thereon. But without resorting to suchcourse of action and pursue his remedies available under law, the 3.drespondent set the criminal law into motion. In such circumstances, thepresent writ petition deserves to be allowed by quashing the impugnedproceedings.proceedings.

I 1. Though the action of 3.d respondenl in initiating criminalproceedings against the petitioners is found to be not correct, it is a factto be taken into consideration that he became scapegoat by depositinghuge sums into the bank in pursuance of the auction proceedings andsuffered mental agony and trauma for all these years due to non-registration of property in his favour. lt is also an admitted fact that thebank ofhcials expressed their willingness to identify the property and gotit register in his favour after conducting survey.

72. In UNITECK Limited Vs. Telangana State Industrial Infrastructure Corporation (Civil Appeal No.317 of 2027 decided on17.O2.2O2ll, wherein the Hon'ble Supreme Court held that exercise ofwrit jurisdiction under Article 226 of the Constitution of India in a contractual matter is not ruled out particularly in the present casewhere rhere is absolutell, no dispute in regard to the basic facts.where rhere is absolutell, no dispute in regard to the basic facts.

13. Further, in view of the principle enunciated by the Hon,bleSupreme court in priyanka srivastava case (1sr supra) since parriamentin its wisdom has made a provision under section 32 of the SARFAESIAct to protect the secured creditors or any of its officers, the present \\proceedings against the petitioners herein, who are accused Nos. 1 to 5 in the impugned FIR, are liable to be quashed.

74. In that view of the matter and in view of the categoricalsubmission made by the learned counsel for the 3d respondent that ifthe bank authorities refund the amounr deposited by him he has noobjection for quashing the criminal proceedings, and also in view of theprinciple enunciated by the Hon,ble Supreme Court tn the cases citedsupra, to meet the ends ofjustice and to put a quietus to the litigation,3'd respondent is directed to approach the bank authorities for refund ofthe money deposited by him and the bank authorities, upondetermination of such application, shall refund the amount deposited bythe 3'd respondent in pursuance of the auction proceedings togetherwith interest at 6ok per annum from thc date of deposit till realizationwithin three months from the date of receipt of such application.

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15. With the above [observations, ][this ][u'rit ][petition ][is ][allowed]u,ithout costs [quashing ][the ][proceedings ][against ][the ][petitioners ][herein,]who are accused Nos. I to 5 [in ][FIR ][No.662 ][of 2Ol4 on ][the ][file ][of ][the]Station House Off-rcer, Police [Station, ][Sailabad, ][Hyderabad']Miscellaneous applications, [if ][any, pending ][shall ][stand ][clcsed]

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SECTION OFFICER

To,1.The Secretary, [Home ][Department Secretariat' Hyderabad' ][State ][of]Telanoana.1.The Secretary, [Home ][Department Secretariat' Hyderabad' ][State ][of]Telanoana.2.iilr'sirii"" House Officer [Police Station ][Saifabad, ][Hyderabad]3.o"i,bdii, Snt [rrll.SntXerurn ][REDDY, ][Advo-cat^e- ][[oPUC]]4.on; aa to sRl [V.V.RAMANA, Advocate. ][oPU-c] -5.i;; ["ct;6''bii ][-ioR ]HOrvie. Hign crjurt [foi ][the ][state ][of ][relansana ][at]Hyderabad. [OUTI3.o"i,bdii, Snt [rrll.SntXerurn ][REDDY, ][Advo-cat^e- ][[oPUC]]4.on; aa to sRl [V.V.RAMANA, Advocate. ][oPU-c] -5.i;; ["ct;6''bii ][-ioR ]HOrvie. Hign crjurt [foi ][the ][state ][of ][relansana ][at]Hyderabad. [OUTI6.Two CD Copies.BSKGJPBSKGJP

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HIGH COURT

DATED:2911212023

ORDERWP.No.24471 of [2014]

ALLOWING THE [WRIT ][PETITION]WITHOUT COSTS

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