While noting that the Petitioners had failed to show that the acts alleged by the de-facto complainant except the acts relating to the offence under Section 442 read with Section 448 of IPC are done in good faith under the provisions of the SARFAESI Act, the Kerala High Court held that the FIR, insofar as the offences under Sections 406, 409 and 420 read with Section 120-B of IPC are concerned, is not liable to be quashed by exercising the powers under Section 482 Cr.P.C.

Finding that the action taken by the officials of the bank in taking possession of the secured assets was backed by the directions of the Chief Judicial Magistrate, a Single Judge Bench of Justice K. Babu observed that “as far as those acts are concerned, the officials are protected from criminal prosecution under Section 32 of the SARFAESI Act. Therefore, registration of FIR under Section 442 read with Section 448 of IPC against the Petitioners is an abuse of the process of law which is liable to be quashed”.

Advocate Madhu Radhakrishnan appeared for the Petitioner, whereas, Advocate Aysha Abraham appeared for the Respondent.

Going by the background of the case, the Petitioners, who are the officials of Punjab National Bank Housing Finance Limited, are accused in an FIR registered by the Respondent/ De facto complainant under Sections 406, 409, 420, 442 and 120-B read with Section 34 of IPC. It was alleged that the second Respondent along with his wife purchased an apartment in a project managed by Jain Housing and Constructions Ltd. called ‘Tuffnel Park’ after availing a housing loan of Rs.40 lakhs from first Petitioner and further paying a sum of Rs.11 lacs by himself. Later, in May, 2019, the complainant came to know that the Supreme Court has ordered demolition of another project by name `Coral Cove’, a project of the same builder. After getting information that the apartment was constructed illegally on a paddy land and without getting mandatory consent from the Kerala Pollution Control Board, the complainant approached the Kerala Human Rights Commission as well as CBI. In the meantime, the complainant also filed a complaint before the Judicial Magistrate against the Petitioners, the Builder and others involved, and the Magistrate directed investigation of the offences alleged. Hence, present petition.

After considering the submission, the Bench found that materials relied on by the Petitioners as well as Respondent would reveal that the project was built on a paddy land.

Further, the Bench highlighted that it has been settled by the Apex Court that for the purpose of exercising its power under Section 482 Cr.P.C. to quash criminal proceedings, the High Court would have to proceed entirely based on the allegations made in the complaint or the documents accompanying the same per se.

It is trite that the power of quashing criminal proceedings should be exercised with circumspection and that too, in the rarest of rare cases and it was not justified for this Court in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the Final report or the complaint”, added the Bench.

The Bench further fortified that a finding on the veracity of a material relied on by the prosecution in a case where the allegations disclose a cognizable offence, is not a consideration for the High Court while exercising its power under Section 482 Cr.P.C.

In the present case, the FIR reveals cognizable offences. The correctness or otherwise of the allegations levelled in the FIR is a matter to be tested during the investigation”, added the Bench.

Referring to the allegation by the de-facto complainant that, at the instigation of the Petitioners, some of the bank officials with the aid of their henchmen in police uniform, without informing the complainant had entered into the building and committed house trespass, the High Court observed that possession of the secured assets was taken by the Petitioners in compliance with the directions of the Chief Judicial Magistrate.

Further, referring to another allegation that the Builder and the officials of the bank with dishonest intention conspired together and consequently the officials of the bank knowing fully well that the construction of the project was in a paddy land approved the same at the time of sanctioning the loan, the High Court observed that the Petitioners are entitled to the immunity under Section 32 of the SARFAESI Act only if the acts alleged are done in good faith under the provisions of the SARFAESI Act.

The fact that the Police submitted the final report under Sub-section (2) of Section 173 of Cr.P.C. stating that no offence appears to have been committed is not a ground for this Court to interfere in the matter in exercise of the power under Section 482 of Cr.P.C”, added the Bench.

Accordingly, the Bench left the matter to the discretion of the Magistrate to consider the report in accordance with the provisions of the Code of Criminal Procedure.

Cause Title: PNB Housing Finance and Ors. v. State of Kerala and Anr.

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