IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.P.BALACHANDRAN WEDNESDAY, THE 9TH JANUARY 2008 / 19TH POUSHA 1929 Crl.MC.No.2307 of 2004(C) ------------------------------- CC.510/2003 of CHIEF JUDL.MAGISTRATE, ERNAKULAM .................... PETITIONERS: ACCUSED Nos.1. & 2. ------------------------------------------ 1. M.ABDUL KALAM AZAD, S/O.MOHAMMED GHANI, MANAGING DIRECTOR, M/S.INTERNATIONAL MERCHANDISE TRADES AND EXPORTS (P) LTD., G-211,MAIN AVENUE, PANAMPILLY NAGAR, KOCHI 36, M/S.M.A.K.AGRO COMMO- DITIES TRADING COMPANY (P)LTD., G-211, MAIN AVENUE PANAMPILLY NAGAR, KOCHI 36, R/AG-211.P.NAGAR,KOCH36 2. FAREEDA HAJEE VAHEED, W/O.M.A.K.AZAD, RESIDING AT HOUSE NO.G-211, MAIN AVENUE, PANAMPILLY NAGAR, KOCHI 36. BY ADV. SRI.VARGHESE C.KURIAKOSE SRI.PRAVEEN K. JOY SRI.E.M.MURUGAN RESPONDENTS: COMPLAINANT. ------------------------------------- 1. DHANALAKSHMI BANK LIMITED, REP. BY SRI.K.K.RANGANATHAN, S/O.KRISHNA IYER, ASSISTANT GENERAL MANAGER AND PRINCIPAL OFFICER, DHANALKSHMI BANK, SHANMUGHAM ROAD, ERNAKULAM BRANCH. 2. STATE OF KERALA, REP. BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. BY PUBLIC PROSECUTOR SRI.P.RAVINDRA BABU SRI.C.K.KARUNAKARAN,SC,DHANALAKSHMI BANK THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 09/01/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: K.P.BALACHANDRAN, J. ------------------------------------------------ Crl. M.C. No.2307 of 2004 ------------------------------------------------ Dated this the 9th day of January, 2008 ORDER Petitioners are accused Nos.1 and 2 in C.C.510/03 on the file of the Chief Judicial Magistrate's Court, Ernakulam. The prayer in this Crl.M.C is to quash Annexure-I complaint on the basis of which C.C.510/03 is registered as also all proceedings pursuant thereto. 2. Annexure-I complaint is filed by the first respondent complaining of commission by the petitioners as also two other assessors and valuers of the first respondent/bank for offence under Sections 120(B), 417, 418 and 420 IPC read with Section 34 thereof on the allegation that the properties furnished as security for the loan advanced by the first respondent bank to the petitioners did not have the value and potentiality as stated by them and as certified also by accused Nos.3 and 4 conspiring among themselves and that Crl. M.C. No.2307 of 2004 -2- thereby the first respondent/bank was cheated and that they have done so with the knowledge that wrongful loss may ensue to the said bank whose interest accused Nos.3 and 4 were bound to protect and that therefore, they are jointly and severely liable for punishment for offences alleged. 3. Petitioners 1 and 2 were being provided with letter of credit facility by the first respondent/bank and according to the first respondent/bank, only genuine businessmen who are capable of giving adequate security to the bank are eligible for letter of credit facility and that despite assets, stock etc. taken as security landed property having adequate worth is invariably taken as collateral security and it is in relation to the immovable property so given as collateral security that the potentiality and value were exaggerated and submitted before the bank so as to cheat the bank and obtain undue benefit Crl. M.C. No.2307 of 2004 -3- for the petitioners. 4. It is for the first respondent/bank who affords letter of credit facility to its customers to ascertain after inspecting the property as to the potentiality and worth of the property and to decide as to whether that would be sufficient security for the bank to act upon. Persons who avail of loan may offer immovable property as security which according to them will be sufficient security but which according to the bank may not be sufficient security. It is the satisfaction of the bank which advances funds that matters though the parties who offer landed property as security may have their own assessment of the worth of their property which either the bank or an intending purchaser may not accept. The Bank Manager or the Assistant General Manager who has advanced loan to the petitioners only on believing the statements made by the petitioners or on the reports submitted by Crl. M.C. No.2307 of 2004 -4- accused Nos.3 and 4 who are their valuers without themselves making an inspection and satisfying themselves as to the worth of the property cannot institute such a criminal complaint against the persons who have furnished immovable property as security especially when the first respondent has no case that the property offered as collateral security is encumbered or that petitioners are not having absolute right over the property contrary to what they have made the first respondent to understand. In the instant case, it was the predecessor of the first respondent who has advanced the loan accepting the immovable property offered by petitioners as collateral security, it is submitted. If at all the property is not sufficient security the bank has to take appropriate action against its own officials who were responsible for sanctioning and disbursing loan on the basis of insufficient security. It is also Crl. M.C. No.2307 of 2004 -5- worthy to make mention that a property which is having sufficient worth to be offered as security in the assessment of one may not be sufficient security in the assessment of another and such assessment may vary from person to person. Counsel for the first respondent submits that it was a take over loan by the Dhanalakshmi Bank Limited which was granted by the Sourashtra Bank. Even in that event before taking over the loan it was up to the concerned Manager of the Bank or the General Manager, as the case may be, who is dealing with the matters to get satisfied that there is sufficient security and that bad debts are not taken over. The appropriate action in such cases should be against the persons responsible for indiscriminately disbursing loans or taking over loans and not against the persons who have availed of loans. Further, it is also submitted that a major part of the loan has already been repaid also Crl. M.C. No.2307 of 2004 -6- by the petitioners and that for the balance, a decree is already passed by the Debt Recovery Tribunal. There is no merit in the circumstances, in prosecuting such a complaint by the first respondent/Dhanalakshmi Bank against the petitioners. The complaint is ill- conceived and is with a view to harass the petitioners and is nothing but an abuse of the process of court probably aimed that screening the real guilty persons who are the top officials of the first respondent bank. 5. In the result, allowing this Crl.M.C, I quash Annexure-I complaint and all proceedings in C.C.510/03 on the file of the Chief Judicial Magistrate's Court, Ernakulam registered on the basis thereof against the petitioners. K.P.BALACHANDRAN, JUDGE kns/-