HONOURABLE SRI JUSTICE N.RAVI SHANKAR CRIMINAL PETITION No.315 of 2011 Dated 20.4.2011 Between: Shaik Abdul Shareef and another. …Petitioners. And: State Bank of India, St.John Road Branch, East Marredpally, 49 DMC Centre, Secunderabad being represented by its Chief Manager Mr.A.Nageshwara Rao …Respondents. HONOURABLE SRI JUSTICE N.RAVI SHANKAR CRIMINAL PETITION No.315 of 2011 ORDER: Petitioners 1 and 2 herein are accused in Cr.No.340 of 2010 of Central Crime Station, Hyderabad. They filed this petition under section 482 Cr.P.C. to quash F.I.R. in the said case. 2. The defacto complainant is the 1st respondent herein ie., State Bank of India, St.John road Branch, East Marredpally, Secunderabad. 3. The gist of the complaint is that on representation made by the petitioner herein, the Bank has granted a loan of about Rs.4,50,00,000/- on the mortgage/security of certain immovable property but ultimately, the Bank found that the substantial portion of the mortgaged property has been completely sold away even prior to the grant of the loan and therefore, the Bank says that the petitioners, by their mis- representation, committed fraud. It would be relevant to notice the averments in the F.I.R. at paragraphs 6,7,8 and 9 which read as follows: “Subsequently, for the purpose of initiating action against the said borrowers and for sale of securities according to law we have obtained Encumbrance Certificate and then we came to know that they have sold away the premises bearing H.No.2-14-154, Plot No.24, admeasuring 419.50 sq.yds. situated at Beerappaguda, Uppal as flats (portions), prior to creation of mortgage with our Bank. The Encumbrance Certificate obtained by us reveals that the said Sri Shaik Abdul Shareef has executed several sale deeds in favour of various persons and sold the premises portion wise as flats/shops, during 2005 to 2007, vide document Nos.7498 of 2005, 7629 of 2005, 7638 of 2005, 4599 of 2006, 6572 of 2006, 7707 of 2006, 7708 of 2006, 7883 of 2006, 12347 of 2006, 19262 of 2006 and 12760 of 2007.” “The said Sri.Shaik Abdul Shareef and his wife have played fraud on our Bank by making false representations to the Bank that they are the absolute owners and they have given affidavit and declaration, mortgage documents, by mentioning the above mentioned property and its value and created mortgage in respect of entire building admeasuring 419.50 sq.yards by suppressing the above mentioned sale transactions with a fraudulent and dishonest intention to cause wrongful loss to the Bank and to have wrongful gain to themselves. Further by selling the hypothecated goods without routing the sale proceeds to the loan account, they have committed criminal breach of trust and criminal misappropriation.” “Prior to creation of mortgage we have obtained Encumbrance Certificate No.28247, dated 15-10-2008 for the period from 28-6-1980 to 14-10-2008 and the above mentioned encumbrances were not reflected in the said E.C. and only one transaction in favour of Sri.Shaik Abdul Shareef was reflected. Therefore, our Bank financed to the above named borrowers bonafide and in good faith.” “On enquiry with the said Sri. Shaik Abdul Shareef and his wife Smt. Fareeda Begum, they have admitted these facts orally. Our enquiries further revealed that the above mentioned persons by conspiring together for unjust enrichment and to cause wrongful loss to the Bank and to have wrongful gain to themselves have mortgaged the property, which was already sold away by them in portions.” 4. The above allegations, in my opinion disclose an offence of cheating punishable under Section 420 I.P.C., the matter is still at the stage of investigation. 5. Learned counsel for the petitioners vehemently argued that the transaction in question is a commercial transaction and there is no question of cheating and the Bank knew everything before it granted the loan and consequently the F.I.R. should be quashed. This is however denied by the bank’s counsel. 6. Learned counsel for the petitioners also placed reliance upon a decision of our Supreme Court reported in V.Y.JOSE AND ANOTHER v. STATE OF GUJARAT AND ANOTHER ([1]). 7. The decision lays down the principle that where the matter essentially involves a civil dispute, it cannot be allowed to be converted into a criminal offence and the High Court under Section 482 Cr.P.C. can interfere where a colour of criminal offence is given to a dispute essentially of a civil in nature. There is no dispute about this proposition. It may however be noted that the averments made in the F.I.R. which are already extracted supra, disclose the offences against the petitioners. The matter is pending investigation. 8. In this connection, learned counsel for the petitioners also drew my attention to a notice given by the Bank under Section 13 (2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and that no averments have been made in the said notice to show that criminal offence has been committed and that is also a ground in favour of the petitioners. There is no force in his contention. It is not necessary for the bank to mention any criminal offence in the notice issued under Section 13 (2) of the above Act. 9. In the above circumstances, I am of the opinion that this Court cannot interfere under Section 482 Cr.P.C. 10. Accordingly, this petition is dismissed. However, it goes without saying that the petitioners are at liberty to put forward their case before the Investigation Officer and he shall consider the same in reaching his conclusions on the investigation. ____________________________ Justice N.RAVI SHANKAR Dated 20.4.2011. Dvs HONOURABLE SRI JUSTICE N.RAVI SHANKAR CRIMINAL PETITION No.315 of 2011 Dated 20-04-2011 [1] (2009) 3 SCC 78