9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (5) TMI 47 - SC - Indian LawsRespondent took housing loan from financial institution - on default in payment of installments, account treated as non-performing asset - recovery - Authorities of financial institution, issued notice to borrowers under section 13(2) of the SARFAESI Act. - Respondent filed several litigations and also criminal complaint against appellants, consequent to which an FIR was registered against appellants - Held that - Present case, as we find, exemplifies in enormous magnitude to take recourse to Section 156(3) Cr.P.C., as if, it is a routine procedure. That apart, the proceedings initiated and the action taken by the authorities under the SARFAESI Act are assailable under the said Act before the higher forum and if, a borrower is allowed to take recourse to criminal law in the manner it has been taken it, needs no special emphasis to state, has the inherent potentiality to affect the marrows of economic health of the nation. It is clearly noticeable that the statutory remedies have cleverly been bypassed and prosecution route has been undertaken for instilling fear amongst the individual authorities compelling them to concede to the request for one time settlement which the financial institution possibly might not have acceded. That apart, despite agreeing for withdrawal of the complaint, no steps were taken in that regard at least to show the bonafide. On the contrary, there is a contest with a perverse sadistic attitude. Whether the complainant could have withdrawn the prosecution or not, is another matter. Fact remains, no efforts were made. Magistrate, as we find, while exercising the power under Section 156(3) Cr.P.C. has narrated the allegations and, thereafter, without any application of mind, has passed an order to register an FIR for the offences mentioned in the application. The duty cast on the learned Magistrate, while exercising power under Section 156(3) Cr.P.C., cannot be marginalized. - Magistrate has to remain vigilant with regard to the allegations made and the nature of allegations and not to issue directions without proper application of mind. He has also to bear in mind that sending the matter would be conducive to justice and then he may pass the requisite order. The present is a case where the accused persons are serving in high positions in the bank. We are absolutely conscious that the position does not matter, for nobody is above law. But, the learned Magistrate should take note of the allegations in entirety, the date of incident and whether any cognizable case is remotely made out. It is also to be noted that when a borrower of the financial institution covered under the SARFAESI Act, invokes the jurisdiction under Section 156(3) Cr.P.C. and also there is a separate procedure under the Recovery of Debts due to Banks and Financial Institutions Act, 1993, an attitude of more care, caution and circumspection has to be adhered to. At this stage it is seemly to state that power under Section 156(3) warrants application of judicial mind. A court of law is involved. It is not the police taking steps at the stage of Section 154 of the code. A litigant at his own whim cannot invoke the authority of the Magistrate. A principled and really grieved citizen with clean hands must have free access to invoke the said power. It protects the citizens but when pervert litigations takes this route to harass their fellows citizens, efforts are to be made to scuttle and curb the same. Stage has come in this country where Section 156(3) Cr.P.C. applications are to be supported by an affidavit duly sworn by the applicant who seeks the invocation of the jurisdiction of the Magistrate. That apart, in an appropriate case, the learned Magistrate would be well advised to verify the truth and also can verify the veracity of the allegations. This affidavit can make the applicant more responsible. We are compelled to say so as such kind of applications are being filed in a routine manner without taking any responsibility whatsoever only to harass certain persons. That apart, it becomes more disturbing and alarming when one tries to pick up people who are passing orders under a statutory provision which can be challenged under the framework of said Act or under Article 226 of the Constitution of India. But it cannot be done to take undue advantage in a criminal court as if somebody is determined to settle the scores. We have already indicated that there has to be prior applications under Section 154(1) and 154(3) while filing a petition under Section 156(3). Both the aspects should be clearly spelt out in the application and necessary documents to that effect shall be filed. The warrant for giving a direction that an the application under Section 156(3) be supported by an affidavit so that the person making the application should be conscious and also endeavour to see that no false affidavit is made. It is because once an affidavit is found to be false, he will be liable for prosecution in accordance with law. This will deter him to casually invoke the authority of the Magistrate under Section 156(3). Magistrate should have kept himself alive to the aforesaid provision before venturing into directing registration of the FIR under Section 156(3) Cr.P.C. It is because the Parliament in its wisdom has made such a provision to protect the secured creditors or any of its officers, and needles to emphasize, the legislative mandate, has to be kept in mind. - Decided in favour of appellant.
Issues Involved:
1. Abuse of the judicial process by unscrupulous litigants. 2. Application of Section 156(3) of the CrPC. 3. Role and responsibility of Magistrates in issuing directions under Section 156(3) CrPC. 4. Protection under Section 32 of the SARFAESI Act. 5. Settlement agreements and their implications on ongoing legal proceedings. Detailed Analysis: 1. Abuse of the Judicial Process by Unscrupulous Litigants: The Supreme Court highlighted a disturbing scenario where litigants misuse the judicial system to harass statutory authorities. The Court noted that such litigants ingeniously design their complaints to create mental pressure on officials, compelling financial institutions to accept "one-time settlements." The case at hand involved a borrower who, after defaulting on a housing loan, filed multiple criminal complaints against bank officials to create pressure for a favorable settlement. This behavior was termed as "potentially dangerous" and "sad and unfortunate." 2. Application of Section 156(3) of the CrPC: The borrower filed a series of criminal complaints under Section 156(3) CrPC, leading to the registration of FIRs against bank officials. The Supreme Court emphasized that the power under Section 156(3) CrPC should not be invoked casually. The Court stated that applications under this section should be supported by an affidavit to ensure the applicant's responsibility and to prevent misuse. The Magistrate must apply judicial mind before issuing directions for investigation under this section. 3. Role and Responsibility of Magistrates in Issuing Directions under Section 156(3) CrPC: The Supreme Court criticized the Magistrate for issuing directions to register FIRs without proper application of mind. The Court reiterated that the Magistrate must remain vigilant regarding the allegations and ensure that sending the matter for investigation is conducive to justice. The Court referred to several precedents, including *Devarapalli Lakshminarayana Reddy v. V. Narayana Reddy* and *Anil Kumar v. M.K. Aiyappa*, to underline the necessity of judicial scrutiny before invoking Section 156(3) CrPC. 4. Protection under Section 32 of the SARFAESI Act: The Court pointed out that Section 32 of the SARFAESI Act provides protection to secured creditors and their officers for actions taken in good faith under the Act. The Magistrate should have considered this provision before directing the registration of FIRs against bank officials. The legislative intent behind this provision is to protect officials from legal proceedings arising out of their bona fide actions under the SARFAESI Act. 5. Settlement Agreements and Their Implications on Ongoing Legal Proceedings: The borrower entered into a one-time settlement agreement with the financial institution, agreeing to withdraw various cases filed by him. However, he did not disclose the initiation of new complaint cases and did not withdraw the earlier complaints, demonstrating a lack of bona fides. The Supreme Court noted that such behavior undermines the settlement process and reflects a perverse attitude aimed at harassing the financial institution and its officials. Conclusion: The Supreme Court allowed the appeal, set aside the High Court's order, and quashed the FIR registered against the bank officials. The Court directed that a copy of the judgment be circulated among Magistrates to ensure vigilance and diligence while exercising power under Section 156(3) CrPC. The judgment underscores the importance of judicial scrutiny and the need to prevent the misuse of legal provisions by unscrupulous litigants.
|
