2017 (12) TMI 1823 - HC - Indian Laws

Criminal misconduct of the officials of State Bank of India for undue waiver of interest - accused failed to pay dues to Government of India - non-payment of percentage of net sale proceeds to Tamil Nadu Small Industries Development Corporation as per NOC - HELD THAT - This court finds that the subject property was put to e-auction for the first time on 17.02.2011 fixing reserve price as ₹ 209.54 crores. The second and third auction date was fixed on 09.03.2011 and 04.01.2012 with same reserve price. Thereafter paper publication effected for auction on 05.10.2012, 05.11.2012 and 23.01.2013 with revised reserve price of ₹ 250/- crores. Meanwhile M/s. RMZ properties, Bangalore has offered ₹ 298/- crores for this property but sale not confirmed in its favour but sold to 5th Accused Company through private negotiation for ₹ 272 Crores. Whether such deal was outcome of any criminal design between the Bank Officials and the buyer is now under investigation. No doubt the FIR contains certain wrong information about the character of HTL and the quantum of alleged loss. As stated in the counter, a prime property in the heart of the City had been sold through private negotiation far below the guidelines value. Unless the investigation gets completed this court cannot jump to a conclusion that the petitioners are innocent bonafide purchaser and not privy to the alleged crime - Petition dismissed.

Summary

Issues:
Quashing of FIR against D.Pratish and VGN Developers (P) Ltd.

Analysis:
The petition sought to quash the FIR registered against D.Pratish and VGN Developers (P) Ltd., alleging wrongful loss to the Government of India due to a property deal. The petitioners argued that the FIR was based on erroneous understanding of facts and caused a cloud on their reputation as premium builders. They contended that the loss, if any, from the private negotiation should not be considered a loss to the government. The FIR mentioned a presumptive loss of ?115 crores based on guidelines value, but the property failed to attract bidders in public auctions, with only one bid exceeding the reserve price but failing due to state government objections. The petitioners emphasized that the property was sold to clear dues to the bank, and the balance sale consideration remained with the seller. They highlighted discrepancies in the FIR regarding the nature of the company involved and the alleged loss figures.

The respondents countered by clarifying that the loss was primarily to the State Bank of India due to undue waiver of interest, not the Government of India. They refuted the petitioners' claims and stated that the investigation was ongoing, focusing on criminal misconduct of bank officials and other accused parties. The investigation involved collecting documents, scrutinizing bank statements, and examining witnesses to determine the validity of the allegations. The court noted that the property in question had a complex auction history, with bids failing to meet the reserve price until a private negotiation resulted in a sale below the guidelines value. The court highlighted the involvement of government entities like SIDCO and the State Government in the property dealings, raising questions about the legality of the private negotiation and potential conflicts of interest. The court concluded that the investigation was necessary to ascertain the innocence of the petitioners and the possible criminal elements in the property deal. Consequently, the Criminal Original Petition was dismissed, and the connected Criminal Miscellaneous Petition was closed.