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TMI Blog2025 (1) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... dge agreement i.e. Indiabulls, borrower and Kadam) has to be resolved by way of arbitration. There is complete suppression in the complaint filed before the Chief Judicial Magistrate, Gautam Budh Nagar with regard to the terms of loan agreement; existence of Arbitration clause, therein; invocation of Arbitration clause by the borrower; rejection of application filed by borrower before the Delhi High Court under Section 9 of the Act of 1996 and many other relevant facts which have a material bearing on the issue in question. Suppression of material facts by the borrower while invoking criminal proceedings against the lender assumes greater significance in the facts of the present case as repeated attempts made by it to injunct the lender i.e. Indiabulls from proceeding against the pledged property had not succeeded. The non-disclosure of material facts would lead to an inference that criminal proceedings are maliciously instituted with the intent to avoid repayment of availed loan facility; to secure leverage in pending Arbitration and other proceedings inter-se between the parties; coerce the lender i.e. Indiabulls to succumb to the terms dictated by the defaulter borrower. There a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... J. K. Upadhya, learned AGA for the State; Sri Sikandar B. Kochar as well as Sri Zoheb Hossain (through VC), learned Advocates for the Enforcement Directorate (ED); Sri Vinay Saran, learned Senior Advocate assisted by Sri Prashant Kumar, Sri Sarvesh Kumar Tiwari, Sri Saumitra Dwivedi and Sri Devesh Srivastava, Advocates for the complainant/intervener and Sri Syed Imran Ibrahim, learned Advocate for the private respondent. 2. These three writ petitions have been heard together and are being disposed of by this common judgment. Criminal Misc. Writ Petition No. 10893 of 2023 (Niraj Tyagi and another Vs. State of U.P. and 3 others) is taken as the lead case. These petitions alongwith Writ Petition Nos. 11837 of 2023 11838 of 2023 were placed before this Court pursuant to an order of nomination passed by the Hon ble Chief Justice on 4.3.2024. The other two petitions i.e. Criminal Misc. Writ Petition Nos. 11837 of 2023 and 11838 of 2023 have been allowed by this Court on 15.4.2024 and the First Information Report, dated 22.7.2023, registered as Case Crime No. 611 of 2023, under Sections 420, 120-B IPC read with Section 82 of the Registration Act, 1908, Police Station - Kavi Nagar, Distric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of pure commercial and civil dispute between the parties, in respect of which initiation of criminal proceedings is nothing but an abuse of the process of law. The short question that arises for our consideration in the facts of the present case is as to whether lodging of the impugned FIRs and the consequential ECIR is an abuse of the criminal process? 8. In order to appreciate the controversy raised in these petitions narration of background facts would be necessary. Indiabulls Housing Finance Limited is a non-banking financial institution registered under the provisions of Indian Companies Act, 1956 (hereinafter referred to as Indiabulls ). It claims to be one of the largest premier housing finance company and is regulated by Reserve Bank of India. It is accorded AA rating by CRISIL and ICRA. Indiabulls is petitioner no. 2 in the leading writ petition no. 10893 of 2023, while petitioner no. 1 Niraj Tyagi is its President, Legal. 9. Indiabulls sanctioned loan facility of Rs. 2478 crores to M/s Shipra Group of Companies; comprising various group companies including M/s Shipra Estate Limited; M/s Shipra Leasing Private Limited, M/s Shipra Hotels Limited etc. (hereinafter collectiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creation of mortgage in favour of Indiabulls vide letters/orders dated 2nd 4th September, 2020. 13. In terms of the loan agreement, Indiabulls issued a cure notice on 20.10.2020 calling upon the borrowers to cure the impaired security (mortgaged plot no. GH-1B 1C, Sector 43, NOIDA) within 15 days of the notice. The borrowers apparently took no steps to regularize the impaired securities. Consequently, Indiabulls issued loan recall notices on 5.11.2020 and 15.12.2020, recalling the entire outstanding loan and demanded repayment of Rs. 1763.61 crores within 7 days from the receipt of notice. Notice was also issued by Indiabulls under Section 95 of the Insolvency and Bankruptcy Code, 2016 to the personal guarantor of loan agreements Mr. Mohit Singh. 14. On failure of borrowers to respond and clear the dues in terms of the notices issued as per loan agreements Indiabulls proceeded to issue loan recall notice to the borrowers. On 14.1.2021 a notice was also issued invoking provisions of Section 176 of the Contract Act in respect of the pledged shares of Kadam. 15. The amount demanded under the loan recall notices from the borrowers to the tune of Rs. 1763 crores approximately has not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for examination before the DRT, Lucknow. Such issues are otherwise civil in nature and cannot be allowed to be raised by lodging an First Information Report. Vague and unsubstantiated ancillary allegations made of encroachment, beyond the transferred secured asset, or alleged irregularity in conduct of auction etc. cannot be allowed to be raised by lodging an FIR and thereby vest jurisdiction in the police regarding civil issues which are required to be adjudicated exclusively by the DRT or the civil court. The tendency of the defaulter to invoke criminal proceedings for resisting coercive action under the SARFAESI Act has to be curbed. The Parliamentary vision of vesting exclusive jurisdiction in specialized tribunal viz DRT, in respect of banking transactions relating to loan, debt etc. has to be respected. Criminal proceedings cannot be pressed into action at the instance of defaulter to scuttle proceedings under the SARFAESI Act on issues exclusively triable by DRT. 23. For the reasons recorded above, these two petitions succeed and are allowed. The First Information Report, dated 22.07.2023, registered in Case Crime No.611 of 2023, under Sections 420, 120-B of IPC and Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e security in respect of the mortgaged properties was impaired. Learned Single Judge relied upon the statement made on behalf of Indiabulls that shares would be transferred in a fair and transparent manner and noted that Indiabulls has disclosed the purchaser and also the amount at which the sale is being done. Offer given by Indiabulls to the borrower to redeem the pledged shares on a payment of Rs. 900 crores and the inability to avail such offer by borrower was specifically noticed. The Court ultimately rejected section 9 petition after recording its prima facie findings in the matter. 21. Indiabulls and DLF in between had entered into an agreement on 20.4.2021 to sell pledged shares for a consideration of Rs. 900 crores. Rs. 750 crores was to be paid by DLF while Indiabulls had to infuse approximately Rs. 150 crores in Kadam so as to enable it to repay the loans of M/s Shipra Estate Limited. Mutually settled Share Sale Agreement was to be formalized between the parties within 21 days subject to fulfillment of conditions. Rs. 100 crores was paid by DLF to Indiabulls. DLF, however, terminated the agreement and demanded refund of Rs. 100 crores which was allowed. 22. Fresh agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or development of its real estate project. Insofar as Indiabulls is concerned, concededly, it is a money lender and its interest is essentially to recover the loans along with interest as claimed by it. Thus, as far as Indiabulls is concerned, it can always be compensated in terms of money. There is no dispute that Kadam is a part of the Shipra Group of entities and admittedly, had mortgaged the Sale Property with Indiabulls to secure the repayment obligations of the Borrowers. The Borrowers claim that Indiabulls had agreed to accept the consideration payable by DLF under the ATS as full and final settlement of its claims. Plainly, if Kadam and the Borrowers prevail in their case that the dues owed to Indiabulls were fully settled, they would stand discharged of their liability on Indiabulls receiving the consideration as provided under the ATS. However, if they fail in this case, the Borrowers would continue to be liable to discharge their dues. Insofar as Kadam is concerned, Kadam is not one of the Borrowers and its liability is limited to the collateral provided by it for securing the debts owed to Indiabulls, that is, the Sale Property. 117. As noted above, in terms of Clause 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29. At this stage, we may note that the loan agreement pursuant to which 100% shares of Kadam were pledged in favour of Indiabulls contained an arbitration clause. This clause has already been invoked by the borrowers and various proceedings therein are already undertaken. Mr. Justice Vikramjit Sen, a retired Judge of the Supreme Court, has already been appointed an arbitrator in the matter. 30. In the arbitration proceedings instituted by M/s DLF Limited also Mr. Justice Vikramjit Sen has been appointed an arbitrator and the proceedings are pending before the learned arbitrator. The Arbitrator has already passed an order of status-quo in respect of the 73 acre mortgaged land of Kadam. These proceedings and the orders passed therein are, however, not referred to in the two FIRs or the complaint of borrower. 31. We shall refer to the proceedings of arbitration, a little later, while considering petitioners argument that invocation of criminal proceedings vide impugned FIRs are intended to overreach and preempt such civil proceedings. 32. It is in the above backdrop and after the borrowers failed to obtain any protection in respect of transfer of pledged shares before the Delhi High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p has also been unauthorizedly encroached upon by Indiabulls. The FIR allegations further are that as against sanctioned loan of Rs. 1939 crores only Rs. 1256.6 crores has been paid to the borrower and Rs. 683 crore has not been disbursed to the borrower company despite the fact that Rs. 163 crore was paid till March, 2023 to Indiabulls. 37. The 2nd FIR is lodged by YEIDA in furtherance of the 1st FIR. The contents of the subsequent FIR is (i) that the transfer of shares of Kadam pledged with Indiabulls in favour of Creative Souls Technology India Private Limited was without the consent of YEIDA (the informant authority); (ii) non-payment of transfer charges has resulted in financial loss caused to the public authority to the extent of Rs. 200 crore; (iii) the contents of the FIR in Case Crime No. 427 of 2023 is also referred to and relied upon in the subsequent FIR. 38. On the basis of the above two FIRs proceedings have been initiated by the Enforcement Directorate, pursuant to ECIR//HIU-I/06/2023, and in the consequential investigation so undertaken the ED has found following facts:- (a) that there was undervaluation by Indiabulls of the value of shares of Kadam while transferri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ground that it is an abuse of the process of law. It is urged that Mr. Amit Walia is the authorized signatory of borrower i.e. M/s Shipra Group, who had filed proceedings before the Delhi High Court, the arbitrator, the debt recovery tribunal and before the Supreme Court of India in respect of the grievances raised in the FIRs wherein the borrower M/s Shipra Group failed to obtain any relief but these facts have been withheld; the FIR does not disclose any criminal intent; the transactions are entirely fiscal in nature and no criminality is reflected; it is argued that sanction of loan, creation of mortgage and the manner in which the sanctioned loan were to be released are all contractual matters which are governed by the terms of contract and the provisions of the SARFAESI Act and Rules and issues in that regard cannot be raised by lodging an FIR; the impugned FIRs are lodged by the borrowers to escape their liability to repay the dues of the lender and only with an intent to evade repayment of loan malicious proceedings have been initiated with an intent to abuse the lender; no prima facie case of cheating, forgery or criminal conspiracy is made out even on the plain reading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nLine SC 1814] passed in WP (Crl.) No. 166 of 2023 would continue in the three FIRs mentioned therein. 9. Insofar as the further FIR No. 197/2023 dated 15-4- 2023 filed by Yeida and ECIR bearing No. ECIR/HIU-I/06/2023 are concerned, no coercive steps would be taken against the petitioner financial institution and its officers, representatives and managers till final disposal of such petitions by the High Court, and it would be open for the petitioners to seek stay of proceedings which would be considered by the High Court on its own merits. It is clarified that this interim protection would only be applicable to the petitioner financial institution and its officers, representatives and managers, and not to any other person. 10. All contentions available to the parties in law are being kept open to be raised before the High Court and the High Court shall decide the petitions strictly on their own merits and in accordance with law. 45. It appears that before passing the aforesaid order by the Supreme Court no opportunity of hearing was given to ED in the matter. The ED was impleaded as a party on the very date when the proceedings were concluded by the above orders. 46. The Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the writ petition, in relation to the first three FIRs, was directed to continue till the disposal of the writ petitions to be filed before the High Courts. When a party is relegated to the High Court to pursue its remedies, it would not be proper, in the normal course, to bind the said High Court with directions in relation to the proceedings to be impugned before such Court. Ordinarily, this Court would leave all issues open for the party so relegated to raise and pursue before the High Court. In Neeharika Infrastructure Pvt. Ltd. v. State of Maharashtra11, a 3-Judge Bench of this Court laid down guidelines for exercise of power under Section 482 CrPC, cautioning that criminal proceedings ought not to be scuttled and Courts, in the usual course, should not thwart investigation into cognizable offences. That being so and as no compelling reasons were recorded by this Court in the order dated 04.07.2023 to justify deviation in the case on hand, it clearly manifests that it was purely unintentional and due to sheer oversight. 18. That apart, such directions can be misconstrued by the High Courts to be observations by this Court on the merits of the matter, thereby influencing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1686 crores were not released to the borrower, instead only Rs. 866.88 crores were credited to the account of borrower and immediately withdrawn and balance Rs. 820 crores were not credited to the account of borrower; false assurances were extended to the borrower by Indiabulls; loan recall notice was issued collusively by Indiabulls; an amount of Rs. 552.76 crores has been fraudulently embezzled by Indiabulls; loan amount as well as dues payable have been inflated contrary to the guidelines of RBI; sanctioned loan amount payable to borrower has been withheld by Indiabulls; Directors of borrower have been ill-treated and threatened; although Rs. 1939 crores were to be credited to the account of the borrower as per loan agreement but only Rs. 1256.6 crores were credited to the account of the borrower and Rs. 683 crores has still not been paid even though borrower has paid Rs. 163 crores till March, 2023; shares of Kadam have been transferred on a kick back of Rs. 300 crores; 73 acre land of borrower in Sector 128 has been misappropriated etc. 49. So far as the 2nd FIR is concerned the YEIDA has alleged that transfer of shares of Kadam is without its consent; it has resulted in l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hasized the importance of disclosing correct facts before a court of law. Reliance was placed upon a previous judgment of the Court in K.D. Sharma Vs. Steel Authority of India and others, 2008 (12) SCC 481, wherein the Court observed as under in para 39:- 39. If the primary object as highlighted in Kensington Income Tax Commrs. [(1917) 1 KB 486 : 86 LJKB 257 : 116 LT 136 (CA)] is kept in mind, an applicant who does not come with candid facts and clean breast cannot hold a writ of the court with soiled hands . Suppression or concealment of material facts is not an advocacy. It is a jugglery, manipulation, manoeuvring or misrepresentation, which has no place in equitable and prerogative jurisdiction. If the applicant does not disclose all the material facts fairly and truly but states them in a distorted manner and misleads the court, the court has inherent power in order to protect itself and to prevent an abuse of its process to discharge the rule nisi and refuse to proceed further with the examination of the case on merits. If the court does not reject the petition on that ground, the court would be failing in its duty. In fact, such an applicant requires to be dealt with for cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmitting various crimes under the Penal Code, 1860 and the Prevention of Money-Laundering Act, 2002. His bail application was rejected by the High Court on 23-6-2023 [Saumya Chaurasia v. Directorate of Enforcement, 2023 SCC OnLine Chh 1907] . In the pleadings before this Court, it was mentioned that the High Court had committed gross error in not considering the charge-sheet dated 8-6-2023 and the cognizance order dated 16-6-2023, which clearly suggested that there was an error apparent on the fact of it. The fact which was available on record was that an order in the bail application was reserved by the High Court on 17-4-2023 [Saumya Chaurasia v. Enforcement Directorate, 2023 SCC OnLine Chh 5838] and pronounced on 23-6-2023 [Saumya Chaurasia v. Directorate of Enforcement, 2023 SCC OnLine Chh 1907] . Having some suspicion, this Court directed the appellant to file an affidavit to clarify the aforesaid position. There was no specific reply given to the aforesaid query to the Court. Rather vague statements were made. Considering the facts available, this Court observed that there was a bold attempt by and on behalf of the appellant therein to misrepresent the facts for challenging t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be decided by an elaborate judgment of the learned Single Judge of the Delhi High Court on 20.05.2021. After noticing the background in which the controversy arose learned Single Judge noticed the contention of borrower in para 5.1 to para 5.19, which are reproduced hereinafter:- 5.1. The loan facility granted in favour of the Borrowers has been arbitrarily recalled by Indiabulls vide loan recall notices dated 05th November, 2020 and 15th December, 2020, on account of an alleged impairment of the security under Clause 12.1.9 of the Loan Agreement. The three ingredients of an Event of Default, as defined under Clause 12.1.9(a), being - (i) impairment of the security , (ii) causing the security to become unsatisfactory , and (iii) in the judgment of the lender (i.e. Indiabulls) - are not met in the instant case. The same is demonstrated as below: 5.1.1. The term Security , as defined in Clause 1.1(xxix), has to be read to mean all securities provided by the Borrower, taken as a whole, and will have to be related to borrowers dues , which are defined in Clause 1.1(iv) to mean outstanding principal and other amounts payable by the Borrowers. In other words, Clause 12.1.9(a) gets att ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er and spirit. In fact, Indiabulls has, at its sole discretion, rescheduled the loan agreements various times in the past, however, it has never been the case that any re-schedulment charges were imposed on Borrowers. Further, on account of the outbreak of COVID-19 pandemic, revised loan repayment schedule was provided to the Borrowers, towards which further PDCs and UDCs were obtained by Indiabulls from the Borrowers. Reschedulment charges towards loans rescheduled on account of the COVID-19 pandemic is inconceivable even in terms of the guidelines provided by the RBI. 5.6. Indiabulls has further concealed that a sum of Rs. 3.33 crores is currently lying in the escrow account of the Shipra Group which is in complete control and custody of Indiabulls. 5.7. In the past, Indiabulls has never banked on any of the security cheques provided by the Petitioners at the time of execution of the loan agreements/reschedulment. 5.8. Out of the total amount of Rs. 759 crores paid by the Petitioners, an amount of approx. Rs. 80 crores was adjusted from the Escrow Account and about Rs. 679 crores was paid by way of RTGS/new Cheques, as can also be seen from Additional Affidavit dated 12th April 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he context requires . Further, Clause 12.1.9(a) uses the phrase impairment of the Security, if any, or any part thereof . Thus, even if we were to hypothetically accept that security must mean all securities as a whole, there is a clear provision for any part of the same to become impaired, leading to it becoming unsatisfactory in the judgment of the Lender, in which case, an Event of Default would occur. This argument, therefore, does not hold any water. Though, the correlation between the Securities and the Borrower's dues is a novel argument, it is not a persuasive one, and would amount to misinterpretation of clause 2.2 for the purpose deciding whether an Event of Default has occurred. If a security is impaired, which causes it to be become unsatisfactory as to character or value, the Event of Default would get triggered, regardless of the availability of other Securities to satisfy the borrower's dues. 12. As regards the exercise of discretion, we must note that the parties have contractually agreed, on a plain reading of Clause 12.1.9(a), that the question whether the impairment of the security has rendered the security unsatisfactory as to character or value has to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d have to be examined in arbitration. Nevertheless, the fact of the matter is that Indiabulls cannot enforce the impaired securities, and is constrained to recall the loan. In these circumstances, the question arises whether the Court can interdict Indiabulls from taking recourse to the provisions of the Loan Agreement for enforcing other securities. The answer to this question has to be in the negative. 60. Upon consideration of borrower s plea regarding nonexistence of financial default learned Single Judge held that an event of default has occurred and that such default is more serious and fundamental than dishonour of an EMI. The Court consequently rejected the application of borrower under Section 9 of the Act of 1996 vide observations made in para 25 and 26 of the judgment, which are reproduced hereinafter:- 25. Without getting into the above controversy, Even if, one were to accept that there is no financial default, it cannot discern the fact that there has been an Event of Default on the date of issuance of recall notices. The significant fact is that loan recall notices are dated 05th November 2020 and 15th December 2020. Indiabulls has recalled the loans on the sole grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the shares of KDPL has been done primarily on the basis of the value of the parcel of land, the shares having no other intrinsic value. Indiabulls supports its valuation on the basis of the reports on record, which are disputed and countered by the Petitioners. The valuation of land is not an exact science. It requires expertise, and certainly cannot be gone into in the present proceedings. The credibility of rival reports would be examined during the arbitration to determine which one is correct and realistic. At this juncture, the Court only has to see if the contractual terms as agreed between the parties under the Pledge Agreement have been adhered to. Undisputedly, notice of invocation had been issued by Indiabulls giving Borrowers and the Pledgor an opportunity to redeem, before proceeding with the sale of pledged shares. The Borrowers have neither provided additional security, nor redeemed the pledge. They have even failed to agree to the proposal of Indiabulls to pay/deposit Rs. 900 crores, being the sale consideration that it is receiving from DLF. Yet, the Borrowers seek restrain on the sale, alleging that there is mala fide motive in the sale, and that the shares are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt also observed that observations made by it are prima facie in nature and would not come in the way of arbitral tribunal in adjudicating the dispute between the parties. 63. The aforesaid judgment of learned Single Judge was unsuccessfully assailed by the borrower in appeal preferred before the Division Bench of Delhi High Court. After referring to various observations of learned Single Judge the Division Bench concluded that in view of categorical observations made in last para of the judgment of learned Single Judge the apprehension of borrower that the observations of learned Single Judge would prejudice the arbitral proceedings is non-existent. The appeal was disposed of accordingly. The matter rests at it. 64. We are rather amazed that the borrower instead of pursuing the remedy of Arbitration available to it, in terms of the loan agreement, which it has already invoked/availed, choose to short circuit such proceedings available in law to it and instead has lodged the impugned FIRs for adjudication of issues already raised in arbitration so as to seek determination of civil/commercial causes in criminal proceedings. 65. We also find absolutely no reason disclosed in the crim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may reiterate that borrower herein is an established company which is aware of normal financing practices as also the terms on which loan is offered to it. To avail finance on terms indicated in the loan agreement is a commercial/managerial decision of the borrower. Availing of finance cannot be foisted upon the borrower by a non-banking finance company. Admittedly, loan was sanctioned to the borrower vide 16 separate loan agreements executed between 2017 to 2020. The event of default occurred in early 2021 itself. The borrower availed of remedies in Arbitration proceedings against Indiabulls and its interim application against coercive action has already failed. 70. Interestingly, in the Arbitration proceedings there are no allegations that Directors of Indiabulls made any misrepresentation or inducement or that loan was offered to the borrower with an intent to grab its properties. Such allegation in the complaint/FIRs are made after several years of default in repayment of loan for the first time. It would not be open for the borrower to come up with arguments that are otherwise available to a poor man who has gone to a village money lender having evil eyes on his property. 71. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon ble Mr. Justice Vikramjit Sen (Retired). We are, therefore, not required to enter into various claims of parties with any sense of definiteness regarding loan agreement or its performance when the issues are seized before the Arbitrator. 75. The allegation that entire loan amount was not disbursed or that a lesser amount was actually released to the borrower is also a grievance raised for the first time in criminal proceeding instituted with unexplained delay. Such claims can otherwise be determined only in accordance with the terms of loan agreement/contract and the disputes or differences between the parties, raised for the first time in criminal proceedings cannot be appreciated. 76. Any adjudication, in criminal proceedings, of issues that requires determination in pending Arbitration would only amount to pre-empting and overreaching the Arbitration proceedings where commercial transactions are yet to be determined as per the contract. 77. The Delhi High Court in proceedings under Section 9 of the Act of 1996 has rightly observed that issues with regard to undervaluation of the shares of Kadam since are to be determined in Arbitration, therefore, no adjudication on that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y relevant consideration here is the likelihood of embarrassment. 13. Another factor which weighs with us is that a civil suit often drags on for years and it is undesirable that a criminal prosecution should wait till everybody concerned has forgotten all about the crime. The public interests demand that criminal justice should be swift and sure; that the guilty should be punished while the events are still fresh in the public mind and that the innocent should be absolved as early as is consistent with a fair and impartial trial. Another reason is that it is undesirable to let things slide till memories have grown too dim to trust. This, however, is not a hard-and- fast rule. Special considerations obtaining in any particular case might make some other course more expedient and just. For example, the civil case or the other criminal proceeding may be so near its end as to make it inexpedient to stay it in order to give precedence to a prosecution ordered under Section 476. But in this case we are of the view that the civil suits should be stayed till the criminal proceedings have finished. 81. The last judgment relied upon by the borrower in Syed Askari (supra) has referred to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt held as under in para 43:- 43. The FIR was lodged not only in regard to forgery of the will but also on the cause of action of a trespass. The appellant admittedly is facing trial under Sections 420, 468 and 448 IPC. It is, thus, possible that even if the will is found to be genuine and that no case under Section 468 IPC is found to have been made out, the appellant may be convicted for commission of other offences for which he has been charged against, namely, trespass into the property and cheating. If it is found that the appellant is guilty of trespass, he may be asked to hand over possession of the premises in question to the complainant. 83. The judgment in Syed Askari therefore has no applicability in the facts of the present case. In this case criminal proceedings are being initiated after almost two years by suppressing and concealing the fact that borrowers interim application against transfer of shares is already rejected, subject to issues being resolved in arbitration. On facts, we do not approve the initiation of criminal action belatedly, on the strength of suppression and concealment of facts, when issues are otherwise pending before the Arbitrator pursuant to or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt and issues in that regard are to be finally determined in Arbitration by virtue of loan agreements it would not be appropriate to allow such issues to be raked up in criminal proceedings. This is so as inter se between the parties it is decided that these issues are to be resolved by way of Arbitration. The borrower s anxiety to overreach this position by seeking criminal adjudication of civil issues would clearly amount to abuse of the process of law. 89. So far as the stand of ED is concerned, we find that its allegation about undervaluation of shares on the strength of report of valuers or that the valuers report are manipulated has to be examined in the context of the financial transaction in its entirety. The valuers report is only an input for the determination of the value of pledged shares of Kadam. To what extent such report of the valuer is binding on Indiabulls would again be a matter to be determined as per the terms of pledge agreement in Arbitration proceedings. 90. Our attention has not been invited to any specific clause in the pledge agreement outlining the role of valuer in determining the value of share for its transfer on account of default in repayment of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudicatory process by suppressing binding adjudications already done between the parties. 95. So far as the 2nd FIR lodged by YEIDA is concerned, the same is substantially based upon the allegations made in the 1st FIR. In a way the 2nd FIR is an offshoot of the 1st FIR. 96. So far as the allegation with regard to non obtaining of permission before transfer of shares of Kadam is concerned the petitioners allege that there are no applicable provision in law which required any permission to be obtained before such transfer of shares. 97. The 2nd FIR records that YEIDA had granted permission on 9.1.2018 for 73 acre land owned by Kadam to be mortgaged to Indiabulls. The 2nd FIR refers to the lodging of 1st FIR as well as complaint made by the borrower to YEIDA and records that no permission is obtained from it by Indiabulls before transferring the shares of Kadam. It also records that transfer of shares has caused expected loss of nearly Rs. 200 crores on the strength of fraud, misrepresentation and concealment, etc. 98. The petitioners state that the 73 acre land of Kadam is part of the concession agreement dated 7th February, 2003 between Taj Expressway Industrial Development Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In our opinion the right of YEIDA to recover such transfer charges would have to be determined in the pending writ proceedings before this Court and such claim in no way would be effected by the outcome of the present petitions filed for quashing of the FIRs. If it is ultimately held by this Court in pending Writ Petition that transfer charges are payable the amount so determined would remain recoverable from Kadam on account of first charge over it by YEIDA notwithstanding the outcome of present petitions. 106. The 2nd FIR is otherwise in continuation to the 1st FIR and is on the prompting of the borrower. The transfer of pledged shares of Kadam by the Indiabulls pursuant to pledge agreement is on account of default by the borrower. Such exercise of authority under the pledge agreement is not shown to be an offence. Except for bald allegations no criminality in the transaction is shown in light of the discussions contained in this judgment. The levy of transfer charges is otherwise an issue pending adjudication before this Court in a separate writ and, therefore, no observations on that count are warranted by us. 107. The 2nd FIR is otherwise lodged pursuant to the direction of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40, the Supreme Court dealt with a similar case of defaulter initiating criminal action against the lender bank. After examining the issue the Court held as under:- 9. As noted, the undisputed fact is that the complainant had approached Canara Bank for financial assistance, wherein the appellants herein were the officers in the circle office. The complainant had availed the loan facility to the tune of Rs 2.68 crores on 16-3-2009. Though the complainant contends that the entire amount of Rs 2.68 crores was not released, but only a sum of Rs 90 lakhs was released and the remaining amount was adjusted as repayment, the question would be as to whether that aspect and the other aspects as raised with regard to the non-consideration of OTS as also the value for which the property was sold and the manner in which it was sold could be investigated into by the police, merely, because allegations are made and certain sections of the Penal Code, 1860 are invoked when the action is resorted to and regulated under the Sarfaesi Act. While taking note of the sequence of events it is noticed that the secured asset though sold in the auction conducted on 31-1-2014 and the grievances as sought to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll, (2009) 8 SCC 366 : (2009) 3 SCC (Civ) 403] wherein it is held as hereunder : (SCC pp. 375-76, paras 34-37) 34. The provisions of Section 13 enable the secured creditors, such as banks and financial institutions, not only to take possession of the secured assets of the borrower, but also to take over the management of the business of the borrower, including the right to transfer by way of lease, assignment or sale for realising secured assets, subject to the conditions indicated in the two provisos to clause (b) of sub-section (4) of Section 13. 35. In order to prevent misuse of such wide powers and to prevent prejudice being caused to a borrower on account of an error on the part of the banks or financial institutions, certain checks and balances have been introduced in Section 17 which allow any person, including the borrower, aggrieved by any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor, to make an application to the DRT having jurisdiction in the matter within 45 days from the date of such measures having taken for the reliefs indicated in sub-section (3) thereof. 36. The intention of the legislature is, therefore, clear that whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he orders passed by the competent court under the Sarfaesi Act which is neither desirable nor permissible and the banking system cannot be allowed to be held to ransom by such intimidation. Therefore, the present case is a fit case wherein the extraordinary power is necessary to be invoked and exercised. 115. In M.N. Ojha Vs. Alok Kumar Srivastav, (2009) 9 SCC 682, the Supreme Court observed as under in paras 33, 34 35 of the judgment, which are reproduced:- 33. This is one case where the averments and allegations made in the complaint do not disclose the commission of any offence by the appellants or any one of them. They were merely discharging their duties to realise and recover the amounts due to the Bank from the borrower as well as the guarantors. The complaint obviously has been filed as a counterblast to the proceedings already initiated by the Bank including the first information report lodged by the first appellant against the complainant and the borrower for the offences of cheating and misappropriation. 34. Sequence of events undoubtedly suggests that the criminal proceedings have been maliciously instituted with an ulterior motive of wreaking vengeance on the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issuing process a criminal court has to exercise a great deal of caution. For the accused it is a serious matter. This Court has laid certain principles on the basis of which the High Court is to exercise its jurisdiction under Section 482 of the Code. Jurisdiction under this section has to be exercised to prevent abuse of the process of any court or otherwise to secure the ends of justice. 41. Furthermore, in the landmark judgment of State of Haryana v. Bhajan Lal [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] regarding exercise of inherent powers under Section 482CrPC, this Court has laid down the following categories of instances wherein inherent powers of the Court can be exercised in order to secure the ends of justice. These are : (SCC pp. 378-79, para 102) 102. (1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused. (2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justify ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25. This Court has time and again cautioned about converting purely civil disputes into criminal cases. This Court in Indian Oil Corpn. [Indian Oil Corpn. v. NEPC India Ltd., (2006) 6 SCC 736 : (2006) 3 SCC (Cri) 188] noticed the prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. The Court further observed that : (Indian Oil Corpn. case [Indian Oil Corpn. v. NEPC India Ltd., (2006) 6 SCC 736 : (2006) 3 SCC (Cri) 188], SCC p. 749, para 13) 13. Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure through criminal prosecution should be deprecated and discouraged. 37. The following observation made by this Court in Uma Shankar Gopalika v. State of Bihar [Uma Shankar Gopalika v. State of Bihar, (2005) 10 SCC 336 : (2006) 2 SCC (Cri) 49] with almost similar facts and circumstances may be relevant to note at this stage : (SCC pp. 338-39, paras 6-7) 6. Now the question to be examined by us is as to whether on the facts disclosed in the petition of the complaint any criminal offence whatsoever is made out much less offences under Sections 420/120-BIPC. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court held as under in para 11 to 13 of the report, which are reproduced: 11. Still not satisfied as the result of the earlier complaint was not to the liking of Respondent 2. He filed another complaint on 23-1-2017. Thereafter, another complaint was filed by Respondent 2 on 15-6-2017 on the basis thereof FIR in question was registered. On the facts of the case in hand, it is evident that the effort of Respondent 2 was merely to put pressure on the appellant while involving her in a criminal case to get his money back whereas there is nothing pleaded that Respondent 2 that he was ever ready and willing to get the sale deed registered. There was no effort made by Respondent 2 or the vendee in the agreement to sell to initiate any civil proceedings to get the sale deed executed on the basis of the agreement to sell. In fact, the last date fixed for execution of the sale deed even after extension was 24- 12-2014. 12. There is nothing on record to suggest that any notice was issued by Respondent 2 or the vendee to the appellant to get the sale deed registered just either before expiry of the last date fixed for execution of sale deed or immediately thereafter. No civil proceedings wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appellants under Section 482 of the Cr. P.C. on the ground of delay/laches and also the factum that the chargesheet had been filed on 12.12.2019. This ground and reason is also not valid. 6. In Mohammed Ibrahim v. State of Bihar 4, this Court had referred to Section 420 of the IPC, to observe that in order to constitute an offence under the said section, the following ingredients are to be satisfied: 18. Let us now examine whether the ingredients of an offence of cheating are made out. The essential ingredients of the offence of cheating are as follows: (i) deception of a person either by making a false or misleading representation or by dishonest concealment or by any other act or omission; (ii) fraudulent or dishonest inducement of that person to either deliver any property or to consent to the retention thereof by any person or to intentionally induce that person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived; and (iii) such act or omission causing or is likely to cause damage or harm to that person in body, mind, reputation or property. 19. To constitute an offence under section 420, there should not only be cheating, bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd authority to recover money or act as a civil court for recovery of money. 10. The chargesheet also refers to Section 406 of the IPC, but without pointing out how the ingredients of said section are satisfied. No details and particulars are mentioned. There are decisions which hold that the same act or transaction cannot result in an offence of cheating and criminal breach of trust simultaneously.10 For the offence of cheating, dishonest intention must exist at the inception of the transaction, whereas, in case of criminal breach of trust there must exist a relationship between the parties whereby one party entrusts another with the property as per law, albeit dishonest intention comes later. In this case entrustment is missing, in fact it is not even alleged. It is a case of sale of goods. The chargesheet does refer to Section 506 of the IPC relying upon the averments in the complaint. However, no details and particulars are given, when and on which date and place the threats were given. Without the said details and particulars, it is apparent to us, that these allegations of threats etc. have been made only with an intent to activate police machinery for recovery of money. 11. ..... 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