Summary
The Supreme Court quashed a borrower’s criminal complaint, investigation order and FIR insofar as two bank officers were concerned. In the particular sequence of prior writ and SARFAESI proceedings, the later complaint alleging loan and auction irregularities was an intimidatory afterthought and abuse of process. Bank enforcement remained reviewable through the statutory forum; the borrower was left free to challenge the DRT and DRAT orders through lawful remedies.
Issues
- Whether the later criminal proceedings against the bank officers amounted to abuse of process in the circumstances.
- What remedies remained available to the borrower against the enforcement proceedings.
Held
- Quashing criminal proceedings is exceptional and requires caution. Here the nature of the transaction and the sequence of earlier proceedings justified exercise of that power. Dismissal of other accused persons’ separate petitions did not preclude the appellants’ remedy. (¶¶ 9, 14, 17)
- The borrower’s concerns about disbursement, settlement proposals, valuation and sale arose from contractual and regulated enforcement dealings. The borrower had already challenged the auction in writ proceedings and pursued the statutory remedy before filing this later complaint. (¶¶ 10, 11, 12, 13, 15)
- SARFAESI enforcement is not unquestionable: the DRT can examine challenged measures, invalidate transactions and restore possession in appropriate cases. On these facts the later criminal complaint instead attempted to reopen the enforcement dispute through police investigation and was an abuse of process. (¶¶ 16, 17)
- The officers’ reliance on good-faith protection did not require exposing them to investigation when the criminal proceedings were otherwise unsustainable on the circumstances identified. The Court left the borrower free to pursue lawful challenges to the DRT and DRAT orders. (¶¶ 18, 19)
Result
Appeal allowed; complaint P.C.389/2016, order dated 20 May 2016 and FIR 0152/2016 quashed only insofar as the appellants were concerned. Borrower granted liberty to pursue lawful remedies against the specified DRT and DRAT orders. No costs; pending applications disposed of.