Full Judgment Text
2025 INSC 558
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO(S)………………. OF 2025
(ARISING FROM SLP(CRL) NOS.5815-5816 OF 2023)
SIVAKUMAR ...APPELLANT(S)
VERSUS
THE INSPECTOR OF
POLICE & ANR. ...RESPONDENT(S)
J U D G M E N T
VIKRAM NATH, J.
1. Leave granted.
2. The present appeals have been preferred by the accused-
appellant against the common judgment and order dated
12.01.2023 passed by the High Court of Madras in Crl.
O.P. (MD) 21417 of 2016 and Crl. O.P. (MD) No. 10979 of
2016, whereby the High Court dismissed the appellant’s
petition under Section 482 of the Code of Criminal
1
Procedure, 1973 to quash the chargesheet and
consequential proceedings arising out of CC. No. 308 of
Signature Not Verified
Digitally signed by
SONIA BHASIN
Date: 2025.04.23
17:53:06 IST
Reason:
1
Cr.P.C.
SLP (CRL) NOS. 5815-5816 OF 2023 1
2016 on the file of the Judicial Magistrate No. 1,
Tirunelveli.
3. The case of the prosecution in the instant matter is that
the first accused was working as a Branch Manager in
HDFC Limited at Palayankottai Branch and the second
accused, i.e. the appellant herein, was working as a
Manager in the Head Office of HDFC Limited at
Thiruvananthapuram when the alleged offence was
committed. In 2004, one Mr. A. Kannan had borrowed loan
from HDFC Limited by mortgaging his immovable property
in Survey No. 145/1 (Plot No. 96) situated at Keela Natham
Village, Palayankottai Taluk, Tirunelveli District and the
superstructure built up therein.
4. Since the said borrower had defaulted in repaying the loan
amount, HDFC Ltd. initiated proceedings under the
provisions of SARFAESI Act and auction notice for the
above-mentioned property was issued on 22.05.2012 by
the Head Office in the vernacular newspaper. On the basis
of the auction notice, the respondent no. 2, i.e. the de-facto
complainant, had participated in the public auction and
purchased the property for a sum of Rs. 7,25,000/-
(Rupees seven lakhs twenty-five thousand only). The entire
sale consideration was paid and the sale certificate was
SLP (CRL) NOS. 5815-5816 OF 2023 2
handed over to the respondent no. 2 in the month of July,
2012.
5. However, it has been alleged that when the complainant
approached the Sub-Registrar, Palayankottai to register
the said sale certificate, respondent no. 2 came to know
that the property in question was already acquired by the
Tamil Nadu Housing Board. It is then in 2013 that the
respondent no. 2 filed a consumer complaint before the
District Consumer Redressal Forum vide Consumer O.P.
No. 58/2013 against the Chairman, Managing Director
and Senior Manager of HDFC Ltd.
6. Further, the complainant filed a complaint under Section
190 of Cr.P.C. before the Judicial Magistrate Court,
Tirunelveli and the Court referred the matter to City Crime
Branch Tirunelveli under Section 156(3) of Cr.P.C.
Accordingly, FIR in Crime No. 21/2014 was registered on
15.07.2014 under Sections 197, 417, 418, 467, 468 and
420 of the IPC wherein the Branch Manager, Tirunelveli
was arrayed as the first accused and the appellant herein
was arrayed as the second accused. It was alleged in the
FIR that the accused persons, by suppressing the
acquisition of the property by the Tamil Nadu Housing
Board, sold the property to the de-facto complainant in the
public auction and, thereby, cheated her. After completion
SLP (CRL) NOS. 5815-5816 OF 2023 3
of the investigation, chargesheet was filed against the
accused persons and the Judicial Magistrate No. I,
Tirunelveli has also taken cognizance of the final report in
CC. No. 308 of 2016.
7. Aggrieved by the filing of chargesheet, the appellant
preferred an application under Section 482 of Cr.P.C.
seeking quashing of the criminal proceedings against him.
The High Court, vide the impugned order, refused to
provide the relief sought and held that a prima facie case
is made out against the appellant and it is not a fit case
for quashing of the final report at the threshold. It was also
observed by the High Court that the appellant, with a
dishonest intention, suppressed the very fact of the
encumbrance by the Tamil Nadu Housing Board in the
subject property and made false promise that the property
was free from encumbrance and made the de-facto
complainant to participate in the auction sale and induced
her to purchase the property. Thus, the offence of cheating
is prima facie made out against the appellant. Similar
observations were also rendered regarding the offence of
issuing a false certificate as well as forgery against the
appellant and the first accused.
8. Aggrieved by the impugned order, the appellant is before
us.
SLP (CRL) NOS. 5815-5816 OF 2023 4
9. We have heard Ms. Sonia Mathur, learned Senior Counsel
appearing for the appellant and Mr. V. Krishnamurthy,
learned Additional Advocate General appearing for the
respondent no. 1, and also perused the material on record.
Despite service of notice, nobody has entered appearance
on behalf of respondent no.2.
10. The chief contention of the appellant is that he was
appointed as the Manager at the Head Office of HDFC
Bank on 03.11.2014 whereas the auction process and
issuance of the sale certificate took place in 2012. At the
relevant time, he was only serving as an Assistant Manager
and it was solely the Manager who was authorized to
initiate proceedings under the SARFAESI Act. Rule 2(a) of
the Security Interest (Enforcement) Rules, 2002 defined
authorized officer as follows:
““authorized officer” means an officer not less than a
chief manager of a public sector bank or equivalent,
as specified by the Board of Directors of Board of
Trustees of the secured creditor or any other person
or authority exercising powers of superintendence,
direction and control of the business or affairs of the
secured creditor, as the case may be, to exercise the
rights of a secured creditor under the [Act].”
11. It was submitted that the appellant had no role in the
transaction that led to the criminal proceedings, and the
initiation of an FIR against him amounts to an abuse of
SLP (CRL) NOS. 5815-5816 OF 2023 5
the legal process, giving a civil dispute an unjustified
criminal color.
12. Further, it was submitted by the appellant that the
consumer complaint preferred by the respondent no. 2 has
been dismissed by the District Consumer Disputes
Redressal Commission vide order dated 14.07.2022
wherein it was observed that the possession receipt, which
was signed by the complainant, clearly showed her
awareness of the acquisition process before participating
in the auction. Therefore, having failed in civil proceedings
against the appellant, the present FIR is an attempt to
further harass the appellant and pressurize him to return
the sale consideration even though the complainant is
currently enjoying the possession of the property in
question.
13. Lastly, it was contended by the appellant that Section 32
of the SARFAESI Act provides immunity to secured
creditors and their officers for actions taken in good faith
under the Act. Further, this Court has categorically held
2
in K. Virupaksha v. State of Karnataka that once
proceedings under the SARFAESI Act have been initiated
and concluded, criminal proceedings on the same subject
2
(2020) 4 SCC 440
SLP (CRL) NOS. 5815-5816 OF 2023 6
matter cannot be entertained. As such, the initiation of
criminal proceedings against the appellant is contrary to
the principles laid down in the above case.
14. On the contrary, the respondent no. 1 has submitted that
the complainant was completely unaware of the fact that
the said property was already acquired by the Tamil Nadu
Housing Board and only when she went to the Sub-
Registrar to register the property, she was informed that it
was already acquired by the Housing Board in 2003.
Therefore, despite taking all reasonable care, it would have
been impossible for the complainant to know about this
acquisition which was not disclosed to the complainant,
neither at the time of the auction nor at the time of
payment of consideration.
15. It was further contended by the respondent that the
appellant herein cannot take the plea that the said auction
was done on the basis of the condition of “as is what is”
and “as is where is” basis. Section 55 of the Transfer of
Property Act, 1882 and the judgment in case of Mrs.
Leelamma Mathew v. M/s Indian Overseas Banks &
3
Ors. were relied on by the respondent in support of this
contention.
3
Civil Appeal No. 7128 of 2012
SLP (CRL) NOS. 5815-5816 OF 2023 7
16. Lastly, it was argued that the protection under Section 32
of the SRAFAESI Act does not apply as the appellant’s
actions were not done in good faith. The concealment of
the property’s acquisition status and misrepresentation to
the auction purchaser indicate deliberate wrongdoing.
Therefore, it was submitted that the High Court has rightly
refused to quash the charge sheet as the allegations in the
FIR and the evidence collected during the investigation
establish the necessity of trial and statutory protection
cannot be used as a shield for fraudulent conduct.
17. After due consideration of the rival submissions of both
the parties, the appellant’s argument as to him not being
the authorized officer at the relevant time has caught our
attention and calls for our deliberation.
18. It is evident that the sale certificate was issued by the
appellant’s predecessor and, at the relevant time, the
appellant was not the authorized officer empowered to
issue the certificate. In fact, right from the initiation of the
auction process to the issuance of sale certificate, no direct
involvement of the appellant can be seen as he was not the
authorized officer during the said period and assumed the
office of Manager only in November, 2014. Therefore, it
becomes clear as day that the appellant had no role to play
in the transaction leading to the FIR as he was not a
SLP (CRL) NOS. 5815-5816 OF 2023 8
signatory to the sale certificate. Since the appellant was
neither the authorized officer at the relevant time nor
responsible for the auction process or issuance of the sale
certificate, the allegations against him are baseless and do
not attract criminal liability. The continuation of the
instant criminal proceedings against the appellant shall
lead to abuse of process of law, cause nothing but
miscarriage of justice and inordinately harass the
appellant who has been implicated without due cause.
19. Accordingly, in light of the above discussion, the appeals
are allowed and the impugned order is set aside. The
criminal proceedings against the appellant arising out of
CC. No. 308 of 2016 on the file of the Judicial Magistrate
No. 1, Tirunelveli are, hereby, quashed.
20. Interlocutory application(s), if any, shall stand disposed of.
………………………. .J.
[VIKRAM NATH]
21.
………………………. .J.
[SANDEEP MEHTA]
NEW DELHI;
APRIL 23, 2025
SLP (CRL) NOS. 5815-5816 OF 2023 9
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO(S)………………. OF 2025
(ARISING FROM SLP(CRL) NOS.5815-5816 OF 2023)
SIVAKUMAR ...APPELLANT(S)
VERSUS
THE INSPECTOR OF
POLICE & ANR. ...RESPONDENT(S)
J U D G M E N T
VIKRAM NATH, J.
1. Leave granted.
2. The present appeals have been preferred by the accused-
appellant against the common judgment and order dated
12.01.2023 passed by the High Court of Madras in Crl.
O.P. (MD) 21417 of 2016 and Crl. O.P. (MD) No. 10979 of
2016, whereby the High Court dismissed the appellant’s
petition under Section 482 of the Code of Criminal
1
Procedure, 1973 to quash the chargesheet and
consequential proceedings arising out of CC. No. 308 of
Signature Not Verified
Digitally signed by
SONIA BHASIN
Date: 2025.04.23
17:53:06 IST
Reason:
1
Cr.P.C.
SLP (CRL) NOS. 5815-5816 OF 2023 1
2016 on the file of the Judicial Magistrate No. 1,
Tirunelveli.
3. The case of the prosecution in the instant matter is that
the first accused was working as a Branch Manager in
HDFC Limited at Palayankottai Branch and the second
accused, i.e. the appellant herein, was working as a
Manager in the Head Office of HDFC Limited at
Thiruvananthapuram when the alleged offence was
committed. In 2004, one Mr. A. Kannan had borrowed loan
from HDFC Limited by mortgaging his immovable property
in Survey No. 145/1 (Plot No. 96) situated at Keela Natham
Village, Palayankottai Taluk, Tirunelveli District and the
superstructure built up therein.
4. Since the said borrower had defaulted in repaying the loan
amount, HDFC Ltd. initiated proceedings under the
provisions of SARFAESI Act and auction notice for the
above-mentioned property was issued on 22.05.2012 by
the Head Office in the vernacular newspaper. On the basis
of the auction notice, the respondent no. 2, i.e. the de-facto
complainant, had participated in the public auction and
purchased the property for a sum of Rs. 7,25,000/-
(Rupees seven lakhs twenty-five thousand only). The entire
sale consideration was paid and the sale certificate was
SLP (CRL) NOS. 5815-5816 OF 2023 2
handed over to the respondent no. 2 in the month of July,
2012.
5. However, it has been alleged that when the complainant
approached the Sub-Registrar, Palayankottai to register
the said sale certificate, respondent no. 2 came to know
that the property in question was already acquired by the
Tamil Nadu Housing Board. It is then in 2013 that the
respondent no. 2 filed a consumer complaint before the
District Consumer Redressal Forum vide Consumer O.P.
No. 58/2013 against the Chairman, Managing Director
and Senior Manager of HDFC Ltd.
6. Further, the complainant filed a complaint under Section
190 of Cr.P.C. before the Judicial Magistrate Court,
Tirunelveli and the Court referred the matter to City Crime
Branch Tirunelveli under Section 156(3) of Cr.P.C.
Accordingly, FIR in Crime No. 21/2014 was registered on
15.07.2014 under Sections 197, 417, 418, 467, 468 and
420 of the IPC wherein the Branch Manager, Tirunelveli
was arrayed as the first accused and the appellant herein
was arrayed as the second accused. It was alleged in the
FIR that the accused persons, by suppressing the
acquisition of the property by the Tamil Nadu Housing
Board, sold the property to the de-facto complainant in the
public auction and, thereby, cheated her. After completion
SLP (CRL) NOS. 5815-5816 OF 2023 3
of the investigation, chargesheet was filed against the
accused persons and the Judicial Magistrate No. I,
Tirunelveli has also taken cognizance of the final report in
CC. No. 308 of 2016.
7. Aggrieved by the filing of chargesheet, the appellant
preferred an application under Section 482 of Cr.P.C.
seeking quashing of the criminal proceedings against him.
The High Court, vide the impugned order, refused to
provide the relief sought and held that a prima facie case
is made out against the appellant and it is not a fit case
for quashing of the final report at the threshold. It was also
observed by the High Court that the appellant, with a
dishonest intention, suppressed the very fact of the
encumbrance by the Tamil Nadu Housing Board in the
subject property and made false promise that the property
was free from encumbrance and made the de-facto
complainant to participate in the auction sale and induced
her to purchase the property. Thus, the offence of cheating
is prima facie made out against the appellant. Similar
observations were also rendered regarding the offence of
issuing a false certificate as well as forgery against the
appellant and the first accused.
8. Aggrieved by the impugned order, the appellant is before
us.
SLP (CRL) NOS. 5815-5816 OF 2023 4
9. We have heard Ms. Sonia Mathur, learned Senior Counsel
appearing for the appellant and Mr. V. Krishnamurthy,
learned Additional Advocate General appearing for the
respondent no. 1, and also perused the material on record.
Despite service of notice, nobody has entered appearance
on behalf of respondent no.2.
10. The chief contention of the appellant is that he was
appointed as the Manager at the Head Office of HDFC
Bank on 03.11.2014 whereas the auction process and
issuance of the sale certificate took place in 2012. At the
relevant time, he was only serving as an Assistant Manager
and it was solely the Manager who was authorized to
initiate proceedings under the SARFAESI Act. Rule 2(a) of
the Security Interest (Enforcement) Rules, 2002 defined
authorized officer as follows:
““authorized officer” means an officer not less than a
chief manager of a public sector bank or equivalent,
as specified by the Board of Directors of Board of
Trustees of the secured creditor or any other person
or authority exercising powers of superintendence,
direction and control of the business or affairs of the
secured creditor, as the case may be, to exercise the
rights of a secured creditor under the [Act].”
11. It was submitted that the appellant had no role in the
transaction that led to the criminal proceedings, and the
initiation of an FIR against him amounts to an abuse of
SLP (CRL) NOS. 5815-5816 OF 2023 5
the legal process, giving a civil dispute an unjustified
criminal color.
12. Further, it was submitted by the appellant that the
consumer complaint preferred by the respondent no. 2 has
been dismissed by the District Consumer Disputes
Redressal Commission vide order dated 14.07.2022
wherein it was observed that the possession receipt, which
was signed by the complainant, clearly showed her
awareness of the acquisition process before participating
in the auction. Therefore, having failed in civil proceedings
against the appellant, the present FIR is an attempt to
further harass the appellant and pressurize him to return
the sale consideration even though the complainant is
currently enjoying the possession of the property in
question.
13. Lastly, it was contended by the appellant that Section 32
of the SARFAESI Act provides immunity to secured
creditors and their officers for actions taken in good faith
under the Act. Further, this Court has categorically held
2
in K. Virupaksha v. State of Karnataka that once
proceedings under the SARFAESI Act have been initiated
and concluded, criminal proceedings on the same subject
2
(2020) 4 SCC 440
SLP (CRL) NOS. 5815-5816 OF 2023 6
matter cannot be entertained. As such, the initiation of
criminal proceedings against the appellant is contrary to
the principles laid down in the above case.
14. On the contrary, the respondent no. 1 has submitted that
the complainant was completely unaware of the fact that
the said property was already acquired by the Tamil Nadu
Housing Board and only when she went to the Sub-
Registrar to register the property, she was informed that it
was already acquired by the Housing Board in 2003.
Therefore, despite taking all reasonable care, it would have
been impossible for the complainant to know about this
acquisition which was not disclosed to the complainant,
neither at the time of the auction nor at the time of
payment of consideration.
15. It was further contended by the respondent that the
appellant herein cannot take the plea that the said auction
was done on the basis of the condition of “as is what is”
and “as is where is” basis. Section 55 of the Transfer of
Property Act, 1882 and the judgment in case of Mrs.
Leelamma Mathew v. M/s Indian Overseas Banks &
3
Ors. were relied on by the respondent in support of this
contention.
3
Civil Appeal No. 7128 of 2012
SLP (CRL) NOS. 5815-5816 OF 2023 7
16. Lastly, it was argued that the protection under Section 32
of the SRAFAESI Act does not apply as the appellant’s
actions were not done in good faith. The concealment of
the property’s acquisition status and misrepresentation to
the auction purchaser indicate deliberate wrongdoing.
Therefore, it was submitted that the High Court has rightly
refused to quash the charge sheet as the allegations in the
FIR and the evidence collected during the investigation
establish the necessity of trial and statutory protection
cannot be used as a shield for fraudulent conduct.
17. After due consideration of the rival submissions of both
the parties, the appellant’s argument as to him not being
the authorized officer at the relevant time has caught our
attention and calls for our deliberation.
18. It is evident that the sale certificate was issued by the
appellant’s predecessor and, at the relevant time, the
appellant was not the authorized officer empowered to
issue the certificate. In fact, right from the initiation of the
auction process to the issuance of sale certificate, no direct
involvement of the appellant can be seen as he was not the
authorized officer during the said period and assumed the
office of Manager only in November, 2014. Therefore, it
becomes clear as day that the appellant had no role to play
in the transaction leading to the FIR as he was not a
SLP (CRL) NOS. 5815-5816 OF 2023 8
signatory to the sale certificate. Since the appellant was
neither the authorized officer at the relevant time nor
responsible for the auction process or issuance of the sale
certificate, the allegations against him are baseless and do
not attract criminal liability. The continuation of the
instant criminal proceedings against the appellant shall
lead to abuse of process of law, cause nothing but
miscarriage of justice and inordinately harass the
appellant who has been implicated without due cause.
19. Accordingly, in light of the above discussion, the appeals
are allowed and the impugned order is set aside. The
criminal proceedings against the appellant arising out of
CC. No. 308 of 2016 on the file of the Judicial Magistrate
No. 1, Tirunelveli are, hereby, quashed.
20. Interlocutory application(s), if any, shall stand disposed of.
………………………. .J.
[VIKRAM NATH]
21.
………………………. .J.
[SANDEEP MEHTA]
NEW DELHI;
APRIL 23, 2025
SLP (CRL) NOS. 5815-5816 OF 2023 9