Court grants anticipatory bail where financial indiscipline in a mortgage sale lacks prima facie criminal intent.

The applicant sought anticipatory bail regarding FIR No. 505/2022 (PS Gandhi Nagar) registered under Section 420/34 IPC

The prosecution alleged that in 2012, the applicant mortgaged his property to the Bank of India to secure a loan but subsequently sold the property in 2015 without discharging the debt

The FIR was initiated by the lending bank; however, the subsequent purchasers of the property did not file any criminal or civil complaints

During the pendency of the application, it was noted that the applicant and the bank were engaged in a One Time Settlement (OTS) process

The investigation revealed that the original title deeds remained in the bank's possession and no forgery of documents was alleged

1. Whether the act of selling a mortgaged property to a third party, while the original title deeds remain with the bank, constitutes a fit case for custodial interrogation or denial of anticipatory bail under Section 420 IPC

2. Whether a financial dispute between a lender and a borrower regarding the sale of secured assets should be treated as a criminal offense of cheating or a matter of financial indiscipline to be resolved through civil/recovery proceedings

The court applied Section 420 (Cheating) and Section 34 (Common Intention) of the Indian Penal Code (IPC)

The court relied on the principle that every instance of financial indiscipline or breach of contract by a borrower does not automatically equate to the criminal offense of cheating, especially when the lender is the complainant and subsequent buyers have not alleged fraud

The court also considered the procedural status of the investigation under the Bharatiya Nagarik Suraksha Sanhita/CrPC regarding the necessity of arrest when a chargesheet has already been filed

The court reasoned that the dispute was largely commercial in nature, noting that the bank and the applicant were already undergoing an OTS process

A critical factor in the court’s analysis was that the original title deeds were never forged and remained with the bank, ruling out any surreptitious duplication of documents to facilitate the sale

The court observed that the purchasers of the property had not raised any grievances, suggesting a lack of "cheating" in the conventional sense toward the public

The judge highlighted that "not every case of financial indiscipline can be treated as cheating" when the lender lodges the complaint

Since the investigation was complete and the chargesheet had been filed, the court found no justification for custodial interrogation

The application for anticipatory bail was allowed.

The court directed that in the event of arrest, the applicant be released on bail upon furnishing a personal bond of Rs. 10,000/- with one surety of the like amount to the satisfaction of the IO/SHO