Criminal proceedings against a bank manager were quashed as maliciously instituted to exert pressure during loan recovery.

The complainant alleged that representatives of Central Bank of India informed him that his deceased and allegedly illiterate mother, Savitri Devi, had stood guarantor for a loan availed by Basant Prasad under C.C. Account No. 1884210844. He asserted that neither his mother nor he had any connection with the borrower and alleged that the bank was attempting to recover the loan from them through wrongful means after refusing to provide the relevant loan documents.

The petitioner, who was posted as Branch Manager of the concerned bank branch when recovery proceedings commenced, was impleaded in his official capacity. The loan had allegedly been sanctioned in 2006 and classified as a non-performing asset in 2012, before the petitioner’s posting at the branch. Upon the complainant’s examination on solemn affirmation and examination of inquiry witnesses, the learned Chief Judicial Magistrate proceeded against the petitioner and co-accused Basant Prasad for offences under Sections 420 and 467/34 of the IPC. The petitioner invoked the High Court’s inherent jurisdiction to quash the criminal proceedings, contending that the complaint disclosed no criminal offence and had been filed out of personal vengeance.

Whether the allegations in the complaint, even if accepted in their entirety, disclosed the commission of offences under Sections 420 and 467 of the IPC against the petitioner, who was not posted at the time of sanction of the loan or its classification as an NPA?

Whether continuation of the criminal proceedings against the petitioner amounted to an abuse of process and warranted quashing under the principles governing Section 482 of the CrPC?

The Court considered Sections 420 and 467 of the IPC, relating respectively to cheating and forgery of a valuable security or specified document, along with the principles governing the High Court’s inherent jurisdiction under Section 482 of the CrPC.

It relied on State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335, particularly the categories permitting quashing where the allegations, taken at face value, do not constitute an offence, where no case is made out on the basis of the uncontroverted allegations and supporting material, or where the proceedings are manifestly attended with mala fides and instituted with an ulterior motive.

The Court found that the petitioner was not posted in the bank when the loan was sanctioned or when the account was declared an NPA; he became involved only when recovery proceedings were initiated against the alleged guarantor.

The complaint did not attribute to him any specific act of deception, fraudulent inducement, creation of a forged document, or participation in the alleged loan transaction sufficient to constitute the offences invoked. The Court therefore treated the criminal complaint as having been instituted against the petitioner for an ulterior purpose and out of personal vengeance, falling within the categories identified in Bhajan Lal for preventing abuse of process.

It accordingly quashed and set aside the impugned order of cognizance/summoning and all consequential proceedings arising from Complaint Case No. 1531C/2015, insofar as they related to the petitioner. The application was allowed, and the trial court record was directed to be returned.