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SC says Bank procedures are not always Sacrosanct

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The Supreme Court has held that the all actions taken by banks are not to be treated as sacrosanct and can be questioned under the provisions of SARFAESI Act. The apex court said this is so when there exists discrepancies in which a Bank has proceeded against a secured debtor and the debtor can assail the orders provided under the said law.

The only issue before the Supreme Court was whether it is permissible to enforce contractual obligation by resorting to filing criminal complaint.

The court was hearing a case in which the appellants were employees of the Canara Bank which sanctioned a term loan of Rs. 2.68 crores to the complainant/ debtor. The loan account became NPA after which  notices under Sections 13(2) & 13(4) were issued which were subsequently challenged before the DRT and DRAT. After dismissal of appeals the complainant moved an application under section 156(3) of CrPC before the JMFC which in turn allowed the application and directed registration of FIR u/s 511, 109, 34, 120­B, 406, 409, 420, 405, 417 and 426 of IPC.

The appellants herein filed a petition before the Karnataka High Court, Dharwad bench u/s 482 of CrPC for quashing of the above said FIR. The High Court declined to exercise its inherent jurisdiction to quash the FIR, which was challenged before the Supreme Court.

Justice A.S.  Bopanna speaking for the bench held that if the complaint is allowed to stand it would result in gross miscarriage of justice as the continuation of investigation would permit the police to redo the entire process which would amount to review of orders passed by the competent courts under the SARFAESI Act which is neither permissible nor desirable in law. Hence, the complaint filed before the JMFC and FIR registered stands quashed.

18450-2019-5-1503-21162-Judgement-03-Mar-2020.pdf

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