Bombay High Court
VASANTRAO WAMANRAO MOREYversusTHE STATE OF MAHARASHTRA AND ANR.
- Decided
- Disposal
- Allowed
Holding
The High Court quashed the FIR and ordered the petitioner to pay costs, while permitting the bank to recover the claimed interest through appropriate legal means.
Summary
Petitioner Vasantrao Morey, a builder, obtained housing loans totalling Rs 18.75 lakh from Dena Bank (now Bank of Baroda) for five borrowers, allegedly using forged documents. An FIR was lodged under Sections 465, 467, 468, 471, 420 and 120B of the IPC. The petitioner repaid the entire loan amount, which the bank accepted, but the bank claimed an outstanding interest of Rs 1.13 lakh and sought to continue the criminal prosecution. The petitioner filed a writ petition under the inherent powers of the High Court to quash the FIR. Relying on Section 482 of the Criminal Procedure Code (and the analogous Section 528 of the BNSS) and the Bhajan Lal guidelines, the Court held that the prosecution was unnecessary as the bank suffered no monetary loss and the matter could be dealt with through civil recovery of interest. The Court quashed the FIR, ordered the petitioner to pay Rs 25,000 to a charitable fund, and left the bank free to pursue the interest amount by law.
Issues considered
- Whether the FIR filed under Sections 465, 467, 468, 471, 420 and 120B IPC can be quashed under the inherent powers of the High Court.
- Whether the repayment of the principal loan amount bars continuation of criminal prosecution for alleged fraud.
- Whether the bank’s claim for unpaid interest can be pursued only through civil remedies.
Legislation cited
- B.N.S.S. — s. 528
- Code of Criminal Procedure, 1973 — s. 482
- Indian Penal Code, 1860 — s. 120B, 420, 465, 467, 468, 471
Subjects
- criminal procedure
- quashing FIR
- Section 482
- fraud
- housing loan
- interest recovery
- inherent powers
- bank merger
Judgment
36. CRI WP-1446-08.odt
Amberkar
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
WRIT PETITION NO. 1446 OF 2008
Vasantrao Wamanrao Morey .. Petitioner
Versus
The State of Maharashtra & Ors. .. Respondents
....................
Mr. Ashwin Vasista, Advocate for Petitioner
Ms. Shilpa G. Talhar, APP for State
Mr. A.R. Bamne i/by M/s. A.R. Bamne & Co., Advocate for
Respondent No. 3
...................
CORAM : MILIND N. JADHAV, J.
DATE : SEPTEMBER 10, 2026
P. C.:
1. Heard Mr. Vasista, learned Advocate for Petitioner; Ms. Talhar,
learned APP for State and Mr. Bamne, learned Advocate for
Respondent No. 3.
2. In so far as Respondent No. 2 is concerned, none appears for
them. On the previous occasion, appropriate directions were passed.
Their consent affidavit is already on record. Respondent No. 2 is State
Bank of Mysore now merged with State Bank of India whose
complaint amount i.e. Rs. 1,35,00,000/- is entirely repaid by
Petitioner. They are the complainant in FIR No. 62 of 2005 originally
registered with Santacruz Police Station later transferred to
Respondent No. 1 G.B.C.B.C.I.D., Economic Offence Wing, Mumbai
being C.R. No. 7 of 20025 registered under Section 465, 467, 468,
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471, 420, 120(B) of Indian Penal Code, 1860 being Case No.
119/PW/2006 pending before the Addl. Chief Metropolitan
Magistrate, 19th Court, Esplanade, Mumbai. In so far as Respondent
No. 3 is concerned, he is added as a party since 5 borrowers had
approached the Respondent No. 3 for availing of the bank loan.
3. Present Petition is a shelf matter of 2008. It saw the light of the
day on 13.08.2026, when the following order was passed:
"1. Heard Mr. Vasista, learned Advocate for Petitioner and Ms. Gotad,
learned APP for Respondent No.1 and Mr. Bamne, learned Advocate for
Respondent No.3.
2. This criminal Writ Petition seeks quashing of the proceedings as filed
by the Petitioner. Respondent No.3 is arrayed as Dena Bank of India. It is
now merged into Bank of Baroda. Appropriate amendment to that effect is
permitted to be carried out by the Advocate for the Petitioner forthwith in
the presence of the Court.
3. Respondent No.2 in the original criminal Writ Petition is arrayed as
State Bank of Mysore. Since State Bank of Mysore has merged into State
Bank of India, that amendment is also permitted to be carried out
forthwith, just now, likewise. Re-verification stands dispensed with for both
the amendments.
4. Hence, issue notice to the Respondents.
5. Humdast permitted. In addition to Court’s notice, Petitioner is
directed to serve the Respondents a copy of this order and amended Writ
Petition and inform about the next date of hearing by any permissible mode
of service and file appropriate affidavit of service with tangible proof
thereof on the next adjourned date.
6. Stand over to 03rd September, 2026. "
4. Pursuant thereto, Respondent No. 3, erstwhile Dena Bank and
now merged with Bank of Baroda, is duly represented by Mr. Bamne,
learned Advocate.
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5. It is the case of the prosecution qua the Petitioner before me
that in or about October 2003, Petitioner who was carrying on
business as builder approached the erstwhile Respondent No. 3 - Dena
Bank with a request for seeking housing loans for the buyers of flats in
his project. In all 5 borrowers availed loan amount of Rs. 3.75 Lakh
each, totally aggregating to Rs. 18.75 Lakh from the bank which was
issued in the name of the Company belonging to the Petitioner, namely
M/s. Dharti Constructions Private Limited.
6. It is the case of prosecution that the bank brought to the notice
of the prosecuting agency that certain documents which were used for
procuring the housing loan for the 5 borrowers were fraudulent and
fabricated and therefore complaint of cheating was originally lodged.
One of the major complaint was that stamps and franking done on the
agreements for sale were forged.
7. Insofar as the Respondent No. 3 Bank is concerned, it is not out-
of-pocket or at any monetary loss because immediately after lodging of
the FIR, the Petitioner and 5 borrowers deposited the entire aggregate
amount of Rs. 18.54 Lakh borrowed from the bank towards the
outstanding payment of the said housing loans over a period of time
which the Respondent No. 3 Bank has happily accepted.
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8. Today, Mr. Bamne would, however, contend that the act on the
part of the Petitoner of submitting fraudulent and fabricated
documents amounted to cheating the bank and for that matter FIR
should continue and the prosecution should be taken to its logical end.
9. It is prima facie seen that, even according to the Respondent No.
3 Bank, the amount of repayment of the outstanding amounts was
made by the Petitioner and the borrowers both forthwith and from
time to time, which the bank allowed them to do so and accepted the
same. The bank's only grievance which could probably remain pending
till date is about payment of interest of Rs.1.13 Lakh for the period
23.10.2003 and up to 17.08.2009, when the date of last payment was
made. That not having been paid could be the only plausible grievance
of the bank. Bona fides of the Petitioner and the borrowers, who had
approached the bank have been prima facie shown. The bank has
accepted the amounts.
10. Though Mr. Bamne would persuade me to consider the facts and
submissions made in paragraph No. 2 of the affidavit filed by Dena
Bank, however, in view of what is stated thereafter in paragraph No. 3
and 4, I am not inclined to accept his submissions to prolong and
protract the agony of the Petitioner who has already shown his bona
fides otherwise. Continuation of prosecution would also be
detrimental to the 5 borrowers in question who have also taken the
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efforts of making the repayment and the bank having accepted the
same. If at all any amount has remained due and payable towards
interest, remedy of the bank would be otherwise available to it in
accordance with law. Criminal prosecution cannot be used for recovery
of amounts. However, in the present case, it is seen that the moment
criminal prosecution is launched, immediately thereafter, the
Petitioner and the borrowers started depositing the outstanding
amounts, which is certified and affirmed in the affidavit filed by the
bank itself. In so far as any outstanding amount towards interest may
be pending, the bank has given a breakup of the said amount.
11. According to the bank, an amount of Rs. 1.13 Lakh is
outstanding, but a humongous rate of interest of 9.25% is applied. The
bank has also levied penal interest. Merely stating the same on
affidavit cannot enure to the benefit of the bank. The bank is free to
take appropriate steps as available to it in accordance with law.
12. Satisfaction of the loan amount with the bank having been done
in full and the bank having accepted and certified the same in its
affidavit dated 17.09.2009 (appended at page Nos. 88-91 of the
Petition) and the Letter of Authority (appended at page 92 thereof)
having been considered by the Court, the Petition deserves to be
allowed. However, in view of the criminal prosecution having been
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launched by the complainant on the act of the Petitioner, I direct the
Petitioner to pay costs to the charity.
13. Section 482 of the Criminal Procedure Code, 1973 conferred
inherent powers on High Courts to pass such orders as are justified to
give effect to any order in the Court, prevent abuse of process of any
Court or secure the ends of justice. In the BNSS this provision stands
incorporated with Section 528 which substantially reproduces the
language and intent of Section 482 of the CRPC, 1973 High Courts
invoke this provision to step in where cases have been instituted with
malafide motives or to harass the accused person thereby avoiding
procedural harassment. It empowers Court to dismiss FIRs or criminal
proceedings if there is no prima facie case or evidence against the
accused person/s or if orders are made in violation of the principles of
natural justice. The exercise of such powers under Section 482 of
CRPC and now Section 528 of BNSS remains discretionary and varies
from case to case.
14. In State of Harayana vs Bhajan Lal1 the Supreme Court laid
down model categories and guidelines in paragraph No. 102 of the
said judgment in which the FIRs can be quashed. The Supreme Court
has furthered asserted that power under Section 482 is an
acknowledgment of "powers inherent" and not the source of powers
1 1992 AIR 604
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additional. It has held that even non compoundable offences can be
quashed where necessary. It has held that High Courts have to decide
whether the prosecution of an offence would further or be against the
interest of justice. It is also held that grievous offences such as murder,
rape, and dacoity cannot ordinarily be quashed even after settlement
because they involve societal implication.
15. Applying the aforesaid principles to the facts of the present case,
I am of the opinion that the action of the Petitioner resulting in the
complainant invoking criminal proceedings, the Petitioner should pay
costs. Hence, Petitioner is directed to pay costs of Rs. 25,000/- to
Account Name: Bar Council of Maharashtra and Goa Advocate Aid
Fund; Bank Name: State Bank of India; Branch: Mumbai Main Branch;
Account No.: 10996711937; and IFSC: SBIN0000300 within a period
of two (2) weeks from the date of uploading of this order.
16. Petitioner through his learned Advocates agrees to pay the
aforesaid costs amount to the charity.
17. Petition is, therefore, allowed in terms of prayer clauses (a) and
(b) which reads thus:-
"(a) that this Hon'ble Court be pleased to pass an appropriate writ, order
and direction thereby quashing and setting aside the FIR No. 62 of
2005 originally with Santacruz Police Station later transferred to
Respondent No. 1 G.B.C.B.C.I.D., Economic Offence Wing, Mumbai
being C.R. No. 7 of 20025 registered under Section 465, 467, 468,
471, 420, 120(B) on such terms as this Hon'ble Court may deem fit
and proper being Case No. 119/PW/2006 pending on the rank and
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files of Addl. Chief Metropolitan Magistrate, 19th Court, Esplanade,
Mumbai, on such terms as this Hon'ble Court may deem fit and
proper;
(b) that this Hon'ble Court be pleased to pass an appropriate writ, order
and direction thereby Investigating Officer to release all the
documents / properties of the Petitioners' project files being in the
custody of the Investigating Officer;?
18. All contentions of the Bank particularly for recovery of the
interest amount, are otherwise kept open to be pursued by it in
accordance with law.
19. List the Writ Petition for compliance of the order regarding
payment of costs on 01.10.2026.
20. Advocate for Petitioner shall remain present and show
compliance on the returnable date for compliance. If he does not
remain present and there is non-compliance of this order, Court will
pass appropriate order for recall of this order, which shall be noted by
the Petitioner.
21. Petition is allowed and disposed.
Amberkar [ MILIND N. JADHAV, J. ]
Digitally signed by
RAVINDRA RAVINDRA
MOHAN
MOHAN AMBERKAR
AMBERKAR Date: 2026.09.12
17:30:18 +0530
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