SIVAKUMARversusTHE INSPECTOR OF POLICE & ANR.

                 [2025] 4 S.C.R. 1688 : 2025 INSC 558

                              Sivakumar
                                   v.
                     The Inspector of Police & Anr.
                (Criminal Appeal No(s). 2140-2141 of 2025)
                                 23 April 2025
               [Vikram Nath* and Sandeep Mehta, JJ.]


                            Issue for Consideration
       Issue arose as regards the correctness of the order passed by the
       High Court dismissing appellant’s petition u/s.482 CrPC seeking
       quashing of chargesheet against him.

                                   Headnotes†
       Code of Criminal Procedure, 1973 – s.482 – Quashing of
       proceedings – On default of borrower to repay the loan to the
       bank, issuance of auction notice for mortgaged immovable
       property – Respondent no.2, de-facto complainant, purchased
       the property in the public auction – Subsequently, complainant
       came to know that the property was already acquired by the
       Tamil Nadu Housing Board – Complainant filed a complaint
       and FIR was registered under various sections of Penal Code
       wherein Branch Manager of the bank and appellant-Manager of
       Head Office arrayed as the accused – Chargesheet filed and the
       magistrate took cognizance – Thereagainst, the appellant filed
       application u/s.482 for quashing of proceedings – High Court
       held that prima facie case made out against the appellant –
       Correctness:
       Held: 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 – Appellant had no role to play in the transaction leading to
       the FIR as he was not a 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 – Continuation of the instant criminal

* Author
[2025] 4 S.C.R.                                                           1689

               Sivakumar v. The Inspector of Police & Anr.


     proceedings against the appellant would lead to abuse of process
     of law, cause miscarriage of justice and inordinately harass the
     appellant who has been implicated without due cause – Impugned
     order set aside. [Para 18]

                             Case Law Cited
     K. Virupaksha v. State of Karnataka [2020] 2 SCR 1020 : (2020) 4
     SCC 440; Mrs. Leelamma Mathew v. M/s Indian Overseas Banks
     & Ors. [2022] 18 SCR 696 – referred to.

                                List of Acts
     Code of Criminal Procedure, 1973; Security Interest (Enforcement)
     Rules, 2002; Transfer of Property Act, 1882; SARFAESI Act, 2002;
     Penal Code, 1860.

                             List of Keywords
     Quashing of chargesheet; Suppression of acquisition of property;
     Cheating; Dishonest intention; False certificate; Forgery; Immunity
     to secured creditors and their officers; Quashing of criminal
     proceedings; Auction process; Sale certificate.

                            Case Arising From
     CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No(s).
     2140-2141 of 2025
     From the Judgment and Order dated 12.01.2023 of the High Court
     of Judicature at Madras at Madurai in CRLOP (MD) No. 21417
     and 10979 of 2016

                         Appearances for Parties
     Advs. for the Appellant:
     Ms. Sonia Mathur, Sr. Adv., Rajendra Sahu, Ms. Hema Sahu,
     Rishabh Sahu, Nikhil Jaiswal.
     Advs. for the Respondents:
     V. Krishnamurthy, Sr. A.A.G., Sabarish Subramanian, Vishnu
     Unnikrishnan, Ms. Azka Sheikh Kalia, Ms. Jahnavi Taneja, Veshal
     Tyagi, Danish Saifi.
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                 Judgment / Order of the Supreme Court

                                 Judgment

      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
      Procedure, 19731 to quash the chargesheet and consequential
      proceedings arising out of CC. No. 308 of 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 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,


1    Cr.P.C.
[2025] 4 S.C.R.                                                      1691

               Sivakumar v. The Inspector of Police & Anr.


     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 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.
9.   We have heard Ms. Sonia Mathur, learned Senior Counsel appearing
     for the appellant and Mr. V. Krishnamurthy, learned Additional
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     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 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
[2025] 4 S.C.R.                                                      1693

                   Sivakumar v. The Inspector of Police & Anr.


     Court has categorically held in K. Virupaksha v. State of Karnataka2
     that once proceedings under the SARFAESI Act have been initiated
     and concluded, criminal proceedings on the same subject 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 & Ors.3
    were relied on by the respondent in support of this contention.
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.


2   (2020) 4 SCC 440
3   Civil Appeal No. 7128 of 2012
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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 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.

     Result of the case: Appeals allowed.




     †
         Headnotes prepared by: Nidhi Jain