Himachal Pradesh High Court
Kailash Chand vs Of on 18 April, 2026
Author: Sandeep Sharma
Bench: Sandeep Sharma
2026:HHC:12476
yIN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr.MMO No.424 of 2018 with
Cr.MMO Nos.362, 386 & 359 of 2018
.
Judgment reserved on: 30.03.2026
Date of Decision: 18.04.2026
_______________________________________________________
1. Cr.MMO No.424 of 2018
Kailash Chand .......Petitioner
Versus
of
State of H.P & another ... Respondents
2. Cr.MMO No.362 of 2018
Baljinder Pal Singh .......Petitioner
rt Versus
State of H.P & another ... Respondents
3. Cr.MMO No.386 of 2018
Manoj Kumar Bansal .......Petitioner
Versus
State of H.P & another ... Respondents
4. Cr.MMO No.359 of 2018
Ankur Sharma .......Petitioner
Versus
Liaquat Ali Khan ... Respondent
_______________________________________________________
Coram:
Hon'ble Mr. Justice Sandeep Sharma, Judge.
Whether approved for reporting? 1 Yes.
For the Petitioner(s): Mr. Rahul Gathania, Advocate, for the
petitioner(s) in Cr.MMO Nos. 424, 359 and
386 of 2018.
Mr. Vijay Arora, Senior Advocate with Mr.
Hitansh Raj and Mr. Gaurav Kumar,
Advocates for the petitioner in Cr.MMO
No.362 of 2018.
1
Whether the reporters of the local papers may be allowed to see the judgment?
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For the Respondents: Mr. Rajan Kahol & Mr. Vishal Panwar,
Additional Advocate Generals with Mr. Ravi
Chauhan & Mr. Anish Banshtu, Deputy
Advocates General, for the respondent/State,
.
in all the petitions, except Cr.MMO No.359 of
2018.
Mr. Sumit Raj Sharma, Advocate, for
respondent No.2 in Cr.MMO Nos. 424, 362
and 386 of 2018 and for sole respondent in
Cr.MMO No.359 of 2018.
_______________________________________________________
Sandeep Sharma, Judge:
of
Since common questions of law and facts are involved in
the above-captioned petitions and the petitioners herein are aggrieved
rt
of order dated 02.07.2018, passed by learned Sessions Judge,
Nahan, District Sirmour, Himachal Pradesh, in case No. 3-Cr.R/10 of
2016, affirming the order dated 22.12.2014, passed by learned
Judicial Magistrate, First Class, Nahan, Himachal Pradesh, thereby
issuing process against the petitioners for the commission of offences
punishable under Sections 409, 465, 467, 468, 471 read with Section
120-B of IPC, all the petitions were heard together and now same are
being disposed of by this common order.
2. For having bird’s eye view, the quintessential facts,
which are common in all the cases, save and except the official
positions held by the petitioners in State Bank of India and New India
Assurance Company, are that respondent No.2, Sh. Liaquat Ali Khan
and Shri Kapil Chaudhary (later on substituted by Ahsan Ullah), were
partners of the firm M/s Paradise Packers. The said firm had availed
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Cash Credit (Hypothecation) and Term Loan from the State Bank of
India, Branch Office, Kala Amb, and had mortgaged its property with
.
the aforesaid bank as Security. Subsequently, Sh. Kpil Choudhary
retired from the company and in his place, Sh. Ahsan Ullah was
inducted as partner. On the request of respondent No.2, Sh. Liaquat
Ali Khan and above named Ahsan Ullah, the credit facilities were
of
renewed by the bank. However, partners of the firm, as named
hereinabove, failed to maintain financial discipline, as a result
whereof, the loan account became irregular and was ultimately
rt
declared as Non-Performing Asset (NPA). Consequently, the bank
issued notice dated 26.11.2010 under Section 13(2) of the SARFAESI
Act and thereafter took physical possession of the secured assets of
the Company. Since respondent No.2 and another partner of
Company failed to liquidate the outstanding liability, bank filed O.A
No.466 of 2011(Annexure P-11) before the Debts Recovery Tribunal-
1, Chandigarh, for recovery of the outstanding amount.
3. Vide order dated 15.07.2017, afore Tribunal allowed the
application of the bank and held respondent No.2 alongwith another
partner, jointly and severally liable to pay a total sum of Rs.28,
80,998/- to the bank alongwith costs and current as well as future
Interest @15% and @13.75% per annum, respectively with monthly
rests on the Term Loan and Cash Credit Account respectively, from
the date of filing of the OA, i.e., 29.07.2011 till the date of realization.
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4. Pleadings adduced on record by the parties reveal that
aforesaid order has attained finality, because, no appeal, whatsoever
.
was ever filed by respondent No.2 or his partner in the superior Court
of law. Before aforesaid order passed by Debts Recovery Tribunal,
Chandigarh could be enforced, respondent No.2 filed an application
under S.156(3) of Cr.P.C. before the learned Judicial Magistrate, First
of
Class, Nahan, District Sirmour, Himachal Pradesh, seeking
registration of an FIR against the petitioners, averring therein that he
is one of the partners of M/s Paradise Packers, Village Rampur Jatta,
rt
Nahan road, P.O. Kala Amb, District Sirmour, Himachal Pradesh,
which was established for the purpose of manufacture/production
of all types adhesive tapes and the said unit was financed by the
State bank of India, Branch Kala Amb, District Sirmour, Himachal
Pradesh by providing a term loan of Rs. 10 Lakhs and also cash
credit limit of Rs. 17 lakhs. Respondent No.2 further alleged that the
Industrial Unit was running successfully and some discrepancies were
found in the loan account by the complainant, which were brought to
the notice of the then Branch Manager Sh. Kailash Chand and the
Field Officer Sh. Ankur (petitioners herein), who informed that as per
bank norms, the industrial unit including machinery and raw material,
was required to be insured and that the bank had already obtained
such insurance. Respondent No.2 further alleged that no signatures
of the complainant or his partner were obtained on the
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proposal forms for such insurance, but yet petitioners, namely Sh.
Kailash Chand and Sh. Ankur along with agent of the New India
.
Assurance Company, namely Shri Baljinder Singh, forged the writings
and signatures on the proposal forms. He further alleged that no
survey was ever conducted by the Insurance company before insuring
the industrial unit and bank had got insurance policy for all types of
of
cardboard and other raw material used for manufacture of
finished/semi-finished cardboard boxes, whereas industrial units was
only manufacturing all types of adhesive tapes and not cardboards as
rt
was mentioned in the policy. Respondent No.2 further alleged that
thereafter he wrote a letter dated 26.5.2008 apprising the bank
officials regarding undervaluation as well as also wrong mentioning of
the production process in the policy and asked the bank to get the
policy corrected, on which petitioners Sh. Kailash Chand and Shri
Ankur assured that necessary correction shall be got done, but there
was no renewal on the expiry of the policy despite his requests to get
the policy renewed for the correct amount and the for correct
purposes after proper survey. Respondent No.2 further alleged that
on seeing the callous attitude of Sh. Kailash Chand and Field Officer
Shri Ankur, who at the relevant time were working as Manager and
Field Officer, respectively, in the bank, he himself got next insurance
policy done from the Oriental Insurance Company, Chandigarh on
4.8.2009 with correct valuation and the purpose of the industrial unit
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for manufacturing of adhesive tapes, which was effective from
4.8.2009 till 3.8.2010. The amount of insurance was Rs. 51,25,000/-,
.
out of which Rs. 14 Lakh were against machinery, Rs. 25 Lakh for the
raw material Rs. 12 Lakh for the building and Rs.25,000/- for furniture
and fixtures. Respondent No.2 apprised the Manager of the bank i.e.
petitioner namely Sh. Kailash Chand regarding comprehensive policy
of
obtained by him with a further instructions to the bank officials not to
renew the insurance taken by them in past. Respondent No.2 further
alleged that surprisingly again the amount from the account of the firm
rt
was debited towards insurance purchased by petitioners Shri Kailash
Chand and Shri Ankur from Sh. Baljinder Singh during the
subsistence of the policy, which was obtained by him from Oriental
Insurance Company. He alleged that on inquiry, he was informed that
inadvertently the bank officials had taken the Insurance from New
India Assurance Company Limited, which was effective from
12.4.2010 to midnight of 11.4.2011. He alleged that petitioner Shri
Kailash Chand, Manager of the Bank, was thereafter asked by him to
provide the copy of new insurance policy, but same was not supplied
to him, rather he was asked by above named Sh. Kailash Chand and
Ankur Sharma to furnish the details of breakup of the insurance cover,
which were sent vide letter dated 24.9.2010 through speed post.
Respondent No.2 alleged that no inspection by the insurance
company before issuing insurance policy was conducted at the time of
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first insurance as well as the second insurance. He further alleged
that no form or any other documents were got filled and signed from
.
him or his partner for the second policy and such insurance policy
was obtained by the petitioners Kailash Chand and Ankur by forging
his signatures as well as of his partner that too despite having noticed
that unit has already been got insured by the complainant from other
of
insurance company i.e. Oriental Insurance Company Limited and as
such, petitioners have committed breach of trust with respect to loan
amount by withdrawing and transferring the amount wrongly and
rt
illegally and purchased the insurance from 12.4.2010 to 11.4.2011
through commission agent Shri Baljinder Singh i.e. petitioner in
Cr.MMO No. 362 of 2018, for causing wrongful gain to him as well to
themselves. He further alleged that on 16.10.2010, he came to know
that due to rains, the industrial unit suffered flooding, resulting in
damage to the building, machinery and raw material and further the
iron grills on the window were found broken and burglary had taken
place in the industrial premises, which was reported to the police on
16.10.2010 and FIR was duly registered by the police. On
18.10.2010, respondent No.2 informed the bank officials regarding the
theft/ burglary and the damage suffered by him and asked them to
process the insurance claim from the insurance company for getting
the premises inspected for assessing the loss in order to raise
insurance claim. It is contended that direct communication to
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insurance company was not possible as he was not having the date of
policy, which was never supplied to him as the policy was retained by
.
the bank itself. He alleged that despite repeated request, policy was
not handed over to him by petitioner Manoj Kumar Bansal, Manager
of the bank. He alleged that on 19.10.2010, he wrote a letter to the
Superintendent of Police, Nahan and lateron he was given the copy of
of
insurance policy and then he came to know that goods insured in the
insurance policy were cardboard boxes manufacturing and the
factory was depicted as a cardboard manufacturing unit and further
rt
the policy was not a comprehensive policy, which could cover theft.
Though, insurance company was informed, but no surveyor was
deputed by the insurance company to evaluate the loss suffered by
him and inaction of the bank and insurance company was on account
of manipulation by bank Manager Sh. Kailash Chand and Field
Officer, Sh. Ankur, who in criminal conspiracy with the insurance
agent Sh. Baljinder Singh have committed offence punishable under
Sections 409, 465, 467, 468, 471 read with section 120-B of Indian
Penal Code.
5. Learned Judicial Magistrate, First Class, Nahan, taking
note of afore complaint, sought report from the police station
concerned. After having conducted investigation, police submitted a
detailed report, thereby stating that no case is made out against the
petitioners, but learned Judicial Magistrate, instead of proceeding on
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the said report, treated the complaint filed at the behest of respondent
No.2, as a private complaint and directed him to lead preliminary
.
evidence. Respondent No.2 examined himself. On the basis of
preliminary evidence adduced by him, court below, vide order dated
22.12.2014, came to the conclusion that there are sufficient grounds
for issuance of process against the accused i.e. petitioners herein for
of
commission of offences punishable under sections 409, 465, 467,
468, 471 read with section 120-B of Indian Penal Code and
accordingly, summoned them.
rt
6. Being aggrieved and dissatisfied with aforesaid order
passed by Learned Judicial Magistrate First Class, Nahan, petitioners
herein filed revision petition under section 397 Cr.P.C, which came to
be registered as case No. 3-Cr.R/10 of 2016, titled as Kailash Chand
and others versus Liaquat Ali Khan and another. Vide order dated
2.7.2018, learned Sessions Judge, Nahan dismissed the afore
revision petition. In the afore background, petitioners have
approached this Court under section 482 Cr.P.C(now Section 528 of
BNSS), praying therein to quash and set aside the order dated
22.12.2014 passed by Learned Judicial Magistrate First Class,
Nahan District Sirmour, Himachal Pradesh in Criminal Complaint
No.55/4 of 2014 as well as order dated 02.07.2018 passed by learned
Sessions Judge, Nahan, District Sirmaur, Himachal Pradesh, whereby
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afore order passed by Learned Judicial Magistrate First Class came
to be upheld and for quashing of the complaint.
.
7. I have heard learned counsel for the parties and have
gone through the record carefully.
8. Before ascertaining the correctness and genuineness of
the aforesaid submissions and counter submissions made on behalf
of
of learned counsel representing the parties, this Court deems it
necessary to discuss /elaborate upon the scope and competence of
this Court to quash the FIR as well as criminal proceedings, while
rt
exercising power under Section 482 CrPC.
9. A three-Judge Bench of the Hon’ble Apex Court in case
titled State of Karnataka v. L. Muniswamy and others, 1977 (2)
SCC 699, held that High Court, while exercising power under Section
482 Cr.PC (now Section 528 of BNSS) is entitled to quash the
proceedings, if it comes to the conclusion that allowing the proceeding
to continue would be an abuse of the process of the Court or that the
ends of justice require that the proceeding ought to be quashed.
10. Subsequently, in case titled State of Haryana and
others v. Bhajan Lal and others, 1992 Supp (1) SCC 335, the
Hon’ble Apex Court, while elaborately discussing the scope and
competence of High Court to quash criminal proceedings under
Section 482 Cr.PC( now Section 528 of BNSS) laid down certain
principles governing the jurisdiction of High Court to exercise its
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power. After passing of aforesaid judgment, issue with regard to
exercise of power under Section 482 Cr.PC ( now Section 528 of
.
BNSS), again came to be considered by the Hon’ble Apex Court in
case bearing Criminal Appeal No.577 of 2017 (arising out of SLP
(CrL.) No. 287 of 2017) titled Vineet Kumar and Ors. v. State of U.P.
and Anr., wherein it has been held that saving of the High Court’s
of
inherent powers, both in civil and criminal matters, is designed to
achieve a salutary public purpose i.e. court proceedings ought not be
permitted to degenerate into a weapon of harassment or persecution.
rt
11. The Hon’ble Apex Court in Prashant Bharti v. State
(NCT of Delhi), (2013) 9 SCC 293, relying upon its earlier judgment
titled as Rajiv Thapar and Ors v. Madan Lal Kapoor, (2013) 3 SCC
330, reiterated that High Court has inherent powers under Section
482 Cr.PC ( now Section 528 of BNSS), to quash the proceedings
against an accused, at the stage of issuing process, or at the stage of
committal, or even at the stage of framing of charge, but such power
must always be used with caution, care and circumspection. In the
aforesaid judgment, the Hon’ble Apex Court concluded that while
exercising its inherent jurisdiction under Section 482 of the Cr.PC(
now Section 528 of BNSS), Court exercising such power must be fully
satisfied that the material produced by the accused is such, that
would lead to the conclusion, that his/her defence is based on sound,
reasonable, and indubitable facts and the material adduced on record
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itself overrule the veracity of the allegations contained in the
accusations levelled by the prosecution/complainant. Besides above,
.
the Hon’ble Apex Court further held that material relied upon by the
accused should be such, as would persuade a reasonable person to
dismiss and condemn the actual basis of the accusations as false. In
such a situation, the judicial conscience of the High Court would
of
persuade it to exercise its power under Section 482 of the Cr.P.C
(now Section 528 of BNSS) to quash such criminal proceedings, for
that would prevent abuse of process of the court, and secure the ends
rt
of justice. In the aforesaid judgment titled as Prashant Bharti v. State
(NCT of Delhi), (2013) 9 SCC 293, the Hon’ble Apex Court has held
as under:-
“22. The proposition of law, pertaining to quashing of criminal
proceedings, initiated against an accused by a High Court
under Section 482 of the Code of Criminal Procedure(hereinafter referred to as “the Cr.P.C.”) has been dealt with by
this Court in Rajiv Thapar & Ors. vs. Madan Lal Kapoor
wherein this Court inter alia held as under: (2013) 3 SCC 330,paras 29-30)
29. The issue being examined in the instant case is the
jurisdiction of the High Court under Section 482 of the Cr.P.C.,
if it chooses to quash the initiation of the prosecution against
an accused, at the stage of issuing process, or at the stage of
committal, or even at the stage of framing of charges. These
are all stages before the commencement of the actual trial.
The same parameters would naturally be available for later
stages as well. The power vested in the High Court under
Section 482 of the Cr.P.C., at the stages referred to
hereinabove, would have far reaching consequences,
inasmuch as, it would negate the prosecution’s/complainant’s
case without allowing the prosecution/complainant to lead
evidence. Such a determination must always be rendered with
caution, care and circumspection. To invoke its inherent
jurisdiction under Section 482 of the Cr.P.C. the High Court
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2026:HHC:12476accused is such, that would lead to the conclusion, that
his/their defence is based on sound, reasonable, and
indubitable facts; the material produced is such, as would rule
out and displace the assertions contained in the charges
levelled against the accused; and the material produced is.
such, as would clearly reject and overrule the veracity of the
allegations contained in the accusations levelled by the
prosecution/complainant. It should be sufficient to rule out,
reject and discard the accusations levelled by theprosecution/complainant, without the necessity of recording
any evidence. For this the material relied upon by the defence
should not have been refuted, or alternatively, cannot be
justifiably refuted, being material of sterling and impeccableof
quality. The material relied upon by the accused should be
such, as would persuade a reasonable person to dismiss and
condemn the actual basis of the accusations as false. In such
a situation, the judicial conscience of the High Court would
persuade it to exercise its power under Section 482 of the
rt
Cr.P.C. to quash such criminal proceedings, for that would
prevent abuse of process of the court, and secure the ends of
justice.
30. Based on the factors canvassed in the foregoing
paragraphs, we would delineate the following steps to
determine the veracity of a prayer for quashing, raised by an
accused by invoking the power vested in the High Court underSection 482 of the Cr.P.C.:-
30.1 Step one, whether the material relied upon by the
accused is sound, reasonable, and indubitable, i.e., the
material is of sterling and impeccable quality?
30.2 Step two, whether the material relied upon by the
accused, would rule out the assertions contained in thecharges levelled against the accused, i.e., the material
is sufficient to reject and overrule the factual assertions
contained in the complaint, i.e., the material is such, aswould persuade a reasonable person to dismiss and
condemn the factual basis of the accusations as false.
30.3 Step three, whether the material relied upon by the
accused, has not been refuted by the
prosecution/complainant; and/or the material is such,
that it cannot be justifiably refuted by the
prosecution/complainant?
30.4 Step four, whether proceeding with the trial would
result in an abuse of process of the court, and would not
serve the ends of justice?
30.5 If the answer to all the steps is in the affirmative,
judicial conscience of the High Court should persuade it
to quash such criminal – proceedings, in exercise of
power vested in it under Section 482 of the Cr.P.C.
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Such exercise of power, besides doing justice to the
accused, would save precious court time, which would
otherwise be wasted in holding such a trial (as well as,
proceedings arising therefrom) specially when, it is clear
that the same would not conclude in the conviction of
.
the accused.”
12. It is quite apparent from the bare perusal of aforesaid
judgments passed by the Hon’ble Apex Court from time to time that
where a criminal proceeding is manifestly attended with mala fide
of
and/or where the proceeding is maliciously instituted with an ulterior
motive for wreaking vengeance on the accused and with a view to
rt
spite him/her due to private and personal grudge, High Court while
exercising power under Section 482 Cr.PC(now Section 528 of
BNSS) can proceed to quash the proceedings.
13. Hon’ble Apex Court in case tilted Anand Kumar
Mohatta and Anr. v. State (Government of NCT of Delhi)
Department of Home and Anr, AIR 2019 SC 210, has held that abuse
of process caused by FIR stands aggravated if the FIR has taken the
form of a charge sheet after investigation and as such, the abuse of
law or miscarriage of justice can be rectified by the court while
exercising power under Section 482 Cr.PC( now Section 528 of
BNSS). The relevant paras of the judgment are as under:
16. Even otherwise it must be remembered that the provision
invoked by the accused before the High Court is Section 482
Cr. P.C and that this Court is hearing an appeal from an order
under Section 482 of Cr.P.C. Section 482 of Cr.P.C reads as
follows:-
“482. Saving of inherent power of the High Court.-
Nothing in this Code shall be deemed to limit or affect
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2026:HHC:12476orders as may be necessary to give effect to any order
under this Code, or to prevent abuse of the process of
any Court or otherwise to secure the ends of justice.”
17. There is nothing in the words of this Section which restricts
.
the exercise of the power of the Court to prevent the abuse of
process of court or miscarriage of justice only to the stage of
the FIR. It is settled principle of law that the High court can
exercise jurisdiction under Section 482 of Cr.P.C even when
the discharge application is pending with the trial court ( G.
Sagar Suri and Anr. V. State of U.P. and Others, (2000) 2 SCC
636 (para 7), Umesh Kumar v. State of Andhra Pradesh and
Anr. (2013) 10 SCC 591 (para 20). Indeed, it would be a
travesty to hold that proceedings initiated against a person can
of
be interfered with at the stage of FIR but not if it has advanced,
and the allegations have materialized into a charge sheet. On
the contrary it could be said that the abuse of process caused
by FIR stands aggravated if the FIR has taken the form of a
rt
charge sheet after investigation. The power is undoubtedly
conferred to prevent abuse of process of power of any court.”
14. Hon’ble Apex Court in case titled Pramod Suryabhan
Pawar v. The State of Maharashtra and Anr, (2019) 9 SCC 608,
has elaborated the scope of exercise of power under Section 482
Cr.PC, the relevant para whereof reads as under:-
“7. Section 482 is an overriding section which saves the inherent
powers of the court to advance the cause of justice. UnderSection 482 the inherent jurisdiction of the court can be
exercised (i) to give effect to an order under the CrPC; (ii) to
prevent the abuse of the process of the court; and (iii) to
otherwise secure the ends of justice. The powers of the courtunder Section 482 are wide and the court is vested with a
significant amount of discretion to decide whether or not to
exercise them. The court should be guarded in the use of its
extraordinary jurisdiction to quash an FIR or criminal proceeding
as it denies the prosecution the opportunity to establish its case
through investigation and evidence. These principles have been
consistently followed and re-iterated by this Court. In Inder
Mohan Goswami v State of Uttaranchal5, this Court observed.
“23. This Court in a number of cases has laid down the scope
and ambit of courts’ powers under Section 482 CrPC. Every
High Court has inherent powers to act ex debito justitiae to do
real and substantial justice, for the administration of which
alone it exists, or to prevent abuse of the process of the court.
Inherent power under Section 482 CrPC can be exercised:
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(i) to give effect to an order under the Code;
(ii) to prevent abuse of the process of the court, and
(iii) to otherwise secure the ends of justice.
24. Inherent powers under Section 482 CrPC though wide
.
have to be exercised sparingly, carefully and with great caution
and only when exercise is justified by the tests specifically laid
down in this section itself. Authority of the court exists for the
advancement of justice. If any abuse of the process leading to
injustice is brought to the notice of the court, then the court
of
would be justified in preventing injustice by invoking inherent
powers in absence of specific provisions in the statute.”
8. Given the varied nature of cases that come before the High
rt
Courts, any strict test as to when the court’s extraordinary
powers can be exercised is likely to tie the court’s hands in the
face of future injustices. This Court in State of Haryana v Bhajan
Lal6 conducted a detailed study of the situations where the court
may exercise its extraordinary jurisdiction and laid down a list of
illustrative examples of where quashing may be appropriate. It is
not necessary to discuss all the examples, but a few bear
relevance to the present case. The court in Bhajan Lal noted
that quashing may be appropriate where, (2007) 12 SCC 1 1992
Supp (1) SCC 335
“102. (1) Where the allegations made in the first information
report or the complaint, even if they are taken at their face
value and accepted in their entirety do not prima facie
constitute any offence or make out a case against the
accused.
(2) Where the allegations in the first information report and
other materials, if any, accompanying the FIR do not disclose
a cognizable offence, justifying an investigation by police
officers under Section 156(1) of the Code except under an
order of a Magistrate within the purview of Section 155(2).
……….
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(7) Where a criminal proceeding is manifestly attended with
mala fide and/or where the proceeding is maliciously instituted
with an ulterior motive for wreaking vengeance on the accused
.
and with a view to spite him due to private and personal
grudge.”
In deciding whether to exercise its jurisdiction under Section
482, the Court does not adjudicate upon the veracity of the
facts alleged or enter into an appreciation of competing
of
evidence presented. The limited question is whether on the
face of the FIR, the allegations constitute a cognizable offence.
As this Court noted in Dhruvaram Murlidhar Sonar v State of
Maharashtra, 2018 SCC OnLine SC3100 (“Dhruvaram Sonar”)
:
rt
“13. It is clear that for quashing proceedings, meticulous
analysis of factum of taking cognizance of an offence by
the Magistrate is not called for. Appreciation of evidence
is also not permissible in exercise of inherent powers. If
the allegations set out in the complaint do not constitutethe offence of which cognizance has been taken, it is
open to the High Court to quash the same in exercise of
its inherent powers.”
15. Aforesaid law, clearly stipulates that court can exercise
power under S.482 of the Code of Criminal Procedure ( now Section
528 of BNSS), to quash criminal proceedings, in cases, where the
allegations made in the first information report or the complaint, even
if they are taken at their face value and accepted in their entirety do
not prima facie constitute any offence or make out a case against the
accused.
16. Now being guided by the aforesaid proposition of law laid
down by the Hon’ble Apex Court, this Court would make an endeavor
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2026:HHC:12476to examine and consider the prayer made in the instant petition vis-Ã -
vis factual matrix of the case.
.
17. Before ascertaining the correctness of rival submissions
advanced by earned counsel for the parties to the lis, this Court finds
it necessary to take note of certain facts, which are germane for the
adjudication of present case. It emerges from the record that
of
respondent No.2, prior to filing of the complaint, had filed Consumer
Complaint No. 11 of 2011 titled M/s Paradise Packers vs. State
Bank of India and, but same was dismissed as withdrawn vide order
rt
dated 06.12.2012 (Annexure P-9) with liberty to file civil suit in respect
of the same cause of action. After withdrawal of aforesaid complaint,
respondent No.2 instituted civil suit No.31of 2013 for recovery of
Rs. 49, 20,525/- alongwith interest, which is stated to be pending
adjudication before this Court (Annexure-P-10). Perusal of the plaint
in the aforesaid suit, if read in its entirety, reveals that averments
made therein are, by and large, identical to those contained in the
complaint filed under Section 156(3) Cr.P.C.
18. Pleadings adduced on record by the petitioners further
reveals that in the aforesaid suit, a specific issue to the following
effect has been framed:-
“Whether defendant No.1-SBI by forging signatures of a
partner of plaintiff No.1-firm i.e. respondent No.2,
fraudulently got issued the insurance policy from
defendant No.3 without the consent of the plaintiff, if so
and its effect?”OPP::: Downloaded on – 20/04/2026 20:31:21 :::CIS
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19. Precisely, the grouse of the petitioners, as can be
gathered from their respective petitions and further canvassed by
.
learned respective counsel, is that the complaint filed under section
156(3) Cr.P.C at the behest of respondent No.2 is nothing, but a
clever ploy to circumvent the order dated 15.07.2017 passed by
Debts Recovery Tribunal, Chandigarh, whereby respondent No.2,
of
alongwith his partner, has been held liable to pay sum of Rs.28,
80,998/- alongwith with costs, current and future interest. While
rt
making this Court peruse complaint filed under section 153(6)Cr.P.C,
learned counsel representing the petitioners vehemently argued that
no case, much less under sections 409, 465, 467, 468 and 471 read
with Section 120-B of IPC is made out against the petitioners, but yet
learned Judicial Magistrate, First Class, Nahan, ignoring the police
report, wherein it was reported that no case is made out against the
petitioners and dispute qua recovery of amount is still pending
adjudication before this Court in Civil Suit No.31 of 2013, proceeded
to treat the complaint as private complaint and thereafter,
erroneously, without due application of mind, issued process against
the petitioners. Learned counsel for the petitioners submitted that
petitioners, while extending loan facilities to respondent No.2, had
ensured that the factory in question was duly insured from time to
time. Learned counsel for the petitioners further argued that
immediately after grant of term loan and extension of Cash credit limit,
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State Bank of India, Kala AMB got the factory and the machinery
therein insured through New India Assurance Company through its
.
officer, Sh. Baljinder Pal. However, respondent No.2, being
dissatisfied with the valuation of the premises and machinery,
independently procured second insurance policy for the same from
Oriental Insurance Company Limited, Chandigarh, which fact is
of
evident from the record.
20. Learned counsel for the petitioners further argued that
after the alleged incident of flooding, there was no delay attributable
rt
to the insurance company, rather insurance claim of respondent No.2
came to be rejected on the ground of delay, as is evident from the
record. Learned counsel for the petitioners further argued that bare
perusal of the order passed by learned Judicial Magistrate First Class,
Nahan, District Sirmour, Himachal Pradesh, which was further upheld
by learned Sessions Judge, Nahan District Sirmour, Himachal
Pradesh, clearly demonstrates that no cogent and convincing
evidence ever came to be produced with regard to allegation of
forging of signatures, but yet both the Courts below proceeded to
issue process merely on the basis of the statement made by
complainant/ respondent No.2. Lastly, learned counsel for the
petitioners submitted that in case learned Judicial Magistrate First
Class, Nahan was not satisfied with the report submitted by the SHO
of the concerned police Station, it could have directed further
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investigation, but certainly there was no occasion, if any, to treat the
complaint as a private complaint, which is otherwise totally devoid of
.
merit and has been filed solely with a view to evade repayment of
loan.
21. To the contrary, Mr. Sumit Raj Sharma, learned counsel
representing the respondents, supported the impugned orders passed
of
by learned Courts below. He submitted that had the petitioners, being
officials of the State Bank of India, procured insurance policy well in
rt
time and for the correct valuation, respondent No.2 would have been
duly indemnified for the loss suffered. He submitted that insurance
claim submitted by respondent No.2 came to be rejected on account
of the failure of the bank officials to obtain insurance coverage of the
premises and machinery within time. He further submitted that by way
of Civil suit, respondent No.2 has prayed for recovery of certain
amount to which he has become entitled on account of loss to the
machinery and factory premises in terms of insurance cover, but at
the same time, he is well within his right to register case against the
petitioners for their having not taken appropriate steps to insure the
factory premises and machinery within time, as a result thereof, huge
loss has been suffered by respondent No.2. He further submitted that
bare perusal of insurance policy suggests that petitioners, who were
at the helm of affairs at the relevant time, acted in a highly negligent,
callous and casual manner, inasmuch as the factory in question was
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shown to be of cardboards etc, whereas same was established for
manufacturing adhesive tapes etc. He further submitted that though
.
petitioners had got the second insurance done of his own at his
expenses, but yet petitioners recovered the premium of the same
from the loan account of respondent No.2. He further submitted that
act and conduct of the petitioners clearly suggests the commission of
of
offence, including criminal conspiracy to cause wrongful loss to
respondent No.2 and wrongful gain to themselves as well as forgery
for the purpose of withdrawal/transfer of funds from the loan account
rt
of the firm and for procuring an incorrect insurance policy for the
period for which another comprehensive insurance policy had already
been obtained by the complainant under information to the bank.
22. Having carefully perused the pleadings as well as other
material adduced on record by the respective parties vis-Ã -vis
reasoning assigned by learned Sessions Judge, Nahan, while
upholding the order dated 22.12.2014 passed by learned Judicial
Magistrate, First Class, Nahan, this Court has no hesitation to
conclude that both the Courts below, while taking cognizance of the
averments contained in the complaint filed by respondent No.2 under
Section 156(3) Cr.P.C, have gone astray. Before issuance of process,
both the Courts below failed to ascertain the relevant facts as well as
background in which the complaint under Section 156(3) Cr.P.C came
to be lodged against the petitioners. Interestingly, pursuant to the
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orders passed by learned Judicial Magistrate, First Class, Nahan in
the afore complaint, SHO of police Station concerned, at first
.
instance, submitted a detailed report giving therein complete
background of the case, stating that no case is made out against the
petitioners, but despite the same, learned Judicial Magistrate, First
Class, Nahan, proceeded to treat the complaint as a private complaint
of
and issued process against the petitioners for the commission of
offences punishable under Sections 409, 465, 467, 468, 471 read with
Section 120-B of IPC. Learned Judicial Magistrate, First Class as well
rt
as learned Sessions Judge, Nahan completely ignored the fact that
accused, named in the complaint, are/were bank officials /officials of
insurance company and every action of their, be it in relation to
processing of loan or obtaining insurance of the factory premises as
well as machinery, is/was in discharge of their official duties/ public
functions.
23. It is not in dispute that respondent No.2 had availed Cash
Credit Limit and term loan from the State Bank of India and in lieu
thereof, mortgaged the property in question with the bank as security.
It is also not in dispute that respondent No.2, alongwith his partner,
failed to adhere the financial discipline, as result whereof the account
became irregular and declared NPA in the year. 2010 itself.
Thereafter, notice under Section 13(2) of the SARFAESI Act was
issued against respondent No.2 on 26.11.2010. Since despite there
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being afore notice, respondent No.2 failed to repay the outstanding
amount, Bank was compelled to take physical possession of secured
.
assets i.e., factory premises alongwith machinery. Significantly, it is
only after the initiation of proceedings under SARFAESI Act, that
respondent No.2 filed complaint under Section 156(3) Cr.P.C against
the petitioners, who otherwise being Manager and Field Officer of
of
State Bank of India as well as official of New India Assurance
Company, were instrumental in the sanction of the Cash Credit Limit
and term loan, as well as in facilitating the insurance.
rt
24. In nutshell, the case of respondent No.2, is that once he
had himself obtained insurance policy from the Oriental Insurance
Company Limited for the period w.e.f. 04.08.2009 to 03.08.2010, ,
there was no necessity to procure another insurance during
subsistence of the said policy. However, the then Manager, Sh.
Kailash Chand and Field Officer, Sh. Ankur allegedly procured second
insurance from New India Assurance Company , which was effective
from 12.04.2010 to 11.04.2011.
25. This Court, having carefully perused the insurance
covers placed on record by respondent No.2 alongwith the complaint,
finds that, at first instance, insurance had been obtained by State
Bank of India in respect of factory premises and machinery. Since
respondent No.2, was not satisfied with the valuation of the insured
assets, he himself procured another insurance policy from Oriental
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2026:HHC:12476
Insurance Company, effective from 04.08.2009 to 03.08.2010,
wherein he unilaterally assessed the value of the property at higher
.
rate and duly apprised State Bank of India about the same. Though
policy taken by respondent No.2 was effective from 04.08.2009 to
03.08.2010, but yet the then Manager Sh. Kailash Chand and Field
Officer Ankur procured another insurance policy in respect of the
of
factory premises as well as machinery from New India Assurance
Company through petitioner Sh. Baljinder Singh, an agent of New
India Assurance Company for the period w.e.f. 12.04.2010 to mid
rt
night of 11.4.2011. Since on account of aforesaid insurance obtained
by Manager Sh. Kailash Chand, certain amount towards its premium
was deducted from the loan account of respondent No.2, without
obtaining any proposal under the signatures of respondent No.2 or
his partner, respondent No.2 made allegation of forgery against the
then Manager, Field Officer as well as the agent concerned, who are
petitioners herein.
26. As has been observed hereinabove, respondent No.2,
being dissatisfied with the valuation of the mortgaged property,
without taking bank officials into confidence, procured a fresh
insurance policy from Oriental Insurance Company on 04.08.2009 at
a higher valuation. The said policy insured the property for a sum of
Rs. 51, 25,000/-, out of which, Rs. 14 Lakh was towards machinery,
Rs. 25 Lakh towards raw material, Rs. 12 Lakh towards the building
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2026:HHC:12476
and Rs.25,000/- towards furniture and fixtures. Though, aforesaid
policy was forwarded to insurance company, but since same was
.
overvalued, coupled with the fact that prime duty to insure the
mortgaged property lies with the bank or financial institution extending
the loan facility, petitioner-Kailash Chand alongwith Field Officer
Ankur, got the mortgaged property insured with New India Assurance
of
Company, against insurance policy, effective from 12.04.2010 to
midnight of 11.04.2011, but since value of the property as well as
other raw material reflected in the said policy was lower in comparison
rt
to the policy independent obtained by respondent No.2, he started
leveling allegations of forgery. The persons responsible for issuance
of the policy w.e.f. 12.04.2010 to 11.04.2011 have categorically stated
that the proposal form for the said policy was submitted and duly
signed by respondent No.2. The entire dispute between respondent
No.2 and the bank officials arose only after the alleged damage
caused to the building, machinery and law material on account of
flooding on 16.04.2010. Since the claim put forth by respondent No.2
qua aforesaid damage to building, machinery and raw material came
to be rejected by the insurance company on the ground of delay, he,
for the first time, raised allegations of forgery against the bank
officials. Prior to filing the complaint on 01.03.2014 under section
156(3)Cr.P.C and even after the alleged incident of flooding dated
16.04.2010, respondent No.2 never raised any dispute with regard to
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the second policy obtained by the bank during the subsistence of the
policy taken by him from Oriental Insurance Company. Moreover, this
.
Court ,having scanned the material adduced on record, coupled with
the allegations contained in the complaint under section 156(3)
Cr.P.C, is persuaded to agree with the submissions of learned
counsel representing petitioners that no loss can be said to have been
of
caused to respondent No.2 by petitioners, namely Sh. Kailash Chand
and Ankur, on account of their having procured second policy for the
period w.e.f. 12.04.2010.11.04.2011, for the reason that during
rt
aforesaid period, mortgaged property was duly insured.
27. The grievance of the respondent No.2 cannot be said to
be qua procurement of second policy by the bank officials for the
period w.e.f. 12.04.2010.11.04.2011, but his actual complaint and
grouse is with regard to valuation of the property reflected in the
aforesaid policy, which according to him, was assessed on the lower
side. Since it is prime duty of financial institution or the bank at the
time of grant of loan to get the mortgaged property insured, coupled
with the fact that no objection was ever raised by respondent No.2 at
the time of issuance of first policy after grant of loan with respect to
valuation of the property, no loss can be said to have been caused to
respondent No.2, who otherwise, in desperate attempt to evade his
liability towards the bank, though, attempted to lodge claim with
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higher value to the insurance company, but same was not accepted
being time barred.
.
28. Interestingly, before lodging the complaint under section
156(3) Cr.P.C against the petitioners, respondent No.2 had filed
Consumer Complaint No.11 of 2011, laying therein challenge to the
order passed by the insurance company, thereby rejecting his claim.
of
Since, in the aforesaid claim, respondent No.2 had also raked up the
issue with regard to the alleged connivance of the then Manager,
rt
Field Officer and Agent of the insurance company, and had also
claimed damages, complaint having been filed by him, was dismissed
as withdrawn with liberty to file a civil suit in respect of same cause of
action.
29. In the year 2013, respondent No.2 filed Civil Suit No.31
of 2013 for recovery of sum of Rs. 49,20,525/-, wherein he also raked
up the issue with regard to alleged forging of signatures as well as
insurance policy taken by the bank officials without his consent. On
18.11.2013, this Court framed specific issues with regard to forgery as
well as taking insurance policy without the consent of respondent
No.2, but before afore suit could be decided, respondent No.2 filed a
complaint dated 01.03.2014 before learned Judicial Magistrate First
Class, Nahan, leveling therein the same allegations as were earlier
made in consumer complaint filed before the HP State Consumer
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Disputes Redressal Commission, Shimla and civil suit pending
consideration before this Court, as detailed hereinabove.
.
30. There is another aspect of the matter that it is not in
dispute that pursuant to initiation of proceedings under section 13(2)
of the SARFAESI Act vide notice dated 26.11.2010, State Bank of
India had taken physical possession of the secured assets, and
of
thereafter respondent No.2 has already been held liable by Debts
Recovery Tribunal, Chandigarh to pay total sum of Rs. 28,80,998/-
rt
along with interest to the bank vide order dated 15.07.2017 and such
order has attained finality. In such circumstances, no loss otherwise
can be said to have been caused to respondent No.2, who appears to
be making frivolous attempt to evade aforesaid liability by raising
issue of insurance of mortgaged assets, which, as per him, were not
properly valued.
31. Since respondent No.2 failed to repay the loan, the
mortgage property stood taken over by the bank immediately after
issuance of notice under section 13(2) of SARFAESI Act, in the year
2010 itself, loss, if any, caused on account of lesser valuation of the
mortgaged property at the time of insurance, can be said to have
been suffered by the bank and not by respondent No.2, who
otherwise in terms of order dated 15.07.2017, passed by Debts
Recovery Tribunal, Chandigarh in O.A No.466 of 2011, has been held
liable to pay total sum of Rs.28,80,998/-, which he otherwise could not
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have got adjusted against the insurance claim, if any, received by the
bank. Since the insured property i.e. building, machinery and raw
.
material, were mortgaged in lieu of the loan/term loan and credit
facilities, the same was otherwise liable to be taken over and
appropriated by the bank on account of failure of respondent No.2 to
repay the loan.
of
32. Leaving everything aside, mere preliminary statement
made by respondent No.2 at the time of his making application under
rt
Section 156(3) Cr.P.C is/was not sufficient to issue process against
the petitioners, who had otherwise discharged their public duties,
especially when the averments contained in the complaint were not
substantiated by any cogent and convincing evidence. Mere placing
on record certain documents does not prove the allegations of
forgery.
33. Section 409 IPC talks about criminal breach of trust by
public servants, bankers, merchants, or agent. Aforesaid section
provides that whoever, being in any manner entrusted with the
property, or with any dominion over property in his capacity of a public
servant or in the way of his business as a banker, merchant, factor,
broker, attorney or agent commits criminal breach of trust in respect
of that property, shall be punished with imprisonment for life, or with
imprisonment of either description for a term which may extend to ten
years, and shall also be liable to fine. To invoke aforesaid provision
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of law, prosecution is under an obligation to prove that accused is a
public servant, banker or agent; was entrusted with property; or had
.
dominion over the same and; that he committed criminal breach of
trust in respect thereof. It is not understood as to how and on what
basis learned courts below arrived at a conclusion that respondent
No.2 had actually entrusted any property to the petitioners in their
of
capacity as public servants. If the allegations levelled by respondent
No.2 are tested on the touchstone of Section 405 IPC, no case can be
said to have been made out under aforesaid provision of law. As per
rt
respondent No.2, petitioners, being bank officials, forged his
signatures for obtaining the insurance policy. If aforesaid allegation of
respondent No.2 is presumed to be correct, section 409 of IPC cannot
be invoked, especially when there is no entrustment of property.
Entrustment of property, if any, in the case at hand can be said to be
property, which came to be mortgaged in lieu of term loan and cash
credit Limit, which remained intact throughout, save and except, some
damage in the year, 2010 on account of flooding and ultimately afore
property was taken over by the bank towards repayment of loan
amount by respondent No.2.
34. Section 465 of IPC provides for punishment for forgery.
Term “forgery” has been defined in section 463 IPC. As per aforesaid
provision, whoever makes any false documents or false electronic
record or part of a document or electronic record, with intent to cause
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damage or injury, to the public or to any person, or to support any
claim or title, or to cause any person to part with property, or to enter
.
into any express or implied contract, or with intent to commit fraud or
that fraud may be committed, can be said to have committed forgery.
The basic ingredients of the offence of forgery are the making of a
false or forged documents or part thereof, coupled with the requisite
of
intent, namely: (i) to cause damage or injury to the public or any
person; (ii) to support any claim or title;(iii) to cause any person to part
with property ;(iv) to cause any person to enter into any express or
rt
implied contract; or (v) with intent to commit fraud or that fraud may
be committed.
35. In the case at hand, the precise allegation of respondent
No.2 is that the bank officials i.e petitioners herein, during subsistence
of policy taken by him from Oriental Insurance Company Limited,
which was effective from 04.08.2009 to 03.08.2010, fraudulently took
another policy for the same mortgaged property, valid w.e.f.
12.04.2010 to 11.04.2011, without his consent and by allegedly
forging his signatures on the proposal form. Though aforesaid
allegation has been specifically denied by the bank officials, but even
if same is presumed to be correct, it is not understood, what benefit
accrued to the bank officials from such alleged act of forgery.
36. As has been observed hereinabove, the mortgaged
property is always got insured by the financial institution/ bank at the
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time of grant of loan so that any loss, if caused to the mortgaged
property during the subsistence of loan, may be recovered from the
.
insured amount. The very intention of the bank officials in getting the
mortgaged property insured at the time of grant of loan is to safeguard
the public exchequer. Had the unfortunate incident of flooding, which
occurred on 16.04.2010 during the subsistence of policy obtained by
of
respondent No.2 from the Oriental Insurance Company Limited, which
was effective from 04.08.2009 to 03.08.2010, taken place on some
other date, in all probability, he would not have levelled allegation of
rt
forgery against the bank officials i.e. petitioners herein, because his
grievance is not with regard to policy taken by the bank, but his
grouse from day one was with regard to valuation of the property.
Respondent No.2 of his own without taking the bank officials into
confidence, got the mortgaged assets insured with Oriental Insurance
Company Limited at higher value i.e. Rs. 51, 25,000/-, whereas at first
instance, State Bank of India had obtained two insurance policies
effective from 08.04.2008 to 07.04.2009. Otherwise also, in no
manner could the bank officials, i.e. the petitioners herein, have
derived any benefit from the alleged act, since, amount, if any
received under the insurance policy obtained at their instance, would
necessarily have been adjusted towards the outstanding loan amount.
37. Similarly, offences punishable under Sections 467 and
468 of IPC, which talks about forgery of valuable security, will, etc.,
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and forgery for the purpose of cheating, are also not made out against
the petitioners. There is nothing to suggest that bank officials i.e.
.
petitioners herein, committed any forgery of documents with the
intention of using the same for the purpose of cheating.
38. Section 471 of IPC provides that, whoever, fraudulently
or dishonestly uses as genuine any document or electronic record,
of
which he knows or has reason to believe to be a forged document or
electronic record, shall be punished in the same manner as if he had
rt
forged such documents or electronic record. In the case at hand, no
document alleged to be forged ever came to be used by the
petitioners for getting any benefit, rather insurance cover obtained by
the bank officials for the mortgaged property for the period w.e.f.
12.04.2010 to 11.04.2011 was in furtherance of safeguarding the
secured assets, which ultimately came to be taken over by the
respondent-bank towards repayment of loan amount. If the facts, as
detailed hereinabove, are read in their entirety, this Court has no
hesitation to conclude that respondent No.2 has left no stone
unturned to evade his liability, as has been fastened upon him with
the passing of order by Debts Recovery Tribunal, Chandigarh.
39. Immediately, after taking over of his assets, pursuant to
his failure to repay the loan amount after receipt of show cause notice
under Section 13(2) of SARFAESI Act, respondent No.2 started
initiating multiple proceedings, i.e. a complaint before State Consumer
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Commission, Civil suit before this Court and finally a complaint under
Section 156(3) Cr.P.C, which is the subject matter of the present
.
cases, all arising out of the same cause of action.
40. Interestingly, in the case of petitioner Manoj Kumar
Bansal, who was not even in picture at the time of grant of loan as
well as taking insurance w.e.f 12.04.2010 to 11.04.2011 has been
of
arrayed as an accused merely on the ground that he failed to provide
copy of insurance policy to the complainant, enabling him to settle his
rt
claim before the insurance company. Both the courts below, in a
mechanical manner, without bothering to look into role played by
above Manoj Kumar Bansal, proceed to issue process against him.
41. In view of the discussion made hereinabove as well as
material adduced on record, this Court is persuaded to agree with
learned counsel for the petitioners that no case much less case under
Sections 409, 465, 467, 468, 471 read with Section 120-B of IPC, is
made out against the petitioners and as such, no fruitful purpose
would be served in continuation of trial against the petitioners under
the aforesaid provisions of law, rather continuation of the same
besides causing mental agony to the petitioners would amount to
sheer abuse of process of law.
42. Consequently, in view of the aforesaid discussion as well
as law laid down by the Hon’ble Apex Court (supra), the present
petitions are allowed. Order dated 02.07.2018 passed by learned
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Sessions Judge, Nahan, District Sirmour, Himachal Pradesh
(Annexure P-2) and order dated 22.12.2014, passed by learned
.
Judicial Magistrate, First Class, Nahan, Himachal Pradesh (Annexure
P-1) as also private complaint filed by respondent No.2, are quashed
and set aside qua the petitioners.
Interim orders in all the petitions, if any, are vacated. Pending
of
applications in all the petitions, if any, also stand disposed of.
2.
rt (Sandeep Sharma),
Judge
April 18, 2026
(shankar)
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