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Sunderan Pillai vs State Of Kerala on 27 September, 2018

IN THE HIGH COURT OF KERALA AT ERNAKULAM

PRESENT

THE HONOURABLE MR. JUSTICE SUNIL THOMAS

THURSDAY ,THE 27TH DAY OF SEPTEMBER 2018 / 5TH ASWINA, 1940

Crl.MC.No. 1240 of 2012

(AGAINST THE FIR NO.7/2012 OF THE ULIKKAL POLICE STATION)

PETITIONER/S:

SUNDERAN PILLAI,
CHENNALA VEEDU, ARABI, KOLITHATTU POSE, KANNUR.

BY ADVS.
SRI.SUNIL NAIR PALAKKAT
SRI.K.N.ABHILASH
SRI.PROMY KAPRAKKATT
SRI.SUCHITRA VARMA

RESPONDENT/STATE DEFACTO COMPLAINANT:
1 STATE OF KERALA
REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF
KERALA, ERNAKULAM.

2 THE STATION HOUSE OFFICER,
ULIKKAL POLICE STATION, ULIKKAL, KANNUR.

3 THE KOLITHATTU SERVICE CO-OPERATIVE BANK LTD
NO.406,
REPRESENTED BY ITS SECRETARY, KRISHNAN KUTTY,
VAYATHOOR AMSOM DESAM, KOLITHATTU, THALIPARAMBA
TALUK, KANNUR DISTRICT.

OTHER PRESENT:
SREEJA V PP

THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD
ON 13.09.2018, THE COURT ON 27-9-2018 PASSED THE
FOLLOWING:
Crl.M.C. No.1240/2012 2

ORDER

The petitioner herein faces investigation in Crime No.7/2012 of

Ulikkal Police station, for offences punishable under sections 406,468

and 423 IPC.

2. Private complaint was laid by the secretary of a Service Co-

operative Bank before the Judicial First Class Magistrate Court,

Mattannur, alleging that the petitioner herein who was the former

Director of the Service Co-operative Bank, had availed various loans

from the bank by offering a registered Continuing Guarantee Bond on

16/3/1994 in relation to 15 cents of land in Vaythoor Amsom, and

thereafter assigned the property to a third party without intimating

the bank. It was stated that, the petitioner herein committed breach

of trust and cheating and, thereby punishable under the relevant

provisions of Indian Penal Code.

3. Pursuant to the crime registered, investigation is progressing.

The petitioner, contending that he has been proceeded against

wrongly due to political reasons and that none of the offence alleged

against him will survive in the eye of law, has approached this court to

quash the proceedings.

4. Heard the learned counsel for the petitioner and the learned

Public Prosecutor.

Crl.M.C. No.1240/2012 3

5. 2nd respondent bank did not appear to contest the

proceedings. It seems that, there is no dispute that the petitioner

herein was a former Director and had availed few loans. It is also not

in dispute that, he had executed Continuing Guarantee Bond on

16/3/1004 creating interest in favour of the bank, for recovery of the

money due in relation to an item of his property. It is also not in

dispute that, he had assigned the property to the third party. The

private complaint was laid in January 2012 by the Bank.

6. Assailing the above investigation, the learned counsel for the

petitioner vehemently contended that, even from the admitted facts,

offence attributed to the petitioner herein will not survive, much less

any offence punishable under any of the penal statutes. The crucial

question that arises is whether the act committed by the petitioner

herein amounts to cheating. It is pertinent to note that, in the

complaint though there is an averment that by assigning the property

the petitioner herein committed cheating, there is absolutely no

averment that at the time of availing the loan, nor at any time later at

the time of executing the bond, petitioner herein had dishonest

intention to cheat the bank.

7. This court in an identical situation, in Gopalakrishnan K.

v. State of Kerala and Another (2009 (4) KHC 506), had held that

even if the property is mortgaged to the bank, sale of mortgagor’s

right is not forbidden by law. It was held that, such sale also may not
Crl.M.C. No.1240/2012 4

amount to breach of trust so as to be prosecuted. Such sale in no way

affects the mortgagee’s right. It would be subject to the right of the

mortgagee. Mortgagee can ignore such sale and enforce his right. It

is pertinent to note that, in the case at hand, mortgage deed was a

registered one. Necessarily, the subsequent purchaser must have

notice regarding the existence of mortgage and he purchased

mortgaged property with that information. It is also pertinent to note

that, a mortgage is the transfer of an interest in specific immovable

property for the purpose of securing the payment of money advanced

or to be advanced by way of loan, as defined under section 58 of the

Transfer of Property Act. Hence, there is no entrustment of the

property so as to commit breach of trust to constitute offence under

section 406 IPC,even if the mortgaged property was subsequently

sold. This was the view in Gopalakrishnan’s case(supra) also.

8. The above decision squarely applies to the facts of this case.

Since there is no entrustment of the property or domain over the

property or its dishonest misappropriation to constitute an offence of

breach of trust, the subsequent sale by the petitioner herein will not

constitute an offence punishable under section 406 IPC. The above

decision and the factual matrix show that even if the entire allegation

of the prosecution is accepted, no offence is made out. Since prima

facie no offence is made out, the petitioner herein cannot be called

upon to face the investigation even. The above proceeding is liable to
Crl.M.C. No.1240/2012 5

be given premature termination to avoid inconvenience to the

petitioner herein. In the light of this, I am inclined to allow the

Crl.M.C.

Accordingly, CrlM.C.is allowed. All further proceedings pursuant

to Annexure A1 FIR No.7/12 and complaint dated 6/1/212 stand

quashed.

Sd/-

SUNIL THOMAS

JUDGE

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