Paragraph numbers below are the court’s original numbering, recovered from the source text.
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. 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. (2020) 4 SCC 440 Civil Appeal No. 7128 of 2012 1694
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