Mumbai Court Mandates Police Probe Against Allahabad Bank Over Property Documents
A sessions court in Mumbai has issued a significant order directing the registration of a First Information Report (FIR) and a comprehensive police investigation against Allahabad Bank. The case centers on allegations that the bank failed to return original property title deeds to a borrower even after the complete repayment of a loan.
Court Overturns Magistrate's Decision, Orders Criminal Investigation
Setting aside an earlier order from a Magistrate Court, Additional Sessions Judge Pravin V Chatur directed the senior inspector of Andheri (East) police station to formally register the FIR and proceed with a full investigation. The probe will target the bank itself along with specific officials from its Andheri (E) branch, including the chief manager, senior general manager, and general manager. The FIR was officially registered on a recent Saturday, marking the formal commencement of the criminal process.
Details of the Loan and Alleged Breach of Trust
The complainant in this case is Shelter Makers (I) Private Limited. The company secured loans from Allahabad Bank in 2009 based on a sanction letter dated September 19, 2009, and a subsequent registered mortgage deed dated September 24, 2009. As part of this loan agreement, the company deposited the original title deeds and related property documents with the bank, establishing a fiduciary relationship.
According to the allegations presented by the company's authorized representative, Nandkumar Harchandani, the loan was fully repaid. The bank issued a "No Dues Certificate" on April 9, 2013, confirming the settlement. Despite this clearance and repeated formal demands, the bank and its officers allegedly refused to return the original property documents, leading to the legal complaint.
Judge Cites Serious Criminal Implications
In his detailed order, Judge Chatur emphasized the gravity of the situation. He observed that when original title deeds are lawfully deposited with a bank under a fiduciary duty, and the bank subsequently refuses to return them after repayment and formal demand, the essential ingredients for criminal breach of trust are potentially met.
The judge criticized the magistrate's initial order, which had relegated the matter to a summary inquiry via a private complaint. This approach, the sessions court found, would have unfairly burdened the complainant with manually providing evidence. More critically, it would have prevented the police from executing essential investigative powers.
Key Legal Points Highlighted by the Court:- The refusal to return documents held in trust after obligation fulfillment can attract charges under Section 409 (Criminal Breach of Trust) of the Indian Penal Code (IPC).
- Other relevant sections include 420 (Cheating) and 120-B (Criminal Conspiracy) of the IPC.
- The existence of potential civil remedies, such as a suit for recovery, does not preclude a criminal investigation when material facts prima facie suggest criminality.
- Under Section 156(3) of the Code of Criminal Procedure (CrPC), a magistrate is empowered to direct police registration of an FIR and investigation if they have failed to act.
"Given the potential for misuse of title deeds and the special fiduciary duty of banking institutions, a police investigation is necessary," Judge Chatur stated. He clarified that the investigation is crucial to ascertain the documents' whereabouts, secure them through seizure, and determine if prosecutable offences have been committed.
Legal Proceedings and Bro Implications
The complainant, represented by lawyer Filji Frederick, had filed a revision application challenging the Magistrate Court's order dated June 2, 2022. The sessions court's ruling now mandates a standard police investigation, enabling authorities to search, seize evidence, and interrogate the bank officials allegedly holding the documents.
Judge Chatur concluded that at this procedural stage, the court's role is to assess whether the presented material discloses a prima facie case warranting police inquiry. "Whether the facts ultimately sustain conviction is a matter for full investigation and trial," he noted, underscoring that the current order initiates that very process.
This case highlights the serious legal consequences financial institutions may face for failing to uphold their fiduciary responsibilities regarding client property, moving beyond civil disputes into the realm of potential criminal liability.
