The Allahabad High Court (Lucknow Bench) has quashed criminal proceedings for cheating arising out of a housing loan dispute, holding that the complaint was a misuse of criminal law aimed at securing property rights through coercive means.
The Court was dealing with petitions under Section 482 CrPC challenging a summoning order passed against the accused, including family members and a bank official, in connection with allegations of cheating relating to repayment of a housing loan and transfer of the mortgaged property.
Upon examining the facts, the Court found that the property was owned by the borrower and his deceased mother, and that the complainant despite having paid certain loan instalments did not acquire any ownership rights. It noted that the complainant had voluntarily offered to clear the loan dues on the condition that the property be transferred to him, but no legally enforceable agreement existed to support such a claim.
Significantly, the Court held that the allegations did not disclose any element of cheating, as there was no fraudulent or dishonest inducement at the inception of the transaction. It further observed that the bank official had merely acted in discharge of official duties by accepting repayment and had neither demanded money nor promised transfer of ownership.
The Court went a step further to observe that the complainant appeared to have devised a “mala fide design to grab the entire house” by paying off the loan and attempting to divest other legal heirs of their share.
Additionally, it was noted that the dispute regarding ownership and partition of the property was already pending before a civil court, and that the complainant had concealed material facts while initiating criminal proceedings.
Finding that the Magistrate had issued the summoning order mechanically and without proper application of mind, the Court held that continuation of the criminal proceedings would amount to abuse of the process of law.
Accordingly, the High Court allowed the petitions, quashed the summoning order dated April 8, 2022, and dismissed the complaint in its entirety, reiterating that criminal law cannot be used as a tool to settle civil property disputes.
Appearances:
Counsel for Applicant(s) : Vivek Pandey, Akshat Sinha, Chandra Shekhar Sinha, Gaurav Verma, Mohit Sharma, Pooja Mishra
Counsel for Opposite Party(s) : G.A., Pramendra Kumar Singh
