The Bombay High Court allowed an anticipatory bail application filed by the accused apprehending arrest under Sections 61(2)(a), 318(4) and 3(5) of Bharatiya Nyaya Sanhita, 2023. Justice Sandesh D. Patil held that no offence of cheating was made out in a loan default case where substantial repayment had been made, emphasizing that criminal law could not be set into motion for the purpose of recovery of an amount.
The complainant alleged that seven applicants obtained loans of Rs.87.5 lakh by mortgaging a property that was later found to be already mortgaged and not owned by them, causing a loss of over Rs.3.55 crore to the society. It was contended by the complainant that the applicants conspired to obtain the loan despite the property already being mortgaged.
The applicant contended that he had applied for a loan of Rs.21.5 lakh in February 2018, which was disbursed as instructed, and had repaid Rs.8.65 lakh. A recovery certificate under Section 101 of the MCS Act was issued in favour of the society in December 2019. It was argued that no offence of cheating was made out and custodial interrogation was unnecessary.
The Court observed that the applicant had taken a loan of Rs.21.5 lakh and that respondent was aware of the application and its purpose, which was to repay debts. Noting that the applicant had already repaid Rs.8.65 lakh, the Court held that no offence under Section 318(4) was made out, as cheating requires an intention to deceive from the outset. Reliance was placed on (i) S.W. Palanitkar V/s. State of Bihar [(2002) 1 SCC 241] and (ii) Delhi Race Club (1940) Limited and Ors. V/s. State of Uttar Pradesh and Anr. [(2024) 10 SCC 690].
The Court emphasized that a substantial amount had been repaid by the applicant to the respondent, who had resorted to recovery of the outstanding money. Citing Bimla Tiwari v. State of Bihar, (2023) 7 SCC 461 it was reiterated that criminal law cannot be used for arm-twisting or money recovery. The Court also noted the gross delay in initiating proceedings, as the recovery certificate had been obtained in December 2019, while criminal proceedings were initiated only in November 2024.
Conclusively, the Court granted anticipatory bail, observing that the case was fit for it and that custodial interrogation was not required, directing the applicant to execute a PR bond of Rs.25,000 with sureties.
Cases relied on
(i) S.W. Palanitkar V/s. State of Bihar
(ii) Delhi Race Club (1940) Limited and Ors. V/s. State of Uttar Pradesh and Anr.
(iii)Bimla Tiwari v. State of Bihar,
Appearances:
Applicant: Chinmay Patil with Amit K. Pardeshi, AdvocateState: P.P. Shinde, Additional PPIntervener/
Complainant: Shreyas P. Baraswade with Dhiraj J. Pungaliya and Vishal Deshpande, Advocates
