Sivakumar VERSUS The Inspector of Police & Anr | Supreme Court of India

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1. Case Number: CRIMINAL APPEAL NO(S). __ OF 2025 (ARISING FROM SLP(CRL) NOS.5815-5816 OF 2023)
(The document does not provide the specific assigned Criminal Appeal numbers for 2025, only the SLP numbers from which they arise. The blank for appeal number is as per the original document.)

2. Case Title: Sivakumar VERSUS The Inspector of Police & Anr.

3. Headnote: The Supreme Court allowed the appeals and quashed criminal proceedings initiated against the appellant (Accused No. 2), a former bank employee, for offences including cheating and forgery under the IPC, arising from the auction of a property under the SARFAESI Act. The Court found that the appellant was not the “authorized officer” at the time of the auction process or issuance of the sale certificate in 2012, as he only assumed the relevant managerial role in November 2014. Since he had no direct involvement or signatory role in the transaction leading to the FIR, the allegations against him were baseless and did not attract criminal liability. Continuing the criminal proceedings would be an abuse of process of law and a miscarriage of justice. The protection under Section 32 of the SARFAESI Act and the dismissal of a related consumer complaint were also noted.

4. Background and Facts:
The case pertains to a property mortgaged to HDFC Limited by Mr. A. Kannan in 2004. Upon default, HDFC Ltd. initiated SARFAESI proceedings and issued an auction notice on 22.05.2012. Respondent No. 2 (de-facto complainant) purchased the property for Rs. 7,25,000/- in the public auction, paid the consideration, and received a sale certificate in July 2012.
Later, when Respondent No. 2 approached the Sub-Registrar to register the sale certificate, she discovered that the property had already been acquired by the Tamil Nadu Housing Board.
In 2013, Respondent No. 2 filed a consumer complaint (Consumer O.P. No. 58/2013) against HDFC Ltd. officials. Subsequently, she filed a complaint under Section 190 Cr.P.C. before the Judicial Magistrate Court, Tirunelveli, which was referred to the City Crime Branch under Section 156(3) Cr.P.C. An FIR (Crime No. 21/2014) was registered on 15.07.2014 under Sections 197, 417, 418, 467, 468, and 420 of the IPC. The Branch Manager, Tirunelveli, was Accused No. 1, and the appellant herein (Sivakumar, then working as a Manager in the Head Office of HDFC Limited at Thiruvananthapuram) was Accused No. 2. The allegation was that the accused persons suppressed the fact of the property’s acquisition by the Tamil Nadu Housing Board and sold it to the complainant, thereby cheating her. A chargesheet was filed, and cognizance was taken (CC. No. 308 of 2016).

5. Court: IN THE SUPREME COURT OF INDIA

6. Type: Judgment

7. SCR Citation: not mentioned

8. Neutral Citation: 2025 INSC 558

9. Judgment Authored by: Hon’ble Justice Vikram Nath*

10. Date of Judgment: April 23, 2025

11. Case Start Date: 2023 (Year of filing of Special Leave Petitions (Criminal) Nos. 5815-5816 of 2023. Leave was granted on April 23, 2025, as mentioned in Para 1 of the judgment, before conversion to Criminal Appeals).

12. Case Arising From:
The appeals arose from the common judgment and order dated 12.01.2023 passed by the High Court of Madras in Crl. O.P. (MD) 21417 of 2016 and Crl. O.P. (MD) No. 10979 of 2016. The appellant had filed these petitions under Section 482 of the Code of Criminal Procedure, 1973, seeking to quash the chargesheet and consequential proceedings in CC. No. 308 of 2016 on the file of the Judicial Magistrate No. 1, Tirunelveli. The High Court dismissed the appellant’s petitions, holding that a prima facie case was made out against him for offences including cheating, issuing a false certificate, and forgery, based on allegations of suppressing the encumbrance by the Tamil Nadu Housing Board and falsely promising the property was free from encumbrance.

13. Parties Involved:

• Appellant(s): Sivakumar (Accused No. 2)
• Respondent(s): The Inspector of Police & Anr. (Anr. refers to the de-facto complainant, Respondent No. 2)

14. Disposal Nature: Appeals allowed. Criminal proceedings against the appellant quashed.

15. Case Type: CRIMINAL APPEAL (ARISING FROM SLP(CRL))

16. Law Type: Criminal Law, Banking Law (SARFAESI Act), Indian Penal Code.

17. Judges (Assent/Dissent):

• Hon’ble Justice Vikram Nath (Authored the judgment, Assented)
• Hon’ble Justice Sandeep Mehta (Assented)
  No dissenting opinions were recorded.

18. Procedural History:

• Lower Court Decisions:
  • Judicial Magistrate No. 1, Tirunelveli: Took cognizance of the final report (chargesheet) and numbered the case as CC. No. 308 of 2016.
  • High Court of Madras (12.01.2023): Dismissed the appellant’s petitions (Crl. O.P. (MD) 21417 of 2016 and Crl. O.P. (MD) No. 10979 of 2016) filed under Section 482 Cr.P.C. for quashing the proceedings.
• Appeals:
  • Special Leave Petitions (Criminal) Nos. 5815-5816 of 2023 filed before the Supreme Court against the High Court’s order. Leave granted and converted to Criminal Appeals.
  • The Supreme Court allowed these appeals.

19. Issues Framed:
The main issue considered by the Supreme Court was:

• Whether the criminal proceedings against the appellant (Accused No. 2) should be quashed on the ground that he was not the authorized officer at the relevant time of the auction and issuance of the sale certificate and thus had no role in the transaction leading to the FIR. (Inferred from paras 10, 17, 18)

20. Cases Cited:

• Cited by Petitioner/Appellant/Plaintiff:
  • K. Virupaksha v. State of Karnataka, (2020) 4 SCC 440 (Para 13, Page 6)
    • Relevance: Argued that once proceedings under the SARFAESI Act have been initiated and concluded, criminal proceedings on the same subject matter cannot be entertained.
    • Judicial Consideration: The Court noted this contention.
    • Exact Quote: Not quoted, but principle stated.
• Cited by Respondent/Defendant:
  • Mrs. Leelamma Mathew v. M/s Indian Overseas Banks & Ors., Civil Appeal No. 7128 of 2012 (Para 15, Page 7)
    • Relevance: Relied upon by Respondent No. 1 in support of the contention that the appellant cannot take the plea that the auction was done on an “as is what is” and “as is where is” basis, and regarding Section 55 of the Transfer of Property Act, 1882.
    • Judicial Consideration: The Court noted this contention.
    • Exact Quote: Not quoted.

21. Acts/Rules/Orders Referred:

• Code of Criminal Procedure, 1973 (Cr.P.C.):
  • Section 482: Mentioned as the provision under which the appellant approached the High Court to quash proceedings. (Para 2, Page 1; Para 7, Page 4)
  • Section 190: Mentioned as the provision under which the complainant filed a complaint before the Judicial Magistrate Court. (Para 6, Page 3)
  • Section 156(3): Mentioned as the provision under which the Magistrate referred the matter to the City Crime Branch. (Para 6, Page 3)
    • Context: These sections relate to the inherent powers of the High Court to quash proceedings, cognizance of offences by Magistrates, and police investigation of cognizable cases. The appellant invoked Section 482, and the initial criminal complaint process involved Sections 190 and 156(3).
• Indian Penal Code (IPC):
  • Sections 197, 417, 418, 467, 468, 420: Mentioned as the sections under which the FIR was registered and chargesheet filed. (Para 6, Page 3)
    • Context: These sections pertain to offences like issuing or signing false certificate, cheating, cheating with knowledge that wrongful loss may ensue to person whose interest offender is bound to protect, forgery of valuable security, forgery for purpose of cheating, and cheating and dishonestly inducing delivery of property.
• Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act):
  • General reference to proceedings under the Act. (Para 4, Page 2; Para 10, Page 5)
  • Section 32: Mentioned for providing immunity to secured creditors and their officers for actions taken in good faith under the Act. (Para 13, Page 6; Para 16, Page 8)
    • Context: The auction was conducted under SARFAESI. The appellant argued for immunity under Section 32, while the respondent argued it didn’t apply due to lack of good faith.
• Security Interest (Enforcement) Rules, 2002:
  • Rule 2(a) (Definition of “authorized officer”): Quoted text: “”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].” (Para 10, Page 5)
    • Context: Crucial for determining the appellant’s role and responsibility in the SARFAESI proceedings. The appellant argued he was not the “authorized officer” at the relevant time.
• Transfer of Property Act, 1882:
  • Section 55: Mentioned as being relied upon by Respondent No. 1. (Para 15, Page 7)
    • Context: Relates to rights and liabilities of buyer and seller, likely cited in context of disclosure obligations.

22. Acts/Rules/Orders Governing the Case:

• Code of Criminal Procedure, 1973
• Indian Penal Code
• Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
• Security Interest (Enforcement) Rules, 2002

23. Literature Citation:

• Cited by Petitioner/Appellant/Plaintiff: []
• Cited by Respondent/Defendant: []

24. Appearances:

• Advocates:
  • For Appellant: Ms. Sonia Mathur, learned Senior Counsel. (Para 9, Page 5)
  • For Respondent No. 1 (The Inspector of Police): Mr. V. Krishnamurthy, learned Additional Advocate General. (Para 9, Page 5)
  • For Respondent No. 2 (De-facto complainant): Nobody entered appearance despite service of notice. (Para 9, Page 5)
• Witnesses: not mentioned.
• Other Persons: not mentioned.

25. Legal Jargons and Maxims:

• Prima facie: “at first sight” or “on the face of it.” Used to describe a situation where the evidence, as it initially appears, is sufficient to establish a fact or raise a presumption unless disproved or rebutted. (Para 7, Page 4)
• Vide: “see” or “refer to.” Used to direct the reader to another part of a document or another source. (Para 5, Page 3; Para 7, Page 4; Para 12, Page 6)
• De-facto complainant: The actual person who has made the complaint, even if not formally the initiator of the legal proceedings. (Para 4, Page 2; Para 6, Page 3; Para 7, Page 4)

26. Exhibits: not mentioned.

27. Prayer:
The appellant’s prayer before the Supreme Court was to set aside the common judgment and order dated 12.01.2023 passed by the High Court of Madras, and to quash the chargesheet and consequential criminal proceedings arising out of CC. No. 308 of 2016 on the file of the Judicial Magistrate No. 1, Tirunelveli, against him. (Inferred from paras 2, 7, 8, 19).

28. Evidence & Findings:

• Evidence Type: Employment Record / Position of Appellant
  • Description: Appellant was appointed as Manager at HDFC Bank Head Office on 03.11.2014. The auction process and issuance of the sale certificate took place in 2012. At the relevant time (2012), he was serving as an Assistant Manager. (Para 10, Page 5; Para 18, Page 8)
  • Findings: The sale certificate was issued by the appellant’s predecessor. The appellant was not the authorized officer empowered to issue the certificate at the relevant time. He had no direct involvement from the initiation of the auction process to the issuance of the sale certificate as he assumed the office of Manager only in November 2014. (Para 18, Page 8)
• Evidence Type: Consumer Complaint Outcome
  • Description: Consumer complaint preferred by Respondent No. 2 was dismissed by the District Consumer Disputes Redressal Commission vide order dated 14.07.2022. (Para 12, Page 6)
  • Findings: The Commission observed that the possession receipt, signed by the complainant, showed her awareness of the acquisition process before participating in the auction. (Para 12, Page 6)
• Evidence Type: Sale Certificate
  • Description: Issued in July 2012. (Para 4, Page 2)
  • Findings: The appellant was not a signatory to the sale certificate. (Para 18, Page 9)

29. Petitioner/Appellant/Plaintiff/Accused Arguments:
(Summarized from Paras 10-13, Pages 5-6)

• The appellant was appointed as Manager at the Head Office of HDFC Bank on 03.11.2014, whereas the auction and sale certificate issuance occurred in 2012. At that time, he was an Assistant Manager, and only a Manager was authorized under SARFAESI Act (Rule 2(a) of Security Interest (Enforcement) Rules, 2002). (Para 10)
• The appellant had no role in the transaction leading to criminal proceedings; initiating an FIR against him is an abuse of legal process, giving a civil dispute an unjustified criminal color. (Para 11)
• The consumer complaint by Respondent No. 2 was dismissed on 14.07.2022, with the observation that the possession receipt signed by her showed awareness of the acquisition before the auction. The FIR is an attempt to harass the appellant and pressurize him to return the sale consideration, even though the complainant possesses the property. (Para 12)
• Section 32 of the SARFAESI Act provides immunity to secured creditors and their officers for actions taken in good faith. Citing K. Virupaksha v. State of Karnataka, it was argued that once SARFAESI proceedings are concluded, criminal proceedings on the same subject cannot be entertained. (Para 13)

30. Respondent/Defendant/Opponent/State Arguments:
(Summarized from Paras 14-16, Pages 7-8, arguments of Respondent No. 1)

• The complainant (Respondent No. 2) was unaware that the property was already acquired by the Tamil Nadu Housing Board in 2003 until she went to the Sub-Registrar. This information was not disclosed at the time of auction or payment. (Para 14)
• The appellant cannot plead that the auction was on an “as is what is” and “as is where is” basis. Reliance was placed on Section 55 of the Transfer of Property Act, 1882, and Mrs. Leelamma Mathew v. M/s Indian Overseas Banks & Ors. (Para 15)
• The protection under Section 32 of the SARFAESI Act does not apply as the appellant’s actions were not in good faith. Concealment of the property’s acquisition status and misrepresentation indicate deliberate wrongdoing. The High Court rightly refused to quash the chargesheet as the FIR allegations and evidence necessitate a trial, and statutory protection cannot shield fraudulent conduct. (Para 16)

31. Ratio Decidendi:
The core reasoning for allowing the appeal and quashing proceedings against the appellant was:

• The appellant was not the “authorized officer” under the SARFAESI Act at the time of the auction process (2012) or the issuance of the sale certificate. He assumed the relevant managerial position only in November 2014. (Para 18, Page 8)
• The sale certificate was issued by the appellant’s predecessor, and the appellant was not a signatory to it. (Para 18, Page 8-9)
• Due to his lack of status as an authorized officer and non-involvement in the auction or sale certificate issuance at the relevant time, the allegations against him were baseless and did not attract criminal liability. (Para 18, Page 9)
• Continuation of criminal proceedings against the appellant, who was implicated without due cause, would constitute an abuse of process of law and result in a miscarriage of justice and inordinate harassment. (Para 18, Page 9)

32. Final Decision:
The appeals are allowed, and the impugned common judgment and order dated 12.01.2023 passed by the High Court of Madras 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. Interlocutory application(s), if any, shall stand disposed of. (Para 19, Page 9)

33. Timeline:

• 2004: Mr. A. Kannan borrowed a loan from HDFC Limited, mortgaging the subject property. (Para 3, Page 2)
• 2003: Property allegedly acquired by Tamil Nadu Housing Board. (Para 14, Page 7)
• May 22, 2012: Auction notice for the property issued by HDFC Ltd. (Para 4, Page 2)
• July 2012: Sale certificate handed over to Respondent No. 2. (Para 4, Page 2)
• 2013: Respondent No. 2 filed Consumer O.P. No. 58/2013. (Para 5, Page 3)
• July 15, 2014: FIR in Crime No. 21/2014 registered. (Para 6, Page 3)
• November 03, 2014: Appellant appointed as Manager at HDFC Bank Head Office. (Para 10, Page 5; Para 18, Page 8)
• 2016: Chargesheet filed, and cognizance taken as CC. No. 308 of 2016. (Para 2, Page 1-2; Para 6, Page 3)
• 2016: Appellant filed Crl. O.P. (MD) 21417 of 2016 and Crl. O.P. (MD) No. 10979 of 2016 in Madras High Court. (Para 2, Page 1)
• July 14, 2022: Consumer complaint by Respondent No. 2 dismissed. (Para 12, Page 6)
• January 12, 2023: High Court of Madras dismissed appellant’s petitions. (Para 2, Page 1)
• 2023: SLP(CRL) NOS.5815-5816 OF 2023 filed in Supreme Court. (Page 1)
• April 23, 2025: Supreme Court delivered this judgment. (Page 9)