Court orders FIR against bank for failing to return original docus after loan fully repaid

Mumbai: Observing that the refusal to return documents held in trust after repayment could attract charges of criminal breach of trust, a sessions court recently ordered the registration of an FIR and a police probe into allegations that Allahabad Bank failed to return original property title deeds to a borrower even after the loan was fully repaid. Setting aside a Magistrate Court's order, the senior inspector of Andheri (East) police station was directed to register the FIR and proceed with the investigation against the bank and the Andheri (E) branch's chief manager, senior general manager and general manager.The FIR was registered on Saturday.The complainant, Shelter Makers (I) Private Limited, had secured loans from Allahabad Bank in 2009. The judge said that the magistrate's conclusion effectively relegated the matter to a summary inquiry without enabling the investigating agency to search for, seize and secure the original documents or to interrogate the bank officials in whose custody the documents are alleged to have been deposited. "Given the potential for misuse of title deeds and the special fiduciary duty of banking institutions, a police investigation is necessary to ascertain the whereabouts of the documents, to seize them, and to determine offences under Sections 409 (criminal breach of trust) 420 (cheating) and 120-B (criminal conspiracy) IPC are made out," said additional sessions judge Pravin V Chatur. The judge further said that the possibility that civil remedies, such as a suit for recovery or injunction exist, does not preclude criminal investigation where the material prima facie discloses criminality. The judge noted that where the original title deeds are lawfully deposited with a bank in fiduciary custody and are thereafter refused to be returned despite repayment and demand, the essential ingredients of criminal breach of trust may be attracted. "Whether the facts ultimately sustain conviction is a matter for full investigation and trial, at the stage of Section 156(3) CrPC, the court must consider whether the material placed before it discloses a prima facie case warranting police inquiry," the judge said. Section 156(3) empowers a magistrate to direct the police to register an FIR and conduct an investigation when they have failed or refused to do so.The judge set aside an earlier ruling by a lower court that had ordered a private complaint. This would have required the complainant to provide evidence manually instead of the police conducting a search and seizure.Through lawyer Filji Frederick, complainant had filed the revision application to challenge the order dated June 2, 2022, issued by a Magistrate's Court in Andheri. The complainant company, through their authorized representative, Nandkumar Harchandani, alleged that they had secured loans from the bank following a sanction letter dated Sept 19, 2009, and a registered mortgage deed dated Sept, 24, 2009. In accordance with these agreements, they deposited the original title deeds and related property documents with the bank. It was further submitted that though the complainant repaid the loan in full and received a "No Dues Certificate" on April 9, 2013, the bank and its officers allegedly refused to return the original documents despite multiple demands.